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United States Government Accountability Office: 
GAO: 

Report to the Ranking Member, Special Committee on Aging, U.S. Senate: 

November 2012: 

Older Americans Act: 

Options to Better Target Need and Improve Equity: 

GAO-13-74: 

Contents: 

Letter: 

Agency Comments and Our Evaluation: 

Appendix I: Briefing Slides: 

Appendix II: Objectives, Scope, and Methodology: 

Appendix III: Application of the Partial Beneficiary Equity Option to 
Fiscal Year 2012 Titles III and VII Allotments: 

Appendix IV: Transition Measures for Moderating Impact of Formula 
Modifications: 

Appendix V: Comments from the Department of Health and Human Services: 

Appendix VI: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Disability Questions from the American Community Survey, 2008-
2010: 

Table 2: Comparison of States' Share of Population Age 60 and Over 
with at Least One ADL Limitation: 

Table 3: Percentage of Older Adults Age 60 and Older with Various 
Indicators of Need with One or More Activities of Daily Living 
Limitations: 

Table 4: Comparison of Fiscal Year 2012 Title III Allotments to 
Simulated Partial Beneficiary Equity Allotments: 

Table 5: Comparison of 2012 Title VII Allotments to Simulated Partial 
Beneficiary Equity Allotments: 

Table 6: Transition Combining the FY 2012 Current Formula Allotments 
and Partial Beneficiary Equity Formula Option, Comparison of 
Allotments: 

Table 7: Transition Using a Hold Harmless, Comparison of FY 2012 
Allotments to Allotments for the Partial Beneficiary Equity Formula 
Option: 

Abbreviations: 

AAA: Area Agency on Aging: 

ADL: activities of daily living: 

ACS: American Community Survey: 

AOA: Administration on Aging: 

BLS: Bureau of Labor Statistics: 

FMR: Fair Market Rents: 

HHS: Department of Health and Human Services: 

OAA: Older Americans Act of 1965: 

Treasury: Department of the Treasury: 

TTR: Total Taxable Resources: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

November 30, 2012: 

The Honorable Bob Corker: 
Ranking Member: 
Special Committee on Aging: 
United States Senate: 

The Older Americans Act of 1965 (OAA)[Footnote 1] was enacted to help 
older individuals remain in their homes and communities as long as 
possible. Based on formulas specified in law,[Footnote 2] the 
Department of Health and Human Services' (HHS) Administration on Aging 
(AOA) awards grants to fund services for older individuals. State and 
local agencies are responsible for planning, developing, and 
coordinating services within each state, as well as distributing OAA 
grant funds to local Area Agencies on Aging (AAA) through intrastate 
funding formulas developed by each state in accordance with OAA 
requirements. Services funded by titles III and VII OAA grants, as 
well as by other sources, provide a broad range of vital assistance to 
older adults and include congregate and home-delivered meals, home-
based care, transportation services, and elder abuse, neglect, and 
exploitation prevention programs. In fiscal year 2012 approximately 
$1.4 billion and $22 million, respectively, was provided for services 
and programs under title III and title VII of the OAA. In fiscal year 
2010--the most recent year for which data are available--these funds 
were used to serve nearly 11 million older Americans and their 
caregivers. While all adults age 60 and over are eligible for 
services, the OAA title III requires programs to target or prioritize 
service to older individuals with the greatest economic and social 
need.[Footnote 3] The OAA defines such need as (1) living below the 
poverty threshold; (2) having physical or mental disabilities that 
pose risk for institutional placement; or (3) cultural, social, or 
geographic isolation, including isolation caused by language, race, or 
ethnic status.[Footnote 4] 

Given current fiscal pressures, it is increasingly important to ensure 
that program funds align with greatest economic and social need, 
especially considering that demographic studies show that older 
Americans will make up an increasing proportion of the country's 
population in the next few decades. Specifically, U.S. census 
projections estimate the number of Americans age 65 and over will 
increase from 40 million in 2010 to 72 million in 2030.[Footnote 5] 
Accordingly, the number of those eligible and in need of services like 
those provided under OAA title III and VII programs will increase as 
well. In 2011, we issued a report examining unmet need for OAA title 
III services showing that many older adults who may be in need of 
meals or home-based care may not receive assistance from title III 
programs or from other sources.[Footnote 6] Despite the growing need 
for these services as the population ages, it is anticipated that the 
funding level for these programs at the federal level will remain 
relatively flat in fiscal year 2013--as it has for at least the last 9 
years.[Footnote 7] 

In light of concerns about the growing demand for these vital OAA 
services combined with current federal fiscal constraints, you asked 
us to assess the current formula used to allot OAA funds to the states 
and explore options to better ensure that the needs of the growing 
older adult population are met. Specifically, our study examined (1) 
how intrastate funding formulas take into account older adults with 
greatest economic and social need as defined by OAA, (2) options for 
modifying OAA title III and VII statutory funding formulas to better 
target older adults with the greatest economic and social need under 
generally accepted equity standards, and (3) what effect, if any, 
might these formula modifications have on states' program allotments 
and what transition measures could be used to ease the implementation 
of modifications. 

We used several methodologies to develop our findings. To assess how 
intrastate funding formulas account for older individuals in greatest 
economic and social need, we reviewed the state plans for all 50 
states and the District of Columbia--45 of which had intrastate 
funding formulas.[Footnote 8] To develop formula modification options 
and estimate the effects on states' program allotments, we analyzed 
data from a number of sources, including AOA's data on state OAA 
titles III and VII allotments, American Community Survey (ACS) data on 
elderly populations, Department of the Treasury's (Treasury) data on 
state taxable resources, Bureau of Labor Statistics (BLS) data on 
wages, and the Department of Housing and Urban Development data on 
rents. For all of the objectives, we reviewed literature on OAA 
services and elder abuse and we interviewed advocacy groups, state and 
local aging officials in Illinois and Wisconsin, experts on aging, and 
officials at AOA. Appendix II provides a detailed description of our 
methodology. 

