Title III, Older Americans Act: Administration on Aging Funding Method
Underfunds High-Elderly-Growth States (Letter Report, 06/30/2000,
GAO/HEHS-00-107).

Pursuant to a congressional request, GAO reviewed the Administration on
Aging's (AOA) method for distributing Older Americans Act title III
grants, focusing on the: (1) extent to which AOA's distribution of
funding differs from the distribution that would take place if funds
were allocated according to the statute; and (2) effect of AOA's funding
distribution method on states with more rapidly growing elderly
populations.

GAO noted that: (1) the AOA procedure for distributing title III funds
results in unequal funding per elderly person across states to a much
greater degree than would be the result using the statutory formula; (2)
for example, using AOA's approach, Arizona's fiscal year (FY) 2000
funding per elderly person is 33 percent less than Iowa's, while strict
adherence to the statute would result in a 5-percent difference; (3)
moreover, under the AOA procedure, most states with above-average growth
in number of elderly residents received less funding than called for by
the statute; (4) for example, for FY 2000, Florida received $6.8 million
less, California, $3.8 million less, Texas, $3.7 million less, and
Arizona, $3.2 million less; (5) in total, using the statutory rather
than the AOA method would redirect $27 million of Older Americans Act
title III FY 2000 state allotment funds (3.3 percent) to states that
have experienced above-average growth in their elderly populations; and
(6) when GAO first reported on this issue in 1994, the amount that would
have been redirected using the statutory method in FY 1993 would have
been $17 million (2.2 percent of that year's title III allotments).

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

 REPORTNUM:  HEHS-00-107
     TITLE:  Title III, Older Americans Act: Administration on Aging
	     Funding Method Underfunds High-Elderly-Growth States
      DATE:  06/30/2000
   SUBJECT:  Aid for the elderly
	     Elderly persons
	     Appropriated funds
	     Formula grants
	     State-administered programs
	     Grant administration
	     Grants to states
IDENTIFIER:  Title III Challenge Grant

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GAO/HEHS-00-107

Appendix I: Comparison of the Funding Allotment Steps Described

in the Statute With Those of AOA's Method

14

Appendix II: Title III Funding per Elderly Person Using Statutory
and AOA Methods of Allocation, Fiscal Year 2000

15

Appendix III: In Fiscal Year 2000, AOA Method Underfunded Most
States With Above-Average Elderly Population
Growth

17

Appendix IV: Over- and Underfunding Resulting From Use of the
AOA Method, Fiscal Years 1993 and 2000

19

Appendix V: Comments From the Department of Health and
Human Services

21

Figure 1: States Under- and Overfunded by AOA's Method 8

Figure 2: Over- and Underfunding Under AOA's Method
in States With Fast- and Slow-Growing Elderly Populations, Fiscal Years 1993
and 2000 10

AOA Administration on Aging

HHS Department of Health and Human Services

Health, Education, and
Human Services Division

B-285994

June 30, 2000

The Honorable Mike DeWine
Chairman, Subcommittee on Aging
Committee on Health, Education, Labor,
and Pensions
United States Senate

Dear Mr. Chairman:

Title III of the Older Americans Act is intended to assist elderly Americans
by removing barriers to independent living and adding to a continuum of care
for vulnerable individuals. Administered by the Administration on Aging
(AOA) in the Department of Health and Human Services (HHS), title III
authorizes support programs such as congregate, or group, and in-home meals;
transportation; and housekeeping services. In fiscal year 2000, a total of
$810 million in title III grants was distributed among states and U.S.
territories.1

Previously, we reported that the method used by AOA to distribute title III
funding was not consistent with statutory requirements because it failed to
provide grants that were proportional to the elderly populations of those
states not guaranteed a minimum level of funding.2 In commenting on that
report, AOA asserted that its distribution procedures were based on a valid
interpretation of the statute. Our analysis of the legislative history,
however, does not support AOA's interpretation.

In response to your January 10, 2000, request that we update the analysis in
our previous report, this report describes (1) the extent to which AOA's
distribution of funding differs from the distribution that would take place
if funds were allocated according to the statute and (2) the effect of AOA's
funding distribution method on states with more rapidly growing elderly
populations.

