Department  of  Health  and Human  Services 
ADMINISTRATION  ON  AGING

AND

OFFICE  OF

INSPECTOR  GENERAL

STATE  IMPLEMENTATION  OF  THE 
FINANCIAL  MANAGEMENT 
REQUIREMENTS  OF  THE  OLDER 
AMERICANS  ACT 
APRIL  1993
 ADMINISTRATION  ON  AGING

The  Administration  on  Aging  (AoA)  is the  principal  Federal  agency  designed  to  carry  out  the 
provisions of the Older  Americans  Act  (OAA).  It  advises  the  Secretary  of  Health  and Human 
Services and  other  Federal  agencies  on  the  characteristics,  circumstances  and  needs  of  older 
individuals.  Further,  it develops  policies,  plans,  and  programs  designed  to  promote  their 
welfare. 
AoA  administers  three  grant  programs  under  the  Older  Americans  Act.  The  largest  progr:lm -
-Title  III  of  the  Act  -- consist  of  formula  grants  to  States  to  establish  State  and  community-
based  programs  for  older  individuals  with  the  purpose  of  preventing  the  premature 
institutionalization  of older  individuals.  The  second  program  -- Title  VI  -- consists  of 
discretionary  grants  with  the  same  purpose  as Title  III,  but  to  meet  the  unique  needs  of  older 
Native  Americans.  The  third  program  -- Title  IV  -- is also  discretionary.  Its  purpose  is to  fund 
research,  demonstration,  and  training  activities  to  elicit  knowledge  and  techniques  to  improve 
the  circumstances  of  older  Americans.  (The  1992  Amendments  to  the  OAA  created  a fourth 
program  -- Title  VII  -- which  provides  funds  for  State  activities  to  protect  the  rights  of 
vulnerable  older  people.  Prior  to  the  1992  Amendments,  Title  III  of  the  OAA  provided  the 
funds  for  these  activities.) 
OFFICE OF INSPE~OR  GENERAL 
The  mission  of  the  Office  of  Inspector  General  (OIG),  as mandated  by Public  Law  95452.  as 
amended,  is to  protect  the  integrity  of  the  Department  of  Health  and  Human  Semites  (HHS) 
programs  as well  as the  health  and  welfare  of beneficiaries  served  by those  programs.  This 
statutory  mission  is carried  out  through  a nationwide  network  of  audits,  investigations.  and 
inspections  conducted  by three  OIG  operating  components:  the  Office  of  Audit  Services,  the 
Office  of  Investigations,  and  the  Office  of  Evaluation  and  Inspections.  The  OIG  also  informs 
the  Secretary  of  HHS  of  program  and  management  problems and recommends  courses  to 
correct  them. 
The  OIGS  Office  of  Evaluation  and  Inspections(OEI) conducts short-term  management  and 
program  evacuations  (called  inspections)  that  focus  on  issues  of  concern  to  the  Department. 
the  Congress,  and  the  public.  The  findings  and  recommendations  contained  in  these  inspection 
reports  generate  rapid,  accurate,  and  up-to-date  information  on  the  efficiency,  vulnerability, 
and  effectiveness  of  departmental  programs. 
THIS REPORT 
This  report  is the  result  of  a joint  effort  between  AoA  and  OIG/OEI  to  assess  the 
implementation  of  Title  HI  of  the  Older  Americans  Act.  OIG  staff  in the  New  York  and 
Dallas  regional  offices  provided  technical  support  to  the  joint  project.  AoA  staff  in  New  York 
and  Dallas  directed  the  project  with  all  regional  offices  participating  in the  development  of 
instruments  and  data  collection. 
For additional information, please  contact: 
AoA  John Dia~ Regional Program Director-Dallas 
OIG  Jack Molnar, Project Leader-New York  Department  of  Health  and Human  Services 
ADMINISTRATION  ON  AGING

AND

OFFICE  OF

INSPECTOR  GENERAL 
STATE  IMPLEMENTATION  OF  THE 
FINANCIAL  WAGEMENT 
REQUIREMENTS  OF  THIZ OLDER 
AMERICANS  ACT 
APRIL  1993  OE14)2-91-01514 
I  EXECUTIVE  SUMMARY 
PURPOSE 
To review  State  Units  on Aging  (SUA)  implementation  of the  financial  management 
requirements  of Title  III of the  Older  Americans  Act  (OAA). 
BACKGROUND 
In an effort  to  strengthen  its stewardship  of the  O- the  Commissioner  of the 
Administration  on Aging  (AoA)  requested  technical  assistance  from  the  Office  of 
Inspector  General  (OIG)  in designing  a review  of their  primary  Title  III grantees  --
SUAS.  After  reviewing  traditional  and  current  financial  management  activities,  and 
discussing  potential  approaches  for future  efforts,  we agreed  that  a review  of 
individual  States  would  be  instituted  in such a way as to provide  the  Commissioner 
with  an overview  of how States  are  implementing  key components  of Title  III.  The 
OIG  agreed  to  assist AoA  in developing  national,  standardized  review  instruments  for 
key components  of Title  III.  In order  to conserve  limited  travel  funds  the  reviews 
would  be  conducted  on a sample  of States  and would  focus  on only five programmatic 
areas  -- stewardship,  targeting,  ombudsman,  nutrition,  and  financial  management. 
This  report  on financial  management  addresses  the  SUAS financial  management  of 
OAA  funds  and  its funding  and  oversight  of area  agencies  on aging  (lL%%).  It 
focuses  on issuing guidance  on and  monitoring  implementation  of the  key financial 
management  requirements  of Title  III of the  O- including  the  area  planning 
process. 
METHODOLOGY 
The  reviews  were  conducted  in a stratified,  random  sample  of 20 States  based  upon 
the  population  of individuals  over  60 years  of age in each  State.  In the  first step  of 
the  sampling  process,  States  were  divided  into  four  strata  based  upon  the  number  of 
older  individuals  in each  State.  In the  second  step,  five States  were  selected  from 
each  stratum.  This  stratified,  random  sample  permits  a generalization  of findings  from 
the  20 sample  States  to the  Nation. 
FINDINGS 
While States  Address  A  Majority  Of Financial  Management  Reqhemenfi,  Some 
Vulnerabilities  StiZl Bist 
One-third  of States  that  engage  in program  development  and  coordination 
 
activities  exceed  the  allowable  Federal  share  of the  costs. 
Many  States  do not  monitor  voluntary  contribution  or the  use  of profit-making 
 
organizations 
i  Most  States  Have  Impkmented  Required  Audi  Bocesses 
  Virtually  all States  require  audits  of area  agencies  and  have  follow-up  procedures 
The  most  common  deficiencies  noted  among  area  agencies  are  internal  control 
 
weaknesses 
States  l%ovide  area  agencies  Wtih  Technical  Assktance  And  ?kabzkg  To Addrew 
Deficiencia 
60 percent  of States  provide  financial  management  technical  assistance  to area 
 
agencies 
Most  common  deficiencies  are  in accounting  and  budgeting 
 
ii  TABLE  OF  CONTENTS 
EXECUTIVESUMM.ARY  . . . . . . . . . . . . . . . . . . . . . . . . . . ..=  ...0000   OOO*Ci 
INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..=~~.  .~OOOOOO1 
States  Address  Most  Financial  Management  Requirements  . . . . . . . . . . . . . . . .  4 
Most  States  Have  Implemented  Audit  Processes  . . . . . . . . . . . . . . . . . . . . . . . .  8 
States  Provide  Technical  Assistance  And  Training  . . . . . . . . . . . . . . . . . . . . . . .  9 
APPENDICES 
k  Appendix  A  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...=  .- A-1  INTRODUCTION 
PURPOSE 
To review  State  Units  on Aging  (SUA)  implementation  of the  financial  management 
requirements  of Title  III of the  Older  Americans  Act  (OAA).  In this report,  the  term 
financial  management  refers  to the  SUAS fiscal management  of OAA  funds  and  its 
funding  and  oversight  of AAAs.  It focuses  on issuing guidance  on and  monitoring 
implementation  of the  key financial  management  requirements  of Title  III of the 
0~  including  the  area  planning  process. 
