Title III, Older Americans Act: Carryover Funds Are Not Creating a Serious Meal Service Problem Nationwide
Published: 2001-01-09T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Under Title III of the Older Americans Act, the Administration on Aging (AoA) distributes grants to states on the basis of their proportional share of the total elderly population in the United States. These grants are then disbursed to more than 600 area agencies nationwide, and are used to fund group and in-home meals, as well as support services, including transportation and housekeeping. The grants are further subdivided by these agencies to more than 4,000 local service providers. AoA requires that states obligate these funds by September 30 of the fiscal year in which they are awarded. Also, states must spend this money within two years after the fiscal year in which it is awarded. During this time AoA does not limit or monitor the amount of unspent funds that states may carry over to the succeeding fiscal year. GAO examined whether states were using Title III carryover funds to expand their meal service programs for the elderly beyond a level sustainable by their annual allotments alone.
section_title: What GAO Found
paragraphs: GAO found that the buildup and use of Title III carryover funds to support elderly nutrition services does not appear to be a widespread problem. However, AoA does not monitor the states' buildup of carryover funds. As a result, the agency has little assurance that it could identify meal service problems that could emerge in the future.

section_title: Letter
paragraphs: The Older Americans Act (42 U.S.C. 3001-3058ee) is intended to assist  elderly Americans (aged 60 and over) by removing barriers to independent  living through a variety of long-term care services in communities across  the nation. Administered by the Administration on Aging (AoA) in the  Department of Health and Human Services, Title III of the Act authorizes  nutrition services such as congregate (group) and in-home meals, as well as  support services, including transportation and housekeeping. Under Title  III, program funds are to be distributed as grants to states on the basis of  their proportional share of the total elderly population in the United  States. In fiscal year 1999, the 50 states; the District of Columbia; and the  U.S. territories, including American Samoa, the Commonwealth of the  Northern Marianas, Guam, the Commonwealth of Puerto Rico, and the U.S.  Virgin Islands (hereafter referred to as the 56 states), received about $785  million to operate Title III services. The bulk of these funds—$486  million—was directed to nutrition services.
Most states generally pass on their Title III funds to more than 600 area  agencies nationwide, such as county human services organizations, that  oversee the nutrition and support services provided by these funds at the  local level. In turn, most of these area agencies award subgrants or  contracts to about 4,000 local service providers, which deliver these  services in a variety of settings, including senior centers, schools, and  homes. Some states award Title III funds directly to the local service  providers.
AoA requires that states obligate Title III funds by September 30 of the  fiscal year in which they are awarded to a state. Furthermore, AoA  requires the states to spend these obligated funds within 2 years after the  year in which they are awarded (e.g., funds awarded in federal fiscal year  1999—October 1, 1998, to September 30, 1999—must be spent by  September 30, 2001). AoA does not limit or monitor the amount of unspent  funds that states and area agencies may carry over to the succeeding fiscal  year during that time. However, AoA allows states to limit the amount of  carryover funds used by their area agencies. States may also transfer Title  III funds, with some limits, between their allotments for nutrition services  (Part C) and support services (Part B), as well as between their allotments  for congregate meal services (Part C-1) and home-delivered meal services  (Part C-2).
You asked us to review whether states may be using Title III carryover  funds to expand their meal service programs for the elderly beyond a level  sustainable by their annual allotments alone. Your request stemmed from a  recent incident in Connecticut wherein one local service provider faced a  serious funding shortfall because the provider had relied upon a large  amount of carryover funds to expand the number of meals served beyond a  level supportable solely by its annual nutrition allotment. When these  carryover funds were depleted, the provider faced the prospect of having to  reduce the number of meals served by 16 percent, thereby putting the  nutritional welfare of about 175 older persons at risk.
To determine whether this incident in Connecticut was unique or a sign of a  potentially broader problem, we reviewed the extent to which Title III-C  carryover funds are used by state and area agencies to support nutrition  services for the elderly. This report provides information on the (1) levels  of Title III-C carryover funds available in fiscal year 1999, (2) extent to  which the states and area agencies have established limits on the amount of  funds carried over, and (3) extent to which carryover funds are used to  expand meal services and the effects that reductions in the amount of  carryover funds from one year to the next have had on meal services. This  report also provides information on the extent to which states transferred  Title III funds among nutrition and support services and the extent to  which states allow area agencies to transfer Title III funds.