To estimate the effects of AOA's method on the distribution of funds, we
computed title III grant amounts using the allocation method specified by
the statute and then compared the resulting distribution of funds with that
computed by AOA for fiscal year 2000. We then compared funding for those
states with above-average growth in their elderly populations3 under the
alternative allocation methods. We conducted our work from January through
June 2000 in accordance with generally accepted government auditing
standards, with the exception that we did not verify data obtained in
electronic format from AOA.

The AOA procedure for distributing title III funds results in unequal
funding per elderly person across states to a much greater degree than would
be the result using the statutory formula. For example, using AOA's
approach, Arizona's fiscal year 2000 funding per elderly person is 33
percent less than Iowa's, while strict adherence to the statute would result
in a 5-percent difference. Moreover, under the AOA procedure, most states
with above-average growth in number of elderly residents received less
funding than called for by the statute. For example, for fiscal year 2000,
Florida received $6.8 million less; California, $3.8 million less; Texas,
$3.7 million less; and Arizona, $3.2 million less. In total, using the
statutory rather than the AOA method would redirect $27 million of Older
Americans Act title III fiscal year 2000 state allotment funds (3.3 percent)
to states that have experienced above-average growth in their elderly
populations. When we first reported on this issue in 1994, the amount that
would have been redirected using the statutory method in fiscal year 1993
would have been $17 million (2.2 percent of that year's title III
allotments).

We suggest that if the Congress wants to explicitly ensure that priority be
given to current data on states' elderly populations in distributing title
III grant funds, it could amend the statute to require that funds be
distributed in that way. HHS concurs with this suggestion.

Under section 304 of the Older Americans Act of 1965, as amended (42 U.S.C.
3024), title III funds are to be distributed among states in proportion to
the most current data on the population aged 60 and older, which would yield
equal funding across states per person aged 60 and older. This requirement,
however, is subject to two conditions: first, no state is to receive less
than it received in fiscal year 1987 (a "hold-harmless" provision), and
second, no state is to receive less than 0.5 percent of funds available for
distribution (a small-state minimum provision).4 These requirements could be
satisfied by

ï¿½ first, distributing available funding among states on the basis of the
current population aged 60 and older;

ï¿½ next, increasing funding for those states that would otherwise receive
less than their fiscal year 1987 amount or whose share would fall below the
0.5-percent minimum; and

ï¿½ finally, proportionally reducing the funding of all other states to
conform with the total amount to be distributed.

Rather than distributing funding on the basis of current population data in
the first step, AOA gives priority to the hold-harmless provision. As a
consequence, each state first receives its 1987 grant amount, which was
determined partly on the basis of 1985 population estimates. This "base"
allotment represented 85 percent of AOA's total fiscal year 2000 grants for
title III. The remaining 15 percent of funding is then allocated on the
basis of current population statistics (for fiscal year 2000, the 1998
elderly population of states was the most current available). Then, the
hold-harmless base allotment and the allotment based on current population
are summed for each state. When that sum is less than 0.5 percent of overall
title III funding, additional funds are provided to raise the funding level
to the small-state minimum.5 These additional funds are obtained by
proportionally reducing the current population formula amounts allotted to
those states whose funding is above the 0.5-percent minimum. (The
hold-harmless amounts for each state are not proportionally reduced).
Appendix

I contains a more detailed comparison of AOA's distribution process with
that of the statute.

AOA distributed title III funding in accordance with the statute until it
changed its method of calculating grant amounts in 1984. The present
formula, which subordinates the importance of the states' proportions of the
elderly to the hold-harmless amounts, is based solely on a provision in the
1984 amendment to the act that moved the hold-harmless requirement from one
paragraph to another. However, this change is designated in the law as a
"technical amendment," and we believe the only purpose of the change was to
make the allotment provision in section 3024 consistent with a change to
another section dealing with administrative expenses.

Moreover, the absence of any discussion of a change to the allotment formula
in the history of the 1984 amendment suggests that the amendment was not
intended to have the effect that results from AOA's method. Intentionally
reversing the practice in use since 1973 to de-emphasize the role of the
elderly population in allotting funds among the states would have been an
important change from the states' viewpoint--one that would have been
expected to be the subject of debate and discussion and would have been
documented in the record. However, the 1984 change was made without any
debate or discussion.

