2010 Census: Population Measures Are Important for Federal
Funding Allocations (29-OCT-07, GAO-08-230T).
The decennial census is a constitutionally-mandated activity that
produces critical data used to apportion congressional seats,
redraw congressional districts, and allocate billions of dollars
in federal assistance. This testimony discusses (1) the various
measures of population used to allocate federal grant funds (2)
how the accuracy of the population count and measurement of
accuracy have evolved and the U.S. Census Bureau's (Bureau) plan
for coverage measurement in 2010; and (3) the potential impact
that differences in population estimates can have on the
allocation of grant funds. This testimony is based primarily on
GAO's issued work in which it evaluated the sensitivity of grant
formulas to population estimates.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-08-230T
ACCNO: A77728
TITLE: 2010 Census: Population Measures Are Important for
Federal Funding Allocations
DATE: 10/29/2007
SUBJECT: Allocation (Government accounting)
Block grants
Census
Comparative analysis
Data collection
Data integrity
Federal aid to states
Federal funds
Federal grants
Federal/state relations
Funds management
Grants to states
Population growth
Population statistics
Statistical data
Surveys
2010 Decennial Census
Census Bureau American Community Survey
Census Bureau Current Population Survey
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GAO-08-230T
* [1]Population Measures Are Used in Grant Formulas
* [2]Accuracy of Population Count Is Important
* [3]Population Estimates May Affect Allocation of Federal Funds
* [4]Contacts and Acknowledgments
* [5]GAO's Mission
* [6]Obtaining Copies of GAO Reports and Testimony
* [7]Order by Mail or Phone
* [8]To Report Fraud, Waste, and Abuse in Federal Programs
* [9]Congressional Relations
* [10]Public Affairs
Testimony
Before the Subcommittee on Information Policy, Census, and National
Archives, Committee on Oversight and Government Reform, House of
Representatives
United States Government Accountability Office
GAO
For Release on Delivery
Expected at 10:00 a.m. EDT
Monday, October 29, 2007
2010 CENSUS
Population Measures Are Important for Federal Funding Allocations
Statement of Mathew Scire
Director, Strategic Issues
GAO-08-230T
Mr. Chairman, Mr. Turner, and Members of the Subcommittee:
Thank you for the opportunity to be here today to discuss the role that
the nation's population count plays in the allocation of federal funds to
states and localities. My remarks today describe (1) the various measures
of population used to allocate federal grant funds (2) how the accuracy of
the census count and measurement of accuracy have evolved, and (3) the
potential impact that differences in the census count and population
estimates can have on the allocation of grant funds.
As you know, the decennial census is a critical national effort mandated
by the Constitution. Census data are used to apportion congressional
seats, redraw congressional districts, and allocate billions of dollars in
federal assistance to state and local governments. The census count also
serves as a foundation for annual estimates of the nation's population.
Along with the decennial census count, these annual estimates directly and
indirectly affect the distribution of federal assistance to state and
local governments. The U.S. Census Bureau (Bureau) puts forth tremendous
effort to conduct an accurate count of the nation's population. However,
some degree of error in the form of persons missed or counted more than
once is inevitable. Further, because of limitations in methods for
annually estimating the population during the years between censuses, the
difference between an annual estimate of the population on census day and
the census count itself can emerge. Because many federal grant programs
rely directly or indirectly on population measures, inaccuracies in census
counts and methodological problems with population estimates can affect
the allocation of funds.
My remarks are based primarily on reports we have previously issued. To
describe the various measures of population used to allocate federal grant
funds, we examined the logistics and data from postcensal population
estimates, the American Community Survey (ACS) and the Current Population
Survey. To obtain insight on how the accuracy of the population count and
the measurement of accuracy have evolved, we reviewed information from the
Census Bureau's Decennial Statistical Studies Division, as well as
previous GAO reports.^1 To describe the potential impact that differences
in population estimates can have on the allocation of grant funds, we
relied on work we reported to this subcommittee last year, as well as
prior work.^2 We conducted our work in accordance with generally accepted
government auditing standards.
^1GAO, Federal Assistance: Illustrative Simulations of Using Statistical
Population Estimates for Reallocating Certain Federal Funding,
[11]GAO-06-567 (Washington, D.C.: June 22, 2006); GAO, 2000 Census:
Coverage Measurement Programs' Results, Costs, and Lessons Learned,
[12]GAO-03-287 (Washington, D.C.: January 29, 2003) and GAO, Formula
Grants: Effects of Adjusted Population Counts on Federal Funding to
States, [13]GAO/HEHS-99-69 (Washington, D.C.: Feb. 26, 1999).