To address these objectives, we conducted national surveys of the 56 states  and 652 area agencies that received Title III nutrition and support services  funds in fiscal year 1999. We received survey responses from all of the  states and 563 of the area agencies—for a response rate of 86 percent. We  performed our review from March through December 2000 in accordance  with generally accepted government auditing standards. Appendix I  contains a detailed description of the methodology we used to conduct this  review.
subsections: section_title: Background
paragraphs: According to the Congressional Research Service, Title III nutrition funds  provide almost 3 million older persons with about 240 million meals each  year. Forty-eight percent of the meals are provided in congregate settings,  such as senior centers, and 52 percent are provided to frail older persons in  their home.
In fiscal year 1999, about $785 million in Title III nutrition and support  services funds was distributed to 56 states. A total of about $486 million  was allotted for congregate and home-delivered meals (Title III-C). Table 1  shows how these federal funds were distributed to the states.
Fiscal year 2000 funding for the Older Americans Act increased about 3.5  percent above the level for fiscal 1999. Funds for the home-delivered meals  program increased by $35 million—31 percent over the level for fiscal 1999.
section_title: The Nationwide Level of Title III-C Carryover Funds Is Low, but Some States Have Relatively High Levels
paragraphs: Nationwide, the funds carried over into fiscal year 1999 reported by the  states represented a small percentage of the $486 million Title III-C  allotment—about 5 percent, or $24.6 million. However, the level of  carryover funds reported by the states varied considerably. Twenty-two  states reported that they had no carryover at the beginning of fiscal year  1999. The remaining 34 states reported a carryover that ranged, as a  percentage of their fiscal year 1999 nutrition allotment, from less than 1  percent in 6 states (Colorado, Kentucky, Maryland, Massachusetts, New  Mexico, and Puerto Rico) to about 50 percent in Arizona. Seven states  (Arizona, Delaware, Hawaii, Missouri, New York, Oregon, and South  Dakota) had carryover funds that exceeded their nutrition allotment for  fiscal year 1999 by at least 15 percent. Additionally, two-thirds of the  carryover funds—$16.3 million—were reported by seven states (Alabama,  Arizona, California, Missouri, New York, Ohio, and Texas) that had at least  $1 million in carryover funds. Table 2 shows the distribution of these  carryover funds and their respective percentage of the nutrition allotment  for each of the latter seven states above at the beginning of fiscal year 1999.  (See app. II for information on the amount of carryover funds available to  each of the 56 states at the beginning of fiscal year 1999.)
States may have substantial amounts of carryover funds for a variety of  reasons. For example, a state official said that the annual allotment of Title  III funds may not be received by the beginning of a state’s fiscal year  because of differences between federal and state fiscal year periods (41  states begin their fiscal year 3 months earlier than the federal government)  or delays in the federal appropriations process. States may then need to  budget their spending on the basis of funding projections. According to the  official, some states may develop more conservative spending estimates  than others. As a result, some of these states may have substantial funds  that cannot be fully spent by the end of the fiscal year. Because of this,  funds may be carried over into the next federal fiscal year.
The accumulation of carryover funds can occur at the state, area-agency,  and/or local-service-provider level. In fiscal year 1999, about 25 percent of  the nationwide carryover funds reported by the states were held at the  state level and 75 percent were held at the area-agency and/or local- provider level. The states reported that 341, or about 52 percent, of all area  agencies had some carryover funds available for their nutrition programs at  the beginning of fiscal year 1999. The level of carryover at the area-agency  level can vary dramatically. For example, of the 208 area agencies that  responded to our survey and reported some carryover at the beginning of  fiscal year 1999, the carryover ranged from less than 1 percent of the fiscal  year 1999 Title III-C allotment at 20 area agencies to more than 50 percent  at 3 area agencies. Most area agencies (132) reported a carryover of from 1  to 10 percent of their annual allotment.
section_title: Half of the States Do Not Restrict Title III-C Carryover Funds, and Those That Do Use a Variety of Limits
paragraphs: Half of the 56 states reported that they do not restrict the amount of Title  III-C funds that their area agencies and/or local service providers may carry  over from one year to another. Of the remaining 28 states, 15 reported that  neither area agencies nor local service providers are allowed to carry over  any funds, and 13 reported having limits on the amount that their area  agencies and/or local service providers may carry over into the succeeding  fiscal year.
Eleven of the 13 states with carryover limits reported that their limits were  based on a percentage of the area agencies’ and/or local service providers’  annual grant allotment. The percentage of annual grant limit varied from 2  to 10 percent. The average reported percentage limit was about 8 percent.  The remaining two states did not specify how they limited the amount of  area-agency and/or local-service-provider carryover. Information on each  state’s policy regarding carryover by area agencies or directly funded local  service providers is shown in appendix II.