We conducted this performance audit from March 2012 through November 
2012 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

On July 23, 2012, we briefed your staff on the results of our 
analysis. This report formally conveys the information provided during 
that briefing (see appendix I for the briefing slides). In summary, we 
found that states used a variety of demographic factors to account for 
greatest economic and social need in their intrastate funding 
formulas. We also presented three options for revising the statutory 
funding formula to more equitably account for differences among states 
with respect to needs, cost, and capacity using generally accepted 
equity standards. The first option allots[Footnote 9] funds based on 
states' elderly population with limitations in their activities of 
daily living (ADL); the second option adds an additional factor to 
account for costs of providing services, and the third option further 
accounts for state resource capacity.[Footnote 10] Lastly, we found 
that such modification to the formula would redistribute funds among 
states, and presented a number of transition measures that could 
moderate such effects. 

More specifically, we found that: 

* States use a variety of factors to distribute OAA intrastate funding 
to AAAs and local service providers. All states that use intrastate 
funding formulas[Footnote 11]--which help determine the distribution 
of funds within a given state--use one or more demographic measures of 
need to target funding for OAA titles III and VII services. Factors 
included age, income, rural residence, disability impairment status, 
and minority status to indicate need for OAA services. 

* The current statutory funding formula could better meet generally 
accepted equity standards[Footnote 12] in targeting greatest economic 
and social need for services by addressing differences among states 
with respect to the (1) needs of the elderly population, (2) cost of 
services to address those needs, and (3) capacity of individual states 
to finance needed services. Funds are currently allotted to states 
according to the relative proportion of older individuals, and states 
with similar populations are treated the same, irrespective of need. 
We presented three options for revising the formula using generally 
accepted equity standards to illustrate a range of possibilities. The 
first, the partial beneficiary equity option, distributes funds based 
on the state's population in need of services by measuring older 
adults with limitations in their ability to maintain an independent 
lifestyle; the second, the full beneficiary equity option, accounts 
for differences in the costs of key inputs for providing services, 
such as wages, food, and office space; and the third, the taxpayer 
equity option, further accounts for state resource capacity. 

* Modifying the formula under a partial beneficiary option using ADL 
limitations as a need measure could result in a number of states 
seeing changes in their allotments and we presented several transition 
measures for moderating the impact of such changes. Under the partial 
beneficiary equity option, states with disproportionately high elderly 
populations with ADL limitations--as well as low-income states--would 
receive larger increases in their allotments. At the same time, states 
currently receiving the small state minimum[Footnote 13] could see 
larger decreases in their allotments. However, if transition measures 
such as a phase-in or hold harmless provision,[Footnote 14] minimum 
allotment, or funding floors and ceilings are implemented, the effect 
on states can be tempered. 

Agency Comments and Our Evaluation: 

We provided HHS with the opportunity to comment on a draft of this 
report (HHS' written comments appear in appendix V). In its comments, 
HHS generally agreed with our findings. In particular, HHS 
acknowledged the importance of moderating the effects of any formula 
changes in the current fiscal environment of relatively flat funding 
levels. 

HHS also called attention to a few issues that reinforced our 
findings. While not specifically raising these issues on its own, HHS 
noted that questions could be raised regarding the impact of formula 
changes on very rural states. Such an adverse effect was a key reason 
why the report discusses the importance of formula changes with 
transitions measures, such as a minimum allotment for small states 
that could mitigate such effects. Further, HHS highlighted the wide 
variation in the frequency, collection, and weighting of cost data 
among states and communities, which highlights the importance of 
creating a cost index that relies on federal data sources that capture 
the geographic variation in the costs of key inputs for providing 
services. HHS also agreed that, should Congress implement a different 
funding formula under the reauthorization of the OAA, the agency would 
work with Congress to ensure that any such formula involved 
appropriate available data. 

As agreed with your office, unless you publicly announce its contents 
earlier, we plan no further distribution of this report until 30 days 
from its issue date. At that time, we will send copies of this report 
to the Secretary of Health and Human Services, relevant congressional 
committees, and other interested parties. In addition, this report 
will be available at no charge on GAO's website at [hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-7215 or jeszeckc@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff members who made key 
contributions to this report are listed in appendix VI. 

Sincerely yours, 

Signed by: 

Charles Jeszeck, Director: 
Education, Workforce, and Income Security Issues: 

[End of section] 

Appendix I: Briefing Slides: 

Older Americans Act: 

Options to Better Target Need and Improve Equity: 

Briefing for Congressional Requesters on Preliminary Findings: 

July 23, 2012: 

Introduction: 

The Older Americans Act of 1965 (OAA) was enacted to provide 
services to older adults and help them remain in their homes and 
communities. OAA funds are allocated primarily based on states’ 
relative proportion of older adults and states develop formulas to 
target those funds within the state consistent with the act. 

Programs funded by Titles III and VII OAA grants provide a broad range 
of vital services to older adults, including: 

Table: 

Title and Part: IIIB; 
Service: Support services, such as transportation. 

Title and Part: III C; 
Service: Congregate and home-delivered meals. 

Title and Part: IIIE; 
Service: Caregiver support. 

Title and Part: VII; 
Service: Vulnerable elder rights protection activities. 

