April 5, 1994

PROGRAM INSTRUCTION

AOA-PI-94-2

TO: STATE AND AREA AGENCIES ADMINISTERING PLANS UNDER TITLE III AND VII
OF THE OLDER AMERICANS ACT OF 1965, AS AMENDED

SUBJECT: Title VII Fiscal Policy

LEGAL AND RELATED

REFERENCES: Older Americans Act, as Amended

This Program Instruction provides guidance to the States on the
following issues related to implementation of Title VII of the Older
Americans Act (Act):

1\. Use of Title III funding for ombudsman activities and applicability
of the intrastate funding formula;

2\. Required ombudsman program funding levels for State and Area
agencies on aging;

3\. The intent of the non-supplantation provision in Section 705(a)(4)
of the Act;

4\. Allowable uses of Title VII abuse prevention and ombudsman program
funding;

5\. Non-applicability of the intrastate funding formula to Title VII
funding;

6\. Non-inclusion of Title VII funds in the calculation of State
administrative costs after October 1, 1994

7\. Non-inclusion of Title VII funds in the calculation of funds for
area plan administration; and

8\. No matching requirement for Title VII funding.

AoA will issue other policies regarding the use of Title VII funds as
they are needed.

**1. Use of Title III Funding for Ombudsman Services; Applicability of
the Intrastate Funding Formula**

**Policy**

Section 303(a)(2) of the Act authorizes use of Title III supportive
services funding for ombudsman activities. Title III funds utilized by
the **State** under Section 304(d)(1)(B) must be used to support
activities of the Ombudsman Program, as defined in Section 712 of the
Act, at either the State level or at the local level for statewide
program development. These funds are not subject to the intrastate
funding formula. **Area Agencies** also may use Title III funds
allocated under Section 304(d)(1)(D) to support ombudsman program
activities.

**Discussion**

Section 303(a)(2) of the Act, the Title III authorization section, was
amended to read: \"Funds appropriated under paragraph (1) shall be
available to carry out section 712.\" Paragraph (1) is the Title III,
Part B authorization for supportive services and senior centers. Section
712 is the ombudsman section of Title VII.

The exemption from the intrastate formula of Title III supportive
services money spent on the Ombudsman Program is supported both by
Section 304(d)(l)(B) and by Section 321(a)(10), which permits use of
supportive services money for \"services of an ombudsman at the State
level to receive, investigate and act on complaints by older individuals
who are residents of long-term care facilities and to advocate for the
well-being of such individuals.\" Based on the legislative history,
which is discussed below (see issue number 5 on page 9), we have
determined that States may use this money to fund any aspect of the
statewide Ombudsman Program, as the program is defined in Section 712 of
the Act. Area agencies may also spend Federal Title III supportive
services money which they receive through the formula on ombudsman
services.

**2. Required Ombudsman Program Funding Level for State and Area
Agencies on Aging**

**Policy**

**For State Agencies on Aging:** Beginning in FY 1994,[^1] in carrying
out the Ombudsman Program under Titles III and VII, States must, at a
minimum, **expend** in a Fiscal Year not less than the total amount
expended by the agency from all sources in fiscal year 1991, with the
exception of:

> funds received in a State\'s allotment of the budget line item for
> abuse prevention (old Title III, Part G) in the FY 1991 Departments of
> Labor, Health and Human Services, and Education, and Related Agencies
> Appropriation Act which the State elected to expend on ombudsman
> activities in FY 1991.

In addition, States should **spend or obligate** on their Ombudsman
Program the full amount of the **increase** in funding between

! what they received and expended in FY 1991 on ombudsman activities
from the State\'s allotment of the budget line item for ombudsman
services in the FY 1991 Departments of Labor, Health and Human Services,
and Education, and Related Agencies Appropriation Act and

! their Title VII ombudsman allotment for a current Fiscal Year.

States should use **at least** this amount annually on ombudsman
services to residents of long term care facilities, as defined in
Sections 102(19) and (34), 307(a)(12) and 712 of the Act.

**For Area Agencies on Aging:** Area Agencies must expend on activities
of the Ombudsman Program, as defined in Section 712 of the Act, not less
than the total amount of Title III funds received under Section
304(d)(1)(D) and expended by the Area Agency in carrying out the
Ombudsman Program under Title III in FY 1991.