We also examined the types of limits, if any, that area agencies located in  the 28 states with no carryover limits placed on their local providers. Of the  563 area agencies responding to our survey, 178 were located in states that  did not have carryover limits and did provide elderly meal services  primarily through local service providers. The carryover limits that the  agencies placed on their providers varied; most (97) did not allow their  providers to carry over any funds. Information on the number and  percentage of these 178 area agencies is presented in table 3 by type of area  agency carryover restriction, if any, placed on local providers.
section_title: Carryover Funds Are Used to Expand Meal Services, but Few Major Impacts From Declines in Carryover Funds Were Identified
paragraphs: While some area agencies have used carryover funds to expand their meal  services, state and area agencies identified relatively few instances of  major cutbacks in meal services that occurred in fiscal year 1999 because  carryover funds were less than they were in prior years. Additionally, from  our analysis of the state and area-agency survey data, we estimate that,  nationwide, a very small percentage of area agencies and local providers  would have to make major cutbacks in meal services in fiscal years 2000 or  2001 because of reductions in carryover funds.
Our state survey information indicated that 37 states allowed their area  agencies to carry over unspent Title III-C funds into fiscal year 1999.  Seventeen of these states reported that 133 of their 234 area agencies had  used carryover funds to expand the number of meals served that year.  Only 9, or about 7 percent, of these agencies had to reduce the number of  meals served by 10 percent or more in fiscal year 1999. We estimated from  the states’ survey data that 23, or about 4 percent, of all area agencies  nationwide may have to reduce their meal services by 10 percent or more in  fiscal years 2000 or 2001.
Of the 5 states that directly funded local service providers, 2 reported that 2  of their 8 providers used carryover funds to expand the number of meals  served (neither of these providers had to reduce meals served by 10  percent or more), 2 reported that none of their 54 providers used funds to  expand the meals served, and 1 state with 37 providers reported that  comparable data on its providers were not available. We did not estimate  how many directly funded local providers may have to reduce meal  services by 10 percent or more in fiscal years 2000 or 2001.
The results from our area-agency survey were similar. Of the 152 area  agencies reporting that they allow local service providers to carry over  funds, about one-third (47) did not provide information about their local  service providers’ use of carryover funds to expand meal services. The 105  area agencies that reported such information identified a total of 287 local  service providers that had used carryover funds to expand meal services in  fiscal year 1999. These area agencies identified only 20 local providers that  had reduced the number of meals served by 10 percent or more in fiscal  year 1999 because of declines in carryover funds. Again, from our analysis  of the area agencies’ survey data, we estimated that about 3 percent of the  approximately 4,000 local service providers nationwide may need to reduce  meals by that amount in fiscal years 2000 or 2001 because of declines in  carryover funds.
section_title: Most States Have Transferred Title III Funds and Allow Area Agencies Similar Flexibility
paragraphs: Forty-seven of the states reported that they transferred a total of about $76  million in Title III nutrition and support services funds during fiscal year  1999. Although funds were transferred among the two nutrition allotments  and the support services allotment, the bulk of the funds came out of the  congregate meal allotment. The flexibility that area agencies and local  providers have to transfer these funds varied.
subsections: section_title: Most Transfers of Title III Funds Are Made Out of Congregate Meal Allotments
paragraphs: As shown in table 4, the bulk of the Title III funds transferred—$71  million—came from congregate meal allotments and were reallocated to  either the home-delivered meal or support services allotments. These  transfers resulted in a decrease of about 19 percent from the level of  funding originally allotted to the states for congregate meal services.
According to the Congressional Research Service, states have increasingly  transferred funds from the congregate meal allotment to the home- delivered meal allotment because of various factors. For example, the  growth in the number of persons in the oldest age categories has created a  greater demand for the delivery of home care services, including home- delivered meals. According to federal population projections, the number  of persons who are 60 years and older will increase by 21 million, or 46  percent, over the next 16 years, while the number who are 85 years and  older will increase by 2.2 million, or 51 percent, during the same time  frame. In addition, many states, including Connecticut, have devoted  resources to the creation of a home- and community-based long-term care  system for older persons. Home-delivered meals represent a key  component in these systems.
