Vocational Rehabilitation Grants to States:
Program Overview
Benjamin Collins
Analyst in Labor Policy
June 26, 2013
Congressional Research Service
7-5700
www.crs.gov
R42148
CRS Report for Congress
Pr
epared for Members and Committees of Congress

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Vocational Rehabilitation Grants to States: Program Overview

Summary
Vocational rehabilitation (VR) state grants provide funds to state and territorial agencies to
administer services to individuals with disabilities to aid them in securing and maintaining
employment. States are required to match a portion of their federal grants. The VR grants
program is administered by the Rehabilitation Services Administration (RSA), part of the
Department of Education (ED).
To be eligible for VR services, an individual must establish that (1) he or she has a disability that
creates an obstacle to employment and (2) he or she would benefit from VR services. After
qualifying for VR services, each client works with a VR counselor to develop an Individualized
Plan for Employment (IPE). The IPE defines the client’s desired employment outcome and
outlines the services necessary to achieve that outcome.
To meet the objective stated in a client’s IPE, a VR agency can coordinate a variety of services.
These can range from simpler services such as job search assistance to more complex job training
or postsecondary education. VR agencies can also provide support services that aid a client’s
progress toward employment, such as transportation subsidies or reader services for clients with
visual impairments. In all cases, a client must exhaust all other applicable government assistance
before a VR agency will pay for a service.
In cases where a state anticipates that it will not be able to serve all eligible individuals, it must
notify RSA that it will implement an order of selection plan. This plan establishes which
individuals will receive preference if the state agency is unable to serve all eligible clients. ED
dictates that agencies must first serve individuals with the most significant disabilities, but
defining the most significant disabilities is left to the state agencies.
VR grants are supported through mandatory appropriations. Authorization for the VR grant
program expired after FY2003. The program’s authorizing legislation specifies that if the
authorization for appropriations has expired and Congress has taken no action, the program will
automatically be reauthorized for the subsequent year and the appropriation for the program will
equal the prior year’s appropriation plus an increase equal to inflation. The program has operated
under these provisions since FY2004.
Since the expiration of authorization of appropriations after FY2003, the reauthorization of the
VR state grants program has been debated as a part of a package to reauthorize the Workforce
Investment Act of 1998 (WIA). While bills have made legislative progress in several Congresses,
no consensus has emerged.
Congress appropriated $3.1 billion for VR grants to states in FY2013. In FY2011, the most recent
year for which program data are available, more than 1 million individuals had contact with a
state or territorial VR agency and agencies reported more than 178,000 successful employment
outcomes. At the end of FY2011, about 34,000 individuals were on VR waiting lists.

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Vocational Rehabilitation Grants to States: Program Overview

Contents
Background ...................................................................................................................................... 1
Financing and Administration .......................................................................................................... 1
Federal Grants and State Matches ............................................................................................. 2
Administering Agencies ............................................................................................................ 2
Current Authorization Status ........................................................................................................... 3
Individual Eligibility for Vocational Rehabilitation Services .......................................................... 4
Eligibility Criteria ...................................................................................................................... 5
Order of Selection and Waiting Lists ......................................................................................... 5
Services Provided by Vocational Rehabilitation Agencies .............................................................. 6
Individualized Plan for Employment (IPE) ............................................................................... 7
Scope and Distribution of VR Services ..................................................................................... 7
Case Closure and Employment Outcomes .............................................................................. 10
Characteristics of the VR Population ............................................................................................. 12
Legislative Activity Since 2003 ..................................................................................................... 14

Tables
Table 1. State VR Grant Appropriations, FY2003-FY2013 ............................................................. 4
Table 2. States with the Most Individuals on Order of Selection Waiting List, End of the
Fiscal Year, FY2010 and FY2011 ................................................................................................. 6
Table 3. VR Services Provided by State Agencies in FY2011 ......................................................... 8
Table 4. Employment Outcomes Among Cases Closed After Clients Received Services,
FY2003-FY2011 ......................................................................................................................... 11
Table 5. Case Closures in FY2011 ................................................................................................. 12
Table 6. Disabilities and Other Characteristics of Individuals with VR Cases Closed After
Receiving Services in FY2011 ................................................................................................... 13
Table B-1. Final VR Grants to States and Territories, FY2010-FY2012 ....................................... 18

Appendixes
Appendix A. Formula for State VR Grant Allotments ................................................................... 15
Appendix B. Final Grants to States and Territories, FY2010-FY2012 .......................................... 18

Contacts
Author Contact Information........................................................................................................... 20
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Vocational Rehabilitation Grants to States: Program Overview

Background
Vocational rehabilitation (VR) state grants provide federal funds to state agencies to provide
customized services to individuals with disabilities to assist those individuals in securing and
maintaining employment. The VR grants to states program is administered by the Rehabilitation
Services Administration (RSA) of the Department of Education (ED) and is authorized by Title I
of the Rehabilitation Act of 1973, as amended.1 In FY2013, Congress appropriated $3.1 billion
for VR grants to states. In FY2011, the most recent year for which data are available, more than 1
million individuals had contact with a state or territorial VR agency and agencies produced
almost 178,000 employment outcomes.2
This report will provide an overview of the federal VR grant program and the associated state
programs.3 The first section will provide an overview of how the program is funded and the
respective roles of the federal government and the cooperating state agencies. The second section
will outline eligibility requirements for individuals to participate in the program. The following
sections will use program data to illustrate what services VR agencies provide, outcomes for
clients at case closure, and the characteristics of the population the program serves. The final
section will briefly discuss legislative activity related to the program since authorization for
appropriations expired after FY2003.
Financing and Administration
VR programs are funded by a combination of federal grants and matching funds from the states.
VR grants to states are mandatory spending and funded out of general revenue. Since FY2000,
the program’s annual appropriation has equaled the prior year’s appropriation plus an increase
equal to inflation.4
The programs are administered by state agencies. While there are certain federal requirements for
all VR programs, each individual agency has autonomy in determining what specific services are
provided and how they are delivered.