[End of table] 

In FY 2012, approximately $1.36 billion was provided for Title III 
services, and $21.8 million was provided for Title VII services. 

[End of Introduction] 

Background: 

Current OAA Formula Allocates Funds Primarily Based on Age: 

The OAA funding formula generally allocates federal funds to states 
based on the proportion of elderly residents in each state. For 
example: 

Table: 

Title and Part: IIIB and C; 
Formula: Share of population age 60 and older. 

Title and Part: VII; 
Formula: Share of population age 60 and older. 

Title and Part: III E; 
Formula: Share of population age 70 and older. 

[End of table] 

The Act also provides a minimum level of funding to each state. No 
state receives less than one-half percent of the total appropriation. 
The FY 2012 minimums for Titles III and VII were about $5.9 million and 
$108,000, respectively. 

A “hold harmless” provision also guarantees that each state will 
receive at least as much funding as it received in a specified prior 
fiscal year. 

OAA Requires States to Target Greatest Economic and Social Need: 

While the federal formula is generally based on age, OAA requires 
state programs to target or prioritize service to older adults with 
the greatest economic and social need, including those: 

* living at or below the poverty threshold, 

* having physical or mental disabilities that pose risks for 
institutional placement, or, 

* impacted cultural, social, or geographic isolation, including 
isolation caused by language, race, or ethnic status. 

States are required to consider such factors when developing the 
intrastate formulas they use to allocate funds among their local 
agencies.[A] 

[A] 42 U.S.C. § 3025(a)(2)(ii)(C). 

General Distribution of OAA Funds: 

U.S. Department of Health and Human Services, Administration on 
Community Living, Administration on Aging: 
Allocates funds to states based on proportion of elderly population, 
generally those over age 60 or 70. 

State Units on Aging: 
Distribute funds using intrastate funding formulas, which must be 
approved by AOA,[A] that target elderly with greatest economic and 
social need using factors reflecting individual state characteristics, 
such as age, minority status, and income level. 

Area aging agencies or local service providers: 
Use funds to deliver services in the community. 

[A] 42 U.S.C. §3024(a)(2)(D). 

Activities of Daily Living Capture Many Need Factors: 

A 2011 GAO study[A] found that the very old, minorities, and poor 
experienced greater disabilities in terms of being able to perform 
activities necessary to maintain an independent lifestyle or 
activities of daily living (ADL). ADLs measure a person’s ability to 
perform “basic” daily activities such as eating, bathing, dressing, 
and toileting. 

These are many of the same population groups that OAA identifies as 
having greatest social and economic need and instructs states to use 
similar factors in allocating federal funding among local agencies. 

The U.S. Census Bureau’s American Community Survey (ACS) refined its 
questions related to ADLs in 2008. 

[A] GAO, Older Americans Act: More Should Be Done to Measure the 
Extent of Unmet Need for Services, [hyperlink, 
http://www.gao.gov/products/GAO-11-237] (Washington, D.C.: February 
28, 2011). 

[End of Background] 

Research Objectives: 

1. How do intrastate funding formulas take into account older adults 
with greatest economic and social need as defined by OAA? 

2. What are options for modifying OAA Title III and VII statutory 
funding formulas to better target older adults with the greatest 
economic and social need under generally accepted equity standards? 

3. What effect, if any, might these formula modifications have on 
states’ program allotments and what transition measures could be used 
to ease the implementation of modifications? 

[End of Research Objectives] 

Methodology: 

* Reviewed intrastate funding formulas for all 50 states.[A] 

* Reviewed literature on OAA services and elder abuse. 

* Interviewed advocacy groups, state and local aging officials in 
Illinois and Wisconsin, experts on aging, and officials at the 
Department of Health and Human Services, Administration on Aging. 

* Analyzed data from the American Community Survey (ACS), Treasury's 
Total Taxable Resources (TTR) databases, Bureau of Labor Statistics 
data from the Occupational Employment Statistics, and U.S. Department 
of Housing and Urban Development’s Fair Market Rents (FMR) data to 
develop formula options. 

[A] Some states are single service-area states and are not required to 
use an intrastate funding formula to distribute Title III funds. 42 
U.S.C. §3025(b)(5). We did not review intrastate funding formulas in 
the U.S. territories. 

[End of Methodology] 

Objective One: 
States Use a Variety of Factors to Allocate OAA Funding: 

All states with intrastate funding formulas use one or more 
measures of need to target funding for OAA services. 

States use a variety of factors to indicate need, including: 
* age, 
* income, 
* rural residence, 
* disability or impairment status, and, 
* minority status. 

[End of Objective One] 

Objective 2: 

Equity Standards for Designing and Evaluating Funding Formulas[A]: 

Improved targeting for greatest social and economic need could 
be accomplished by adhering to commonly used equity standards. 

Beneficiary Equity: federal allotments are based on need and adjusted 
for differences in the cost of providing services: 

* Partial Beneficiary Equity-–distributes funds based on size of 
state’s population potentially needing services, and; 

* Full Beneficiary Equity-–also adjusts for differences in the cost of 
providing services in each state. 

Taxpayer Equity: allotments are adjusted to account for each state’s 
ability to finance a given program from its own resources. 

[A] These standards are commonly used in social science research to 
evaluate and design funding formulas. See, for example, National 
Research Council, Statistical Issues in Allocating Funds by Formula, 
Panel on Formula Allocations,Committee on National Statistics 
(Washington, D.C.: 2003). 

Objective 2: 
Current Federal Formula Could Better Meet Equity Standards: 

Current federal formula primarily allocates funds to states according 
to the relative proportion of older adults, with adjustments for 
minimum funding levels for each state and “hold harmless” provisions. 

