Improvements in the Alcohol, Drug Abuse and Mental Health Block Grant Distribution Formula Can Be Made Both Now and in the Future

GGD-84-88: Published: Jun 21, 1984. Publicly Released: Jun 21, 1984.

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Pursuant to congressional requests, GAO evaluated the funding formula for the alcohol, drug abuse, and mental health (ADAMH) block grant, focusing on: (1) factors related to state needs; (2) factors related to state contributions to ADAMH programs; and (3) the cost effectiveness of ADAMH programs operated by state and local governments.

When the block grant program was set up, funds were allocated to states in proportion to the amount they had received under prior programs in fiscal year (FY) 1981. GAO found that this formula could lead to inequities because: (1) the FY 1981 distribution of funding may not reflect relative differences in state needs for federal funding; and (2) the formula does not respond to demographic changes. In addition, GAO found that alterations in state contributions are not reflected in the funding formula, but noted that, as a condition for receiving their grant allotments, states are required to use their allotments to supplement and increase the level of non-federal funding for ADAMH services. GAO also found that compensating grantees for cost effectiveness poses difficult problems because of the difficulty of identifying the source of cost effectiveness differences between ADAMH service providers.

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