BACKGROUND 
Under  the  0~  the  Administration  on Aging  (AoA)  serves  as  the  principal  Federal 
advocate  for older  individuals,  providing  national  leadership  in the  development  of 
programs  to address  their  needs.  Through  Title  III of OAA  (Grants  for State  and 
Community  Programs  on Aging),  AoA  encourages  and  assists  SUAs  and  area  agencies 
on aging  (A&%)  to implement  a system  of coordinated  community-based  services  to 
prevent  the  premature  institutionalization  of older  individuals  by allowing  them  to 
remain  in their  own community. 
Under  Title  III, AoA  distributes  approximately  $765million  in formula  grants  to States 
based  on the  age  60+  population  within  each  State.  The  SUAs  use  about  5 percent 
of the  grant  on administration,  and  then  fund  AAAs  who then  contract  for the 
supportive  services,  nutrition  services  and  multipurpose  senior  centers.  The  single 
largest  component  of Title  III, the  nutrition  program,  provides  approximately  $450 
million  for  congregate  and  home-delivered  meals.  Other  key program  components 
include  supportive  services  (i.e., access  services,  in-home  services  and  legal  assistance) 
and  the  Ombudsman  program  which  serves  as an advocate  for residents  in long term 
care  facilities. 
One  of AoAs major  administrative  responsibilities  is to provide  stewardship  over  the 
States  implementation  of the  Title  III program.  However,  AoAs capacity  to carry  out 
its stewardship  responsibilities  declined  substantially  during  the  1980s due  to a 
significant  reduction  in resources.  More  specifically,  AoA  sustained  a 47 percent 
reduction  in staff  and  75 percent  reduction  in travel  funds.  Each  regional  office  had 
only $2,000 annually  for travel.  Because  they  could  not  monitor  SUAs, AoA  became 
further  and  further  removed  from  the  activities  of the  SUAs  and  their  area  agencies 
on aging. 
In an effort  to  strengthen  its stewardship  of the  OAA,  the  Commissioner  of AoA 
requested  technical  assistance  from  the  Office  of Inspector  General  (OIG)  in 
designing  a review  of their  primary  Title  III grantees  -- SUAs.  In response  to the 
Commissioners  request,  OIG  staff met  with key AoA  headquarters  and  regional  staff 
to identi&  traditional  and  current  stewardship  activities,  and  to discuss potential 
1  approaches  for future  efforts.  As a result,  we agreed  that  the  review  of individual 
States  would  be  instituted  in such a way as to provide  the  Commissioner  with  an 
overview  of how States  are  implementing  key components  of Title  III.  The  OIG 
agreed  to assist AoA  in developing  national,  standardized  review  instruments  for key 
components  of Title  III and  in writing  a report  summarizing  States  implementation  of 
the  Act.  We  also  agreed  that  in order  to conserve  limited  travel  funds  the  reviews 
would  be  conducted  on a sample  of States  and would  focus  on only five programmatic 
areas  -- stewardship,  targeting,  ombudsman,  nutrition,  and  financial  management. 
Designing  the  review  began  with  the  meeting  of a review  team  of OIG  and  selected 
AoA  regional  staff.  They  brainstormed  approaches,  identified  Federal  reporting  and 
operating  requirements  for SUAS and AAAs,  and  drafted  instruments  containing  the 
review  questions  and  criteria.  The  draft  instruments  were  shared  with AoA 
headquarters  staff and  each  regional  office for comments,  and  then  revised  to reflect 
comments. 
The  OIG/AoA  review  teams  pre-tested  the  instruments  and  data  collection 
methodology  by conducting  reviews  for each  of the  five instruments  in six States 
located  in four  different  Federal  regions.  The  pre-test  identified  that  a great  deal  of 
time  was lost  explaining  criteria  (interpreting  law and  regulation)  and  searching  for 
documentation.  Accordingly,  the  review  team  modified  each  of the  instruments  and 
changed  the  data  collection  methodology.  The  most  significant  change  to the 
methodology  required  the  sharing  of the  review  instruments  with the  States  prior  to 
the  site visit in the  belief  that  if States  are  aware  of and  understand  the  review  criteria 
being  used  during  the  review,  they will be better  prepared  to provide  required 
documentation  and  to discuss specific  issues. 
METHODODGY 
The  reviews  were  conducted  in a stratified,  random  sample  of 20 States  based  upon 
the  population  of individuals  over  60 years  of age  in each  State.  These  are  the  same 
data  used  to allocate  Title  III funds  among  States.  In the  first step  of the  sampling 
process,  States  were  divided  into  four  strata  based  upon  the  number  of older 
individuals  in each  State.  In the  second  step,  we selected  five States  from  each 
stratum.  This  stratified,  random  sample  permits  us  to  generalize  findings  from  the  20 
sample  States  to the  Nation.  Table  I indicates  those  States  selected  for the  review 
process  (See  Table  I). 
We  also used  sampling  techniques  during  site visits to each  State  for the  reviews  of 
specific  area  plans  and  assessments.  In these  instances,  we selected  a simple,  random 
sample  of 10 AAAs  prior  to the  visit to review  on-site.  For  those  States  with  less than 
10 AAAs,  all AAAs  were  included  in the  review. 
2  TABLE  I 
II 
SAMPLE  STATES
I 
Stratum  1  Stratum  2  Stratum  3  Stratum  4 
California  Michigan  Wisconsin  New Hampshire 
Pennsylvania  Indiana  Colorado  North  Dakota 
New York  Massachusetts  Oklahoma  Nevada 
Texas  Georgia  Maine  District 
Florida  North  Oregon  of Columbia 
Carolina  Montana 
The  data  collection  was conducted  in two phases  -- an AoA  regional  office  desk 
review  and  an  on-site  review  at the  SUA.  During  the  desk  review  phase,  we looked  at 
area  plan  guidance  and  program  instructions,  as well as the  States  assessment 
instruments  for AAAs  to determine  if they  are  consistent  with Federal  law and 
regulations.  We  also reviewed  priority  services  waivers  and  targeted  populations 
participation  data  from  the  State  Program  Report  for Title  III. 
Following  the  desk  review,  each  State  was sent  a proposed  agenda  for the  site visit, a 
listing of the  AAAs  whose  area  plans  and  assessment  reports  will be  reviewed,  a COpy 
of the  financial  management  review  instrument  (Appendix  A),  and  the  findings  from 
the  desk  review  to be  discussed  during  the  site visit. 