1 The Rehabilitation Act of 1973 (P.L. 93-112) was amended in 1974 (P.L. 93-516), 1976 (P.L. 94-230), 1978 (P.L. 95-
602), 1984 (P.L. 98-221), 1986 (P.L. 99-506), 1992 (P.L. 102-569), 1993 (P.L. 103-73), and 1998 (P.L. 105-220).
Unless specified otherwise, when this report refers to the Rehabilitation Act, it is referring to the Rehabilitation Act of
1973, as amended.
2 Data generated from RSA-113 on rsa.ed.gov website on September 20, 2012. An agency may report an employment
outcome when a client has maintained employment for 90 days. The full criteria for employment outcomes and other
program metrics are discussed later in this report.
3 The Rehabilitation Act defines state as “each of the several States of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, and the Commonwealth of
the Northern Mariana Islands.” This report will follow that definition. There are limited instances in the VR program
where the District of Columbia and the territories are treated differently than the 50 states and these instances will be
noted in the relevant sections.
4 The appropriation is adjusted for inflation using the Consumer Price Index. This process is described in more detail in
the “Current Authorization Status” section of this report.
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Federal Grants and State Matches
The annual appropriation for VR grants is divided among the states using a formula that considers
each jurisdiction’s population, average per capita income, and original VR allotment in 1978. The
formula is fairly sophisticated, but grant sizes are positively correlated with a state’s population
and original 1978 allocation and negatively correlated with per capita income. The formula for
the District of Columbia and the territories is somewhat different than the formula for the 50
states.5
VR grants require a match from the states. The federal share is 78.7%, with the state providing
the remaining 21.3%.6 Grant recipients have the option of contributing funds beyond their
required match.
Not all states provide a full match for their VR allocations. In these cases, the state’s federal grant
is reduced accordingly and the remaining funds are made available to other states. States that
receive reallocated funds must match them as they do their original VR grant funds. If state
requests for reallocated funds exceed the funds available for reallocation, ED typically gives first
preference to states that received the smallest increases from the prior year. In cases where the
amount of funding available for reallocations is greater than requests for reallocated funds, the
unmatched funds are typically returned to the Treasury, though Congress may specify other uses
for unmatched funds in appropriations legislation.7
Final grant allotments for each state from FY2010 to FY2012 are listed in Appendix B. Final
grant allotments for FY2013 are not currently available.
Administering Agencies
VR programs are administered by state agencies. All agencies are required to provide certain
services and collect data on clients’ characteristics, services received, and outcomes at case
closure.
Each state has the option of establishing a single VR agency that serves all eligible individuals (a
“combined agency”) or one agency that serves blind clients and another general agency that
serves all other eligible individuals. As of FY2011, 32 states and territories have a single
combined agency and 24 states have one agency that serves blind clients and a general VR
agency that serves all other clients.
To qualify for VR funding under the Rehabilitation Act, a state must file a VR plan with ED. This
plan must designate the state agency that will provide VR services and must specify if a separate
state agency will provide services to blind clients. The state plan must demonstrate how the state

5 Specifics of the formula are outlined in Appendix A. A detailed analysis of the formula is available in archived CRS
Report RL34017, Vocational Rehabilitation Grants to States and Territories: Overview and Analysis of the Allotment
Formula, by Umar Moulta-Ali.
6 See 29 U.S.C. 705(14).
7 For example, the Consolidated Appropriations Act of 2012 (P.L. 112-74) specified that any funds remaining after
reallocation may be used “for activities aimed at improving the outcomes of children receiving Supplemental Security
Income (SSI).” More information on these activities is available at http://www2.ed.gov/about/inits/ed/promise/
index.html.
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will meet the specific requirements of the Rehabilitation Act, including requirements concerning
program goals and evaluation, cooperation with other agencies, the IPE process, and the provision
of VR services to qualified individuals.8 If a state anticipates not having enough resources to
serve all eligible individuals, it must include an order of selection plan as part of its state plan. A
state plan does not have to be submitted each year, but must be amended to reflect any changes in
state VR policy.
Current Authorization Status
The authorization of appropriations for VR state grants expired at the end of FY2003. The
Rehabilitation Act, however, includes a provision that automatically extends the authorization of
appropriations if authorization expires and Congress has not amended the act to extend it.9 Under
the extension provisions, the authorization of appropriations for VR grants is the equal to the
amount appropriated in the previous fiscal year, increased by the percentage change in the
Consumer Price Index for all urban consumers (CPI-U).10 In years where the CPI-U reports no
change or a negative change, the authorization equals the prior year’s appropriation.

