Title III, Older Americans Act: Carryover Funds Are Not Creating a
Serious Meal Service Problem Nationwide (Letter Report, 01/09/2001,
GAO/GAO-01-211).

Under Title III of the Older Americans Act, the Administration on Aging
(AoA) distributes grants to states on the basis of their proportional
share of the total elderly population in the United States. These grants
are then disbursed to more than 600 area agencies nationwide, and are
used to fund group and in-home meals, as well as support services,
including transportation and housekeeping. The grants are further
subdivided by these agencies to more than 4,000 local service providers.
AoA requires that states obligate these funds by September 30 of the
fiscal year in which they are awarded. Also, states must spend this
money within two years after the fiscal year in which it is awarded.
During this time AoA does not limit or monitor the amount of unspent
funds that states may carry over to the succeeding fiscal year. GAO
examined whether states were using Title III carryover funds to expand
their meal service programs for the elderly beyond a level sustainable
by their annual allotments alone. GAO found that the buildup and use of
Title III carryover funds to support elderly nutrition services does not
appear to be a widespread problem. However, AoA does not monitor the
states' buildup of carryover funds. As a result, the agency has little
assurance that it could identify meal service problems that could emerge
in the future.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GAO-01-211
     TITLE:  Title III, Older Americans Act: Carryover Funds Are Not
	     Creating a Serious Meal Service Problem Nationwide
      DATE:  01/09/2001
   SUBJECT:  Elderly persons
	     Food programs for the elderly
	     Unexpended budget balances
	     Federal/state relations
	     Grants to states

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GAO-01-211
A

Report to the Honorable Christopher Shays, House of Representatives

January 2001 TITLE III, OLDER AMERICANS ACT

Carryover Funds Are Not Creating a Serious Meal Service Problem Nationwide

GAO- 01- 211

Lett er

January 9, 2001 The Honorable Christopher Shays House of Representatives

Dear Mr. Shays: The Older Americans Act (42 U. S. C. 3001- 3058ee) is
intended to assist elderly Americans (aged 60 and over) by removing barriers
to independent living through a variety of long- term care services in
communities across

the nation. Administered by the Administration on Aging (AoA) in the
Department of Health and Human Services, Title III of the Act authorizes
nutrition services such as congregate (group) and in- home meals, as well as
support services, including transportation and housekeeping. Under Title
III, program funds are to be distributed as grants to states on the basis of
their proportional share of the total elderly population in the United
States. 1 In fiscal year 1999, the 50 states; the District of Columbia; and
the U. S. territories, including American Samoa, the Commonwealth of the
Northern Marianas, Guam, the Commonwealth of Puerto Rico, and the U. S.
Virgin Islands (hereafter referred to as the 56 states), received about $785

million to operate Title III services. The bulk of these funds-$ 486
million- was directed to nutrition services.

Most states generally pass on their Title III funds to more than 600 area
agencies nationwide, such as county human services organizations, that
oversee the nutrition and support services provided by these funds at the
local level. In turn, most of these area agencies award subgrants or

contracts to about 4,000 local service providers, which deliver these
services in a variety of settings, including senior centers, schools, and
homes. Some states award Title III funds directly to the local service
providers.

1 We previously reported that Title III funds were not distributed to the
states according to the statute. See Title III, Older Americans Act:
Administration on Aging Funding Method Underfunds High- Elderly- Growth
States (GAO/ HEHS- 00- 107, June 30, 2000). The Department of Health and
Human Services disagreed with the report's conclusions, asserting that the
method currently used by AoA is not inconsistent with the law and that,
absent a definitive determination of congressional intent, a unilateral
modification (of the method) is not appropriate.

AoA requires that states obligate Title III funds by September 30 of the
fiscal year in which they are awarded to a state. 2 Furthermore, AoA
requires the states to spend these obligated funds within 2 years after the
year in which they are awarded (e. g., funds awarded in federal fiscal year
1999- October 1, 1998, to September 30, 1999- must be spent by September 30,
2001). 3 AoA does not limit or monitor the amount of unspent funds that
states and area agencies may carry over to the succeeding fiscal year during
that time. However, AoA allows states to limit the amount of