The  review  instrument  focused  on the  guidance  SUAS issued  to AAAs,  on key 
requirements  of Title  111,and  on the  instruments  and  procedures  they  use  to assess 
AAAs  with  those  requirements.  A review  of area  plans  and  assessment  reports 
determine  whether,  and  to what  extent,  they  reflect  OAA  requirements.  The 
instruments  also focus  on the  issues of SUA  operating  procedures,  and  on training  and 
technical  assistance  activities. 
We  entered  data  from  the  financial  management  review  instruments  into  three 
databases.  One  database  contained  the  responses  to the  open- and  closed-ended 
questions  on the  instrument  and  the  other  two contained  the  reviews  of 191 area 
plans,  audits  and  assessments.  The  number  of responses  to questions  vary because 
some  questions  did not  apply  to the  four  States  in Stratum  4-- NH,  ND,  NV,  & DC  --
which  are  single planning  and  service  area  (SPSA)  States. 
The  percentages  cited  in this report  are  based  on the  responses  to specific  questions 
contained  in the  review  instrument.  The  responses  are  weighted  to reflect  the  sampling 
plan  and  are  projected  to the  Nation.  The  precision  at the  90-percent  confidence 
intervals  vary for each  question  from  plus or minus  6 to 21 percent  based  upon  the 
nature  of the  question  (categorical  or continuous)  and  the  number  of respondents  to 
each  question. 
3  FINDINGS 
WHILE  STATES  ADDRESS  A  MAJORITY  OF  FINANCIAL  MANAGEMENT 
REQUIREMENTS,  SOME  VULNERAJ31LITIES  STILL  EXIST 
State  Administration 
The  Older  American  Act  (OAA)  limits the  amount  that  maybe  spent  for State  agency 
administration.  A State  agency  may spend  Up to $300,000  or 5 percent  of its Title  III 
allotment  (whichever  is greater)  for administrative  purposes.  It may spend  an 
additional  3/4 of one-percent  more  of its Title  III allotment  with the  approval  of the 
Administration  on Aging  (AoA).  We found  that  most  States  (91 percent)  have 
documentation  indicating  that  they  spend  less than  either  $300,000  or 5 percent  of 
their  Title  III allotments.  Only, 4 percent  indicate  spending  more  than  $300,000  or 5 
percent. 
AAA Administration 
After  subtracting  the  costs for State  administration  from  the  Title  III allotment, 
statewide  expenditures  for AAA  administration  cannot  exceed  10 percent  of the  Title 
III allotment  balance.  Our  review  found  that  4 percent  of States  spent  more  than  the 
authorized  amount. 
Our  review  also found  that  71 percent  of the  State  agencies  have  issued  policy or 
guidance  regarding  this percen~age  limitation  on area  agency  on aging  expenditures;  9 
percent  do not.  (The  remaining  20 percent  are  single planning  and  service  area 
States.)  Further,  only 41 percent  of State  agencies  monitor  A&U  to ensure  that  this 
expenditure  limit  is met.  Additionally,  we found  that  only 24 percent  of the  States 
have  developed  controls  at the  State  level to ensure  that  this requirement  is met. 
The  OAA  funds  used  for the  AAA  administration  must  come  from  Title  III-B  or Title 
III-C  allotments.  We  found  that  62 percent  of the  States  have  policy  or guidance  that 
either  fully or partially  addressed  this limitation.  However,  an equal  percent  of States 
do not  monitor  AAAs  to ensure  that  only Title  III-B  and  Title  III-C  funds  are  being 
spent  for  administration.  In addition,  we determined  that  21 percent  of States  have 
State-1evel  internal  controls  to ensure  that  funds  for &%  administration  are  derived 
from  the  appropriate  allotments. 
1+-ogram Development  and  Coordination 
The  Title  III regulations  place  a limit  on the  Federal  share  of the  cost of AAA 
expenditures  for program  development  and  coordination  activities.  The  Federal  share 
of costs is limited  to  75 percent  of the  total  cost  of such activities,  until  expenditures 
in  a State  exceed  the  m&imum  amount  that  can be  spent  for AAA  administration. 
4  When  this maximum  amount  is expended  in a State,  then  the  limit  on the  allowable 
Federal  share  of costs for program  development  and  coordination  activities  increases 
to 85 percent.  AAAs  in 42 percent  of States  engage  in program  development  and 
coordination  activities.  Thirty-one  percent  of these  States  exceed  the  allowable 
Federal  share  of such  costs. 
Ruxal  @7en4iitures 
Each  Federal  fiscal year,  Title  III expenditures  in rural  areas  must  equal  or exceed  105 
percent  of specified  OAA  funds  spent  in rural  areas  in fiscal year  1978.  In 30 percent 
of the  States,  annual  Title  III expenditures  in rural  areas  equaled  or exceeded  the 
required  amount.  However,  only a few States  have  developed  internal  procedures  to 
document  that  this requirement  is being  met. 
Seventy  percent  of States  did not  know  the  amount  of Older  Americans  Act 
expenditures  in rural  areas  in Fiscal  Year  1978.  Forty-six  percent  of the  States  did not 
know the  amount  of Older  Americans  Act expenditures  in rural  areas,  during  a recent 
fiscal year.  Additionally,  we found  that  42 percent  of States  do not  have  policy or 
guidance  which  addresses  this requirement. 
i!ltle III-B Allotment 
Each  State  agencys plan  must  specify the  minimum  percentage  of each  AAAs Title 
III-B  allotment  which  must  be  spent  for access,  in-home,  and  legal  services.  In turn, 
each  area  plan  must  assure  that  AA&  will spend  the  State  agencys prescribed 
percentage  for  each  the  three  categories  of services.  Upon  request,  and  under 
specified  circumstances,  the  State  agency  is authorized  to grant  a waiver  to an  area 
agency which  suspends  those  requirements  for one  or more  of these  three  categories 
of service.  (See  the  report,  State  Implementation  of Stewardship  Requirements  of 
the  Older  Americans  Act 02-91-01512,  for a discussion  of waiver  procedures.) 
Sixty-three  percent  of the  States  have  fully addressed  the  policy or guidance  which 
requires  expenditures  of the  State-stipulated  percentages  in each  service  category. 
However,  18 percent  do not  have  policy or guidance  which  addresses  the  required 
expenditures.  Also,  only 36 percent  of the  State  agencies  assess the  extent  to which 
AAAs  expend  the  required  amounts  for the  three  categories  of services,  while  44 
percent  of the  State  agencies  do not  monitor  to determine  if AAAs  are  expending  the 
required  amount. 
Voluntay  Contnbutions 
In general,  nearly  all State  agencies  have  either  fully or partially  addressed  45 CFR 
1321 requirements  pertaining  to voluntary  contributions.  However,  9 percent  of the 
States  do not  provide  guidance  to AAAs  to ensure  that  such contributions  are  used  to 
enhance  services. 
5  In reviewing  the  States  assessment  instruments  or related  materials  used  to determine 
AAAs  response  to the  criteria,  20 percent  of States  do not  determine  whether 
participants  are  given an opportunity  to make  voluntary  contributions  or there  is 
privacy  for individuals  making  contributions.  Further,  18 percent  do not  address 
safeguards  and  accounting  for contributions,  and  46 percent  do not  assess  to 
determine  if support  services  contributions  are  being  used  to expand  support  services. 