**Discussion**

Sections 306(a)(11) and 307(a)(21) of the Act establish fiscal year 1991
as the base year for the ombudsman funding level for both States and
Area agencies.

**State Agency Ombudsman Program Funding:** Section 307(a)(21) states:

> The plan shall provide assurances that the State agency, in carrying
> out the State Long-Term Care Ombudsman program under section
> 307(a)(12), will expend not less than the total amount expended by the
> agency in fiscal year 1991 in carrying out such a program under this
> title.

AoA interprets this to mean that Congress intended that States, at a
minimum, maintain the level of expenditures for the Ombudsman Program,
as it is defined in Section 712 of the Act, which they had achieved in
FY 1991.

In determining the total amount expended by the State Agency on its
ombudsman program in fiscal year 1991, States should include:

! all funds expended by the State on ombudsman activities under Title
III of the Older Americans Act, including State match, except for the
abuse prevention allotment cited below;

> ! all other Federal funds expended by the State on ombudsman
> activities, including but not limited to Title IV funding received
> under the provisions of Section 308(b)(3) of the Act (\"Hold
> Harmless\" funding for State administration); and
>
> ! all non-Federal funding expended by the State on ombudsman
> activities.

In determining the total, States may discount any funds received in a
State\'s allotment of the budget line item for abuse prevention (old
Title III, Part G) in the FY 1991 Departments of Labor, Health and Human
Services, and Education, and Related Agencies Appropriation Act which
the State elected to expend on ombudsman activities in FY 1991.

> **Example:**
>
> In FY 1991, a State expended for its Ombudsman Program \$100,000 in
> Title III Federal funds from its FY 1990 and 1991 allotments, \$17,647
> in State match, \$10,000 in State administration funds from its AoA
> Title IV money received under Section 308(b)(3) of the Act (\"Hold
> Harmless\" grant) and an additional \$50,000 in State funds. It also
> received and expended \$45,000 of the special ombudsman allotment (now
> Title VII funding) and chose to expend an additional \$20,000 of its
> elder abuse prevention (formerly Title III, Part G) allotment for
> ombudsman activities to prevent elder abuse in long-term care
> facilities. The base funding level in Federal and non-Federal funds
> is:

\$ 25,000 \'90 Title III

75,000 \'91 Title III

17,647 State match

10,000 Title IV \"Hold Harmless\"

50,000 Other State funding

[45,000]{.underline} \'91 Appropriation budget line item (ombuds.)

\$222,647 Base State ombudsman funding level

> (Note that the \$20,000 of its FY 1991 elder abuse prevention
> allotment which the State elected to provide to its Ombudsman Program
> is not included in the calculation of the base amount.)
>
> In addition to expending this minimal level of \$222,647, the State
> should use its entire Title VII ombudsman allotment for a fiscal year
> on the Ombudsman Program, as the program is defined in Section 712 of
> the Act. Since Congress transferred this ombudsman line item funding
> from Title III to Title VII in the FY 1993 Appropriation Act and this
> money should not be counted twice in determining the minimum required
> funding level, the State should spend or obligate the difference, or
> increase, between what it expended from its FY 1991 ombudsman line
> item allotment and its current Title VII ombudsman allotment. The
> example State\'s FY 1994 Title VII ombudsman allotment is 51,500,
> which is \$6,500 more than it spent from its FY \'91 appropriation
> ombudsman budget line item. **Thus, for FY 1994, the State should
> expend no less than \$222,647 plus \$6,500, or a total of \$229,147,
> on its Ombudsman Program.** The State has the option of using, or not
> using, any portion of its elder abuse prevention allotment to support
> abuse prevention activities outlined under Section 721 of the Act
> which are conducted by the Ombudsman Program.

A worksheet which States may use, at their option, to determine the
required minimum ombudsman program funding level is attached to this
Program Instruction.

**Area Agency Program Funding:** Section 306(e)(11) of the Act states:

> \[Area Plans must\] provide assurances that the area agency on aging
> in carrying out the State Long-Term Care Ombudsman program under
> section 307(a)(12), will expend not less that the total amount of
> funds appropriated under this Act and expended by the agency in fiscal
> year 1991 in carrying out such a program under this title\....

Because Area Agencies have no authority over any Older Americans Act
funds other than those they receive through the intrastate funding
formula, we have determined that the total amount to be calculated for
the Area Agency ombudsman maintenance of effort requirement is confined
to Title III funds received under Section 304(d)(1(D) and expended on
ombudsman services in FY 1991.