8 See 29 U.S.C. 721 and 34 C.F.R. 361.10 for additional details on state plans.
9 See 29 U.S.C. 720(d).
10 See 29 U.S.C. 720(c). The specific index used is the not seasonally adjusted all items Consumer Price Index for all
urban consumers. The reference period is the 12 months ending the October two years prior to the fiscal year. For
example, the reference period for the FY2009 appropriation was the 12 month period ending October 2007.
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Table 1. State VR Grant Appropriations, FY2003-FY2013
VR Grant
Appropriations
Change from Prior
Fiscal Year
(nominal dollars)
Year (%)
Inflation Rate (%)
2003 2,533,492,000 2.1
2.1
2004 2,584,162,000 2.0
2.0
2005 2,635,845,000 2.0
2.0
2006 2,720,192,000 3.2
3.2
2007 2,837,160,000 4.3
4.3
2008 2,874,043,000 1.3
1.3
2009 2,974,635,000 3.5
3.5
2009 540,000,000a —
—
2010 3,084,696,000 3.7
3.7
2011 3,084,696,000 0.0
-0.2
2012 3,121,712,000 1.2
1.2
2013 3,066,192,428b -1.8
3.5
Source: Table created by CRS using data from the Department of Education and the Department of Labor,
Bureau of Labor Statistics. Budget data are from the ED website at http://www2.ed.gov/about/overview/budget/
tables.html and http://www2.ed.gov/about/overview/budget/history/index.html. Inflation data were generated on
the BLS website at http://www.bls.gov/cpi.
Notes: The inflation rate refers to the change in the not-seasonally adjusted CPI-U for all items for the 12
months ending the October two years prior to the fiscal year. Annual appropriation level includes grants to
states and territories as well as an Indian set-aside between 1.0% and 1.5% of the total grant.
a. The American Recovery and Reinvestment Act (P.L. 111-5) provided supplemental grants to state VR
agencies. These funds did not require a state match.
b. The initial appropriation for FY2013 was $3,230,972,000 or a 3.5% increase from the prior fiscal year. This
appropriation was reduced to the listed level under the sequestration process under the Budget Control
Act of 2011 (P.L. 112-25).
Individual Eligibility for Vocational Rehabilitation
Services
Individual participation in the VR program is voluntary. The application process varies by state
but individuals seeking VR services typically apply directly to their state agency. Since VR is a
mandatory partner in the One-Stop workforce development system, prospective clients may also
apply at local One-Stop career centers.11 State VR agencies are generally required to make a
determination regarding an applicant’s eligibility for VR services within 60 days of application.12

11 For background on the One-Stop Delivery System, see CRS Report R41135, The Workforce Investment Act and the
One-Stop Delivery System, by David H. Bradley.
12 See 29 U.S.C. 722(a)(6). State agencies are exempt from the 60-day limit in “exceptional and unforeseen
circumstances” and when the agency is still assessing an applicant.
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Eligibility Criteria
The Rehabilitation Act states that to be eligible for VR services, an individual must establish that
he or she
(i) has a physical or mental impairment which for such individual constitutes or results in a
substantial impediment to employment, and (ii) can benefit in terms of an employment
outcome from vocational rehabilitation services pursuant to Title I, III, or VI of [the
Rehabilitation Act].13
To meet the first criteria above, qualified personnel must determine that the applicant has an
impairment and that the impairment is an obstacle to employment.14 Individuals who are
receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) and
wish to pursue employment are presumed to be eligible for VR services.15
All applicants are presumed to benefit from VR services and thus are assumed to meet the second
eligibility criterion. If a state agency denies an applicant on the basis of not meeting the second
criterion, the agency must provide “clear and convincing evidence that such individual is
incapable of benefiting” from VR services.16
Order of Selection and Waiting Lists
If a state VR agency anticipates that it will not have enough resources to provide services to all
eligible persons during a given fiscal year, it must notify RSA that it will implement an order of
selection plan to determine which individuals will have the first priority to receive services.
Regulations require that the order of selection plan must ensure that persons with the “most
significant disabilities” will be able to receive services before other eligible persons.17 Other
persons not placed in the priority group may be placed on a waiting list and are not guaranteed
services. A state agency is given substantial latitude in determining how it will set up its order of
selection system; neither the Rehabilitation Act nor the C.F.R. provide firm requirements on how
state agencies should determine which persons have the most significant disabilities.18