The current federal formula does not address differences among states 
with respect to: 

* needs of their elderly population, 

* cost of services to address need, and, 

* capacity of states to finance services. 

Under the current federal formula states with similar populations are 
treated alike irrespective of need. For example: 

Louisiana has approximately 83,000 more people age 60 and older with at 
least one ADL limitation than Colorado, but Louisiana receives less 
funding because their total population age 60 and older is less than 
in Colorado. 

Table: 

Population age 60 and older: 
Colorado: 793,144; 
Louisiana: 785,877. 

Population 60 and older with at least one ADL limitation (share): 
Colorado: 234,714 (30 percent); 
Louisiana: 317,913(40 percent). 

Source: GAO analysis of 2008-2010 3-year average American Community 
Survey data. Note: For purposes of this analysis, our measure includes 
people who reported at least one ADL limitation or a severe vision or 
hearing impairment. 

[End of table] 

Objective 2: 
ADLs Better Capture Need and Achieve Partial Beneficiary Equity: 

* Need for OAA services can be better estimated using data on 
ADL limitations. 

* Our analysis found the incidence of ADL limitations is higher 
among some of the demographic groups captured in need factors 
used by states. 

Table: Those age 60 and over reporting at least one ADL limitation: 

Lower income[A]: 
Percent of population: 49%. 

Higher income[A]: 
Percent of population: 31%. 

Limited English speaking: 
Percent of population: 42%. 

English speaking: 
Percent of population: 33%. 

Minority: 
Percent of population: 37%. 

Non-minority: 
Percent of population: 33%. 

Minority and low-income: 
Percent of population: 51%. 

Source: GAO analysis of 2008-2010 3-year average American Community 
Survey data. 

[A] For purposes of this table, lower income is defined as 100 percent 
of the federal poverty level or less and higher income is defined as 
more than 100 percent of the federal poverty level. 

[End of table] 

Figure: Prevalence of Having at Least One ADL Limitation Increases 
with Age: 

[Refer to PDF for image: vertical bar graph] 

Age group: 60-64; 
Percentage: 34%. 

Age group: 65-69; 
Percentage: 39%. 

Age group: 70-74; 
Percentage: 46%. 

Age group: 75-79; 
Percentage: 54%. 

Age group: 80-84; 
Percentage: 63%. 

Age group: 85+; 
Percentage: 73%. 

Source: GAO analysis of 2008-2010 3-year average American Community 
Service data. 

[End of figure] 

Figure: Concentration of Elderly with ADL Limitations Varies across 
States: 

Across all states, the share of the population age 60 and older with 
at least one ADL limitation is 34 percent. States with an index value 
greater than 1 are above the national average. 

Ratio of share of state's population age 60 and over with at least one 
ADL limitation to national average: 

Less than 0.90: 
Colorado: 
Hawaii: 
Maryland: 
Minnesota: 
Nevada: 
New Hampshire: 
New Jersey: 

0.90 to 0.99: 
Arizona: 
California: 
Connecticut: 
Delaware: 
District of Columbia: 
Florida: 
Illinois: 
Iowa: 
Massachusetts: 
Montana: 
Nebraska: 
New York: 
Rhode Island: 
Utah: 
Vermont: 
Virginia: 
Washington: 
Wisconsin: 

1 to 1.09: 
Alaska: 
Georgia: 
Idaho: 
Indiana: 
Kansas: 
Maine: 
Michigan: 
Missouri: 
New Mexico: 
North Carolina: 
North Dakota: 
Ohio: 
Oregon: 
Pennsylvania: 
South Carolina: 
South Dakota: 
Texas: 
Wyoming: 

1.10 to 1.29: 
Alabama: 
Arkansas: 
Kentucky: 
Louisiana: 
Mississippi: 
Oklahoma: 
Tennessee: 
West Virginia: 

Source: GAO analysis of 2008-2010 3-year average American Community 
Service data; map: Map Resources. 

[End of figure] 

Adjusting for Cost Differences Could Achieve Full Beneficiary Equity: 

In addition to need, allotments can be adjusted for differences in the 
cost of key inputs for providing services, including: 

* wages,
* food, and; 
* office space (rent). 

Adjusting for State Taxable Resources Could Achieve Taxpayer Equity: 

* Allotments can be adjusted to achieve taxpayer equity by basing 
allotments on a state’s need population—adjusted for the cost of 
providing services—and its ability to fund program services. 

* A state with fewer taxable resources compared to other states would 
have a larger allotment percentage and, therefore, a larger final 
allotment (all else being equal). 

* Adjustments are based on Treasury’s Total Taxable Resources data, 
which provide a comprehensive measure of the economic activities that 
underlie a state’s sources of revenues—-personal and corporate income. 

[End of Objective Two] 

Objective Three: 

Potential Effects of Partial Equity Formula Modifications on States’ 
Allocations[A]: 

* Under a Partial Beneficiary Equity option using ADL limitations, a 
number of states could see changes in their allocations. 

Table: 

Decrease in funding: 
Number of states: 29. 

Increase in funding: 
Number of states: 22. 

Decrease over 20 percent: 
Number of states: 10. 

Increase over 20 percent: 
Number of states: 7. 

Note: Last two columns only capture those states with increases or 
decreases of 20 percent or more. 

[End of table] 

* States with disproportionately high elderly populations with ADL 
limitations, as well as low-income states, could see higher increases 
in their allocations (e.g., Alabama, Arkansas, and Kentucky). 

* States currently receiving the small state minimum could see larger 
decreases in their allocations (e.g., Alaska, Delaware, and Wyoming). 