carryover funds used by their area agencies. States may also transfer Title
III funds, with some limits, between their allotments for nutrition services
(Part C) and support services (Part B), as well as between their allotments
for congregate meal services (Part C- 1) and home- delivered meal services
(Part C- 2). You asked us to review whether states may be using Title III
carryover funds to expand their meal service programs for the elderly beyond
a level sustainable by their annual allotments alone. Your request stemmed
from a recent incident in Connecticut wherein one local service provider
faced a serious funding shortfall because the provider had relied upon a
large

amount of carryover funds to expand the number of meals served beyond a
level supportable solely by its annual nutrition allotment. When these
carryover funds were depleted, the provider faced the prospect of having to
reduce the number of meals served by 16 percent, thereby putting the
nutritional welfare of about 175 older persons at risk. 4 To determine
whether this incident in Connecticut was unique or a sign of a potentially
broader problem, we reviewed the extent to which Title III- C carryover
funds are used by state and area agencies to support nutrition services for
the elderly. This report provides information on the (1) levels of Title
III- C carryover funds available in fiscal year 1999, (2) extent to which
the states and area agencies have established limits on the amount of

funds carried over, and (3) extent to which carryover funds are used to
expand meal services and the effects that reductions in the amount of
carryover funds from one year to the next have had on meal services. This 2
An obligation represents a commitment to pay out money, as distinct from an
actual payment. 3 AoA Fiscal Guide Older Americans Act Titles III and VII
(Mar. 2000). 4 Since this incident, Connecticut has adopted a limit on the
amount of funds that area agencies and local service providers may carry
over to subsequent years.

report also provides information on the extent to which states transferred
Title III funds among nutrition and support services and the extent to which
states allow area agencies to transfer Title III funds. To address these
objectives, we conducted national surveys of the 56 states and 652 area
agencies that received Title III nutrition and support services funds in
fiscal year 1999. We received survey responses from all of the states and
563 of the area agencies- for a response rate of 86 percent. We performed
our review from March through December 2000 in accordance

with generally accepted government auditing standards. Appendix I contains a
detailed description of the methodology we used to conduct this review.
Results in Brief Nationwide, the total amount of reported Title III- C
carryover funds available in fiscal year 1999 was relatively small-$ 24.6
million-

representing about 5 percent of the total nutrition allotment that year. The
level of carryover funds reported by the states varied considerably.
Twentytwo states reported that they had no carryover funds, while 34 states
reported carryover funds that ranged from less than 1 percent of their
fiscal year 1999 nutrition allotment to almost 50 percent (in 1 state).
Seven states had carryover funds that exceeded their fiscal year 1999
nutrition allotment

by at least 15 percent. Additionally, two- thirds of the carryover funds-
$16.3 million- were concentrated in seven states.

Half (28) of the 56 states have limits on the amount of Title III- C funds
that their area agencies and/ or local service providers may carry over from
one fiscal year to the next, and half do not. Fifteen of the 28 states that
have limits ban the use of any carryover funds. The remaining 13 states
restrict the amount that may be carried over, with an average reported limit
of about 8 percent of their annual nutrition allotment. In the 28 states
that do not impose carryover limits, some area agencies imposed restrictions
on the amount of funds that their local service providers can carry over to
subsequent years.

While area agencies have used carryover funds to expand their meal services,
state and area agencies identified relatively few instances of major
cutbacks in meal services that occurred in fiscal year 1999 because of
reductions in carryover funds. For example, the 17 states that had

information on area agencies' use of carryover funds reported that 133 of
their 234 area agencies receiving nutrition funds for fiscal year 1999 had
used carryover funds to expand the number of meals served that year.

However, only nine area agencies in these states had to reduce the number of
meals served by 10 percent or more in fiscal year 1999 because their
carryover funds were less than in prior years. Forty- seven states reported
that they transferred funds among Title III nutrition and support services
in fiscal year 1999. These transfers totaled about $76 million, the bulk of
which-$ 71 million- were moved out of the allotment for congregate meals and
into the allotments for home- delivered meals and/ or support services. The
amount of authority that states gave to area agencies and/ or local service
providers to transfer Title III funds varied. For example, 9 states reported
that they do not allow their area agencies and/ or providers to make any
transfers, whereas 10 states permit the transfer of funds up to the maximum
amount permitted by AoA without

prior state approval. Although the use of carryover funds to support
nutrition services for the elderly does not currently appear to be creating
a serious meal service problem nationwide, we are recommending that AoA
monitor the levels of unspent Title III- C funds that states carry over to
the succeeding fiscal year

and work with the states that build up substantial amounts of carryover
funds to develop a strategy to spend down such funds in a manner that
minimizes the potential disruption of meal services for the elderly. Such
monitoring could be performed with available resources if it is done as a
part of the agency's routine program- monitoring activities.