13 See 29 U.S.C. 705(20). Title I of the Rehabilitation Act authorizes the state grants discussed in this report. Title III of
the Rehabilitation Act of 1973 authorizes demonstration projects, including projects for migrant farm workers. Title VI
of the act authorizes projects with industry and supported employment programs.
14 See 34 C.F.R. 361.42(a)(i). The C.F.R. does not establish a definition for “qualified personnel.”
15 See 29 U.S.C. 722(a)(3). SSI benefits are means tested and are available to adults and children with disabilities and
persons aged 65 or older with or without disabilities. In this report, SSI benefits will only refer to benefits paid to adults
and children with disabilities. For more information on these programs, see CRS Report RL32279, Primer on
Disability Benefits: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), by Umar
Moulta-Ali.
16 See 29 U.S.C. 722(a)(2)(A).
17 See 34 C.F.R. 361.36(a)(3)(iv)(A).
18 For additional information on the procedures used to establish an order of selection system, see Ronald M. Hager,
Order of Selection for Vocational Rehabilitation Services: An Option for State VR Agencies Who Cannot Serve All
Eligible Individuals, Cornell University, Work Incentives Support Center, Policy and Practice Brief 23, November
2004; available on the Cornell University Employment and Disability Institute website at
http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1058&context=edicollect.
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Although SSDI and SSI beneficiaries are presumed to be eligible for VR services, they may
ultimately be deemed not to have the most significant disabilities by their state VR agency. In
such a case, it would be possible for a state to place a person receiving benefits from a Social
Security disability program on a waiting list.
At the conclusion of FY2011 (the most recent year for which waiting list data are available), 27
states reported a collective total of more than 34,000 individuals on order of selection waiting
lists. Many of these states, however, had relatively short waiting lists. As Table 2 shows,
individuals were concentrated in a small group of states, with 10 states accounting for about 94%
of those waiting for VR services.
Table 2. States with the Most Individuals on Order of Selection Waiting List,
End of the Fiscal Year, FY2010 and FY2011
FY2010
FY2011
Agency
Waiting List
Agency
Waiting List
Wisconsin
4,480 Ohio
4,278
Massachusetts 4,364
Wisconsin
4,127
Iowa 3,825
Iowa 3,817
Arizona 3,512
Louisiana
3,682
Tennessee 2,679
Florida
3,108
Louisiana 2,669
Virginia 3,030
Florida 2,534
Maryland
2,953
Ohio 2,369
Arizona
2,599
Maryland 1,798
Tennessee
2,412
Kentucky 1,282
New
Mexico
2,017
10-state total
29,512 10-state total
32,023
National total
32,766 National total
34,202
Source: Table created by CRS using state-level data from the Department of Education’s RSA-113, retrieved
December 10, 2012, from http://rsa.ed.gov/ahq.cfm?form_id=4.
Note: Waiting lists for states with separate agencies for the blind and all other clients are combined.
Services Provided by Vocational Rehabilitation
Agencies
State VR agencies provide customized services to their clients. Agency staff work with each
client individually to design a combination of services that is intended to help the client achieve
an employment objective. While VR agencies are required to offer certain services, there is no
standard group of services that every client receives nor is there a comprehensive list of all
services that may be provided.
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Individualized Plan for Employment (IPE)
The core of the VR service model is the Individualized Plan for Employment (IPE). After
determining eligibility (but before receiving any services), every client prepares an IPE with the
assistance of agency staff. The IPE states the client’s employment goal as well as the specific
services that the agency will provide to help the client reach that goal.
Before an IPE can be created, staff of the VR agency perform an assessment of the client. This
assessment looks at the factors that may affect the client’s prospects for employment, including
factors related to the client’s disability, work history, and educational background. The assessment
also identifies the client’s specific needs that can be met by the VR agency.
An IPE is statutorily required to include the following items:
• the specific employment outcome chosen by the client;
• the specific VR services that will be provided to the client;
• the timeline for starting services and achieving the employment outcome;
• the specific entity, selected by the client, from which services will be obtained;
• the criteria that will be used to evaluate the progress made by the client;
• the responsibilities of the client, the VR agency, and other entities included in the
IPE;
• the extended services that will be needed if the client is expected to need
supported employment; and
• the projected need for post-employment services.19
Although the staff of the VR agency provides assistance to the client in the preparation of the
IPE, it is the client that has the final say on his or her employment goal and the services that he or
she will receive. The staff member has the responsibility of providing the client with enough
information about available jobs and services to assist the client in making an informed choice
about his or her employment goal and service package. Clients may develop their own IPEs with
the assistance of persons outside of the VR agency. However, the agency must approve all IPEs
before services can be provided. The IPE is reviewed by the staff and the client at least once per
year and changes are made if necessary.
Scope and Distribution of VR Services
VR agencies are required to offer a variety of services to meet clients’ employment objectives
specified in their IPEs. These services are outlined in both statutes and regulations and can be
provided directly by the state agency or purchased from an outside provider.20

19 See 29 U.S.C. 722(b)(3).
20 See 29 U.S.C. 723 and 34 C.F.R. 361.48.
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When clients require services that may be covered by another government program, VR agencies
are considered a payer of last resort. For example, VR agencies will only pay for college
coursework after the client has applied for Pell Grants and any other federal assistance.21
The most recent expenditure data for VR services are from FY2011. Table 3 lists the distribution
of the $3.6 billion in VR services provided by state agencies in that year.22 In support of these
direct services, state VR agencies spent an additional $477 million on administrative expenses in
FY2011.
It should be noted that the 1.4 million individuals who received services in Table 3 is a very
inclusive metric that includes individuals who applied for VR services but were not sufficiently
assessed to determine eligibility for services as well as individuals who were determined to be
eligible for VR services but never developed an IPE. These issues are discussed in the “Case
Closure and Employment Outcomes” section later in this report.
Table 3. VR Services Provided by State Agencies in FY2011
Percent of All
Individuals
Served
Cost
Expenditures
Total, all client services
1,403,072
$3,603,290,068
100.0%
Assessment, counseling, guidance, and
n/aa 1,885,438,412
52.3%
placement
Assessment, counseling, guidance and
611,080b 1,496,228,006
41.5%
placement provided by agency
personnel
Assessment (purchased only)
336,373
194,472,313
5.4%
Placement (purchased only)
107,513
194,738,093
5.4%
Education and training
322,340c 800,461,292
22.2%
Job readiness and augmentative skills
71,443 192,073,695
5.3%
training
Vocational and occupational skills
64,495 161,186,777
4.5%
training
Postsecondary education
122,948
285,198,604
7.9%
Other training and education
94,317
162,002,216
4.5%
Diagnosis and treatment of physical
176,454 263,920,111
7.3%
and mental impairments
Transportation 200,904
86,039,339
2.4%
Maintenance 89,882
77,731,693
2.2%
Personal assistance service
10,264
30,003,968
0.8%
All other services to individuals
184,542
294,447,297
8.2%
Services to groups
n/a
165,247,956
4.6%