In commenting on our earlier report, agency officials asserted that AOA's
interpretation of section 304 and AOA's revised method of distributing title
III funds are consistent with the law. But these officials also acknowledged
that first distributing funds on the basis of current population data, as
specified in the statute, would in fact yield a distribution of funds more
proportional to each state's elderly population. Nevertheless, they stated
that AOA would continue its current distribution method unless the Congress
directed otherwise.

States Than the Statutory Method Would

Because the AOA method applies the hold-harmless provision first, rather
than distributing funding in proportion to current elderly population as a
first step, some states receive more funding and others receive less than if
the method in the statute was used. The gap in funding per elderly person
can be large. For example, Arizona's funding per elderly person is 33
percent less than Iowa's under the AOA method. Under this method, no two
states receive the same funding per elderly person, as would be expected if
grant funding were simply proportional to elderly population. Under the
statutory method, which calls for the use of current population data as the
first step in allocating title III funds, Arizona's grant would be just 5
percent less than Iowa's.6 Appendix II compares funding per elderly person
under the two methods for all states.

Figure 1 shows the funding effects on the states using AOA's allocation
method. AOA's distribution method underfunded 10 states by more than $1
million each in fiscal year 2000 (Arizona, California, Colorado, Florida,
Georgia, North Carolina, Puerto Rico, South Carolina, Texas, and Virginia)
and overfunded 7 others by more than $1 million (Illinois, Massachusetts,
Missouri, New Jersey, New York, Ohio, and Pennsylvania). States underfunded
by AOA's method tend to be in the southern part of the country. (App. III
shows amounts by which individual states were under- and overfunded in
fiscal year 2000.)

on States With Above-Average Growth in Their Elderly Populations

AOA's method for distributing funding has the additional effect of making
states' allotments less sensitive to recent changes in the elderly
population. Among the 23 states whose elderly populations grew faster than
average from 1985 to 1998,7 15 received less funding under the AOA method in
fiscal year 2000 than they would have received under the statutory method.
Nationwide, the population aged 60 and older grew 14 percent between 1985
and 1998. These changes ranged from an increase of 100 percent (that is, a
doubling in size) in Nevada to a decline of 11 percent in the District of
Columbia. AOA's method, which applies the hold-harmless provision first,
lessens the effect of changes in states' elderly populations on fund
distribution. The result is that the AOA method underfunds most states with
above-average growth in their elderly populations, as compared with those
states with below-average growth.8 (See app. III.)

Moreover, the adverse effect of AOA's allocation method on states with
above-average growth in their elderly populations has increased over time.
Using the statutory method would have redirected $17 million in fiscal year
1993 (2.2 percent of the Older Americans Act's title III allotments for
states that year); that figure would have risen to $27 million in fiscal
year 2000 (3.3 percent of title III allotments that year). Similarly, the
states with less rapidly growing elderly populations have become
increasingly overfunded, as shown in figure 2. The state-by-state
differences in funding under the two methods in 1993 and 2000 are shown in
appendix IV.

Note: Fast-growing states are those with above-average growth from 1985 to
1998 in their populations aged 60 and older; slow-growing states are those
with below-average growth in that population over the same period.

AOA's method for distributing title III funds adversely affects states with
more rapidly growing elderly populations. Because it does not give priority
to current population data, these states receive smaller allotments than
they would receive if the agency used the statutory method for allocating
funds. The underfunding of states with above-average growth in their elderly
population has worsened since we first reported on the problem in 1994.

If the Congress wants to ensure that current population data on elderly
populations are the primary factor used in determining how grant funds under
title III of the Older Americans Act are to be distributed among states, it
should consider stipulating this by amending the statute. Such an amendment
could specify that title III allotments be computed first on the basis of
states' current shares of the elderly population. Then, any state allotments
that do not meet the hold-harmless or small-state minimum percentage share
would be increased, while allotments of all other states would be
proportionally reduced as necessary to fund the statutory minimums.

HHS officials agreed with our matters for congressional consideration. They
said that, if the Congress seeks to ensure that current population data on
the distribution of the elderly population are the primary factor used in
determining how grant funds under title III of the Older Americans Act are
to be distributed among states, it should consider stipulating this by
amending the statute. HHS officials also restated their view that AOA's
method of allocating funds is a valid interpretation of the statute and
should be given deference. Further, because AOA views its interpretation of
the provision at issue to be just as consistent with the statute as ours,
HHS officials objected to our application of the term "statutory method" to
our interpretation. We continue to believe that AOA's current practice of
applying the hold-harmless provision first is inconsistent with the statute.
As discussed in the report, we believe that first applying current
elderly-population data when allocating funds would be in accord with the
law. The full text of the agency comments appears in appendix V.