**3. The Intent of the Non-Supplantation Provision in Section 705(a)(4)
of the Act**

**Policy**

The intent of the Title VII non-supplantation provision in Section
705(a)(4) is that States use funds made available for any chapter under
Subtitle B of Title VII to supplement and be spent in addition to, and
not supplant, any funds that are expended under any Federal or State law
in existence on the day before the date of the enactment of Subtitle B
to carry out the vulnerable elder rights protection activities described
in the chapter. In other words, a State may not use Federal Title VII
funds to supplant, replace, or in substitution for, any other Federal or
State funding which the State expends pursuant to State or Federal laws
which were in effect on or before September 29, 1992, which was one day
before the date of enactment of Subtitle B.

To implement this requirement, the State must provide, in its Elder
Rights Plan, an assurance that it will use funds made available for a
chapter under Title VII, Subtitle B, in addition to, and will not
supplant with Title VII funding, any funds that are expended under any
Federal or State law in existence on or before September 29, 1992.

Money that is now available under Title VII which was previously under
Title III as budget line items in the Departments of Labor, Health and
Human Services, and Education, and Related Agencies Appropriation Acts
for FY 1991 and 1992 is to be considered a Title VII expenditure and not
a Title III expenditure, as these monies were transferred from Title III
to Title VII beginning in FY 1993.

**Discussion**

The Title VII non-supplantation provision is different than the Title
III ombudsman required minimum expenditure level for States. The
required minimum expenditure level provision means that the amount spent
by a State on its Ombudsman Program in FY 1991, plus the increase in
funding provided for ombudsman activities in each fiscal year under
Title VII, must be the minimum amount spent by the State on its
Ombudsman Program, as defined in Section 712 of the Act, in subsequent
years. The non-supplantation provision means that funds received under
the new Title VII may not be used to pay for what is already being
provided by the State under any Federal or State law which has been in
existence since on or before September 29, 1992 to conduct activities
described in any of the four chapters under Title VII, Subtitle B.

**4. Allowable Uses of Title VII Abuse Prevention and Ombudsman Program
Funding;**

**Policy**

\(a\) States may use any portion of their Title VII abuse prevention
allotment to fund specific, identifiable activities conducted by any
public or private non-profit program or agency, including adult
protective services and ombudsman programs, which directly correspond to
the abuse prevention activities outlined in Section 721(b) of the Act.

\(b\) States may not provide any of their Title VII abuse prevention
allotment to adult protective services agencies to conduct activities or
provide services not authorized in Section 721(b).

\(c\) Use of Title VII funding for involuntary services to, or coerced
participation in, Title VII-funded programs by alleged victims, abusers
or their households, is strictly prohibited.

\(d\) Use of any of the Title VII ombudsman allotment to fund activities
which are not authorized under Section 712 of the Act and conducted by
the Ombudsman Program or a grantee or contractor of the Ombudsman
Program is prohibited. This includes, but is not limited to, ombudsman
services in settings other than long term care facilities as defined in
Section 102(19) and (24) of the Act and activities under Title VII,
Chapters 3, 4 and 5 conducted by individuals or agencies other than the
Ombudsman or Ombudsman Program, or the Ombudsman\'s grantee or
contractor.

**Discussion**

Section 721(d)(3) specifically requires coordination of elder abuse,
neglect and exploitation prevention activities with the Long Term Care
Ombudsman Program in the State. Many ombudsman activities help prevent
elder abuse, neglect and exploitation in nursing homes, board and care
homes and similar adult care facilities; and ombudsmen routinely carry
out several of the activities listed in Section 721(b) as applicable to
these

settings. Such activities include:

! public education and outreach to help identify and prevent elder
abuse, neglect and exploitation;

! coordination of services with the State adult protection service
program;

! data collection on the extent of abuse, neglect and exploitation in
long-term care facilities;

! analysis of information and identification of service, enforcement or
intervention needs;

! training for individuals, professionals and paraprofessionals on
prevention of abuse and enhancement of residents\' self-determination
and autonomy; and

! technical assistance and training for individuals, including local
ombudsman representatives, who provide services for victims of abuse and
their families.