21 Federal student loans do not supercede payment by VR agencies.
22 FY2011 data from the Arkansas’s general VR agency were not available at the time of writing and are not included
in Table 3 or any estimates based on RSA-2 data. Data from the Arkansas’s VR agency for the blind are included.
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Source: Table created and percentage of expenditures calculated by CRS using aggregated state-level data from
the Department of Education’s RSA-2, generated December 10, 2012 fromhttp://rsa.ed.gov/ad-hoc-query.cfm?
tbl=vw_002. Data include all states and territorial agencies eligible for VR grants except the general VR agency in
Arkansas.
Notes: Individuals who only received services as part of a group are not included in the total. Percentages of all
expenditures subcategories may not add to 100% due to rounding.
a. Due to potential overlap of recipients of purchased assessment and placement services, an unduplicated
count of all recipients of assessment, counseling, guidance, and placement services is not available.
b. The individuals served count of assessment, counseling, guidance, and placement by agency personnel only
includes individuals that received no other services. Other counts may include individuals that are counted
in more than one category.
c. Since some clients may participate in more than one form of education and training, this unduplicated count
may be less than the sum of participants in each type of education and training.
Assessment, counseling, guidance and placement provided by agency personnel includes
services to eligible and potentially eligible individuals and accounted for 41.5% of VR service
expenditures in FY2011. These services can be provided in the context of determining eligibility,
developing an IPE, or fulfilling an IPE. This category includes the salaries and benefits for
agency personnel that provide or supervise these services. Administrative costs and administrative
personnel are not included.
Assessment (purchased only) and placement (purchased only) are similar to the services
described above but are provided by non-agency personnel. These services may be purchased
from another public entity or a private organization. Collectively, these two categories accounted
for 10.8% of VR service expenditures in FY2011.
Education and training expenditures fund the development of human capital and job skills and
represented 22.2% of service expenditures. VR agencies pay for training, but only after
“maximum efforts have been made ... to secure grant assistance in whole or in part from other
sources to pay for such training.”23 There is no federal maximum for training benefits, but many
states establish a cap or can require clients to share the costs of more expensive training.
Education and training expenditures are divided into four subcategories:
• Job readiness and augmentative skills training includes both training in “soft
skills” such as appropriate work behaviors and proper dress as well as disability-
related developmental skills such as sign language and reading Braille.
• Vocational and occupational skills training includes classroom training that
prepares students for gainful employment in a recognized occupation. Training in
this category does not lead to a degree and can come from a community college
or vocational school.
• Postsecondary education includes occupation-focused academic training at
postsecondary institutions of higher education that can lead to a postsecondary
degree.
• Other training and education includes human capital development that does
not fit into the above classifications. It may include on-the-job training,

23 See 29 U.S.C. 723(a)(5). Student loans are not considered a source of funding that supersedes VR funding.
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preparation for the General Educational Development (GED) test, and other
academic courses that are not occupation-focused.
If they are necessary as part of an individual’s IPE and not available from another source (such as
health insurance or a state Medicaid plan), diagnosis and treatment of physical and mental
impairments can be provided by a state VR agency. These expenses represented 7.3% of VR
service expenditures in FY2011. Covered treatments include prosthetic devices, eyeglasses, and,
if it is expected to reduce impediments to employment within a reasonable length of time,
corrective surgery and associated expenses.24 Diagnosis and treatment services that are provided
as part of the assessment process are classified as assessment expenditures.
Transportation costs must be paid by a VR agency if they are needed by an eligible individual to
fulfill and IPE or achieve an employment outcome. Expenditures under this category may also
pay for training in the use of a public transportation system. Total transportation expenditures
accounted for 2.4% of expenditures on VR services in FY2011. Maintenance expenditures pay
for additional subsistence costs (e.g., food, shelter, clothing) that are incurred because of
participation in a VR assessment or receipt of services under an IPE. Maintenance represented
2.2% of VR expenditures in FY2011.
Personal assistance services may include translation, reader services, or other personal attendant
services. These services accounted for less than 1.0% of VR expenditures. Services not part of the
above categories but needed for an individual to achieve an employment outcome such as
occupational licensures or post-employment services are classified as all other services and
accounted for 8.2% of VR service costs in FY2011.
In addition to the funds spent on services to individuals, about $165 million (4.6% of total
expenditures on services) was spent on services for groups. This category includes more general
VR initiatives like construction of facilities and the development of new programs.
While agencies are required to record their expenditures on each service category, they do not
publish client-level data on services received. As such, it is difficult to identify what services (and
at what cost) correspond with high levels of employment outcomes. Even if these data were
available, however, they would be of limited use from a programmatic standpoint. While VR
counselors must approve each client’s IPE, the client-directed and customized nature of the VR
program typically takes precedence over empirical evidence of successful employment
placement.
Case Closure and Employment Outcomes
A VR case can be closed with or without an employment outcome. In order to be closed with an
employment outcome, the client must have
• achieved the employment outcome specified in the client’s IPE;
• maintained the employment outcome for a period of at least 90 days;
• met with a VR counselor after 90 days of employment and agreed that the
employment outcome is satisfactory; and

24 See 29 U.S.C. 723(a)(6).
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• been informed of the availability of post-employment services.25
Table 4 presents historical data on employment outcomes among individuals that received VR
services.
Table 4. Employment Outcomes Among Cases Closed After Clients Received
Services, FY2003-FY2011
Closed without
Closed with
Employment
Percentage with
Employment
Outcomes After
Employment
Fiscal Year
Outcomes
Receiving Services
Outcomes
2003 217,557 154,702 58.4%
2004 213,432 171,643 55.4%
2005 206,695 149,534 58.0%
2006 205,796 146,344 58.4%
2007 205,448 139,103 59.6%
2008 205,023 148,853 57.9%
2009 180,570 142,393 55.9%
2010 171,966 159,344 51.9%
2011 178,289 152,282 53.9%
Source: Table created and percentage of employment outcomes calculated by CRS using state-level data from
the Department of Education’s RSA-113, retrieved December 10, 2012, from http://rsa.ed.gov/ahq.cfm?form_id=
4.
Among clients who achieved employment outcomes in FY2011, 96% worked in what RSA
defines as “competitive employment.”26 To be classified as competitive employment, work must
(1) be performed in a setting “typically found in the community in which applicants or eligible
individuals interact with non-disabled individuals” and (2) pay at least minimum wage “but not
less than the customary wage and level of benefits paid by the employer for the same or similar
work performed by individuals who are not disabled.”27
In FY2011, VR clients who achieved an employment outcome were in the program for an average
of approximately 24 months. Clients who received services but closed their cases without an
employment outcome were active in the program for an average of about 32 months.28
The data in Table 4 only consider closed cases in which clients received services under an IPE.
Table 5 contains data on all case closures in FY2011. In this year, the VR participants never
received services under an IPE in 46% of case closures. In the vast majority of cases where a case
was closed before an individual received services, it was for a reason other than a lack of