Options for Moderating Impact of Formula Changes: 

* Phase-in provision combining the old and new formulas, with a gradual 
increase in the portion of funding distributed through the new 
formula, until the phase-in period is complete. For example: 

Table: 

Year: 1; 
Old formula: 50%; 
New formula: 50%. 

Year: 2; 
Old formula: 40%; 
New formula: 60%. 

Year: 3; 
Old formula: 30%; 
New formula: 70%. 

Year: 4; 
Old formula: 20%; 
New formula: 80%. 

Year: 5; 
Old formula: 10%; 
New formula: 90%. 

Year: 6 (complete); 
Old formula: 0%; 
New formula: 100%. 

[End of table] 

* Funding floors and ceilings limiting the amount of funding that a 
state could lose or gain under a new formula from year to year. 

* Hold harmless provision limiting the increase or decrease in funding 
that states 
could receive under a new formula, until funding for the program 
increases. 

* Maintaining a minimum allocation for small states. 

[End of Objective Three] 

Concluding Observations: 

Given the growing need for OAA services in a constrained fiscal 
environment, it is increasingly important to ensure that program funds 
are aligned with the greatest economic and social need consistent with 
some measure of a state’s resources. 

In deciding whether to revise the current federal formula, policymakers 
should consider how to strike a balance among all important equity 
factors: 

* need, 
* cost of providing services, and, 
* availability of state resources. 

While revising the formula poses challenges, there are options that 
could ease the transition and minimize disruption in OAA services. For 
example, features from different formulas could be combined. 

[End of Concluding Observations] 

Appendix I: OAA Funding Formula Options to Improve Allocation 
Equity[A]: 

Partial Beneficiary Equity: 
Appropriations; 
times: 
State's Elderly Population in Need Index. 

Beneficiary Equity: 
Appropriations; 
times: 
State's Elderly Population in Need Index; 
times: 
Cost of Service Index. 

Taxpayer Equity: 
Appropriations; 
times: 
State's Elderly Population in Need Index; 
times: 
Cost of Service Index; 
times: 
Fiscal Capacity Index. 

[A] The options presented here are simplified to focus on the various 
factors used in each formula and do not represent the actual equations. 

[End of Appendix I] 

GAO on the Web: 

Web site: [hyperlink, http://www.gao.gov/]. 

Contact: 

Chuck Young, Managing Director, Public Affairs, youngc1@gao.gov: 
(202) 512-4800: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7149: 
Washington, D.C. 20548: 

Copyright: 

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. The published product may be 
reproduced and distributed in its entirety without further permission 
from GAO. However, because this work may contain copyrighted images or 
other material, permission from the copyright holder may be necessary 
if you wish to reproduce this material separately. 

[End of briefing slides section] 

Appendix II: Objectives, Scope, and Methodology: 

Our objectives were to examine (1) how intrastate funding formulas 
take into account older adults with greatest economic and social need 
as defined by the Older Americans Act of 1965 (OAA), (2) options for 
modifying OAA title III and VII statutory funding formulas to better 
target older adults with the greatest economic and social need under 
generally accepted equity standards, and (3) what effect, if any, 
might these formula modifications have on states' program allotments 
and what transition measures might ease the implementation of 
modifications. To address the first objective, we reviewed the state 
plans for all 50 states and the District of Columbia--45 of which had 
intrastate funding formulas.[Footnote 15] To address the second 
objective, we used two generally accepted formula design standards 
intended to achieve equity for beneficiaries and taxpayers.[Footnote 
16] To meet both equity standards, a formula should use reliable and 
appropriate measures of the need population in each state and the cost 
of providing services in each state. A taxpayer equity formula 
additionally requires a reliable measure of a state's ability to 
finance a program from its own resources. In the following sections, 
we describe how we measured the need population, cost of providing 
services, and financing capacity in each state, and how we developed 
various formula options to incorporate these equity standards. For the 
third objective, we analyzed the Administration on Aging's (AOA) data 
on state OAA titles III and VII allotments and the American Community 
Survey (ACS) data on elderly populations. Finally, to address all 
three objectives, we reviewed literature on OAA services and elder 
abuse; interviewed advocacy groups, state and local aging officials in 
Illinois and Wisconsin, experts on aging, and officials at AOA; and we 
reviewed relevant laws, regulations, and guidance. 

We conducted this performance audit from March 2012 through November 
2012 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

Analyzing Intrastate Funding Formulas: 

To assess how intrastate funding formulas take into account, as 
required by the OAA, older adults with greatest economic and social 
need as defined by the OAA, we reviewed the most recently available 
state plans for all 50 states. As a starting point for our analysis, 
we obtained an electronic listing of state agency on aging intrastate 
funding formulas updated by AOA staff in May 2012. This list 
categorized factors in each state's funding formula to target and 
indicate need, as well as the weights applied to each factor. To 
assess the reliability of the data, we also obtained electronic copies 
of state plans from the National Association of States United for 
Aging and Disabilities website or officials or an AOA official. In a 
few cases, we also obtained electronic copies of the state plan 
directly from the state unit on aging website or an agency official. 
For the 45 states with intrastate funding formulas, we independently 
reviewed the intrastate formulas detailed in the state plan noting the 
factors used to indicate need and the assigned weights, and revised 
and updated the AOA listing provided to us. To ensure the data 
collected were accurate and complete, two analysts independently 
reviewed and analyzed the formulas. 