Background According to the Congressional Research Service, Title III
nutrition funds provide almost 3 million older persons with about 240
million meals each year. Forty- eight percent of the meals are provided in
congregate settings, such as senior centers, and 52 percent are provided to
frail older persons in their home. 5 In fiscal year 1999, about $785 million
in Title III nutrition and support

services funds was distributed to 56 states. A total of about $486 million
was allotted for congregate and home- delivered meals (Title III- C). Table
1 shows how these federal funds were distributed to the states.

5 See Older Americans Act: Programs and Funding, Congressional Research
Service (CRS 95917, Mar. 23, 2000).

Table 1: Distribution of Title III Nutrition and Support Services Funds to
States in Fiscal Year 1999 State Congregate meals Home- delivered meals
Support services Total

Alabama $6, 039, 123 $1, 809, 239 $4, 842,820 $12, 691, 182 Alaska 1, 868,
496 560,000 1, 498,161 3, 926, 657 American Samoa 591, 564 128,489 459,891
1, 179, 944 Arizona 4, 775, 258 1,480,743 3, 868,799 10, 124, 800 Arkansas
4, 143, 271 1,213,921 3, 314,230 8, 671, 422 California 34, 748, 156 10,
623, 109 27, 928,704 73, 299, 969 Colorado 3, 700, 816 1,165,772 2, 985,170
7, 851, 758 Connecticut 5, 220, 579 1,530,315 4, 176,059 10, 926, 953
Delaware 1, 868, 496 560,000 1, 498,161 3, 926, 657 District of Columbia 1,
868, 496 560,000 1, 498,161 3, 926, 657 Florida 23, 377, 390 7,330,949
18,845,215 49, 553, 554 Georgia 7, 403, 877 2,276,311 5, 954,800 15, 634,
988 Guam 934, 248 280,000 749,081 1, 963, 329 Hawaii 1, 931, 185 560,000 1,
541,101 4, 032, 286 Idaho 1, 920, 049 560,000 1, 528,735 4, 008, 784
Illinois 17, 201, 474 5,023,565 13,754,216 35, 979, 255 Indiana 8, 068, 912
2,396,588 6, 464,097 16, 929, 597 Iowa 5, 058, 716 1,465,547 4, 041,475 10,
565, 738 Kansas 4, 071, 253 1,184,543 3, 254,127 8, 509, 923 Kentucky 5,
544, 695 1,640,545 4, 440,065 11, 625, 305 Louisiana 5, 618, 089 1,666,743
4, 500,215 11, 785, 047 Maine 1, 987, 094 579,885 1, 588,866 4, 155, 845
Maryland 5, 865, 746 1,784,972 4, 712,043 12, 362, 761 Massachusetts 9, 741,
446 2,841,215 7, 788,111 20, 370, 772 Michigan 12, 869, 841 3,852,626
10,319,311 27, 041, 778 Minnesota 6, 367, 865 1,881,838 5, 098,552 13, 348,
255 Mississippi 3, 872, 209 1,135,700 3, 097,807 8, 105, 716 Missouri 8,
428, 910 2,471,390 6, 742,776 17, 643, 076 Montana 1, 897, 134 560,000 1,
505,005 3, 962, 139 Nebraska 2, 726, 708 787,490 2, 177,721 5, 691, 919
Nevada 1, 962, 054 600,833 1, 577,444 4, 140, 331 New Hampshire 1, 923, 749
560,000 1, 531,005 4, 014, 754 New Jersey 12, 140, 147 3,587,191 9, 719,791
25, 447, 129 New Mexico 1, 916, 248 652,134 1, 540,580 4, 108, 962 New York
28, 843, 281 8,363,478 23,044,878 60, 251, 637

(Continued From Previous Page)