25 See 34 C.F.R. 361.56.
26 Competitive employment data from RSA-911, retrieved December 10, 2012 from http://rsa.ed.gov/ahq.cfm?
form_id=911.
27 See C.F.R. 361.5(b)(11).
28 Average duration of services calculated by CRS using state-level data on average period of service from RSA-911,
retrieved December 10, 2012 from http://rsa.ed.gov/ahq.cfm?form_id=911.
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available services: less than 2% of cases closed in FY2011 before the provision of services were
of individuals on waiting lists.
Table 5. Case Closures in FY2011
Share of All Case
Type of Closure
Individuals
Closures
Total Closures
589,763
100.0%
Achieved employment outcome
178,289
30.2%
Closed after services without
152,282
25.8%
employment outcome
Closed after eligibility established,
before Individualized Plan for
143,209
24.3%
Employment (IPE) developed
Closed after IPE developed, before
12,792
2.2%
services initiated
Closed from Order of Selection
Waiting List
4,536
0.8%
Closed from trial work/extended
evaluation
4,930
0.8%
Closed as applicant before
determination of eligibility
93,725
15.9%
Source: Table created and percentage of case closures calculated by CRS using state-level data from the
Department of Education’s RSA-113, retrieved December 10, 2012, from http://rsa.ed.gov/ahq.cfm?form_id=4.
Characteristics of the VR Population
Table 6 provides data on the characteristics of individuals that closed VR cases in FY2011 after
receiving services. The employment rate for each subset is the portion of the group that reported
an employment outcome after receiving VR services.
As Table 6 shows, more than 60% of those with closed cases in FY2011 were eligible for VR
services because of mental disability. This category included psychosocial disabilities such as
interpersonal and behavioral impairments and cognitive disabilities such as impairments
involving learning, thinking, processing information, or concentrating. Slightly less than a quarter
were eligible because of a physical impairment such as reduced mobility or limited dexterity.
Among the disability groups for which data were available, the highest employment rate was
among clients with communicative disabilities such as deafness. The lowest employment rate was
among clients with psychosocial disabilities.
More than 95% of those with cases closed in FY2011 were classified as having a significant
disability. According to the instructions for the RSA-911 form which tracks caseloads, a client
with a significant disability “has a physical or mental impairment that seriously limits one or
more functional capacities in terms of an employment outcome” and is “expected to require
multiple VR services over an extended period of time.”
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Table 6. Disabilities and Other Characteristics of Individuals with VR Cases Closed
After Receiving Services in FY2011

Closed Cases
Share of Cases Employment
Rate
Total 330,367
100.0%
54.0%




Physical
disabilities 77,237 23.4% 51.5%
Mental
disabilities 203,237 61.5% 50.5%
Cognitive
disabilities
94,300 28.5% 54.1%
Psychosocial
disabilities
82,591 25.0% 47.1%
Mental disabilities,
not elsewhere
26,346 8.0% 48.6%
classified
Communicative
31,247 9.5% 75.4%
disabilities
Visual disabilities
18,646
5.6%
65.6%




Total 330,367
100.0%
54.0%
Significant
314,385 95.2% 52.9%
Disabilities
Transition age
114,156 34.6% 51.8%
(14-24)
Over age 65
5,867
1.8%
79.4%
Source: Table created by CRS. Shares of cases and employment rates calculated by CRS by aggregating data
from each state and territorial VR agency. Date are from the Department of Education’s RSA-911, retrieved
December 10, 2012, from http://rsa.ed.gov/ahq.cfm?form_id=911.
Notes: In cases where a client has more than one disability, the client’s primary disability is listed. Data from
individuals who applied for VR but never received services under an IPE are not included.
While data on employment outcomes for different populations are valuable for understanding the
VR program, they are only a partial indicator of program success. The Rehabilitation Act states
that its purpose is not only to empower individuals with disabilities through employment but also
“to ensure that the Federal Government plays a leadership role in promoting the employment of
individuals with disabilities, especially individuals with significant disabilities.”29 This second
purpose reiterates that the program emphasizes serving the most severely disabled populations
over less-disabled populations that may be more likely to achieve an employment outcome. As
such, the identification of trends in program data (such as the higher rates of employment
outcomes for individuals with communicative disabilities) may have limited policy implications.

29 See 29 U.S.C. 701(b).
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Legislative Activity Since 2003
The authorization of appropriations for the VR grants to states program expired after FY2003 and
has been operating under automatic reauthorization provisions since then. As was the case with its
prior authorization in 1998, reauthorization efforts for the VR state grants program have been part
of a broader legislative effort to reauthorize the Workforce Investment Act of 1998 (WIA).30
The House of Representatives and the Senate each passed different WIA reauthorization bills in
the both 108th and 109th Congresses. These bills would have, if enacted, extended the
authorization of appropriations for VR state grants. These bills were part of larger packages of
legislation that would have also reauthorized other provisions of WIA.
In the 108th Congress, H.R. 1261, the Workforce Investment Act Amendments of 2003, would
have reauthorized WIA and extended the authorization for VR state grants until the end of
FY2009. The bill was passed by the House on May 8, 2003. The Senate took up H.R. 1261,
amended it by incorporating provisions from the previously introduced S. 1627, and passed the
amended version of the House bill on November 14, 2003. A conference committee was
appointed to resolve the differences in the two versions of H.R. 1261, but no conference report
was issued and the bill was not considered for final passage into law.
In the 109th Congress, the Job Training Improvement Act of 2005 (H.R. 27) would have
reauthorized WIA and would have extended the authorization for the VR grants program until the
end of FY2011. H.R. 27 was passed by the House on March 2, 2005. The Senate took up H.R. 27
and amended it by incorporating elements of the previously introduced S. 1021. This amended
version of H.R. 27 (now called the Workforce Investment Act Amendments of 2005) was passed
by the Senate on June 29, 2006. No conference committee was formed to reconcile the
differences between the two bills.
WIA reauthorization continued to be debated, but no bill came up for a floor vote in either
chamber during the 110th, 111th, or 112th Congresses.
In the 113th Congress, the House passed H.R. 803, the Supporting Knowledge and Investing in
Lifelong Skills (SKILLS) Act. This bill would reauthorize WIA as well as the VR state grants
program through the end of FY2020. Full details on this bill are available in CRS Report R42990,
Workforce Investment Act (WIA) Reauthorization Proposals in the 113th Congress: Comparison of
Major Features of Current Law and H.R. 803, by David H. Bradley and Benjamin Collins.