Population Measures Are Used in Grant Formulas
Decennial census data play a key role in the allocation of many grant
programs. In fiscal year 2004, the federal government administered 1,172
grant programs, with $460.2 billion in combined obligations.^3 Most of
these obligations were concentrated in a small number of grants. For
example, Medicaid was the largest formula grant program, with federal
obligations of $183.2 billion, or nearly 40 percent of all grant
obligations, in fiscal year 2004. Many of the formulas used to allocate
grant funds rely upon measures of population, often in combination with
other factors. In addition to the census count, the Bureau has programs
that estimate more current data on population and population
characteristics that are derived from the decennial census of population.
Grant formula allocations also use the estimated data from the Bureau's
postcensal population estimates, the Current Population Survey, and the
American Community Survey.
Because the decennial census provides population counts once every ten
years, the Bureau also estimates the population for the years between
censuses. These estimates are referred to as postcensal population
estimates. They start with the most recently available decennial census
data and for each year adjust population counts for births, deaths, and
migration. Because these population estimates are more current than the
decennial population counts, the distribution formulas for federal grants
often use these data. For example, the allocation formula for the Social
Services Block Grants uses the most recent postcensal population estimates
to distribute funds.
While the decennial census and postcensal estimates provide annual data,
the Current Population Survey provides monthly data. This survey's
sampling design relies on information developed for the decennial census
and its data are revised annually to be consistent with the postcensal
estimates. The survey is primarily designed to generate detailed
information about the American labor force, such as the number of people
unemployed. Data from this survey are also used to allocate funds for
programs, for instance programs under the Workforce Investment Act.
^2 [14]GAO-06-567 ; GAO, Formula Grants: 2000 Redistributes Federal
Funding Among States, [15]GAO-03-178 (Washington, D.C.: February 24, 2003)
and GAO, Formula Programs: Adjusted Census Data Would Redistribute Small
Percentage of Funds to States, [16]GAO/GGD-92-12 (Washington, D.C.:
November 7, 1991).
^3In fiscal year 2000, we found that 85 percent of federal government
obligations in grants to state and local governments was distributed on
the basis of formulas that are based on data such as state population and
personal income.
Another survey, the American Community Survey (ACS), provides detailed
socioeconomic characteristics for the nation's communities. The ACS relies
on information developed for the decennial census and its annual data are
controlled to be identical to postcensal population estimates. Currently,
the ACS provides information on communities with populations over 65,000.
Data from the ACS are also used to allocate federal funds, such as
determining fair market rent levels used in the Section 8 housing voucher
program. Because the ACS is to replace 2010 census long form socioeconomic
data, it is expected that ACS data will be used more extensively in other
federal assistance programs in the future. Beginning in 2010, 5-year
estimates will be available for areas to the smallest block groups, census
tracts, small towns, and rural areas. Beyond their use by the federal
government, the population counts and estimates are also used extensively
by state and local governments, businesses, nonprofits, and research
institutions.
Population-based data drawn from the decennial census, postcensal
population estimates, and the ACS play critical roles in the conduct of
community development programs undertaken by the federal, state, and local
governments. Such data are central to the conduct of the federal
government's Community Development Block Grant program (CDBG), the federal
government's 13th largest formula grant program with $3 billion in
obligations in fiscal year 2004. Since 1974, this program has provided
$120 billion to help communities address a host of urban problems ranging
from poverty and deteriorating housing to population loss and social
isolation. Given the breadth of the program's objectives and the diversity
of the nation's communities, CDBG employs four formulas to allocate funds
among 50 states, the District of Columbia, and 1,080 local governments.
These formulas depend on census data, including total population,
individuals in poverty, lagging population growth, households in
overcrowded homes, as well as the number of pre-1940 homes.
Accuracy of Population Count Is Important
An accurate census relies on finding and counting people--only once--in
the right place and getting complete, correct information on them. Seeking
to obtain an accurate count has been a concern since the first census in
1790. Concern about undercounting the population continued through the
decades. In the 1940s, demographers began to obtain a more thorough
understanding of the scope and nature of the undercount. For example, the
selective service registration of October 1940 showed 2.8 percent more men
than the census count. According to the Bureau, operations and programs
designed to improve coverage have resulted in the total undercount
declining in all but one decade since the 1940s. These measures of
coverage are based on demographic analysis, which compares the census
count to birth and death certificates and other administrative data (see
fig. 1).