Prior to enactment of the 1992 Older Americans Act amendments, the elder
abuse prevention provision was in Title III, Part G of the Act. The
Fiscal Year 1991 appropriation provided separate funding for both abuse
prevention activities under Part G and ombudsman activities. The
conference report for the FY 1991 appropriation stated:

> It is the expectation of the conferees that the States be given
> discretion in the allocation of the elder abuse funds so as to provide
> for the most effective elder abuse prevention efforts. It is further
> the conferees\' expectation that portions of the elder abuse funds
> will be made available to State long-term care ombudsman programs to
> address complaints of abuse in long-term care facilities, including
> board and care homes. ([Congressional Record]{.underline}, H. 10798,
> October 20, 1990.)

The 1992 OAA amendments moved both the ombudsman and elder abuse program
provisions from Title III to the new Title VII, and the Fiscal Year 1993
Departments of Labor, Health and Human Services, and Education, and
Related Agencies Appropriation Act provided Title VII funding for both
programs.

The logic of the use of elder abuse prevention funds, as expressed in
the legislative history, carries over from Title III, Part G to Title
VII. There is no basis in the legislative history or in practical
application for States to use ombudsman program money to fund abuse
prevention activities conducted outside of the Ombudsman Program.

The purpose of Title VII, Chapter 3, is to promote only those activities
which are listed in the Act to prevent elder abuse, neglect and
exploitation. Section 721(b) outlines the activities which may be
supported with funding provided under this chapter. Provision of direct
services to individuals, whether as part of a protection plan or
otherwise, is not included. Further, Sections 705(a)(6)(B) and 721(e)(1)
specifically prohibit support of involuntary services under Chapter 3.
We interpret these statutory provisions to mean that funds provided for
this chapter must remain identifiable and cannot be folded into the
larger budget of a protective services agency. However, funds may be
provided to such an agency to carry out specific activities, as outlined
in Section 721(b).

There is no basis in the law or the legislative history for States to
use funding provided to conduct ombudsman services, as defined in
Section 712 of the Act, to fund ombudsman or advocacy services for
individuals living in their own homes or receiving acute medical care in
facilities not covered under the definitions of long term care
facilities in the Older Americans Act**.**

**5. Non-applicability of the Intrastate Funding Formula to Title VII
Funding**

**Policy**

The intrastate funding formula applies only to Title III funds under
Section 304(d)(1)(D) and does not apply to Title VII.

**Discussion**

The purpose of Title VII is to focus attention on advocacy programs
which the States, not the Area Agencies, have the responsibility to
establish and operate. States may designate funding under the various
chapters of Title VII for Area Agency activities or activities conducted
by other local or regional agencies or organizations which correlate
with the purpose of the funding under a particular chapter, but this
should be done for targeted and approved activities, not by the
established Title III formula. The Joint Explanatory Statement of the
Committees of Jurisdiction, Older Americans Act Amendments of 1992
states:

> \...the current Title III requirements governing the allocation of
> funds within states are not applicable to funds made available under
> any part of Title VII nor are area agencies the only entities eligible
> to receive grants from states under any part of Title VII. In
> addition, states may use funds available under Title VII to directly
> carry out vulnerable elder rights protection activities. (138 CONG.
> REC., S125, 13503 \[daily ed. September 15,1992\])

Section 762 of the Act makes it clear that a State may carry out Title
VII activities either directly or through contracts or agreements with
public or nonprofit private agencies or organizations, including but not
limited to Area Agencies. The intent is that States direct the use of
Title VII money for activities within the State which are planned and
coordinated by the State Agency on Aging. Section 705(a)(1) and (2) make
clear that States are to consult with Area Agencies and others in
identifying and prioritizing statewide activities conducted under Title
VII.

In fact, the nature of the intrastate funding formula is such that it is
not applicable to the Title VII chapters. For example, in distributing
funds under Chapter 2, it would be reasonable for States to provide
funding to stimulate development of new local ombudsman programs and
take into account the location and size of long term care facilities,
which are the major influence on workload for local ombudsmen and
volunteers. The distribution of nursing and board and care homes might
be different from the distribution of older people in the State and the
other factors which affect the intrastate funding formula.