State Congregate meals Home- delivered meals Support services Total

North Carolina 8, 800, 131 2,734,705 7, 086,610 18, 621, 446 North Dakota 1,
869, 416 560,000 1, 498,161 3, 927, 577 Northern Marianas 239, 085 70, 000
187,270 496, 355 Ohio 16, 322, 930 4,843,020 13,074,808 34, 240, 758
Oklahoma 5, 056, 269 1,491,095 4, 047,510 10, 594, 874 Oregon 4, 281, 902
1,301,397 3, 439,423 9, 022, 722 Pennsylvania 21, 196, 002 6,212,560
16,954,955 44, 363, 517 Puerto Rico 3, 573, 974 1,115,073 2, 879,810 7, 568,
857 Rhode Island 1, 943, 186 560,000 1, 548,342 4, 051, 528 South Carolina
4, 341, 806 1,348,009 3, 496,056 9, 185, 871 South Dakota 1, 884, 611
560,000 1, 498,161 3, 942, 772 Tennessee 7, 118, 274 2,144,262 5, 711,673
14, 974, 209 Texas 19, 478, 220 6,005,887 15,671,503 41, 155, 610 U. S.
Virgin Islands 934, 248 280,000 749,081 1, 963, 329 Utah 1, 951, 811 598,549
1, 565,062 4, 115, 422 Vermont 1, 868, 496 560,000 1, 498,161 3, 926, 657
Virginia 7, 416, 233 2,281,158 5, 965,011 15, 662, 402 Washington 6, 216,
282 1,914,209 5, 000,722 13, 131, 213 West Virginia 3, 291, 161 955,723 2,
630,062 6, 876, 946 Wisconsin 7, 550, 157 2,229,222 6, 044,551 15, 823, 930
Wyoming 1, 868, 496 560,000 1, 498,161 3, 926, 657

Total $373, 699, 264 $111, 999, 998 $299,632,266 $785, 331, 528

Source: Budget Office, AoA.

Fiscal year 2000 funding for the Older Americans Act increased about 3.5
percent above the level for fiscal 1999. Funds for the home- delivered meals
program increased by $35 million- 31 percent over the level for fiscal 1999.

The Nationwide Level Nationwide, the funds carried over into fiscal year
1999 reported by the

of Title III- C Carryover states represented a small percentage of the $486
million Title III- C allotment- about 5 percent, or $24.6 million. However,
the level of Funds Is Low, but carryover funds reported by the states varied
considerably. Twenty- two

Some States Have states reported that they had no carryover at the beginning
of fiscal year Relatively High Levels 1999. The remaining 34 states reported
a carryover that ranged, as a percentage of their fiscal year 1999 nutrition
allotment, from less than 1

percent in 6 states (Colorado, Kentucky, Maryland, Massachusetts, New
Mexico, and Puerto Rico) to about 50 percent in Arizona. Seven states

(Arizona, Delaware, Hawaii, Missouri, New York, Oregon, and South Dakota)
had carryover funds that exceeded their nutrition allotment for fiscal year
1999 by at least 15 percent. Additionally, two- thirds of the carryover
funds-$ 16. 3 million- were reported by seven states (Alabama,

Arizona, California, Missouri, New York, Ohio, and Texas) that had at least
$1 million in carryover funds. Table 2 shows the distribution of these
carryover funds and their respective percentage of the nutrition allotment
for each of the latter seven states above at the beginning of fiscal year
1999. (See app. II for information on the amount of carryover funds
available to each of the 56 states at the beginning of fiscal year 1999.)

Table 2: Distribution of Carryover Funds in States Having $1 Million or More
in Fiscal Year 1999 Amount of Title III- C

Amount of Title Carryover as a percentage State carryover funds III- C
allotment of Title III- C allotment

Alabama $1, 078,397 $7, 848, 362 13. 74 Arizona 3, 117,817 6, 256,001 49.84
California 1, 311,641 45, 371, 265 2.89 Missouri 1,679,360 10, 900, 300 15.
41 New York 6,308,741 37, 206, 759 16. 96 Ohio 1,686,835 21, 165, 950 7.97
Texas 1, 124,034 25, 484, 107 4.41

Total $16, 306,825 $154, 232, 744 10. 57

States may have substantial amounts of carryover funds for a variety of
reasons. For example, a state official said that the annual allotment of
Title III funds may not be received by the beginning of a state's fiscal
year because of differences between federal and state fiscal year periods
(41

states begin their fiscal year 3 months earlier than the federal government)
or delays in the federal appropriations process. States may then need to
budget their spending on the basis of funding projections. According to the

official, some states may develop more conservative spending estimates than
others. As a result, some of these states may have substantial funds that
cannot be fully spent by the end of the fiscal year. Because of this, funds
may be carried over into the next federal fiscal year.