As with carryover funds, states reported widely varying amounts of funds  transferred. For example, in 43 states that reported transferring funds from  their initial congregate meal allotment to their home-delivered meal  allotment, the percentage of funds transferred ranged from about 1 percent  (Wisconsin) to about 34 percent (West Virginia)—the average transfer  being 12 percent. Twelve states reported no transfers from their  congregate meal allotment to their home-delivered meal allotment, and one  state did not provide transfer information.
section_title: Area Agencies’ Flexibility to Transfer Funds Varies
paragraphs: Nine states reported that they do not allow the transfer of Title III funds by  their area agencies and/or local service providers. Other states have  adopted policies that limit the transfer of funds by area agencies and/or  local service providers. Table 5 shows the number of states that reported a  limit on the transfer of Title III funds.
section_title: Conclusion
paragraphs: At the present time, the buildup and use of Title III-C carryover funds to  support elderly nutrition services does not appear to be a widespread  problem. However, AoA does not monitor the states’ buildup of carryover  funds. As a result, the agency has little assurance that it could identify meal  service problems that could emerge in the future.
section_title: Recommendation for Executive Action
paragraphs: Although the use of carryover funds to support nutrition services for the  elderly does not currently appear to be creating a serious meal service  problem nationwide, we recommend that the Secretary, Department of  Health and Human Services, direct the Assistant Secretary for Aging,  Administration on Aging, to monitor the levels of unspent Title III-C funds  that states carry over to the succeeding fiscal year and work with the states  that build up substantial amounts of carryover funds to develop a strategy  to spend down such funds in a manner that minimizes the potential  disruption of meal services for the elderly. Such monitoring could be  performed with available resources if it is done as a part of the  administration’s routine program-monitoring activities.
section_title: Agency Comments
paragraphs: We provided the U.S. Department of Health and Human Services with a  draft of this report for review and comment. Department officials agreed  with our recommendation. More specifically, the Assistant Secretary for  Aging, stated that AoA will monitor those states having a history of  difficulty in controlling carryover and provide enhanced technical  assistance to ensure that these practices do not jeopardize the program’s  goals. In addition, the Assistant Secretary noted that the Department will  consider the promulgation of regulations to reinforce the grantees’  understanding of their responsibility in controlling and monitoring such  funds. The Department made no other comments on the information  contained in the draft report.
As arranged with your office, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 10 days after the  date of this letter. At that time, we will send copies to appropriate  congressional committees; interested Members of Congress; the Honorable  Donna E. Shalala, Secretary of Health and Human Services; the Honorable  Jeanette C. Takamura, Assistant Secretary for Aging, Department of Health  and Human Services; the Honorable Jacob J. Lew, Director, Office of  Management and Budget; and other interested parties. We will also make  copies available upon request.
If you have any questions about this report, please contact me or Thomas  E. Slomba, Assistant Director, at (202) 512-5138. Key contributors to this  report were Carolyn M. Boyce, Senior Social Science Analyst; and Peter M.  Bramble, Jr., Senior Food Assistance Analyst.
section_title: Scope and Methodology
paragraphs: To address the objectives of our review, we developed separate written  mail-out surveys for state and area agencies that received Title III nutrition  and support funds, respectively, in fiscal year 1999. We pretested the draft  state survey at three states that manage senior services (Colorado,  Louisiana, and Pennsylvania), and the draft area- agency survey at four area  agencies in four states (Colorado, Louisiana, Virginia, and West Virginia).  We visited these states and area agencies to conduct each pretest. During  these visits, we attempted to simulate the actual survey experience by  asking the state or area agency official to fill out the survey. We  subsequently interviewed the officials to ensure that the (1) questions were  readable and clear, (2) terms were precise, (3) survey did not place an  undue burden on the survey recipients, and (4) survey appeared to be  independent and unbiased. Administration on Aging (AoA) officials also  reviewed and provided comments on each draft survey.
In order to maximize the response to our surveys, we mailed a  prenotification letter to all of the 56 states and 652 area agencies about 1  week before we mailed the surveys. We also sent a reminder letter to  nonrespondents about 4 weeks after the initial survey mailing and a  replacement survey for those who had not responded after about 8 weeks.  After reviewing all of the survey responses, we contacted several states by  telephone and E-mail to clarify their responses to various survey questions.  Our survey data represent the responses from all of the 56 states and 563 of  the 652 area agencies (an 86-percent response rate). We also collected Title  III administrative and program information from AoA.
We performed our work from March through December 2000 in accordance  with generally accepted government auditing standards.
section_title: Nationwide Title III-C Carryover Funds Available to the States at the Beginning of Fiscal Year 1999
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