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Vocational Rehabilitation Program Organizational Structure: Designated State Agency and Designated State Unit

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The requirements for the organizational structure of the designated state agency (DSA) and designated state unit (DSU) for the Vocational Rehabilitation (VR) program can be found in Section 101(a)(2)(A)and (B) of the Rehabilitation Act of 1973 (Rehabilitation Act), as amended by the Workforce Innovation and Opportunity Act (WIOA), and implementing regulations in 34 C.F.R. 361.13(a). These provisions stipulate that the VR State Plan shall designate a state agency as the sole state agency to administer the plan, and that the state agency designated to administer the VR State Plan must be either: 1) a state agency primarily concerned with VR, or VR and other rehabilitation, of individuals with disabilities; or 2) a state agency that includes a VR bureau, division or other organizational unit (Section 101(a)(2)(B) of the Rehabilitation Act and 34 C.F.R. 361.13(a)(1)).

If the state agency contains a VR bureau, division or other organizational unit, Section 101(a)(2)(B)(ii) of the Rehabilitation Act and 34 C.F.R. 361.13(b) require that the VR bureau, division or VR organizational unit (i.e., designated state unit) must:

• be primarily concerned with VR, or VR and other rehabilitation, of individuals with disabilities, and be responsible for the VR program of the DSA (34 C.F.R. 361.13(b)(1)(i));

• be administered by a full-time director (34 C.F.R. 361.13(b)(1)(ii));

• employ staff on the rehabilitation work of the organizational unit all or substantially all of whom devote their full time to such work (34 C.F.R. 361.13(b)(1)(iii)); and

• be located at an organizational level and have an organizational status within the DSA comparable to that of other major organizational units of the DSA (34 C.F.R. 361.13(b)(1)(iv)).

Technical assistance on organizational requirements:

If your state is considering a change in organizational structure that will affect the VR program, you should consult with RSA as soon as you have information available regarding the proposed reorganization. The reorganization will require RSA approval before it can be implemented and will also require amendments to the State Plan. The paragraphs that follow provide brief technical assistance on the four requirements for the DSU listed above. RSA‘s TAC 12-03 Organizational Structure and Non-Delegable Responsibilities of the Designated State Unit for the VR Program, dated April 16, 2012, has excellent discussions of these requirements.

The primary function of the DSA or the DSU, if one exists, must be the delivery of VR or VR and other rehabilitation services to individuals with disabilities. The preamble to the 1997 VR regulations clarifies that “other rehabilitation” “includes, but is not limited to, other programs that provide medical, psychological, educational, or social services to individuals with disabilities.” The concept of "other rehabilitation" is broad, but not all human service programs would qualify as "other rehabilitation." For instance, programs for the aging or child welfare would not qualify as "other rehabilitation" because they are not primarily concerned with the rehabilitation of individuals with disabilities, even though they may sometimes benefit individuals with disabilities.

Full-Time Director: If a DSU has been established within a larger DSA, the DSU must employ a full-time director. The DSU director must devote their full time to the work of the DSU, which would include the VR program and any other program under the purview of the DSU. While the director is not required to devote their full time to the VR component of the DSU’s work, title I funds must be used only to support the work of the director as it relates to the VR program.

Staff Performing VR and Other Rehabilitation Work: The DSA and the DSU, if one exists in the state, must be primarily concerned with the VR or VR and other rehabilitation needs of individuals with disabilities. Although the work of the DSU can encompass activities that extend beyond VR and other rehabilitation, the Rehabilitation Act and the VR implementing regulations prescribe that "all or substantially all staff" – i.e., 90 percent -- of the DSU must devote their full time to the rehabilitation work of the unit, i.e., VR or vocational and other rehabilitation. In other words, no more than ten percent of the DSU staff can devote any portion of their time to other programs and activities carried out by the DSU that do not constitute VR or other rehabilitation. In determining compliance with this requirement, RSA takes into account the total staff currently employed by the DSU and the manner in which they are apportioned to each of the DSU’s activities to determine the percentage that work full-time on the rehabilitation work of the DSU.

Organizational level and Status of the DSU: When evaluating whether the DSU is at a comparable level to other major organizational units within the DSA, it has been the long-standing policy of RSA that such an evaluation will take into consideration such factors as:

  • The directness of the reporting line from the VR director to the head of the DSA;

  • The title, status, and grade of the VR director, as compared with those of the heads of other organizational units within the DSA;

  • The extent to which the VR director can determine the scope and policies of the VR program; and

  • The kind and degree of authority delegated to the director of the DSU for the administration of the VR program.

Such an analysis is challenging and a multitude of details about the functions and structure of a particular state must be considered in making the determination that the VR unit is positioned such that the VR director and VR staff can carry out the non-delegable functions described below. Discussions with RSA in making these determinations are essential.

Regulations found in 34 C.F.R. 361.13(c) require that certain functions be reserved solely to the staff of the DSU and that these functions may not be delegated to any other agency or individual. At a minimum, these “non-delegable” responsibilities relate to decisions affecting:

Technical Assistance on Non-Delegable Functions:

RSA has long interpreted these provisions to require that these non-delegable functions and activities should be carried out by the DSU's own staff. In addition, the VR unit must have clear and direct supervision over VR program staff with regard to program policy, operations, and related program matters. The non-delegation provisions are intended to strengthen the role of the DSU by requiring that the unit have a substantial role in all decisions affecting the administration of the VR program whenever management functions within the State agency are centralized. When certain functions, such as human resource development or financial management, are placed at the DSA or departmental level, it is important to assess the manner in which the DSU exercises a strong voice or provides effective input into the policy, planning, operations or similar program decisions made in these areas. Examples of these functions include, but are not limited to, development of legislative proposals and regulations regarding VR program funding and services; program planning and evaluation; personnel management; implementation and use of management information systems; and fiscal and statistical reporting.

Regarding the allocation and expenditure of VR funds, consideration must be given as to whether the DSU has responsibility for the approval of expenditures, the development and approval of contracts, budgeting for the program, development of the cost allocation plan, and the procurement process. Because the DSU is the entity solely responsible for the expenditure and allocation of VR funds, the DSU director must be privy to all financial information about the VR program and should be in direct control of the decisions affecting the VR program. Decisions regarding staffing levels, priority setting, and the awarding of contracts fall within the scope of the expenditure and allocation of VR funds. Therefore, decisions related to these matters require the DSU to determine where to spend its resources for the benefit of the program and to meet the needs of individuals with disabilities within the state. For example, while the DSA may centralize contracting processing,

decisions involving whether to contract for a service, the amount to be contracted, and the service to be procured, must be retained by the DSU, since those decisions pertain to the allocation and expenditure of VR funds and the provision of VR services.


Both of the Technical Assistance Circulars listed below were developed prior to the passage of WIOA and the publication of final regulations in August 2016. Therefore, some of the citations and references may be somewhat dated, particularly in TAC-13-02. However, the principles discussed are sound.