Narrative: g. 2. A.

Since Fiscal Year (FY) 2022, the West Virginia Division of Rehabilitation Services (DRS) has experienced a significant increase in the number of applicants, from about 4,900 in FY 2022 to over 7,200 in FY 2024.  During this time period, the number of consumers served in each FY also increased from approximately 8,800 to over 15,600.  Case service expenditures also continued to increase during this time, going from about $19 million in FY 2022 to over $48 million in FY 2024.  While expenditures greatly increased, total available funding did not.  The agency received about $35 million in federal funding in FY 2022, $40 million in FY 2023, and only $31 million in FY 2024; state funding remained relatively constant at $12 million during this time. DRS also serves a large number of students and youth with disabilities, accounting for over half of all applicants. These younger consumers tend to remain with the agency for many years and require high levels of funding for extended periods of time once under an Individualized Plan for Employment (IPE).

After being notified of a significantly lower amount of reallotted funds than requested (WVDRS was awarded less than $3 million of the $21 million it requested) at the end of FY 2024, the agency immediately began to take proactive, cost-saving measures and make fiscal and programmatic projections to determine if it needed to implement and Order of Selection (OS).

The agency used FY 2024 data, including the cost of services and number of consumers, to project the total cost of case services and number of consumers in FY 2025 (holding all things constant).  Based on the available resources at the start of FY 2025, which includes approximately $19 million in federal carryover funds from FY 2024 and $29 million in FY 2025 available base allotment federal funds (the agency also receives approximately $12 million in state funding), total available funds to the agency in FY 2025 were determined to be approximately $60 million.  The total projected administrative costs for FY 2025 are $21 million, leaving $39 million for all other costs, including case services. In FY 2024, the agency spent over $49 million in case services.  If case services remained constant in FY 2025, this would leave a deficit of $10 million. However, as the agency continues to experience a large number of applicants, the projected deficit would be even higher, at approximately $12.9 million, based on extrapolating current trends in early FY 2025.  Using historical and projected case service data, the agency estimated a reduction in total expenditures of $12.94 million if individuals assigned to OS Categories 2 and 3 were placed on a waitlist for the remainder of FY 2025.  Therefore, due to the projected deficit, the large number of current consumers, and the continued large number of new applicants, the agency determined it must implement an OS as soon as possible to prevent the exhaustion of its available funds prior to the end of the fiscal year. 

Beginning on February 20, 2025, DRS will be operating under an OS with OS Categories 2 and 3 closed during Federal Fiscal Year 2025 due to insufficient fiscal and personnel resources available to provide services to all eligible consumers; OS Category 1 will remain open to allow the agency to prioritize services to those with the most significant disabilities. Additionally, DRS has elected to serve eligible individuals, regardless of any established OS, who require specific services or equipment to maintain employment. 

DRS will continue to monitor caseload size, vacancies, and other related fiscal measures to ensure proactive measures are taken, if needed.