In addition,  the  OAA  stipulates  that  contributions  for nutrition  services  must  be  used 
to increase  meals,  facilitate  access  to meals,  or to provide  other  supportive  services 
directly  related  to nutrition  services.  All States  have  issued  policy  or guidance  to 
AA&  which  either  fully or partially  addresses  the  allowable  use  of nutrition  services 
contributions.  However,  46 percent  of the  States  do not  address  this requirement  on 
their  assessment  instruments. 
Xransfen  Between  Congregate  and  Home-Delivered  Meak 
Each  Federal  fiscal year,  State  agencies  may transfer  up to 30 percent  of the 
congregate  meals  allotment  to the  home-delivered  meals  allotment,  or from  the  home-
delivered  meals  allotment  to the  congregate  meals  allotment  without  approval.  Any 
transfers  exceeding  30 percent  can  only be made  with  the  approval  of the 
Commissioner  on Aging.  We  found  that  the  4 percent  of States  that  transferred  more 
than  30 percent  between  the  congregate  meals  allotment  and  the  home-delivered 
meals  allotment  had  obtained  the  required  approval  of the  Commissioner  on Aging. 
Most  States  (82 percent)  have  either  fully or partially  addressed  policy  or guidance 
regarding  the  limitation  on transfers  between  allotments;  18 percent  have  not. 
Further,  while  35 percent  of the  States  monitor  AAAs  for the  limitation  on transfers 
between  allotments,  60 percent  do not.  Of those  States  that  do conduct  assessments, 
a review  of assessment  reports  indicates  that  78 percent  address  this requirement 
through  State-level  controls. 
Transfen  Between  Suppti  Services  and  Nutdion 
State  agencies  have  authority  to annually  transfer  up to 30 percent  of Title  III-B 
supportive  services  funds  to the  Title  III-C  nutrition  program.  The  converse  is also 
authorized.  We  found  that  59 percent  of States  either  fully or partially  addressed  this 
transfer  authority  in policy.  Although  22 percent  of the  States  do not  have  policy  or 
guidance,  this probably  reflects  those  State  agencies  having  internal  controls  at the 
State  level  to regulate  the  amounts  that  are  transferred  among  these  allotments.  We 
determined  that  since  many  States  have  State-level  controls  monitoring  the  transfer  of 
allotments,  it was not  necessary  in this study to determine  if State  agencies  were 
assessing  AAAs  to determine  the  nature  and  the  extent  of transfers  between 
allotments. 
6  Pro@-making  Organizations 
The  OAA  authorizes  recipients  of grants  or contracts  (AAAs)  to enter  into  a contract 
with  a profit-making  organization,  subject  to the  approval  of the  State  Agency. 
Seventy-three  percent  of State  agencies  have  issued  policy or guidance  regarding  this 
requirement;  8 percent  do not. 
Half  of the  States  do not  monitor  AAAs  to ensure  that  they  are  meeting  requirements. 
Of the  States  which  do monitor  the  AA&,  16 percent  manage  this requirement  with 
State-level  controls. 
Record  Retention 
Federal  financial  management  regulations  specify the  length  of time  that  records  must 
be  retained  by recipients  of Federal  funds.  While  98 percent  of the  States  provide 
such guidance  to AA&,  35 percent  do not  monitor  whether  each  A&4  retains  records 
for three  years  after  the  date  that  the  AAA  submits  its final  expenditure  report,  or the 
date  on which  resolution  of audits  exceptions,  litigations,  etc., occurs  (whichever  date  is 
later). 
Dedktion  Alternative 
The  Title  III regulations  do not  allow the  deduction  alternative  in applying  program 
income.  Sixty percent  of the  States  have  policy or guidance  which  fully addressed  this 
requirement.  Although  25 percent  of the  States  do not  have  policy or guidance,  many 
of the  State  agencies  indicate  they  are  able  to control  use  of the  deduction  alternative 
at the  State  level. 
Federal  Financial  Interest  ik Senior  Centen 
The  Federal  government  retains  financial  interest  in senior  centers  acquired  or 
constructed  with  OAA  funds.  A share  of funds  is returned  to the  Federal  government 
under  certain  circumstances:  1) the  owner  of the  facility ceases  to be  a public  or 
private  agency  or organization,  or 2) the  facility ceases  to be used  for the  purposes  for 
which  it was acquired.  This  financial  interest  remains  in effect  for ten  years  after  the 
acquisition  of a senior  center  and  for 20 years  after  the  construction  of a senior  center. 
Seventy-three  percent  of States  have  fully addressed  this issue  in policy or guidance, 
and  60 percent  monitor  AAAs  to ensure  that  the  appropriate  Federal  share  of the 
cost  of senior  centers  will revert  to the  United  States  Treasury.  However,  23 percent 
of the  States  do not  have  policy or guidance  addressing  this requirement,  and  40 
percent  do not  monitor  AAAs  to determine  what  they  are  doing  to  ensure  the 
retention  of Federal  financial  interest  in senior  centers. 
7  Ombudkman  l%o~am 
For  State  long-term  care  ombudsman  programs,  each  year,  State  agencies  must 
expend  an  amount  of supportive  services  funds  that  equals  or exceeds  the  amount  of 
supportive  services  funds  expended  for this program  in FY  1987.  A majority  of the 
States  (96 percent)  have  documented  expenditures  for the  State  long-term  care 
ombudsman  program  which  equal  or exceed  the  required  amount.  However,  4 
percent  of the  State  agencies  did not  expend  sufficient  supportive  services  funds  to 
meet  this requirement.1 
Maintenance  of Effort 
The  Title  III regulations  require  each  State  agenq  to annually  spend  from  State 
sources  at least  the  average  amount  that  was spent  annually  from  State  sources  during 
the  previous  three  years.  To  ensure  this requirement  is met,  AoA  requires  State 
agencies  to  submit  a certification  of maintenance  of effort  annually.  In this 
certification,  the  State  agency  specifies  the  amount  of State  funds  expended  in the 
previous  year.  Further,  the  State  agency  certifies  whether  the  amount  of State  funds 
being  spent  annually  is 1) less than  the  required  funding  level,  2) equal  to the  required 
funding  level,  or 3) more  than  the  required  funding  level. 
We  reviewed  the  amount  expended  from  State  sources  in the  most  recent  fiscal year 
as compared  with  the  documented  prior  three-year  average  expenditures  from  State 
sources.  All States  provided  documentation  to determine  prior  three-year  average 
amounts  expended  for maintenance  of effort.  The  findings  of this review  are  that  100 
percent  of the  States  equal  or exceed  the  amount  from  State  sources  that  is required 
to meet  the  maintenance  of effort  requirements. 
MOST  STATES  HAVE  IMPLEMENTED  REQUIRED  AUDIT  PROCESSES 
Ninety-six  percent  of the  States  have  policies  and  procedures  on audits  and  84 percent 
of the  States  direct  grantees  to follow Office  of Management  and  Budget  Circulars  in 
an attempt  to  ensure  audits  will be  conducted  in accordance  with  applicable  law and 
regulations.  To  assure  that  audits  are  conducted  46 percent  of States  require  AAAs  to 
budget  funds  for  audits  and  89 percent  require  grantees  to transmit  all audit  reports  to 
the  State  agency  for review.  State  agencies  usually  use letters  (90 percent)  to indicate 
how and  when  grantees  are  to submit  information  on actions  taken  to address  findings. 