As agreed with your office, unless you publicly announce its content
earlier, we plan no further distribution of this report until 30 days from
the date of this letter. At that time, we will send copies to the Honorable
Donna E. Shalala, Secretary of Health and Human Services; the Honorable
Jeanette C. Takamura, Assistant Secretary of the Administration on Aging;
appropriate congressional committees and subcommittees; and other interested
parties. We will also make copies available to others on request.

If you have any questions regarding this report, or if we can be of further
assistance, please call Jerry Fastrup at (202) 512-7211 or me at (202)
512-7114. Robert Dinkelmeyer and Richard Horte made major contributions to
this report.

Sincerely yours,

Kathryn G. Allen
Associate Director, Health Financing
and Public Health Issues

Comparison of the Funding Allotment Steps Described in the Statute With
Those of AOA's Method

 Statute                 AOA method                Remarks
                                                   The fiscal year 1987
                                                   allotments were
                         (1) Each state receives   calculated on the basis
                         an amount equal to its    of the 1985 population
                         1987 allotment, called    aged 60 and older. Title
                         the "hold-harmless"       III funding for 1987
                         amount.                   represents 85 percent of
                                                   the amount available in
                                                   fiscal year 2000.
                         (2) The remaining funds
                         are distributed among     Only 15 percent of
                         states in proportion to   current title III
                         the number of individuals funding is allotted on
                         aged 60 or older in each  the basis of current
                         state, as derived from    (1998) population data.
                         current population data.
 (1) Each state's
 initial allotment is
 the result of           (3) Each state's initial
 distributing the amount allotment is the sum of   In contrast to AOA's
 available for state     the 1987 allotment (step  method, the statute
 programs in proportion  1) plus the amount        calls for all available
 to the number of        derived using a           funds to be distributed
 individuals aged 60 or  population-based formula  on the basis of current
 older in each state, as (step 2).                 population data.
 derived from current
 population data.
 (2) If a state's
 initial allotment is
 below its 1987 funding
 level (the                                        Under the statute,
 hold-harmless           (4) If a state's initial  states receive the
 provision) or if its    allotment is below 0.5    largest of the
 share of funding is     percent of the title III  following: their 1987
 below 0.5 percent of    total, the state's        funding amount, 0.5
 the title III total     allotment is increased to percent of available
 (the small-state        0.5 percent of the total. funds, or the amount
 minimum), the state's                             calculated using the
 allotment is increased                            formula.
 to reflect the larger
 of these two amounts.

 (3) Allotments for      (5) For states not
 states not affected by  affected by the
 the hold-harmless       0.5-percent minimum, the  Both methods ensure that
 provision or the        amount allotted on the    a state's funding is not
 0.5-percent minimum are basis of current          proportionally reduced
 proportionally reduced  population is             below either the
 to pay the increased    proportionally reduced to 0.5-percent minimum or
 funding for states that pay for the increased     the hold-harmless level.
 benefit from these      funding for states that
 provisions.             benefit from the
                         0.5-percent minimum.

Title III Funding per Elderly Person Using Statutory and AOA Methods of
Allocation, Fiscal Year 2000

