SEQ CHAPTER \h \r 1

April 5, 1994

PROGRAM INSTRUCTION

AOA-PI-94- TC \l1 "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, 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

  17,647State match

  10,000Title IV "Hold Harmless"

  50,000Other State funding

45,000'91 Appropriation budget line item (ombuds.)

 $222,647Base 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, 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

ATTACHMENTOptional 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$______________**

     �  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.