Only 30 percent  indicate  that  grantees  are  provided  this information  through  guidance 
in procedures  manuals. 
Most  States  (82 percent)  routinely  monitor  and/or  assess  grantees  until  all grantee 
audit  deficiencies  have  been  resolved,  and  48 percent  also require  grantees  to submit  a 
written  report  describing  progress  in correcting  deficiencies  cited  in audit  findings. 
We  reviewed  the  most  currently  completed  annual  cycle of AAA  grantee  audits  to 
determine  1) the  type  of audit  conducted,  2) when  the  last  audits  were  completed,  3) 
8  if the  audits  were  on file with the  State  agency,  and  4) the  type  of audit  deficiencies 
that  were  being  identified.  All audits  we reviewed  (A-128  and  A-133  audits  of 176 
sample  grantees)  were  for  a one-year  period.  In the  last fiscal year  during  which 
grantee  audits  were  made,  72 percent  were  completed  in 1991, 21 percent  in 1990, and 
7 percent  in 1989.  The  most  common  deficiencies  identified  in these  audits  were: 
1)  internal  control  weaknesses  (79 percent); 
2)  non-compliance  with law or regulations  (57 percent); 
3)  questioned  costs  (71 percent);  and 
4)  other  types  of deficiencies  (27 percent),  such as fiscal policies 
and  procedures  not  in place,  mathematical  errors  on expenditure 
statements,  and  failure  to file timely  reports. 
States  add  that  based  upon  their  assessments  of AAAs  the  most  common  AAA 
financial  management  deficiencies  involve  accounting  (58 percent),  staffing  issues  (33 
percent),  auditing  (31 percent),  and  reporting  (13 percent). 
STATES  PROVIDE  AAAs  WITH  TECHNICAL  ASSISTANCE  AND  TRAINING 
TO  ADDRESS  DEFICIENCIES 
Many  of the  State  agencies  (60 percent)  provide  technical  assistance  (T/A)  or training 
to AAAs  for  addressing  deficiencies  identified  either  through  the  audit  or assessment 
processes.  Forty  percent  of States  indicate  that  such T/A  or training  was for 
accounting  problems  and  15 percent  indicate  providing  T/A  or training  in budgeting. 
States  further  report  that  their  capacity  to provide  such T/A  or training  to A&k  is 
sometimes  limited  and  indicated  they  also have  unmet  training  and  T/A  needs.  Some 
States  (16 percent)  indicate  their  most  common  unmet  training  and  T/A  needs  are  for 
clearer  guidance  on AoA  regulations,  program  instructions,  and  legislation.  Another 
15 percent  need  help  with  audits  and  9 percent  indicate  a need  for computer  training. 
Others  noted  T/A  needs  include  monitoring  requirements,  contracting,  cost  allocation, 
and  earned  income. 
9  APPENDIX  A 
Review Instrument For Financial 
Management 
A -1  FINANCIAL  MANAGEMENT  COMPLIANCE  REVIEW 
Department  of  Health  and  Human  Services 
Administration  on  Aging 
State  Date 
Primary  Respondent  Telephone 
Review  Team  Leader  Telephone 
..------------ ____________________________._--_--_-_-------
1.  Prior  to the  on-site  visit,  obtain  copies  of policies,  procedures,  and  other  guidance  to Area 
Agencies  on A~ng  (AAAs)  on financial  management  from  the  Sttie  Agency  on Aging 
(St&e  Agency).  Review  and  determine  whether  or not  these  issuances  address  the  cliteria 
identified  in  the following  table.  Indicae  your  responses  with  an  X in the  appropnate 
column  reflecting  these  codes: 
Y (Yes)  =  Total  Compliance  with  Criteria 
P  (Patil)  =  Patial  Compliance  with  Cnteria 
N  (No)  =  Not  in  Compliance  with  Cnteria 
Dun-ng  the  desk  review,  if the policy  materials  do ~  include  those  items  necessary  to 
make  a detennin~on  of  compliance  ~,  P,  or N),  mark  NA  (Not Available)  in the 
Comments  section  of the  table. 
I 
CRITERIA  Y  P  N  CONIMIZNTS 
a.  State  Agency approves all AAA contracts with 
profitmaking  grantees 
OAA Sec. 212 
b.  Title 111expenditures  in rural areas equal or 
exceed  105% of specified  expenditures  in FY  1978 
OAA Sec. 307(a)(3)(B) 
c.  AAA administrative  expenditures  statewide  do  not 
exceed  the  1070 limitation 
OAA Sec. 304(d)( l)(A) 
d.  There  is no  finding  at the  85-15  match  for 
program  development  and coordinated  activities 
until the specified  percentage  is expended 
statewide  for AAA administration 
45 CFR  1321. 17( f)(14) 
A-1  CRITERIA  Y  P  N  COMME.NTS 
,..  Each AAA retains records  for3  yrs after the date 
that the AM  submits its final expenditure  report 
or the date on which resolution  of audit 
exceptions,  litigation,  etc. occurs  (whichever  date 
is later) 
45 CFR 92.42  & 74 Subpart  D 
f.  Participants  are :iven  an opportunity  to make 
voluntary  contributions 
45 CFR  1321.67(a)(1) 
o Limitations  on transfers  between congregate  and 
3 
home-delivered  meal allotments 
45 cm  1321.45 
h.  Privacy  of contributions 
45 CFR 1321.67(a) (2) 
i.  Safeguards  and accounting  for contributions 
45 CFR  1321.67(a)(3) 
j  Support services contributions  are  used  to expand 
support  services 
45  CFR  1321.67 
k.  In applying  program  income.  the  deduction 
alternative  is not  used 
45  CFR  1321.73 
1.  AAA administration  is fi.mded from Title [11 B 
andior  Title LI1C, only 
OAA Sec. 303(c) 
m.  Statewide transfers  between Title III B & C do not 
exceed 30% 
OAA Sec. 308(b)(5)(B) 
n.  Retention of Federal government  financial interest 
in senior centers 
OAA Sec. 312 
0.  AAAs spend State Agency prescribed  percentages 
on specified  categories  of services 
OAA Sec. 307(a)(22)  and 306(a)(2) 
P.  Audits for  governmental  and  non-governmental 
AAAs 
OMB  Circulars  A-1X3,  A-133 
q.  Nutrition  services  contributions  are  used  to 
increase  meals,  for access,  or  for authorized 
services. 
OAA  307(a)(  13)( C)(ii)  & 45  CFR  1321.67 
A-2  At  this point,  you  should  have  completed  the  in-house  compliance  review  of the policies, 
procedures,  and  other  guidance  provided  to AAAs  on jinancial  management.  For  each  ctitetia 
la-lq  indic~ng  an  entry  of NO,  PARTL4L,  or NOT  AVAILABLE,  list  it in the jirst  column  of 
question  2 prior  to the  on-site  interview.  NOTE:  For  those  items  marked  NA  as  a result  of the 
desk  review,  St&e  Agency  responses  may  indicate  conveting  the  NA  to  Y, P,  N,  CMSL  (Criteria 
met  at  State  level),  or  NSC  (State  Agency  does  not  address  this  applicable  Federal  cnteria).  Ask 
question  2 dunng the  on-site  visit following  the  bnef explizn~on  initialing  the  interview. 