Measuring State Need Populations: 

Data that directly measure the number of people in a state who 
potentially need OAA services do not exist. Although AOA collects data 
on the number of clients who receive certain types of OAA services, 
these data are not appropriate for use in a funding formula for two 
reasons. First, caseloads may be influenced by state funding levels. 
For example, an agency's caseload may be relatively small because of 
limited funds, not because of limited demand for services. Second, 
data that can be controlled by state agency officials should not be 
used in a funding formula because they could introduce some 
undesirable incentives into the program. For instance, if a state's 
allotment were determined by the size of its caseload, a state agency 
might be rewarded for taking inappropriate actions, such as enrolling 
individuals into an OAA program who do not require these services. 

There are, however, several national surveys that provide estimates of 
the number of people that may need OAA services by state using several 
need indicators. Measures of need for OAA services may be based on low 
income or minority status, impairments, limited English proficiency, 
race, and living in rural area. Several surveys include some of these 
measures and are conducted by statistical agencies such as the U.S. 
Census Bureau, the National Institute on Aging, and the Social 
Security Administration. 

For this study we used the Census Bureau's ACS to use as a measure of 
state populations potentially in need of OAA services for several 
reasons. First, the ACS provides data on states' populations age 60 
and over. Second, the ACS has a large sample size (with about 3 
million housing units surveyed across all 50 states, the District of 
Columbia, and Puerto Rico), which would allow for accurate estimates 
of populations in each state.[Footnote 17] Third, the ACS surveys 
people in group quarters such as those living in nursing care 
facilities. This is significant because the title VII Long-term Care 
Ombudsman program focuses on advocating on behalf of older residents 
of long-term care facilities, including nursing homes, assisted 
living, and other residential settings. Fourth, the ACS asks questions 
that are designed to capture a wide range of potential economic and 
social need for populations 60 and older who are targeted for OAA 
services, including a person's ability to perform basic activities of 
daily living (ADL), and these questions are asked consistently across 
all states (see table 1). 

Table 1: Disability Questions from the American Community Survey, 2008-
2010: 

(Continued From Previous Page) 

Question: 1. Is this person deaf or does he/she have serious 
difficulty hearing? 

Question: 2. Is this person blind or does he/she have serious 
difficulty seeing even when wearing glasses? 

Question: 3. Because of a physical, mental, or emotional condition, 
does this person have serious difficulty concentrating, remembering, 
or making decisions? 

Question: 4. Does this person have serious difficulty walking or 
climbing stairs? 

Question: 5. Does this person have difficulty dressing or bathing? 

Question: 6. Because of a physical, mental, or emotional condition, 
does this person have difficulty doing errands alone such as visiting 
a doctor's office or shopping? 

Source: U.S. Census Bureau, American Community Survey (2008-2010). 

[End of table] 

From the ACS data averaged for 2008 to 2010, the number of elderly 
people age 60 and over that had at least one ADL limitation is listed 
in table 2. Nationwide, about 34 percent of all adults over 60 are 
limited by at least one of the six items indicated in table 2. The 
state's share of elderly population compared with the national 34 
percent is used to calculate a state index. If the state's index value 
is greater than 1 then the percentage share of their elderly 
population with at least one ADL limitation is higher compared to the 
national average. For example, West Virginia has a higher percent of 
elderly with at least one ADL limitation (42 percent) compared to the 
national average (34 percent) and an index greater than 1. Mississippi 
ranks the highest in percentage of elderly with at least one ADL 
limitation. Mississippi's state index is 1.28. At the other end 
Colorado has the least percent of elderly with at least one ADL 
limitation. Colorado's state's index is 0.87. 

Table 2: Comparison of States' Share of Population Age 60 and Over 
with at Least One ADL Limitation: 

State: Totals; 
Number of elderly age 60 and over: 55,871,230; 
Number with at least one ADL limitation: 18,941,108; 
Percentage with at least one ADL limitation: 33.90%; 
State to national average index: 1.00. 

State: Alabama; 
Number of elderly age 60 and over: 914,807; 
Number with at least one ADL limitation: 373,662; 
Percentage with at least one ADL limitation: 40.85%; 
State to national average index: 1.20. 

State: Alaska; 
Number of elderly age 60 and over: 85,953; 
Number with at least one ADL limitation: 30,429; 
Percentage with at least one ADL limitation: 35.40%; 
State to national average index: 1.04. 

State: Arizona; 
Number of elderly age 60 and over: 1,201,071; 
Number with at least one ADL limitation: 367,907; 
Percentage with at least one ADL limitation: 30.63%; 
State to national average index: 0.90. 

State: Arkansas; 
Number of elderly age 60 and over: 577,965; 
Number with at least one ADL limitation: 240,338; 
Percentage with at least one ADL limitation: 41.58%; 
State to national average index: 1.23. 

State: California; 
Number of elderly age 60 and over: 5,930,094; 
Number with at least one ADL limitation: 1,938,535; 
Percentage with at least one ADL limitation: 32.69%; 
State to national average index: 0.96. 

State: Colorado; 
Number of elderly age 60 and over: 793,347; 
Number with at least one ADL limitation: 234,714; 
Percentage with at least one ADL limitation: 29.59%; 
State to national average index: 0.87. 

State: Connecticut; 
Number of elderly age 60 and over: 701,564; 
Number with at least one ADL limitation: 212,704; 
Percentage with at least one ADL limitation: 30.32%; 
State to national average index: 0.89. 

State: Delaware; 
Number of elderly age 60 and over: 178,423; 
Number with at least one ADL limitation: 57,323; 
Percentage with at least one ADL limitation: 32.13%; 
State to national average index: 0.95. 

