Federal auditors designate Idaho Vocational Rehabilitation high-risk; $10 million federal reallocation, contractor spending and forensic review prompt state sup

Legislative auditors and Vocational Rehabilitation officials told the Joint Finance-Appropriations Committee on Feb. 24 that the Idaho Division of Vocational Rehabilitation (IDVR) is under intensive federal scrutiny after the Rehabilitation Services Administration (RSA) designated the division a "high-risk" grantee, a $10 million federal reallocation was recognized by the governor, and auditors found weaknesses in financial controls and federal reporting.

April Renfro of the Legislative Services Office audits division told the committee the audit team issued an accountability report (dated Jan. 13, 2025) that identified a failure to establish procedures and control activities to ensure compliance with appropriation laws applicable to FY2024; insufficient financial-management systems; failures to account for and report obligations and expenditures properly; and inaccurate and unsupported federal financial reporting. RSA subsequently imposed specific conditions on the grant under 2 CFR 200.208 and required a corrective action plan; auditors found the corrective action plan the division submitted lacked specific, measurable steps.

The division received a noncognizable $10,000,000 federal adjustment in September 2024 — a reallocation of RSA funds to states able to absorb and…