        State         Statutory method  AOA method
 Alabama              $17.10            $17.40
 Alaska               78.20a            78.20a
 Arizona              17.23             13.25
 Arkansas             17.43b            18.77
 California           17.10             16.29
 Colorado             17.10             14.74
 Connecticut          17.58b            18.98
 Delaware             32.55a            32.55a
 District of Columbia 43.10a            43.10a
 Florida              17.10             15.11
 Georgia              17.10             15.88
 Hawaii               19.92a            20.44c
 Idaho                21.63a            22.09c
 Illinois             17.60b            18.99
 Indiana              17.10             17.98
 Iowa                 18.18b            19.65
 Kansas               17.89b            19.32
 Kentucky             17.15b            18.20
 Louisiana            17.10             17.95
 Maine                18.10a            19.12c
 Maryland             17.10             16.56
 Massachusetts        17.89b            19.33
 Michigan             17.10             17.54
 Minnesota            17.16b            18.24
 Mississippi          17.39b            18.69
 Missouri             17.46b            18.82
 Montana              25.87a            26.12c
 Nebraska             18.39b            19.88
 Nevada               17.10             15.77
 New Hampshire        22.36a            22.85c
 New Jersey           17.25b            18.41
 New Mexico           16.79             16.02
 New York             18.22b            19.69
 North Carolina       17.10             15.42
 North Dakota         34.19a            34.20c
 Ohio                 17.10             18.10
 Oklahoma             17.22b            18.35
 Oregon               17.10             16.62
 Pennsylvania         17.60b            19.00
 Rhode Island         21.45a            22.09c
 South Carolina       17.10             15.32
 South Dakota         30.02a            30.15c
 Tennessee            17.10             17.06
 Texas                17.10             15.75
 Utah                 17.04             17.27
 Vermont              42.97a            42.97a
 Virginia             17.10             15.97
 Washington           17.10             15.94
 West Virginia        18.03b            19.48
 Wisconsin            17.18b            18.28
 Wyoming              53.80a            53.80a
 American Samoa       469.78b,c         471.79c
 Guam                 231.16a           231.16a
 Northern Marianas    414.34b,c         414.91c
 Puerto Rico          17.10             14.75
 Virgin Islands       209.58a           209.58a
 National average     17.90             17.90

aThis state is subject to a small-state minimum for all component programs.

bThis state is subject to a hold-harmless minimum for one or more component
programs.

cThis state is subject to a small-state minimum for some component programs.

In Fiscal Year 2000, AOA Method Underfunded Most States With Above-Average
Elderly Population Growth

                 Change in
                 population    Allotment                Overfunding/underfunding
                                           Allotment
     State      aged 60 and      using     using AOA
                older, 1985    statutory
                  to 1998       method      method         Amount    Percentage
               (percentage)
 States with above-average elderly population growth
 Nevada        100.1         $4,663,791   $4,300,150    -$363,641    -7.8
 Alaskaa       75.8          4,048,585    4,048,585     0            0
 Arizona       48.5          13,757,194   10,577,987    -3,179,207   -23.1
 Hawaiia       39.6          4,048,585    4,154,953     106,368      2.6
 Colorado      35.5          9,466,691    8,155,465     -1,311,226   -13.9
 Utahb         35.3          4,192,590    4,248,979     56,389       1.3