The accumulation of carryover funds can occur at the state, area- agency,
and/ or local- service- provider level. In fiscal year 1999, about 25
percent of the nationwide carryover funds reported by the states were held
at the state level and 75 percent were held at the area- agency and/ or
local

provider level. The states reported that 341, or about 52 percent, of all
area agencies had some carryover funds available for their nutrition
programs at the beginning of fiscal year 1999. The level of carryover at the
area- agency level can vary dramatically. For example, of the 208 area
agencies that responded to our survey and reported some carryover at the
beginning of fiscal year 1999, the carryover ranged from less than 1 percent
of the fiscal year 1999 Title III- C allotment at 20 area agencies to more
than 50 percent at 3 area agencies. Most area agencies (132) reported a
carryover of from 1 to 10 percent of their annual allotment. Half of the
States Do Half of the 56 states reported that they do not restrict the
amount of Title

Not Restrict Title III- C III- C funds that their area agencies and/ or
local service providers may carry over from one year to another. Of the
remaining 28 states, 15 reported that Carryover Funds, and

neither area agencies nor local service providers are allowed to carry over
Those That Do Use a any funds, and 13 reported having limits on the amount
that their area Variety of Limits agencies and/ or local service providers
may carry over into the succeeding fiscal year.

Eleven of the 13 states with carryover limits reported that their limits
were based on a percentage of the area agencies' and/ or local service
providers' annual grant allotment. The percentage of annual grant limit
varied from 2

to 10 percent. The average reported percentage limit was about 8 percent.
The remaining two states did not specify how they limited the amount of
area- agency and/ or local- service- provider carryover. Information on each
state's policy regarding carryover by area agencies or directly funded local
service providers is shown in appendix II.

We also examined the types of limits, if any, that area agencies located in
the 28 states with no carryover limits placed on their local providers. Of
the 563 area agencies responding to our survey, 178 were located in states
that did not have carryover limits and did provide elderly meal services
primarily through local service providers. The carryover limits that the
agencies placed on their providers varied; most (97) did not allow their
providers to carry over any funds. Information on the number and percentage
of these 178 area agencies is presented in table 3 by type of area agency
carryover restriction, if any, placed on local providers.

Table 3: Number and Percentage of Area Agencies Located in States That Did
Not Have Carryover Limits and Provided Elderly Meal Services Primarily
Through Local Service Providers, by Type of Carryover Restriction Placed on
Local Providers by Area Agencies

Area agencies Type of carryover restriction Number Percent

Carryover not allowed 97 54 Carryover is limited as a specific 11 6
percentage of local providers' grant ranging from 1 to 10 percent

Carryover is limited to a maximum 2 1 dollar amount ($ 1,000 and $24,001) No
limits placed on carryover 59 33

Did not report 9 5

Total 178 100

Carryover Funds Are While some area agencies have used carryover funds to
expand their meal Used to Expand Meal

services, state and area agencies identified relatively few instances of
major cutbacks in meal services that occurred in fiscal year 1999 because
Services, but Few carryover funds were less than they were in prior years.
Additionally, from Major Impacts From

our analysis of the state and area- agency survey data, we estimate that,
Declines in Carryover

nationwide, a very small percentage of area agencies and local providers
would have to make major cutbacks in meal services in fiscal years 2000 or

Funds Were Identified 2001 because of reductions in carryover funds.

Our state survey information indicated that 37 states allowed their area
agencies to carry over unspent Title III- C funds into fiscal year 1999.
Seventeen of these states reported that 133 of their 234 area agencies had
used carryover funds to expand the number of meals served that year. 6 Only
9, or about 7 percent, of these agencies had to reduce the number of meals
served by 10 percent or more in fiscal year 1999. We estimated from 6 Of the
remaining 20 states, 5 reported that none of their 60 area agencies used
carryover funds to expand meals served, and 15 reported that they did not
have similar data for their

219 area agencies.

the states' survey data that 23, or about 4 percent, of all area agencies
nationwide may have to reduce their meal services by 10 percent or more in
fiscal years 2000 or 2001. 7