Figure 1: Decennial Census Population Net Undercount Rates from
Demographic Analysis in Percentages: 1940 to 2000
Modern coverage measurement began with the 1980 Census, when the Bureau
compared decennial figures to the results of an independent sample survey
of the population. In using statistical methods such as these, the Bureau
began to generate detailed measures of the differences among undercounts
of particular ethnic, racial and other groups. In 1990, the Bureau relied
on a Post-Enumeration Survey to verify the data it collected through the
1990 Census. For this effort, the Bureau interviewed a sample of
households several months after the 1990 Census, and compared the results
to census questionnaires to determine if each sampled person was correctly
counted, missed, or double counted in the Census. The Bureau estimated
that the net undercount, which it defined as those missed minus those
double counted, came to about 4 million people.^4 To estimate the accuracy
of the 2000 Census, the Bureau conducted the Accuracy and Coverage
Evaluation (A.C.E.), which was an independent sample survey designed to
estimate the number of people that were over- and undercounted in the
census, a problem the Bureau refers to as coverage error. This evaluation
found that in the 2000 Census there was a net overcount. For 2010 the
Bureau plans a census coverage measurement program that will, among other
things, produce estimates of components of census net and gross coverage
error (the latter includes misses and erroneous enumerations) in order to
assess accuracy.
Population Estimates May Affect Allocation of Federal Funds
The accuracy of state and local population estimates may have an effect,
though modest, on the allocation of grant funds among the states. In our
June 2006 report, we analyzed how sensitive two federal formula grants are
to alternative population estimates, such as those derived by statistical
methods.^5 In the June 2006 report, we recalculated certain federal
assistance to the states using the A.C.E. population estimates from the
2000 Census, as well as the population estimates derived from the
Post-Enumeration Survey, which was administered to evaluate the accuracy
of the 1990 Census. This simulation was done for illustrative purposes
only--to demonstrate the sensitivity of government programs to alternative
population estimates. While only the actual census numbers should be used
for official purposes, our simulation shows the extent to which
alternative population counts would affect the distribution of selected
federal grant funds and can help inform congressional decision making on
the design of future censuses.
We selected the Social Services Block Grant (SSBG) as part of this
simulation because the formula for this block grant program, which is
based solely on population, and the resulting funding allocations are
particularly sensitive to alternative population estimates. At a given
level of appropriation, any changes in the state's population relative to
other states' changes would have a proportional impact on the allocation
of funds to the state. In fiscal year 2004, the federal government
allocated $1.7 billion to states in block grant funds under the program.
Recalculating these allocations using statistical population estimates
from the 2000 A.C.E., only $4.2 million--or 0.25 percent--of $1.7 billion
in block grant funds would have shifted. The total $1.7 billion SSBG
allocation would not have changed because SSBG receives a fixed annual
appropriation. In other words, those states receiving additional funds
would have reduced the funds of other states.
^4 [17]GAO/HEHS-99-69 .
^5 [18]GAO-06-567 .
In short, 27 states and the District of Columbia would have gained $4.2
million and 23 states would have lost a total of $4.2 million. Based on
our simulation of the funding formula for this block grant program, the
largest percentage changes were for Washington, D.C., which would have
gained 2.05 percent (or $67,000) in grant funding and Minnesota which
would have lost 1.17 percent (or $344,000). For the programs we examined,
less than half of a percent of total funding would be redistributed by
using the revised population counts. Figure 2 shows how much (as a
percentage) and where SSBG funding in 2004 would have shifted as a result
of using statistical population estimates for recalculating formula grant
funding by state. We previously reported that using 1990 adjusted data as
the basis for allocations had little relative effect on the distribution
of annual funding to states.^6 More recently, we reported that statistical
population estimates from the 2000 Census would have shifted a smaller
percentage of funding compared to those from the 1990 Census because the
difference between the actual and estimated population counts was smaller
in 2000. For example, using statistical estimates of the population
following the 1990 Census, a total of 0.37 percent of SSBG funds would
have shifted among the states in fiscal year 1998.
^6GAO, Formula Programs: Adjusted Census Data Would Redistribute Small
Percentage of Funds to States, [19]GAO/GGD-92-12 (Washington, D.C.: Nov.
7, 1991).
Figure 2: Estimated Social Services Block Grant Percentage Change in Grant
Funding Using Statistical Population Estimates for States
In addition to any impact that inaccuracies in the census count may have
on allocation of federal funds, between decennials differences between the
actual population and population estimates could affect fund allocation.
