Audit finds Idaho vocational rehabilitation lacked controls; federal agency designates program high risk and state may need $2.7M match

Legislative auditors reported to the Joint Finance-Appropriations Committee on Feb. 24 that Idaho’s Division of Vocational Rehabilitation (IDVR) failed to maintain internal controls needed to ensure compliance with appropriation laws and federal grant reporting, prompting the federal Rehabilitation Services Administration (RSA) to designate the state program as a high-risk grantee.

The finding and follow-up discussions centered on four fiscal issues: a $10 million federal reallotment recognized by the governor in September 2024; a state supplemental request of $2.7 million to meet the required state match for those federal funds; an estimated $1.7 million in charges that the federal partner has already identified as unallowable; and a contractor engagement that initially cost $499,999 and was amended to add roughly $1.9 million in additional services.

Why it matters: IDVR provides job counseling, placement and related services for Idahoans with disabilities. Auditors said the division had obligated far more spending than available appropriation in FY2023–FY2024, had reporting weaknesses tied to its case management system, and submitted federal draw requests that RSA could not fully support because documentation and period-of-performance accounting were inconsistent.

Audit finding and federal response April Renfro of the Legislative Services Office audits division summarized the report’s principal conclusion: "We issued one finding with this report and that was that the division did not establish procedures and control activities to ensure compliance with appropriation laws applicable to fiscal year 2024."…