Of the 5 states that directly funded local service providers, 2 reported
that 2 of their 8 providers used carryover funds to expand the number of
meals served (neither of these providers had to reduce meals served by 10
percent or more), 2 reported that none of their 54 providers used funds to
expand the meals served, and 1 state with 37 providers reported that

comparable data on its providers were not available. We did not estimate how
many directly funded local providers may have to reduce meal services by 10
percent or more in fiscal years 2000 or 2001. The results from our area-
agency survey were similar. Of the 152 area agencies reporting that they
allow local service providers to carry over funds, about one- third (47) did
not provide information about their local service providers' use of
carryover funds to expand meal services. The 105 area agencies that reported
such information identified a total of 287 local service providers that had
used carryover funds to expand meal services in fiscal year 1999. These area
agencies identified only 20 local providers that had reduced the number of
meals served by 10 percent or more in fiscal year 1999 because of declines
in carryover funds. Again, from our analysis of the area agencies' survey
data, we estimated that about 3 percent of the approximately 4,000 local
service providers nationwide may need to reduce meals by that amount in
fiscal years 2000 or 2001 because of declines in carryover funds. 8

7 For the 15 states where data were unavailable, we estimated the future
impact by using the rate of impact on area agencies reported by other
states. 8 Eighty- four area agencies that responded to our survey did not
provide information on the future impact of the use of carryover funds to
expand meal services to the elderly, and 89 area agencies did not respond to
our survey. For these agencies, we estimated the future impact by using the
rate of impact on local service providers reported by other area agencies.

Most States Have Forty- seven of the states reported that they transferred a
total of about $76

Transferred Title III million in Title III nutrition and support services
funds during fiscal year 1999. Although funds were transferred among the two
nutrition allotments Funds and Allow Area

and the support services allotment, the bulk of the funds came out of the
Agencies Similar

congregate meal allotment. The flexibility that area agencies and local
Flexibility

providers have to transfer these funds varied. Most Transfers of Title III

As shown in table 4, the bulk of the Title III funds transferred-$ 71 Funds
Are Made Out of million- came from congregate meal allotments and were
reallocated to Congregate Meal Allotments

either the home- delivered meal or support services allotments. These
transfers resulted in a decrease of about 19 percent from the level of
funding originally allotted to the states for congregate meal services.

Table 4: Transfer of Funds Between Title III Nutrition and Support Services
Allotments Reported by States, Fiscal Year 1999

Dollars in millions

Allotment Initial

Amount of Amount of

Allotment categories allotment transfers out transfers in after transfers

Congregate meals $370 $71 $1 $300 (Part C- 1) Home- delivered 112 3 44 153

meals (Part C- 2)

Support services 298 2 30 326 (Part B) According to the Congressional
Research Service, states have increasingly transferred funds from the
congregate meal allotment to the homedelivered

meal allotment because of various factors. 9 For example, the growth in the
number of persons in the oldest age categories has created a greater demand
for the delivery of home care services, including homedelivered meals.
According to federal population projections, the number of persons who are
60 years and older will increase by 21 million, or 46 9 See Congressional
Research Service memorandum to Representative Christopher Shays (Feb. 7,
2000).

percent, over the next 16 years, while the number who are 85 years and older
will increase by 2.2 million, or 51 percent, during the same time frame. 10
In addition, many states, including Connecticut, have devoted resources to
the creation of a home- and community- based long- term care

system for older persons. Home- delivered meals represent a key component in
these systems.

As with carryover funds, states reported widely varying amounts of funds
transferred. For example, in 43 states that reported transferring funds from
their initial congregate meal allotment to their home- delivered meal
allotment, the percentage of funds transferred ranged from about 1 percent
(Wisconsin) to about 34 percent (West Virginia)- the average transfer being
12 percent. 11 Twelve states reported no transfers from their

congregate meal allotment to their home- delivered meal allotment, and one
state did not provide transfer information.

Area Agencies' Flexibility to Nine states reported that they do not allow
the transfer of Title III funds by Transfer Funds Varies

their area agencies and/ or local service providers. Other states have
adopted policies that limit the transfer of funds by area agencies and/ or
local service providers. Table 5 shows the number of states that reported a
limit on the transfer of Title III funds.

10 Data provided by the Population Projections Program, Population Division,
U. S. Census Bureau. 11 Generally, states are permitted to transfer up to 30
percent of the funds received for homedelivered nutrition services or
congregate nutrition services between those two programs. AoA is authorized
to grant waivers to states for transfers of up to an additional 10 percent
of such funds.

