Mental Health Grants: Funding Not Distributed in Accordance with State Needs

GAO discussed the distribution of the $1.3 billion in federal funds under the Alcohol, Drug Abuse, and Mental Health block grant program. GAO found that: (1) the recent changes in the grant allocation formula improved the targeting of the block grant to states in relation to their population at risk for drug abuse; (2) populations at risk for mental health disorders and alcohol abuse would have little influence on the distribution of block grant funding when the hold-harmless provision for those populations is eliminated; (3) within states, the formula's allocation of funding between mental health and substance abuse was unrelated to state differences in mental health needs; (4) the allocation of mental health funds through a separate apportionment formula would significantly improve the targeting of mental health funds in accordance with state needs, but would redistribute those funds across states, with some states gaining funds and others losing funds; (5) the importance placed on urban population in the current formula may serve as a proxy for the higher cost of providing services in urban states; (6) the at-risk drug abuse population and the cost of services best explain the current distribution of block grant funding; and (7) the proposed formula did not consider the cost of labor and office space used to provide services.