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. 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. 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. 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. 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. 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.