Table 5: Number of States Reporting a Limit on the Transfer of Title III
Funds Number of Type of limit states

Grantees must receive prior approval from the state to transfer funds- 22
grantees are not permitted to transfer more than the maximum amounts
prescribed by AoA for the state

Grantees are permitted to transfer funds up to a maximum amount 10
prescribed by AoA for the state without prior state approval Grantees must
receive prior approval from the state to transfer funds-

8 grantees may be permitted to transfer more than the maximum amount
prescribed by AoA for the state

Grantees are permitted to transfer funds up to a maximum amount set 4 by the
state without prior state approval- the maximum amount set by the state is
below the maximum amount prescribed by AoA for the state

Other type of limit 3 Transfers not allowed 9

Total 56

Conclusion At the present time, the buildup and use of Title III- C
carryover funds to support elderly nutrition services does not appear to be
a widespread problem. However, AoA does not monitor the states' buildup of
carryover funds. As a result, the agency has little assurance that it could
identify meal service problems that could emerge in the future.

Recommendation for Although the use of carryover funds to support nutrition
services for the

Executive Action elderly does not currently appear to be creating a serious
meal service problem nationwide, we recommend that the Secretary, Department
of

Health and Human Services, direct the Assistant Secretary for Aging,
Administration on Aging, to monitor the levels of unspent Title III- C funds
that states carry over to the succeeding fiscal year and work with the
states that build up substantial amounts of carryover funds to develop a
strategy to spend down such funds in a manner that minimizes the potential
disruption of meal services for the elderly. Such monitoring could be

performed with available resources if it is done as a part of the
administration's routine program- monitoring activities.

Agency Comments We provided the U. S. Department of Health and Human
Services with a draft of this report for review and comment. Department
officials agreed with our recommendation. More specifically, the Assistant
Secretary for Aging, stated that AoA will monitor those states having a
history of difficulty in controlling carryover and provide enhanced
technical assistance to ensure that these practices do not jeopardize the
program's goals. In addition, the Assistant Secretary noted that the
Department will consider the promulgation of regulations to reinforce the
grantees'

understanding of their responsibility in controlling and monitoring such
funds. The Department made no other comments on the information contained in
the draft report.

As arranged with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 10 days after
the date of this letter. At that time, we will send copies to appropriate
congressional committees; interested Members of Congress; the Honorable
Donna E. Shalala, Secretary of Health and Human Services; the Honorable
Jeanette C. Takamura, Assistant Secretary for Aging, Department of Health
and Human Services; the Honorable Jacob J. Lew, Director, Office of
Management and Budget; and other interested parties. We will also make

copies available upon request. If you have any questions about this report,
please contact me or Thomas E. Slomba, Assistant Director, at (202) 512-
5138. Key contributors to this report were Carolyn M. Boyce, Senior Social
Science Analyst; and Peter M. Bramble, Jr., Senior Food Assistance Analyst.

Sincerely yours, Robert E. Robertson Director, Education, Workforce, and
Income Security

Appendi Appendi xes x I

Scope and Methodology To address the objectives of our review, we developed
separate written mail- out surveys for state and area agencies that received
Title III nutrition and support funds, respectively, in fiscal year 1999. We
pretested the draft state survey at three states that manage senior services
(Colorado, Louisiana, and Pennsylvania), and the draft area- agency survey
at four area agencies in four states (Colorado, Louisiana, Virginia, and
West Virginia). We visited these states and area agencies to conduct each
pretest. During

these visits, we attempted to simulate the actual survey experience by
asking the state or area agency official to fill out the survey. We
subsequently interviewed the officials to ensure that the (1) questions were

readable and clear, (2) terms were precise, (3) survey did not place an
undue burden on the survey recipients, and (4) survey appeared to be
independent and unbiased. Administration on Aging (AoA) officials also
reviewed and provided comments on each draft survey.

In order to maximize the response to our surveys, we mailed a
prenotification letter to all of the 56 states 1 and 652 area agencies about
1 week before we mailed the surveys. We also sent a reminder letter to
nonrespondents about 4 weeks after the initial survey mailing and a
replacement survey for those who had not responded after about 8 weeks.
After reviewing all of the survey responses, we contacted several states by
telephone and E- mail to clarify their responses to various survey
questions. Our survey data represent the responses from all of the 56 states
and 563 of the 652 area agencies (an 86- percent response rate). We also
collected Title

III administrative and program information from AoA. We performed our work
from March through December 2000 in accordance with generally accepted
government auditing standards.