30 For more information on WIA, see CRS Report R41135, The Workforce Investment Act and the One-Stop Delivery
System, by David H. Bradley.
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Appendix A. Formula for State VR Grant
Allotments
The VR grant allotment process for states and territories consists of a series of steps that consider
a jurisdiction’s population, per capita income, and VR allocation in FY1978. The example of
Utah’s allocation in FY2008 will be used to illustrate the role of each factor.31
Step 1. Distribute 1978 allocations
From the total amount available for grants,32 each state and territory receives an allocation equal
to its grant in FY1978, which was determined by the state’s population at this time. This
component is fixed and the first $759,317,831 in VR funds are distributed in the same way every
year. Utah’s annual allocation from this component is $5,559,165.
Step 2. Determine excess amount
The remainder of the available grant funds that are not allocated by the 1978 grants is referred to
as the excess amount. The excess amount is then equally divided into two parts that are allocated
in steps 4 and 5.
In FY2008, the total amount available for grants was $2,839,152,117. Once the FY1978
allocations were subtracted, the excess amount was $2,079,834,286.
Step 3. Calculate each state’s allotment percentage
The VR grant formula calculates a biennial allotment percentage for each state that considers the
state’s per capita personal income as reported by the Department of Commerce. State and national
per capita income levels are determined by averaging the three most recent years of data, the most
recent of which is typically two years prior to the fiscal year. For example, the allotment
percentages that were used in FY2008 and FY2009 were calculated using per capita income data
from 2004-2006.
To calculate a state’s allotment percentage, the per capita income of the state is divided by the
national per capita income. The resulting quotient is then multiplied by 50%. The resulting
product is then subtracted from 100%. The resulting difference is the state’s allotment percentage.
A state’s allotment percentage can also be expressed in the following equation:
⎛
pitaIncome
StatePerCa
⎞
ercentage
AllotmentP
=
%
100 − ⎜⎜
× %
50 ⎟⎟
⎝
ome
rCapitaInc
NationalPe
⎠
A state’s per capita income relative to the national per capita income has an inverse relationship to
its allotment percentage. States with below-average per capita incomes will have a higher

31 The data used for these calculations were acquired from the Department of Commerce’s website in November 2011.
The data from the reference periods may have been revised since their use in the formula. This illustration also rounds
certain figures. As such, this exercise described in this section may not precisely mirror the actual allocation process in
FY2008.
32 “The total amount available for grants” refers to the total annual appropriation for VR state grants minus the
American Indian set-aside of between 1.0% and 1.5% of the total appropriation required by 29 U.S.C. 730(c).
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allotment percentage (and subsequently higher formula grant) than states with per capita incomes
above the national average.
No state may have an allotment percentage less than 33.3% or greater than 75%. If a state’s
allotment percentage falls outside of these boundaries, it is automatically increased to 33.3% or
decreased to 75%. The allotment percentage formula is not used for territories or the District of
Columbia. The allotment percentage for these jurisdictions is automatically set to 75%.33
In the example of Utah in FY2008, the state’s per capita income was $29,131 and the national per
capita income was $35,695. Using the process above, the state’s allotment percentage was 59.2%.
Step 4. Allot the first half of the excess amount using a formula
Each state’s and territory’s share of the first half of the excess amount is determined by
multiplying the population of the state by its allotment percentage determined in step 3. The
resulting product is then divided by the sum of the corresponding product for all states and
territories. The resulting fraction is then multiplied by one-half of the excess amount to determine
the second component of the state’s formula allocation.34 In an equation, this step is as follows:
(
ation
StatePopul
×
ercentage
AllotmentP
)
nt
ExcessAmou
∑
(
×

ation
StatePopul
×
ercentage
AllotmentP
)
2
AllStates
In Utah in FY2008, its population during the reference period was 2,525,507. Multiplying the
population by the state’s allotment percentage of 59.2 yields 149,510,014. The sum of the
corresponding products for all states was 15,286,042,168. Dividing Utah’s product by that of the
sum of all the states yields a share of 0.978%. Multiplying this share by the half of the excess
amount allocated in this step ($1,039,917,143) yields $10,170,390 for Utah.
Step 5. Allot the second half of the excess amount using a formula
The next component of the formula is the same as that in step 4 except that the allocation
percentages are squared. This change results in the following equation:
(
2
ation
StatePopul
×
ercentage
AllotmentP
)
nt
ExcessAmou
∑
(
×

2
ation
StatePopul
×
ercentage
AllotmentP
)
2
AllStates
Squaring the allotment percentage increases its influence on the grant size in this step, leading to
higher grants for states with high allotment percentages. In the case of Utah, the square of its
allotment percentage calculated (59.2 x 59.2) was 3,504. Multiplying this product by its
population yields a product 8,849,376,528. This product is then divided by the aggregate sum of
the corresponding products for all the states and territories (786,522,143,805). The resulting
quotient of 1.125% is the portion of the excess amount allocated in this step that will be allocated
to Utah. Since half of the excess amount is allocated in this step, Utah’s share is $11,699,068
($1,039,917,143 x .01125 = $11,699,068).