 New Mexico    34.9          4,455,159    4,250,466     -204,693     -4.6
 South Carolina28.0          10,647,870   9,535,061     -1,112,809   -10.5
 Florida       27.4          58,109,935   51,334,691    -6,775,244   -11.7
 North Carolina26.7          21,400,865   19,295,387    -2,105,478   -9.8
 Delawarea     25.6          4,048,585    4,048,585     0            0
 Idahoa        25.5          4,048,585    4,134,706     86,121       2.1
 Texas         24.9          46,298,862   42,627,208    -3,671,654   -7.9
 Georgia       24.4          17,440,732   16,191,749    -1,248,983   -7.2
 Washington    22.7          14,566,063   13,576,287    -989,776     -6.8
 Virginia      22.1          17,356,015   16,200,305    -1,155,710   -6.7
 Wyominga      20.6          4,048,585    4,048,585     0            0
 California    19.6          79,517,589   75,749,046    -3,768,543   -4.7
 Oregon        19.0          9,586,987    9,314,214     -272,773     -2.8
 Montanaa      17.8          4,048,585    4,087,033     38,448       0.9
 Maryland      17.3          13,181,102   12,765,236    -415,866     -3.2
 Tennessee     15.4          15,497,517   15,453,478    -44,039      -0.3
 New Hampshirea15.2          4,048,585    4,136,901     88,316       2.2
 States with below-average elderly population growth
 Alabama       13.5          12,865,115   13,084,901    219,786      1.7
 Vermonta      11.9          4,048,585    4,048,585     0            0
 Michigan      11.1          27,153,675   27,852,605    698,930      2.6
 Louisiana     10.5          11,565,880   12,140,815    574,935      5.0
 Minnesota     9.0           12,931,265   13,740,777    809,512      6.3
 Kentucky      8.8           11,268,665   11,964,039    695,374      6.2
 Indiana       8.6           16,580,363   17,428,748    848,385      5.1
 Mainea        8.6           4,048,585    4,275,885     227,300      5.6
 Wisconsin     8.2           15,314,422   16,290,204    975,782      6.4
 Mississippi   8.0           7,758,023    8,338,888     580,865      7.5
 Oklahoma      7.9           10,232,430   10,904,983    672,553      6.6
 Ohio          7.5           33,284,956   35,228,933    1,943,977    5.8
 Arkansas      6.8           8,283,533    8,920,040     636,507      7.7
 New Jersey    5.5           24,507,207   26,159,402    1,652,195    6.7
 Missouri      4.9           16,820,575   18,136,246    1,315,671    7.8
 South Dakotaa 4.7           4,048,585    4,065,136     16,551       0.4
 Kansas        3.8           8,093,456    8,741,836     648,380      8.0
 Illinois      3.7           34,276,664   37,000,570    2,723,906    7.9
 Nebraska      3.1           5,402,193    5,840,857     438,664      8.1
 Connecticut   3.1           10,394,132   11,219,859    825,727      7.9
 North Dakotaa 2.9           4,048,585    4,050,034     1,449        0
 West Virginia 2.5           6,536,037    7,061,681     525,644      8.0
 Pennsylvania  2.4           42,193,866   45,547,641    3,353,775    7.9
 Massachusetts 1.7           19,353,657   20,905,177    1,551,520    8.0
 Iowa          1.7           10,036,189   10,846,991    810,802      8.1
 New York      0.3           57,191,446   61,818,656    4,627,210    8.1
 Rhode Islanda -1.1          4,048,585    4,169,230     120,645      3.0
 District of
 Columbiaa     -11.3         4,048,585    4,048,585     0            0
 Recipients without comparable population data for 1985 and 1998
 American
 Samoaa        c             1,190,885    1,195,975     5,090        0.4
 Guama         c             2,024,294    2,024,294     0            0
 Northern
 Marianasa     c             511,292      511,999       707          0.1
 Puerto Rico   c             9,151,919    7,894,077     -1,257,842   -13.7
 Virgin
 Islandsa      c             2,024,294    2,024,294     0            0
 National
 average/total 13.6c         $809,717,000 $809,717,000