To calculate grant amounts, formula grants generally rely on annual
population estimates for each state developed by the Bureau. State
populations are estimated by adding to the prior year's population
estimate the number of births and immigrants and subtracting the number of
deaths and emigrants. These estimates are subject to error, mainly because
migration between states and between the United States and other countries
is difficult to measure. By the end of the decade, when the census count
is taken, a significant gap may have arisen between the population
estimate and the census count. We found that by the time of the 2000
census count, the annual estimates of population differed from the 2000
count by about 2.5 percent. This "error of closure" was substantially
larger than that for the 1990 census--0.6 percent. We found that
correcting population estimates to reflect the 2000 census count
redistributes among states about $380 million in federal grant funding for
Medicaid, Foster Care, Adoption Assistance, and SSBG. Most of the shift in
funding occurred in fiscal year 2003 when federal matching rates for three
of the programs were based on population estimates derived from the 2000
census. For the SSBG program, the shift occurred in 2002 when it began
using the 2000 census count.
Complete and accurate data from the decennial census are central to our
democratic system of government. These same data serve as a foundation for
the allocation of billions of dollars in federal funds to states and local
governments. Because of the importance of the once-a-decade count, it is
essential to ensure that it is accurate. Though the overall undercount has
generally declined since it has been measured, evaluating the accuracy of
the census continues to be essential given the importance of the data, the
need to know the nature of any errors, and the cost of the census overall.
We continue to monitor the Bureau's progress in this important effort.
Mr. Chairman, this concludes my remarks. I will be glad to answer any
questions that you, Mr. Turner, or other subcommittee members may have.
Contacts and Acknowledgments
For further information regarding this statement, please contact Mathew
Scire, Director, Strategic Issues, on (202) 512-6806 or at
[20][email protected] . Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this
testimony. Individuals making key contributions to this statement included
Steven Lozano, Assistant Director; Betty Clark; Robert Dinkelmeyer; Greg
Dybalski; Ron Fecso; Sonya Phillips; Michael Springer; and Cheri Truett.
Related GAO Products
Federal Assistance: Illustrative Simulations of Using Statistical
Population Estimates for Reallocating Certain Federal Funding.
[21]GAO-06-567 . Washington, D.C.: June 22, 2006.
Data Quality: Improvements to Count Correction Efforts Could Produce More
Accurate Census Data. [22]GAO-05-463 . Washington, D.C.: June 20, 2005.
Census 2000: Design Choices Contributed to Inaccuracy of Coverage
Evaluation Estimates. [23]GAO-05-71 . Washington, D.C.: November 12, 2004.
2010 Census: Cost and Design Issues Need to Be Addressed Soon.
[24]GAO-04-37 . Washington, D.C.: January 15, 2004.
Formula Grants: 2000 Census Redistributes Federal Funding Among States.
[25]GAO-03-178 . Washington, D.C.: February 24, 2003.
2000 Census: Coverage Measurement Programs' Results, Costs, and Lessons
Learned. [26]GAO-03-287 . Washington, D.C.: January 29, 2003.
2000 Census: Complete Costs of Coverage Evaluation Programs Are Not
Available. [27]GAO-03-41 . Washington, D.C.: October 31, 2002.
The American Community Survey: Accuracy and Timeliness Issues.
[28]GAO-02-956R . Washington, D.C.: September 30, 2002.
2000 Census: Refinements to Full Count Review Program Could Improve Future
Data Quality. [29]GAO-02-562 . Washington, D.C.: July 3, 2002.
2000 Census: Coverage Evaluation Matching Implemented as Planned, but
Census Bureau Should Evaluate Lessons Learned. [30]GAO-02-297 .
Washington, D.C.: March 14, 2002.
Formula Grants: Effects of Adjusted Population Counts on Federal Funding
to States. [31]GAO/HEHS-99-69 . Washington, D.C.: February 26, 1999.
Formula Programs: Adjusted Census Data Would Redistribute Small Percentage
of Funds to States. [32]GAO/GGD-92-12 . Washington, D.C.: November 7,
1991.
(450637)
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For more information, contact Mathew Scire at (202) 512-6806 or
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Highlights of [40]GAO-08-230T , a testimony before the Subcommittee on
Information Policy, Census, and National Archives, Committee on Oversight
and Government Reform, House of Representatives
October 29, 2007
2010 CENSUS
Population Measures Are Important for Federal Funding Allocations
The decennial census is a constitutionally-mandated activity that produces
critical data used to apportion congressional seats, redraw congressional
districts, and allocate billions of dollars in federal assistance. This
testimony discusses (1) the various measures of population used to
allocate federal grant funds (2) how the accuracy of the population count
and measurement of accuracy have evolved and the U.S. Census Bureau's
(Bureau) plan for coverage measurement in 2010; and (3) the potential
impact that differences in population estimates can have on the allocation
of grant funds. This testimony is based primarily on GAO's issued work in
which it evaluated the sensitivity of grant formulas to population
estimates.