-.7  A few weeks ago,  we requested  copies of the policies,  procedures,  and other guidance 
provided  to the  Area  Agencies  on Aging concerning  financial  management.  These  were 
reviewed  against  specific  financial  management  criteria  contained  in the Older  Americans 
Act  and the  Title  III regulations.  During  this review,  we identified  issuances  which only 
partially  addressed  specific criteria,  or we were unable  to identify  issuances  addressing 
specific  criteria.  For these,  I need to understand  how the State Agency  directs  and guides 
the  AAAs  to ensure  that financial  management  requirements  are met for those criteria  not 
addressed  or partially  addressed. 
Criteria  # with 
No,  Partial,  or 
Not Available  entry  ARencv ResDonse 
(If adliitional  space  is required,  use  the  back  of the previous  page) 
A-3  Note:  Under  the  Single  Audit  concept,  the  term  grantee  refers  to the ~,  when  tfle AAA  iS 
an  independent  agency  or organ i~on.  Otherwise,  the  term  grantee  refers  to t~~e 
multtpuvose  agency  or  organ i~on,  when  the  AAA  is a separate  organ izalzonal unit  within 
such  multi pupose  agency  or organ imon. 
3.  How  does  the  State  Agency  ensure  that  audits  of  its  grantees  will  be conducted  in 
accordance  with  the  law  and  the  regulations?  (i. e.,  through  which  methods) 
a.  AA%  must  budget  funds  for  audits 
b.  grantees  are  directed  to  have  audits  conducted  in accordance  with  specified 
OMB  Circulars 
c.  Other  (Identi~  the  specific  procedure  and  explain) 
4.  What  was  the  last  fiscal  year  during  which  audits  were  made  of the  State  Agencys 
grantees? 
a.  Beginning  date  -
b.  Ending  date  -
Questions  4C - 4f pertain  to the  last jiscal  year  in  which  audits  were  made: 
c.  Prior  to  the  on-site  visit,  list  the  sample  grantees  below.  ln preparation  for  the  on-
site  visit,  ask  the  State  Agency  to  have  available  for  each  sample  A&i: 
1)  the  type  of audit  conducted  (A-128  or A-133)  for  the  last jiscal  year  (identified 
at  question  4 a and  b) and 
2)  the  name  of the  audit  agency  conducting  th~  audit. 
For  each  of the  sample  AAAs,  jill-in  the  approptie  infonn~on  on the following 
table. 
A-4  1 
A-128 AUDIT  A-133 AU-DIT 
GRAINTEE  AUDIT AGENCY  (Check if  (Check if 
applicable)  applicable) 
(1) 
(~) 
(3) 
(4) 
(5) 
(6) 
(7) 
(s) 
(9) 
(lo) 
d.  Based  on your  review  of the provided  audit  information,  indicate  how  many  A-12$  and 
A-133  audits  were  conducted  of the  sample  gmntees: 
e.  My review  of the audit information  indicates  that  (fW-in  with  the  total 
number  from  d above)  A-128 and  A-133  audits were  conducted  of the sample grantees  in 
the last fiscal year.  Of these audits,  how many of the audit reports  are on file with the 
State Agency? 
A-5  f.	 Prior  to the  on-site  visit,  list  the  sample  grantees  below.  In prepar~on  Jor  the  on-site 
visit,  ask  the  State  Agency  to have  available  audit  jindings  for  the  most  recently 
completed  A-128  or A-133  audit  of each  sample  AAA.  For  -11  of the  sample  ~s~ 
place  a check  mark  in each  approptie  column  to designate  any  dejiciency~ies  that  were 
specified  in that  AAAs  audit  findings. 
AUDIT FINDINGS  (Check all applicable) 
Internal  Non-complkuwe 
GRANTEE  Control  with Law or  Questioned  Other 
Weakness  Regulations  costs  CIdentifi) 
1 
(1) 
(2) 
(3) 
(4) 
(5) 
(6) 
(7) 
(8) 
(9) 
(lo)

A-6  5.  Of the following,  which  does the State Agency  routinely  use to ensure  that its grantees  address 
audit  findings?  Does the:  (Complete  the  question  by  asking  a,  b,  and  c below) 
(Check  a-c  only  if the  response  is  YES) 
a.	 State  Agency  require  grantees  to transmit  all audit  reports  to the S ate Agent y 
for review? 
b.	 State Agency  require  its grantees  to  submit  a written  progress  report 
describing  progress  in correcting  deficiencies  cited  in audit  finding? 
c.	 State  Agency  monitor  and/or  assess  grantees  until  all  audit  deficiencies  have 
been  resolved  to the  satisfaction  of the  State  Agency? 
6.  What  other  methods  are  used  by  the  State  Agency  to  ensure  its grantees  address  audit  findings? 
a. 
b.  Not  Applicable 
May  I review  examples  of  letters  or  transmittals  showing  these?  Check  as  appropntie: 
Document~on  is provided  1 is unavailable  ,  or  will  be  made  avaikzble  by 
. 
7.  How  does  the  State  Agency  inform  its grantees  as to how and when to submit  information 
on the actions  taken to address  audit  findings? 
a.  Letter 
b.  Memoranda 
c.  Procedures  manual 
d.  Other,  (Zdenti!) 
Questions  8-15  refer  to expenditures  as  reported  in the  most  recent  Final  SF-269  Report: 
A-7  8.  The  Final  SF-269  Report  shows  that  $  (jill-in  amount  prior  to  on-site  visit)  in Title 
III  funds  was  expended  for  State  Agency  administration. 
I need  to  review  documentation  contlrming  this  information.  Check  as  approptie: 
Document&on  is provided  ,  is unavailable  ,  or  will  be made  avaikzble  by 
on  (date)  . 
If received,  review  the  documentmon  and  determine  whether  the  documented  expenditures 
indicate  that  more  than  $300,000,  or more  than  5 percent  of the  Title  III  allotments 
(whichever  is greater)  was  spent  on  Stale  Agency  administrtion.  77~is may  require  your 
calculating  the  5 percent  jigure. 
Indicate  your  finding:  a.  More  than  $300,000  or more  than  5 percent  was 
  . 
spent 
b.  $300,000  or less  than  5%  was  spent 
c.  Don t Kkow  (Check  if applicable) 
Only  if the  documented  expenditures  are  more  than  $300,000  or more  than  5 percent,  ask 
question  9.  Otherwise,  skip  to  question  10. 
9.  What  is the  reason(s)  for  the  additional  expenditures?  (,}lore funds  could  have  been  spent  if un 
additional  .75 percent  was  approved  by AoA  (OAA  3011(b).) 
a. 
b.  Not  Applicable 
10.  The  Final  SF-269  Report  shows  that  $  (jW-in  amount  prior  to  on-site  visit)  was 
expended  for  the  State  ombudsman  program  from  Title  III-B  resources. 
I need  to  review  documentation  confirming  this  information.  Check  as approptie: 
Documentation  is provided  ,  is unavailable  ,  or  will  be made  available  by 
on  (dale)  . 
A-8  11.  How  much  was  spent  for  the  State  Ombudsman  Program  in Fiscal  Year  1987  from  Title  III-B 
resources? 
