Overview of IDB Funding and Spending

Updated 4/21/23

IDB Funding Streams

IDB receives seven types of funding.

• Federal VR grant: approximately 67%
• State Appropriation approximately 28%
• Capital state appropriation: varies based on needs and has to be signed over to the Department of Administrative Services (DAS) Major Maintenance for large building maintenance projects such as roof or elevator replacement.
• Older Blind grant: approximately 2%
• IL Federal Part B funds: less than 1%
• SSA reimbursements: varies from year to year based on the number of VR clients who exit in employment and get off of Social Security SSI or SSDI benefits
• Support from the Gifts & Bequests fund: varies as needed but has not exceeded 4% in the past six years

Budgeting considerations

Because we must meet Maintenance of Effort requirements (MOE) to continue to receive our federal VR support, we reserve the amount needed to do this during our budgeting process and monitor it continually throughout the course of the fiscal year.

VR dollars are matched at a rate of 21.3% non-federal to 78.7% federal dollars. This means that for every state or other non-federal dollar we spend on VR services, the federal government gives us approximately four additional dollars to spend on VR services.

Not all costs related to providing VR services are allowable under the VR grant. Generally 63% of administrative costs can be charged to the federal VR grant as indirect costs. Some examples of things that are never allowed to be charged to the federal VR grant include:

• Client cancellations
• Vacation payouts
• Any meals not for teaching purposes and not travel related

We receive the full Older Individuals Who Are Blind (OIB) grant when we match 10% of the grant amount with non-federal dollars. This same formula is used for the IL Part B funds used to serve people in IL younger than age 55. IDB has traditionally spent far more than the required non-federal match on Independent Living services because the need for these services far surpasses what can be done only with federal support and required match. Some states provide only minimal services to seniors losing vision due to lack of funding, but the Iowa Department for the Blind has always prided itself on teaching sustainable techniques and providing sustainable equipment that will allow seniors losing their vision to remain independent in their homes and active in their communities. We have demonstrated that these state, G&B, and SSA reimbursement expenditures prevent waste by reducing nursing home and home health care costs. We have also seen the priceless impact that continued independence brings to the quality of life of those we serve.

As we receive grant notifications (GANs) from the federal government providing the exact dollar amounts, our CFO and accounting team adjust expenditures as needed to maintain optimal cash flow. If the federal government is delayed in its budget process, we may receive partial grants or no grant until the federal budget is passed. In some years, we have receive state mid-year de-appropriations. This means that we needed to give back state dollars and this causes us to have to make significant adjustments.

Once the state legislature approves and the Governor signs our budget, we make further adjustments as needed. Other factors that cause us to have to make adjustments in May or June for the year that begins July 1st include:

• Increases to payments made to the Department of Administrative Services (DAS) for required and contracted services
• Increases in mandatory payments to the Office of the Chief Information Officer (OCIO)
• Cost of living adjustments negotiated by DAS and the state employee union

Current Situation

Our MOE is currently around 2.2 million. This leaves only about 600,000 for Older Blind and Independent Living and everything else that cannot be paid for with federal VR dollars. This includes the larger state share of admin costs, portions of building maintenance, IT, portions of communications, and other miscellaneous costs. We have worked really hard to reduce these costs as much as possible over the last six years and always keep looking for opportunities to reduce costs. However, there isn’t much left to cut in this category and so that leaves our state expenditure on Independent Living services for individuals who are older blind and younger blind independent Living services. Because the federal support for older blind services decreases every year and Iowans continue to develop age related vision loss, we need to use every remaining state dollar to provide Independent Living Services. In brief, whenever we take a cut of any kind, it means less services to seniors and others needing independent living services. In SFY22, we received a backlog of Social Security reimbursements for our VR program and were able to use those funds to support IL. We don’t have this in SFY23 and are starting to limit services and equipment to make it through this state year. If we receive more SSA reimbursements, we will restore equipment purchases and not take further steps to reduce IL spending like creating a waiting list or reducing the number of visits teachers can make to client homes, etc. However, we have no way of knowing when SSA reimbursements will arrive and whether claims will be accepted or rejected. We can make some educated guesses, but only enough to develop contingency plans. Essentially, any loss in state appropriation ends up hurting our IL program. It’s just a question of luck and timing as to which clients, when, and how much, so we work hard to find evvery opportunity to minimize the impact on those we serve.