State: District of Columbia; 
Number of elderly age 60 and over: 96,949; 
Number with at least one ADL limitation: 31,186; 
Percentage with at least one ADL limitation: 32.17%; 
State to national average index: 0.95. 

State: Florida; 
Number of elderly age 60 and over: 4,312,979; 
Number with at least one ADL limitation: 1,362,336; 
Percentage with at least one ADL limitation: 31.59%; 
State to national average index: 0.93. 

State: Georgia; 
Number of elderly age 60 and over: 1,480,443; 
Number with at least one ADL limitation: 526,517; 
Percentage with at least one ADL limitation: 35.56%; 
State to national average index: 1.05. 

State: Hawaii; 
Number of elderly age 60 and over: 273,399; 
Number with at least one ADL limitation: 81,791; 
Percentage with at least one ADL limitation: 29.92%; 
State to national average index: 0.88. 

State: Idaho; 
Number of elderly age 60 and over: 269,969; 
Number with at least one ADL limitation: 94,680; 
Percentage with at least one ADL limitation: 35.07%; 
State to national average index: 1.03. 

State: Illinois; 
Number of elderly age 60 and over: 2,229,960; 
Number with at least one ADL limitation: 725,069; 
Percentage with at least one ADL limitation: 32.51%; 
State to national average index: 0.96. 

State: Indiana; 
Number of elderly age 60 and over: 1,168,207; 
Number with at least one ADL limitation: 407,755; 
Percentage with at least one ADL limitation: 34.90%; 
State to national average index: 1.03. 

State: Iowa; 
Number of elderly age 60 and over: 613,051; 
Number with at least one ADL limitation: 200,908; 
Percentage with at least one ADL limitation: 32.77%; 
State to national average index: 0.97. 

State: Kansas; 
Number of elderly age 60 and over: 518,052; 
Number with at least one ADL limitation: 183,550; 
Percentage with at least one ADL limitation: 35.43%; 
State to national average index: 1.05. 

State: Kentucky; 
Number of elderly age 60 and over: 810,708; 
Number with at least one ADL limitation: 332,533; 
Percentage with at least one ADL limitation: 41.02%; 
State to national average index: 1.21. 

State: Louisiana; 
Number of elderly age 60 and over: 785,851; 
Number with at least one ADL limitation: 317,913; 
Percentage with at least one ADL limitation: 40.45%; 
State to national average index: 1.19. 

State: Maine; 
Number of elderly age 60 and over: 294,439; 
Number with at least one ADL limitation: 104,568; 
Percentage with at least one ADL limitation: 35.51%; 
State to national average index: 1.05. 

State: Maryland; 
Number of elderly age 60 and over: 999,733; 
Number with at least one ADL limitation: 301,054; 
Percentage with at least one ADL limitation: 30.11%; 
State to national average index: 0.89. 

State: Massachusetts; 
Number of elderly age 60 and over: 1,252,829; 
Number with at least one ADL limitation: 389,813; 
Percentage with at least one ADL limitation: 31.11%; 
State to national average index: 0.92. 

State: Michigan; 
Number of elderly age 60 and over: 1,888,120; 
Number with at least one ADL limitation: 643,100; 
Percentage with at least one ADL limitation: 34.06%; 
State to national average index: 1.00. 

State: Minnesota; 
Number of elderly age 60 and over: 942,976; 
Number with at least one ADL limitation: 279,820; 
Percentage with at least one ADL limitation: 29.67%; 
State to national average index: 0.88. 

State: Mississippi; 
Number of elderly age 60 and over: 532,428; 
Number with at least one ADL limitation: 231,384; 
Percentage with at least one ADL limitation: 43.46%; 
State to national average index: 1.28. 

State: Missouri; 
Number of elderly age 60 and over: 1,153,175; 
Number with at least one ADL limitation: 424,288; 
Percentage with at least one ADL limitation: 36.79%; 
State to national average index: 1.09. 

State: Montana; 
Number of elderly age 60 and over: 205,106; 
Number with at least one ADL limitation: 68,692; 
Percentage with at least one ADL limitation: 33.49%; 
State to national average index: 0.99. 

State: Nebraska; 
Number of elderly age 60 and over: 337,579; 
Number with at least one ADL limitation: 113,036; 
Percentage with at least one ADL limitation: 33.48%; 
State to national average index: 0.99. 

State: Nevada; 
Number of elderly age 60 and over: 463,287; 
Number with at least one ADL limitation: 139,035; 
Percentage with at least one ADL limitation: 30.01%; 
State to national average index: 0.89. 

State: New Hampshire; 
Number of elderly age 60 and over: 254,488; 
Number with at least one ADL limitation: 75,798; 
Percentage with at least one ADL limitation: 29.78%; 
State to national average index: 0.88. 

State: New Jersey; 
Number of elderly age 60 and over: 1,640,212; 
Number with at least one ADL limitation: 489,437; 
Percentage with at least one ADL limitation: 29.84%; 
State to national average index: 0.88. 

State: New Mexico; 
Number of elderly age 60 and over: 383,604; 
Number with at least one ADL limitation: 140,072; 
Percentage with at least one ADL limitation: 36.51%; 
State to national average index: 1.08. 

State: New York; 
Number of elderly age 60 and over: 3,627,253; 
Number with at least one ADL limitation: 1,173,610; 
Percentage with at least one ADL limitation: 32.36%; 
State to national average index: 0.95. 

State: North Carolina; 
Number of elderly age 60 and over: 1,727,139; 
Number with at least one ADL limitation: 618,971; 
Percentage with at least one ADL limitation: 35.84%; 
State to national average index: 1.06. 

