Older Americans Act:

Funding Formula Could Better Reflect State Needs

HEHS-94-41: Published: May 12, 1994. Publicly Released: May 12, 1994.

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Pursuant to a congressional request, GAO reviewed the interstate funding formula of the Older Americans Act (OAA) of 1965, focusing on: (1) whether equity standards are appropriate in evaluating the allocation of title III assistance among states; (2) alternative formulas to distribute title III funds more equitably among the states; (3) how implementing each of the alternatives would redistribute funding among the states; and (4) ways of phasing in a new formula to moderate the degree of funding changes in a single year.

GAO found that: (1) current OAA funding allocations do not achieve beneficiary equity; (2) states differ in their concentrations of high-risk individuals; (3) the current formula does not recognize differences among states in the costs of providing title III services; (4) current OAA funding allocations do not achieve taxpayer equity; (5) several options for distributing funds exist that would improve equity in fund distribution; (6) some states are consistently underfunded under the current formula; and (7) a new distribution formula should be phased in over a multiyear period in order to allow states to gradually adjust to new funding levels.

Matters for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: No action is planned by the congressional committees.

    Matter: To better ensure that the distribution of title III funds is based on economic and social indicators of need, Congress should improve the Older Americans Act's interstate funding formula to better reflect the goal of helping the elderly maintain an independent lifestyle. This goal could be achieved by adopting a formula, to be implemented over a multiyear period, for distributing title III funds that reflects state needs and that specifically takes into account the issues of beneficiary and taxpayer equity.

  2. Status: Closed - Not Implemented

    Comments: No action is planned by the congressional committees.

    Matter: In its deliberations to improve the fairness in the distribution of title III funds, Congress should consider the six allocation formulas that have been developed. Each formula option would improve the current title III funding process by permitting all states to finance comparable services for their respective elderly populations experiencing barriers to independent living.


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