[41]What GAO Recommends
At this time, GAO is not making any new recommendations.
In fiscal year 2000,GAO found that 85 percent of federal government
obligations in grants to state and local governments were distributed on
the basis of formulas that use data such as state population and personal
income. The decennial census is the foundation for measuring the nation's
population. It provides a count of the population every 10 years, and is
the starting point for estimates of population made in years between the
censuses.
Obtaining an accurate population count through the decennial census has
been a concern since the first census in 1790. Concern that the decennial
census undercounted the population has continued since then. To measure
accuracy, the Bureau since 1940 has used demographic analysis, in which it
compares census counts with information on births, deaths, and other
information. With the exception of 1990, the Bureau's demographic analysis
shows that the extent to which the census undercounted the population has
declined. More recently, the Bureau has used statistical techniques in
which it compares the census count with the results of an independent
sample survey of the population. For 2010, the Bureau plans to use similar
statistical techniques to measure the accuracy and coverage of the census.
Evaluating the accuracy of the census is essential given the importance of
the data, the need to know the nature of any errors, and the cost of the
census overall.
GAO's prior work has illustrated that the accuracy of state and local
population estimates may have some effect on the allocation of grant
funds. Specifically, to show the sensitivity of grant programs to
alternative population estimates, GAO simulated how two grant program
formulas would allocate federal funds to states if population estimates
were substituted for census counts. This simulation was done for
illustrative purposes only. While only actual census numbers should be
used for official purposes, this simulation showed some shifting of grant
funds among the states when estimates were used. For example,
recalculating allocations of Social Services Block Grant funds using
estimates of population for 2000, rather than the census count, would
result in shifting $4.2 million--or 0.25 percent--of $1.7 billion in
fiscal year 2004 funds. Specifically, 27 states and the District of
Columbia would have gained $4.2 million and 23 states would have lost a
total of $4.2 million.
References
Visible links
11. http://www.gao.gov/cgi-bin/getrpt?GAO-06-567
12. http://www.gao.gov/cgi-bin/getrpt?GAO-03-287
13. http://www.gao.gov/cgi-bin/getrpt?GAO/HEHS-99-69
14. http://www.gao.gov/cgi-bin/getrpt?GAO-06-567
15. http://www.gao.gov/cgi-bin/getrpt?GAO-03-178
16. http://www.gao.gov/cgi-bin/getrpt?GAO/GGD-92-12
17. http://www.gao.gov/cgi-bin/getrpt?GAO/HEHS-99-69
18. http://www.gao.gov/cgi-bin/getrpt?GAO-06-567
19. http://www.gao.gov/cgi-bin/getrpt?GAO/GGD-92-12
20. mailto:[email protected]
21. http://www.gao.gov/cgi-bin/getrpt?GAO-06-567
22. http://www.gao.gov/cgi-bin/getrpt?GAO-05-463
23. http://www.gao.gov/cgi-bin/getrpt?GAO-05-71
24. http://www.gao.gov/cgi-bin/getrpt?GAO-04-37
25. http://www.gao.gov/cgi-bin/getrpt?GAO-03-178
26. http://www.gao.gov/cgi-bin/getrpt?GAO-03-287
27. http://www.gao.gov/cgi-bin/getrpt?GAO-03-41
28. http://www.gao.gov/cgi-bin/getrpt?GAO-02-956R
29. http://www.gao.gov/cgi-bin/getrpt?GAO-02-562
30. http://www.gao.gov/cgi-bin/getrpt?GAO-02-297
31. http://www.gao.gov/cgi-bin/getrpt?GAO/HEHS-99-69
32. http://www.gao.gov/cgi-bin/getrpt?GAO/GGD-92-12
33. http://www.gao.gov/
34. http://www.gao.gov/
35. http://www.gao.gov/fraudnet/fraudnet.htm
36. mailto:[email protected]
37. mailto:[email protected]
38. mailto:[email protected]
39. http://www.gao.gov/cgi-bin/getrpt?GAO-08-230T
40. http://www.gao.gov/cgi-bin/getrpt?GAO-08-230T
*** End of document. ***