Return on Investment

Prepared by the Organizational Improvement UnitOctober 26, 2012

Return on Investment (ROI) Process for Florida Division of Vocational Rehabilitation (DVR)

The process of calculating the ROI for Florida DVR falls into a number of steps. The first step includes extraction of customer data from DVR’s Rehabilitation Information Management System (RIMS) database. Data is extracted according to the relevant state fiscal year (July 1st –June 30th). Data gathered to calculate the ROI includes customers who are gainfully employed, the customer’s age when he/she left the system, their earnings before and after receiving services from DVR, and the county he/she lives in. This data is combined with tables showing which counties are associated with congressional and Florida senate, and house districts. These steps are taken using statistical software called SAS.

During the next step, a series of financial calculations are done in Microsoft Excel. Net income is calculated as the difference between customer income before and after receiving services from DVR. The number of years to retirement is calculated as sixty-seven (67) minus the customer’s age when he/she becomes gainfully employed. The net benefit from DVR is calculated as the net income projected forward as a gain in earnings until the customer retires. This is generated through a Net Present Value (NPV) calculation (with the cost of money, a ten year average of the prime rate). The cost is attained by assigning the DVR expenses to the districts based on the number of gainfully employed customers per district as a percent of the statewide total. Cost in certain pass through programs such as Centers for Independent Living are excluded from calculations because they are not related to customer gainful employment. Tax benefits are calculated by multiplying the net benefit by 19.4 percent (this number was reached by consulting governmental sources as to what the federal, state, and local tax rates were likely to be in Florida). Finally, ratios reflecting benefit to cost, and (separately) cost to tax gains are calculated. The benefit to cost ratio is calculated by dividing the benefit by cost. The cost to tax gains ratio is calculated by dividing cost by tax gains. At this point, the calculation of ROI is complete.

Santa Rosa

Okaloosa

Walton

HolmesJackson

Bay Calhoun

Gadsden

Leon

Jeffe

rson

Madison

Hamilton

Taylor

WakullaLiberty

Franklin

Gulf

Lafayette

Suwannee

Co

lum

bia

AlachuaDixie

Union

Bra

dfor

d

Gilchris

t

Baker

Nassau

Duval

ClaySt. Johns

Putnam

Flagler

MarionLevy

Citrus

Pasco

Volusia

Hernando

Sum

ter

Lake

Hillsborough

Manatee

Pinellas

Polk

Seminole

Orange Brevard

Osceola

Highlands

Sarasota

Hardee

DeSoto

Okeechobee

Charlotte

Lee

Glades

Hendry

Collier

Indian River

St. Lucie

Martin

Palm Beach

Broward

Monroe

Escambia

THE STATE OF FLORIDA

DVR customer information is collected from individual customers and compiled at the county level. This report contains information about all Vocational Rehabilitation customers served in the state of Florida.

The information contained in this report is drawn from performance-based budgeting reports prepared for the Department of Education’s Division of Vocational Rehabilitation (DVR) for State Fiscal Year 2011-2012 (July 1, 2011-June 30, 2012).

“Working to increase opportunities for employment and independence for persons

with disabilities”Miami-Dade

Washington

Florida Statewide ProfileDistrict Population

Number of counties Census Population

Total population of ALL counties in State per 2010 CensusPopulation age 16 and over in ALL Counties in State per 2010 CensusEstimated rate of employment for Floridians age 16 and over with a disability per 2010 American Community SurveyEstimated rate of employment for Floridians age 16 and over without a disability per 2010 American Community Survey

Vocational Rehabilitation CounselorsNumber of Vocational Rehabilitation Counselors carrying a caseload in ALL counties for month of July, 2011

Customers in Vocational RehabilitationAverage number of active Vocational Rehabilitation customers per month in ALL counties 55,035 Total number of customers applying for Vocational Rehabilitation services in ALL counties 31,320

Employment* Total number of Vocational Rehabilitation customers gainfully employed during State Fiscal Year* in ALL counties 6,071

*Approximate time for average customer to complete Vocational Rehabilitation and become employed is 12-24 months Proportion of customers employed at minimum wage ($7.31) or above 90.4%

Earnings for Customers Employed Projected average annual earnings for customers placed in employment in ALL counties $17,286Average hourly wage for customers placed in employment in ALL counties $10.85

Return on Investment for Gainfully Employed Customers in All Counties** Estimated income increase over work life for gainfully employed customers in all counties $1,184,396,923Estimated amount returned to economy for every dollar invested in rehabilitating the customer $6.97Estimated combined federal, state and local tax gains statewide $229,773,003

Costs Approximate expenditures from General Revenue for direct costs of services for VR customers in ALL counties (20%) $13,746,560Approximate expenditures from Federal "match" for direct costs of services for VR customers in ALL counties (80%) $54,986,241

* Total includes VR customers residing in an institutional setting during SFY 2011-2012Gainfully Employed

(%)** Calculations do not reflect VR customers residing in an institutional setting during SFY 2011-2012 Chronic Medical 13.1%

Developmental Disabilities 8.1%Learning Disabilities 1.5%Mental Health 43.8%Orthopedic 18.3%Sensory 11.5%Substance Abuse 3.6%

Disability Groups

67

448

61.5%19.5%

15,283,26618,801,310