33 See 29 U.S.C. 706.
34 See 29 U.S.C. 730. This statute outlines steps 4-7 of the allotment process.
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Step 6. Sum allotments for preliminary formula grant
The resulting allotments from steps 1, 4, and 5 are then combined for the state’s preliminary grant
size. In the case of Utah, $5,559,165 + $10,170,390 + $11,699,068 = $27,428,623.
If every state’s grant is at least one-third of 1% of the total appropriation ($9,463,840 in FY2008),
no further changes are needed.35 Historically, several states required reallocated funds to reach
this minimum.
Step 7. Adjust grants for small state minimums
If there are states with preliminary final grants states below the minimum, their grants are
increased to the required level and the grants of other states are reduced in proportion to their
share of the total appropriation. In FY2008, six states’ formula allocations were lower than the
minimum. In order for these states to receive $9,463,840 each, Utah’s allocation was reduced
from $27,428,623 to its final formula allotment of $27,275,860.

35 The minimum grant level applies to the 50 states, the District of Columbia, and Puerto Rico, but does not apply to the
other territories.
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Appendix B. Final Grants to States and Territories,
FY2010-FY2012
Table B-1. Final VR Grants to States and Territories, FY2010-FY2012
FY2010
FY2011
FY2012
Alabama $59,746,023
$59,101,952
$54,911,519
Alaska $11,157,490
$11,657,490
$11,479,380
Arizona $64,465,810
$64,736,995
$62,823,314
Arkansas $44,037,738
$45,995,973
$44,873,806
California $290,143,755
$289,165,617
$294,857,633
Colorado $39,952,101
$40,186,308
$40,548,289
Connecticut $31,121,705
$24,053,270
$32,286,791
Delaware $10,807,490
$10,457,490
$10,779,380
District of Columbia
$13,345,845
$14,872,642
$12,859,214
Florida $159,153,979
$155,697,699
$139,414,681
Georgia $76,510,963
$64,749,034
$98,771,065
Hawaii $13,232,080
$12,899,816
$12,884,686
Idaho $15,816,223
$15,481,337
$16,264,148
Illinois $117,943,665
$114,847,171
$111,621,896
Indiana $62,548,597
$64,145,199
$62,187,711
Iowa $27,328,850
$26,235,678
$25,629,706
Kansas $29,188,253
$29,103,545
$28,478,239
Kentucky $47,154,772
$46,185,590
$46,150,084
Louisiana $31,482,174
$33,432,451
$35,542,942
Maine $16,689,618
$16,496,411
$16,607,909
Maryland $47,029,781
$47,116,848
$47,258,836
Massachusetts $67,075,320
$68,679,732
$62,794,197
Michigan $102,486,112
$98,698,679
$104,509,250
Minnesota $47,219,322
$47,461,786
$48,252,516
Mississippi $44,514,376
$44,457,037
$44,516,178
Missouri $62,515,686
$65,177,150
$65,513,320
Montana $12,087,792
$11,750,000
$13,477,988
Nebraska $19,872,496
$19,982,695
$19,872,497
Nevada $17,364,524
$18,616,938
$12,436,585
New Hampshire
$11,650,039
$11,973,927
$11,879,724
New Jersey
$59,391,388
$57,620,257
$57,356,004
New Mexico
$23,987,102
$22,020,044
$23,956,821
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FY2010
FY2011
FY2012
New York
$176,844,444
$169,121,277
$147,633,943
North Carolina
$106,916,369
$103,489,985
$106,173,470
North Dakota
$10,157,490
$10,157,490
$12,126,798
Ohio $98,527,009
$105,641,313
$96,889,776
Oklahoma $41,092,230
$43,404,870
$44,256,861
Oregon $39,071,791
$39,058,861
$39,356,101
Pennsylvania $128,694,693
$99,130,376
$121,560,791
Rhode Island
$13,007,431
$15,953,474
$13,019,092
South Carolina
$55,390,599
$49,971,590
$56,011,693
South Dakota
$10,157,490
$10,157,490
$10,592,380
Tennessee $72,509,053
$72,682,343
$65,912,937
Texas $235,794,815
$234,145,010
$238,193,072
Utah $37,672,947
$37,874,343
$36,873,493
Vermont $13,247,490
$14,815,490
$16,079,380
Virginia $71,479,094
$73,421,635
$71,532,018
Washington $52,131,288
$53,688,910
$54,273,985
West Virginia
$54,579,169
$47,955,763
$43,244,551
Wisconsin $55,648,243
$57,088,852
$55,648,243
Wyoming $8,912,009
$8,920,659
$9,254,962




American Samoa
$1,081,888
$1,084,072
$958,889
Guam $2,052,208
$2,992,651
$2,900,220
Northern Mariana Islands
$877,825
$820,583
$751,550
Puerto Rico
$75,355,380
$75,015,072
$72,425,264
U.S. Virgin Islands
$2,101,025
$2,286,262
$1,978,643




Indian set-aside
$42,899,000
$43,550,117
$37,898,000




Unmatched funds
$1,473,951
$59,210,751
$95,369,579




Total $3,084,696,000
$3,084,696,000
$3,121,712,000
Source: State grant tables on United States Department of Education website at http://www2.ed.gov/about/
overview/budget/statetables/index.html.
Notes: The total appropriations level did not change between FY2010 and FY2011 because of a negative 0.2%
change in the Consumer Price Index during the applicable reference period.










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Author Contact Information

Benjamin Collins

Analyst in Labor Policy
bcollins@crs.loc.gov, 7-7382


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