1 To simply this discussion, we refer to all of the 50 states; the District
of Columbia; and the U. S. territories, including American Samoa, the
Commonwealth of the Northern Marianas, Guam, the Commonwealth of Puerto
Rico, and the U. S. Virgin Islands, as the 56 states.

Nationwide Title III- C Carryover Funds Available to the States at the
Beginning of

Appendi x II

Fiscal Year 1999 State carryover policy for area Amount of Title III- C
Carryover as a percentage of

agencies or directly funded local State carryover funds Title III- C
allotment

service providers

Alabama $1,078, 397 13. 74 Carryover allowed without restrictions Alaska 0 0
Carryover not allowed Arizona 3, 117, 817 49. 84 Carryover allowed without
restrictions Arkansas 60, 032 1.12 Carryover allowed without restrictions
California 1, 311, 641 2.89 Carryover allowed without restrictions Colorado
29, 698 0.61 Carryover allowed without restrictions Connecticut 0 0
Carryover allowed without restrictions Delaware 678, 595 27. 94 Carryover
not allowed District of Columbia 266, 301 10. 97 Carryover allowed without
restrictions Florida 382, 053 1.24 Carryover allowed without restrictions
Georgia 0 0 Carryover not allowed Hawaii 491, 137 19. 74 Carryover allowed
without restrictions Idaho 0 0 Carryover allowed with restrictions Illinois
673, 425 3.03 Carryover allowed with restrictions Indiana 192, 314 1.84
Carryover allowed without restrictions Iowa 0 0 Carryover allowed with
restrictions Kansas 339, 064 6.45 Carryover allowed with restrictions
Kentucky 45, 723 0.64 Carryover allowed without restrictions Louisiana 0 0
Carryover not allowed Maine 0 0 Carryover allowed without restrictions
Maryland 30, 391 0.42 Carryover allowed without restrictions Massachusetts
26, 965 0. 21 Carryover allowed with restrictions Michigan 934, 983 5.59
Carryover allowed without restrictions Minnesota 0 0 Carryover allowed
without restrictions Mississippi 0 0 Carryover allowed without restrictions
Missouri 1,679, 360 15. 41 Carryover allowed without restrictions Montana
225, 000 9.16 Carryover allowed without restrictions Nebraska 214, 655 6.11
Carryover allowed with restrictions Nevada 0 0 Carryover allowed without
restrictions New Hampshire 0 0 Carryover not allowed New Jersey 989, 231
6.29 Carryover allowed with restrictions New Mexico 1, 400 0. 05 Carryover
allowed without restrictions New York 6,308, 741 16. 96 Carryover allowed
with restrictions North Carolina 0 0 Carryover not allowed

(Continued From Previous Page)

State carryover policy for area Amount of Title III- C Carryover as a
percentage of

agencies or directly funded local State carryover funds Title III- C
allotment

service providers

North Dakota 0 0 Carryover not allowed Ohio 1,686, 835 7.97 Carryover
allowed with restrictions Oklahoma 78, 447 1.20 Carryover allowed with
restrictions Oregon 847, 974 15. 19 Carryover allowed without restrictions
Pennsylvania 0 0 Carryover not allowed Rhode Island 68, 650 2.74 Carryover
allowed without restrictions South Carolina 0 0 Carryover not allowed South
Dakota 501, 163 20. 50 Carryover not allowed Tennessee 0 0 Carryover allowed
with restrictions Texas 1, 124, 034 4.41 Carryover allowed without
restrictions Utah 71, 374 2.80 Carryover allowed without restrictions
Vermont 150, 752 6.21 Carryover allowed without restrictions Virginia 400,
330 4.13 Carryover allowed with restrictions Washington 509, 670 6.27
Carryover allowed with restrictions West Virginia 0 0 Carryover not allowed
Wisconsin 0 0 Carryover allowed without restrictions Wyoming 105, 362 4.34
Carryover allowed without restrictions American Samoa 0 0 Carryover not
allowed Guam 0 0 Carryover not allowed Northern Marianas 0 0 Carryover not
allowed Puerto Rico 10, 132 0.22 Carryover allowed without restrictions U.
S. Virgin Islands 0 0 Carryover allowed with restrictions

Total $24,631, 646

(150178) Lett er

GAO United States General Accounting Office

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Appendix I

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Appendix II

Appendix II Nationwide Title III- C Carryover Funds Available to the States
at the Beginning of Fiscal Year 1999

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