The lack of applicability of the formula to Title VII is also
demonstrated by the requirements of Section 705(a)(7)(A), which details
a specific set of priorities to use if funds are distributed to Area
Agencies on Aging under Chapter 5, Outreach, Counseling, and Assistance
Program. (See AoA PI 94-1)

**6. Non-inclusion of Title VII Funds in the Calculation of State
Administrative Costs After October 1, 1994**

**Policy**

States may include Title VII allocations in the calculation of funds
available for State plan administration through fiscal year 1994; but
beginning on October 1, 1994, States may not include any Title VII
funding in their calculation of funds available for State plan
administration.

**Discussion**

There is absent any reference in the Act to Title VII allotments in
calculating funding for administration of State plans. On the other
hand, it is quite clear that the Act authorizes States to allocate five
percent, or \$500,000, whichever is greater, of their cumulative total
Title III allotments for meeting administrative costs.

When abuse prevention funding was under Part G of Title III and there
was an ombudsman allotment under Title III, States were authorized to
include these funds in computing the amount allowable to the State for
State agency administration. (See AoA PI-91-02, issued December 13,
1990.) AoA believes it is reasonable to permit Title VII funds to
continue to be calculated in the base for State plan administration
funding through FY 1994, in order to ensure continuity and a smooth
transition for the affected programs from Title III into Title VII.

The programs under Title VII, unlike most of the programs under Title
III, are established and operated as direct advocacy services by the
State Agency on Aging and/or agencies with which the State Agency
contracts or provides grants to operate the programs. Thus, at least
some, if not all, of the Title VII funds are used to pay directly for
such administrative costs as staff, offices expenses, travel, etc.
Therefore, a major funding principle to which States need to adhere with
regard to Title VII is that all funding allotted for a particular Title
VII chapter must be used to carry out the requirements and activities
specified for that chapter in the Act. Funds allotted for FY 1995 and in
subsequent years for any chapter under Title VII should not be included
in the calculation for State plan administration funding.

**7. Non-inclusion of Title VII funds in the calculation of funds for
area plan administration**

**Policy**

Title VII funds allotted to the States should not and may not be
included in the base amount used to calculate the ten percent limitation
on the use of funds for area plan administration under the provisions of
Section 304(d)(1)(A).

**Discussion**

There is no legislative basis for inclusion of Title VII funding in the
calculation for determining area agency funding for administration of
area plans. The provisions of Section 304 apply to Title III funds, not
Title VII funds. Title VII funds are excluded from funds distributed to
Area Agencies through the intrastate funding formula. Therefore, the
Title III formula for calculation of funding for area plan
administration may not be applied to the Title VII funding allotted to a
State.

**8. No matching requirement for Title VII funding**

The provisions in the Act regarding matching funds, Sections
304(d)(1)(D) and 308(a)(1), apply to Title III funds. There is no
statutory base to require States to match Federal funding they receive
under Title VII; therefore, there is no Federal matching requirement for
Title VII funds. States, however, are not precluded from requesting a
match to Title VII funds which they award by grant or contract to
another agency or organization.

INQUIRIES: Inquiries should be addressed to Regional Program Directors
on Aging, HHS Regional Offices

(Signed)

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Fernando M. Torres-Gil Date

Assistant Secretary for Aging

EFFECTIVE

DATE: Immediately

ATTACHMENT Optional Worksheet for Determining State FY 1991 Ombudsman
Expenditures

cc: State Ombudsmen

**Determination of Funding Expended by the State Agency**

**in FY 1991 on the Long Term Care Ombudsman Program**

**For Use in Determining Ombudsman Required Minimum Expenditure Level**

**for the State Agency on Aging**

(Use of Worksheet at State Discretion)

Title III-B Expenditures:

from FY \'91 allotment \$ \_\_\_\_\_\_\_\_\_\_\_\_\_\_

from previous Fiscal Year allotments \_\_\_\_\_\_\_\_\_\_\_\_\_\_

Other Federal funds expended

(excluding III G Abuse Prevention) \_\_\_\_\_\_\_\_\_\_\_\_\_\_

State match of Federal funds expended \_\_\_\_\_\_\_\_\_\_\_\_\_\_

All other State Expenditures \_\_\_\_\_\_\_\_\_\_\_\_\_\_

**Total \$ \_\_\_\_\_\_\_\_\_\_\_\_\_\_**

[^1]: ^?^ The Older Americans Act Technical Amendments of 1993 delayed
    applicability of certain Title III provisions, including those
    affecting Ombudsman Program funding, and all Title VII provisions
    until FY 1994.