Summary

The Administration on Aging's (AOA) method of allocating funds under title III of the Older Americans Act is inconsistent with the law's basic requirement that funds be distributed to states in a manner proportionate to their elderly populations. Funds must be allotted proportionally among the states except that no state is to receive less than the minimum set by law. AOA's current method of computing allotments ensures that the minimums are met but in a way that fails to achieve proportionality among states not subject to the minimum grant requirements. Among the distorting effects of AOA's method are that the amounts allotted per elderly person are not equal in similarly populated states, and states with more rapidly growing elderly populations are underfunded. The required method avoids or minimizes both effects.

GAO found that: (1) the AOA formula does not comply with the statutory requirement that title III funds be allotted to the maximum extent possible in proportion to state elderly populations; (2) AOA calculates state allotments by deducting each state's hold-harmless minimum from the total appropriation, then distributing the remainder in proportion to the state's elderly population and, finally, adjusting the allotments so that no state receives less than 0.5 percent of the total appropriation; (3) the law requires that AOA calculate the distribution of funds based on the elderly population in each state and then adjust the allotments to meet the statutory minimums; and (4) the current allocation formula ensures that the statutory minimums are met, but per capita allotments are not equal in states that are not subject to the statutory minimums and states with rapidly growing elderly populations are underfunded.