aAllotments of states subject to the 0.5-percent minimum are not determined
by their population aged 60 years and older. Hence, the use of the AOA
method instead of the statutory method generally does not change their
funding.

bAlthough Utah is a high-growth state, it is currently overfunded because it
benefited from the 0.5-percent minimum in 1987, which resulted in a high
hold-harmless amount.

c1985 data for the population aged 60 and older are unavailable for the
outlying areas and therefore are not included in the national average.

Over- and Underfunding Resulting From Use of the AOA Method, Fiscal Years
1993 and 2000

                                                      Amount over- or
                                                       underfundeda
          State            Population change
                            (percentage)b        Fiscal year   Fiscal year
                                                    1993          2000
 Not affected by the
 0.5-percent minimum in
 fiscal year 2000
 Nevada                  100.1                  $91,785       -$363,641
 Arizona                 48.5                   -1,708,750    -3,179,207
 Colorado                35.5                   -494,843      -1,311,226
 Utah                    35.3                   151,567       56,389
 New Mexico              34.9                   87,399        -204,693
 South Carolina          28.0                   -646,067      -1,112,809
 Florida                 27.4                   -5,936,778    -6,775,244
 North Carolina          26.7                   -1,316,535    -2,105,478
 Texas                   24.9                   -1,454,608    -3,671,654
 Georgia                 24.4                   -596,290      -1,248,983
 Washington              22.7                   -748,581      -989,776
 Virginia                22.1                   -866,452      -1,155,710
 California              19.6                   -2,771,562    -3,768,543
 Oregon                  19.0                   -227,875      -272,773
 Maryland                17.3                   -503,563      -415,866
 Tennessee               15.4                   -12,274       -44,039
 Alabama                 13.5                   113,389       219,786
 Michigan                11.1                   3,626         698,930
 Louisiana               10.5                   397,567       574,935
 Minnesota               9.0                    491,592       809,512
 Kentucky                8.8                    450,115       695,374
 Indiana                 8.6                    149,612       848,385
 Wisconsin               8.2                    449,589       975,782
 Mississippi             8.0                    515,945       580,865
 Oklahoma                7.9                    577,481       672,553
 Ohio                    7.5                    270,740       1,943,977
 Arkansas                6.8                    549,550       636,507
 New Jersey              5.5                    709,603       1,652,195
 Missouri                4.9                    835,502       1,315,671
 Kansas                  3.8                    573,691       648,380
 Illinois                3.7                    1,892,426     2,723,906
 Nebraska                3.1                    528,245       438,664
 Connecticut             3.1                    398,186       825,727
 West Virginia           2.5                    509,975       525,644
 Pennsylvania            2.4                    1,218,074     3,353,775
 Massachusetts           1.7                    1,325,937     1,551,520
 Iowa                    1.7                    773,505       810,802
 New York                0.3                    4,374,177     4,627,210
 Puerto Rico             c                      -727,245      -1,257,842
 Affected by the 0.5-percent minimum in fiscal year 2000d
 Alaska                  75.8                   0             0
 Hawaii                  39.6                   73,919        106,368
 Delaware                25.6                   0             0
 Idaho                   25.5                   45,650        86,121
 Wyoming                 20.6                   0             0
 Montana                 17.8                   0             38,448
 New Hampshire           15.2                   69,496        88,316
 Vermont                 11.9                   0             0
 Maine                   8.6                    234,988       227,300
 South Dakota            4.7                    0             16,551
 North Dakota            2.9                    0             1,449
 Rhode Island            -1.1                   143,495       120,645
 District of Columbia    -11.3                  0             0
 American Samoa          c                      4,595         5,090
 Guam                    c                      0             0
 Northern Marianas       c                      0             0
 Virgin Islands          c                      0             0
 National average        13.6c

aPositive numbers signify that the AOA method yields a larger grant amount
than the statutory method. Conversely, negative numbers signify that the AOA
method yields a smaller grant amount than the statutory method.

bPercentage change in the population aged 60 and older between 1985 and
1998.

c1985 data for the population aged 60 and older are unavailable for the
outlying areas and therefore are not included in the national average.

dAllotments of states subject to the 0.5-percent minimum are not determined
by their population aged 60 and older. Hence, the use of the AOA method
instead of the statutory method generally changes their funding relatively
little.

Comments From the Department of Health and Human Services

(201022)

Figure 1: States Under- and Overfunded by AOA's Method 8

Figure 2: Over- and Underfunding Under AOA's Method
in States With Fast- and Slow-Growing Elderly Populations, Fiscal Years 1993
and 2000 10
  

1. To simplify this discussion, we refer to all grant recipients as states.

2. Older Americans Act: Title III Funds Not Distributed According to Statute
(GAO/HEHS-94-37, Jan. 18, 1994 ).

3. In this report, states with above-average elderly population growth are
those whose percentage change between 1985 and 1998 in the number of people
aged 60 and older exceeded the national average of such population growth.
In the context of state and national elderly population growth, "states"
refers to only the 50 states and the District of Columbia because Puerto
Rico, American Samoa, Guam, the Northern Marianas, and the Virgin Islands
lack comparable population data for 1985 and 1998. The Bureau of the Census
is the source of the population data referred to in this report.

4. The hold-harmless and small-state minimums are applied separately for
each of the five Older Americans Act title III programs: (1) supportive
services and centers, (2) congregate nutrition services, (3) home-delivered
nutrition services, (4) in-home services for frail older individuals, and
(5) disease prevention and health promotion services.

5. Instead of 0.5 percent, Guam and the Virgin Islands have a 0.25-percent
minimum, and American Samoa and the Northern Marianas have a 0.0625-percent
minimum.

6. Iowa's grant would be slightly more than Arizona's because Iowa would
benefit from the hold-harmless provision (in step 2), while Arizona would
not.

7. This period was chosen because 1985 population data were used (in part)
to calculate each state's fiscal year 1987 grant amount and, hence, its
hold-harmless amount, and because 1998 population data were used to
calculate fiscal year 2000 grant amounts.

8. The above-average-growth states that were not underfunded in fiscal year
2000 benefited from the 0.5-percent minimum-funding guarantee (Alaska,
Delaware, Hawaii, Idaho, Montana, New Hampshire, Utah, and Wyoming).
*** End of document. ***