Review  documenttion  and  determine  if the  documented  expenditures  for  the  Ombudsman 
program,  from  Title  III-B,  are  equal  to,  in  excess  OJ or  less  than  the  amount  spent  jiom  this 
source  in Fiscal  Year  1987.  (OAA  307(a) (12),  (21)) 
Indic&e  your  Jnding:  a.  Equals 
b.  Exceeds 
c.  Less  Xhan 
12.  The  Final  SF-269  Report  shows  that  $  (jW-in  amount  prior  to  on-site  visit)  in Title 
IKI funds  was  expended  for  Area  Agency  administration. 
I need  to  review  documentation  confirming  this  information.  Check  as  appropnate: 
Document&-on  is provided  ,  is unavailable  ,  or  will  be  made  available  by 
on  (date)  . 
If received,  review  the  documentaon  and  determine  whether  Title  III  st~ewide  expenditures 
for  AAA  administr@on  are  equal  to  or less  than  10 percent  of the  Title  III  allotment  that 
remains  afier  subtracting  Title  III  State  administrtive  costs. 
Indicate  your  finding: 
a.  Equal  to 
b.  Less  than  If  less,  how  much  less?  $ 
More  than  If more,  how  much  more?  $ 
;  Don t how  (Check  if applicable) 
13.  Were  funds  expended  for  program  deve[oprnent  and coordination  using  a matching  ratio? 
a.  Yes  Zf yes,  what  was  the  matching  ratio?  (e. g.,  85-15,  75-25) 
If yes,  how  much  was  spent  statewide  for  program  development  and 
coordination? 
$ 
b.  No 
c.  Dont  Know  (Check  if applicable) 
A-9  Prior  to the  on-site  visit,  determine  if the  State  Agency  repotied  any  transfers  among  allotments 
during  the  hzst Federal  fiscal  year.  If  none  were  repotied,  go  to  question  16.  If transfers  were 
repotied,  ask  the follo  wing  approptie  questions  ~re-marked  pnor to the  on-site  visit),  depending 
upon  the  type  of transfer(s)  which  occurred. 
14.	 Prior  to our visit,  we reviewed  fiscal data to determine  if any transfers  occurred  among 
allotment  during  the last Federal  fiscal year.  The State Agent y reported  (Fill-in  with  a,  b,  or 
both  a and  be as  review  indicated): 
a.	 Transfers  between  Title  III-B  and  Title  III-c  in  the  amount  of  :$ 
(fill-in  amount  prior  to  on-site  visit). 
Not  Applicable 
(If applicable)  1 need  to  review  documentation  confirming  this  information.  Check  as 
appropn~e:  Document~on  is provided  ,  is unavailable  ,  or  will  be made 
available  by  on  (d&e) 
. 
Review  the  document~on  and  indic~e  below  whether  or not  documented  transfers 
between  Title  III-B  and  Title  III-C  exceed  30 percent  of either  of these  allotments. 
a.  Yes 
b.  No 
c.  Don t Know 
b.	 Transfers  between  Title  III-C-1  and  Title  III-C-2  in the  amount  of  $ 
(/W-in  amount  prior  to  on-site  visit). 
Not Applicable 
(If applicable)  I need  to  review  documentation  confirming  this  information.  Check  as 
approptie:  Document~on  is provided  ,  is unavailable  ,  or  will  be made 
avaikzble  by  on  (date) 
. 
Review  the  document~on  and  indicate  below  whether  or not  documented  trwlsfem 
between  Title  III-C-1  and  Title  III-C-2  exceed  30 percent  of  either  of these  allotments. 
a.  Yes  (IJ YES,  ask  question  15) 
b.  No  (If NO,  go  to  question  16) 
c.  Don t Know  (If Don t Know,  go  to  question  16) 
A-1o
 15.  A review  of  your  documentation  indicates  transfers  between  Title  III-C-1  and  Title  III-C-2 
exceeded  30 percent  for  either  of these  allotments;  were  such  transfers  approved  by the 
Administration  on  Aging? 
a.  Yes 
b.  No 
c.  Dont  Know  (Check  if applicable) 
d.  Not Applicable 
16.  The  last  Certification  of Maintenance  of Effort,  dated  _  shows  that 
$  (j711-in date  and  amount  prior  to on-site  visit)  was  expended  from  State 
sources  to  meet  administrative  and  program  matching  requirements. 
I need  to  review  documentation  confirming  this  information.  Check  as  appropriate: 
Documenttion  is provided  ,  is unavailable  ,  or  will  be  made  available  by 
on  (d&e)  . 
Prior  to the  last  Certification  of Maintenance  of Effort,  the  average  amount  spent  in the  previous 
three  Federal  fiscal  years  from  State  sources  to meet  Maintenance  of Effort  requirements  was 
reported  to be  $  (fill-in  amount  prior  to on-site  visit) 
Note:  Agency  may  not  use  avera~ng;  you  will have  to  calcutie  the  3-year  average. 
I need  to  review  documentation  confirming  the amount  expended  from  State  sources  to  meet 
administrative  and  program  matching  requirements  for  these  three  years.  Check  as  appropnale: 
Document&on  is provided  ,  is unavailable  ~  or  will  be made  avaiilzble  by 
on  (dhte)  . 
Review  the  document~on  and  determine  if the  documented  3 year  average  amount  expended 
for  Maintenance  of  Effoti  is equal  to,  greater  than,  or  less  than  the  amount  repotied  in the 
most  recent  Ce~!jic&on  of Maintenance  of Effoti. 
Indic&e  your  finding:  a.  Equal  to 
b.  Gre&er  than 
c.  Less  than 
17.  Prior  to the  on-site  visit,  obtan  a copy  of the  inst~ment  used  by the  State  Agency  to assess 
compliance  and  performance  of A&is  with jhzncial  management  law  and  regutions.  If the 
questions  on jlnanciai  management  are pati  of a kzrger  review  instrument,  ask  the  St&e 
Agency  to  identzfi  or  highlight  those  items  petimning  to the  review  of financial  management 
practices.  Have  the  St&e  Agency  mark  the  instrument(s)  with  the  applicable  ctiena  (e.g.,  a, 
b,  c,  etc.)  using  a provided  copy  of the  cnleriiz.  Zhis  infonnationaL  request  shouki  be 
included  in the  letter  thti  is sent  to  the  State  Agency  outlining  the  Compliance  Review. 
A-11  Review  and  determine  whether  or not  the  assessment  instmments  address  the financial 
management  ctieria  identij?ed  in the Jollo wing  table.  Indic&e  your  responses  with  an  X in 
the  appropriate  column  reflecting  these  codes: 
Y (Yes)  =  Total  Compliance  with  Criteria 
P  (Patil)  =  Pa&al Compliance  with  Criteria 
N  (No)  =  Not  in  Compliance  with  Critena 
Duting  the  desk  review,  if the  assessment  instrument  and  related  mtierials  do  ~t  include 
those  items  necessary  to  make  a determintion  of  compliance  (Y,  P,  or  N),  mark  N.  (Not 
Available)  in the  Comments  section  of the  table. 
CRITERIA  Y  P  N  COMMENTS 
a.  State  Agency  approves  all AAA  contracts  with 
profitmaking  grantees 
OAA  Sec.  212 
b.  NOT  APPLICABLE  TO  AAA 
c.  AAA  administrative  expenditures  statewide  do not 
exceed  the  10% limitation 
OAA  Sec.  304(d)(  1)(A) 
d.  There  is no  funding  at the  S5- 15 match  for 
program  development  and  coordinated  activities 
until  the specified  percentage  is expended 
statewide  for  .%AA administration 
45 cm  1321.17(9(14) 
e.  Each  AAA  retains  records  for 3 yrs  after  the date 
that  the  AAA  submits  its final  expenditure  report 
or the  date  on which  resolution  of audit 
exceptions.  litigation.  etc.  occurs  (whichever  date 
is later) 
45  CFR 92.42  & 74 Subpart  D 
f.  Participants  are given an opportunity  to make 
voluntary  contributions 
45 CFR  1321.67(a)(1) 
~  Limitations  on transfers  between congregate  and 
homedelivered  meal allotments 
45 cm  1321.45 
h.  Privacy  of contributions 
45  CFR  1321 .67(a) (2) 
i.  Safeguards  and  accounting  for  contributions 
45  CFR  1321.67(a)(3) 
j.  Support  services  contributions  are  used  to expand 
support  services 
I 
45  CFR  1321.67 
A-12  CRITERIA  Y  P  N  coNfMIINTs 
k.  NOT APPLICABLE  TO AAA 
1.	 AAA administration  is funded  from  Title  [II  B 
and/or  Title  III C,  only 
OAA  Sec.  303(c) 
m.  NOT  APPLICABLE  TO  AAA 
n.	 Retention  of Federal  government  financial  interest 
in senior  centers 
OAA  Sec.  312 
0.	 AAAs  spend  State  Agency  prescribed  percentages 
on  specified  categories  of  senices 
OAA  Sec.  307(a)(22)  and  306(a)(2) 
P.	 Audits  for  governmental  and  non-governmental 
AAAs 
OMB  Circulars  A-1X3,  A-133 
q.	 Nutrition  services  contributions  are  used  to 
increase  meals,  for access.  or  for authorized 
services. 
OAA 307(a) (13)(C)(ii)  & 45 CFR  1521.67 
For  each  criteria  17a-1 7q indic~ng  an  entry  OJ No,  PA.RHAL,  or NOT  AVAILABLE,  list  it in 
the jlrst  column  of  question  18 prior  to the  on-site  interview.  NOTE:  For  those  items  marked 
iVA as  a result  of-the  desk  review,  State  Agency  responses  may  indicate  conveting  the  NA  to  Y, 
P,  N,  CMSL  (Criteria  met  at  State  level),  or NSC  (Stale  Agency  does  not  address  this  applicable 
Federal  criteti).  Ask  question  18 during  the  on-site  visit. 
18.	 A few  weeks  ago,  AoA  also  requested  a copy  of the  assessment  instrument  and  any 
applicable  tools  used  by the  State  Agency  to assess  compliance  and  performance  of AAAs 
with  financial  management  law  and  regulations.  These  were  reviewed  against  the  specific 
financial  management  criteria  contained  in the  older  Americans  Act  and  the  Title  III 
regulations.  During  this  review,  we  identified  issuances  which  only  partially  addressed 
specific  criteria,  or  we  were  unable  to  identify  issuances  addressing  specific  criteria.  For 
these,  I need  to understand  how  the  State  Agency  assesses  the  AAAs  to ensure  that  financial 
management  requirements  are  met  for  those  criteria  not  addressed  or partially  addressed. 
Criteria  # with 
No,  Partial,  or 
Not  Available  entrv 
A-13  (If additional  space  is required,  the  back  of the previous  page) 
19.  What  are  the  most  common  financial  management  deficiencies  of the ANA?
a. 
b.  Don$t  Know  (Cheek  if applicable) 
A-14  20.  What  technical  assistance  orttitig  hasthe  Smte  Agency  provided  toWs  in order  to 
address  these deficiencies? 
a. 
b.  Dont  Know  (Check  i~a..@cable) 
21.  What  kind  assistance  or  training  on  financial  management  is needed by  the  State 
Agency? 
a. 
b.  Dont  Know  (Check  if applicable) 
2).  What  was  the  ending date  of the  most  recent  area plan  year? 
a.  Beginning  date 
b.  Ending  date 
Questions  23  and  24  apply  to the  most  recent  area  plan  year: 
23.  How  many  contracts  did  MS  award  to profitmaking  firms? 
a.  (Indicate  number) 
b.  Dont Know  (Check  if applicable) 
c.  None 
A-15  24.  If any  contracts  were  made  with  profitmaking  firms,  how  many  firms  were  approved  by  the 
State  Agency? 
a.  (Indicate  number) 
b.  Donut  Know  (Check  if applicable) 
25.  In  Fiscal  Year  1978,  what  was  the  total  amount  of the  expenditures  in  rural  areas  from  Title 
III,  Title  V (multipurpose  senior  centers),  and Title  VII  (nutrition)? 
a.  Title  III  Expenditures 
b.  Title  V Expenditures 
-.  Title  VII  Expenditures 
L.
d.  Dont  Know  (Check  if applicable) 
26.  Of the  total  amount  of the  Title  III  expenditures  included  in the  most  recent  Final  SF-269 
Report,  how  much  was  expended  in rural  areas? 
a.  $ 
b.  Dont  Know  (Check  if applicable) 
27.  The preselected  sample  of 10 Area  Agencies  on Aging  were  identified  prior  to the  on-site 
visit.  This  sample  is to be  used  throughout  the  compliance  review  process  for  all jive 
areas,  the jht  compliance  review  being  Stewardship. 
For  the  sample  AAAs,  obtain  the  most  currently  completed  annual  cycle  of  St&e  Agency 
assessment  instruments  and  corresponding  assessment  reports  (if any).  Review  the 
assessment  J7ndings  and  determine  the  extent  to  which  each  of the  sample  AAAs  were  in 
compliance  with  each  of the  criteria  identified  in Attachment  A.  Record  your  responses 
on  the follo  wing  table  using  these  codes: 
Y ~es)  =  Total  Compliance  with  Criteria 
P  (Pati)  =  Patil  Compliance  with  Criteria 
N  (.0)  =  Not  in  Compliance  with  Criteria 
Lvsc  = 
No State  Criteria  (State  Agency  does  not  assess  this 
Federal  criteria  - identified  through  in-house  review  of 
Sttie  Agencys  assessment  tool  and  retied  materials) 
CMSL  =  Ctieria  met  al Stale  level 
o = 
Other  Finding  @rovide  explantion  and  indicate  by 
repoti  number  and  critena number  in the  Comments 
section  Jollo wing  the  table) 
As  a few  of the  Federal  ctieti  are  not  applicable  to the  AAAs,  they  have  been  elinlinated 
from  the following  table. 
A-16  AAA 
Name 
Sample  1  ~  3  4  5  6  7  8  9  10 
Number 
Criteria 
a. 
c. 
d. 
e. 
f. 
g 
h. 
i. 
1. 
n. 
o. 
P 
q 
COMMENTS: 
[INTERVIEW  COMPLETED] 
A-17  ENDNOTES 
1.  This  requirement  has been  revised  in the  1992 Amendments  to the  OAA.  The 
new requirement  in Section  307(a)(21)  reads:  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. 
A -2 
. ..