State: North Dakota; 
Number of elderly age 60 and over: 131,650; 
Number with at least one ADL limitation: 45,966; 
Percentage with at least one ADL limitation: 34.92%; 
State to national average index: 1.03. 

State: Ohio; 
Number of elderly age 60 and over: 2,249,710; 
Number with at least one ADL limitation: 769,349; 
Percentage with at least one ADL limitation: 34.20%; 
State to national average index: 1.01. 

State: Oklahoma; 
Number of elderly age 60 and over: 697,580; 
Number with at least one ADL limitation: 285,232; 
Percentage with at least one ADL limitation: 40.89%; 
State to national average index: 1.21. 

State: Oregon; 
Number of elderly age 60 and over: 751,860; 
Number with at least one ADL limitation: 254,812; 
Percentage with at least one ADL limitation: 33.89%; 
State to national average index: 1.00. 

State: Pennsylvania; 
Number of elderly age 60 and over: 2,662,996; 
Number with at least one ADL limitation: 900,008; 
Percentage with at least one ADL limitation: 33.80%; 
State to national average index: 1.00. 

State: Rhode Island; 
Number of elderly age 60 and over: 208,204; 
Number with at least one ADL limitation: 70,042; 
Percentage with at least one ADL limitation: 33.64%; 
State to national average index: 0.99. 

State: South Carolina; 
Number of elderly age 60 and over: 884,234; 
Number with at least one ADL limitation: 317,300; 
Percentage with at least one ADL limitation: 35.88%; 
State to national average index: 1.06. 

State: South Dakota; 
Number of elderly age 60 and over: 156,676; 
Number with at least one ADL limitation: 54,118; 
Percentage with at least one ADL limitation: 34.54%; 
State to national average index: 1.02. 

State: Tennessee; 
Number of elderly age 60 and over: 1,198,644; 
Number with at least one ADL limitation: 460,380; 
Percentage with at least one ADL limitation: 38.41%; 
State to national average index: 1.13. 

State: Texas; 
Number of elderly age 60 and over: 3,673,715; 
Number with at least one ADL limitation: 1,361,585; 
Percentage with at least one ADL limitation: 37.06%; 
State to national average index: 1.09. 

State: Utah; 
Number of elderly age 60 and over: 345,934; 
Number with at least one ADL limitation: 109,120; 
Percentage with at least one ADL limitation: 31.54%; 
State to national average index: 0.93. 

State: Vermont; 
Number of elderly age 60 and over: 129,647; 
Number with at least one ADL limitation: 42,075; 
Percentage with at least one ADL limitation: 32.45%; 
State to national average index: 0.96. 

State: Virginia; 
Number of elderly age 60 and over: 1,386,861; 
Number with at least one ADL limitation: 436,196; 
Percentage with at least one ADL limitation: 31.45%; 
State to national average index: 0.93. 

State: Washington; 
Number of elderly age 60 and over: 1,171,854; 
Number with at least one ADL limitation: 389,577; 
Percentage with at least one ADL limitation: 33.24%; 
State to national average index: 0.98. 

State: West Virginia; 
Number of elderly age 60 and over: 415,102; 
Number with at least one ADL limitation: 174,949; 
Percentage with at least one ADL limitation: 42.15%; 
State to national average index: 1.24. 

State: Wisconsin; 
Number of elderly age 60 and over: 1,063,026; 
Number with at least one ADL limitation: 324,361; 
Percentage with at least one ADL limitation: 30.51%; 
State to national average index: 0.90. 

State: Wyoming; 
Number of elderly age 60 and over: 98,377; 
Number with at least one ADL limitation: 33,510; 
Percentage with at least one ADL limitation: 34.06%; 
State to national average index: 1.00. 

Source: GAO analysis of U.S. Census Bureau, American Community Survey 
3-year average data (2008-2010). 

[End of table] 

Activities of Daily Living and Different Need Measures: 

Prior GAO work has shown that indicators of the ability of a person to 
perform basic activities of daily living (ADL) are highly correlative 
with other need indicators used by states, such as age, income, and 
minority status. For example, in another report, we found that food 
insecurity among the elderly was associated with being low-income and 
having ADL limitations.[Footnote 18] 

Table 3 presents the estimated proportion of adults age 60 and over 
within various demographic groups reporting one or more ADL 
limitation. It shows that many of the demographic groups associated 
with greatest economic and social need for title III and VII services 
(based on low-income or minority status, impairments, and limited 
English proficiency) have a higher percent chance of having one or 
more ADL limitation compared to those not within the above-mentioned 
groups. 

Table 3: Percentage of Older Adults Age 60 and Older with Various 
Indicators of Need with One or More Activities of Daily Living 
Limitations: 

Indicator of need: Age; 
Category: 60-64; 
Percent age 60 and older: 29.1%; 
Percent age 60 and older reporting one or more ADL limitations: 21%. 

Indicator of need: Age; 
Category: 65-69; 
Percent age 60 and older: 21.5%; 
Percent age 60 and older reporting one or more ADL limitations: 24%. 

Indicator of need: Age; 
Category: 70-74; 
Percent age 60 and older: 16.4%; 
Percent age 60 and older reporting one or more ADL limitations: 30%. 

Indicator of need: Age; 
Category: Indicator of need: 75-99; 
Percent age 60 and older: Indicator of need: 13.1%; 
Percent age 60 and older reporting one or more ADL limitations: 
Indicator of need: 40%. 

Indicator of need: Age; 
Category: Indicator of need: 80-84; 
Percent age 60 and older: Indicator of need: 10.2%; 
Percent age 60 and older reporting one or more ADL limitations: 
Indicator of need: 52%. 

Indicator of need: 85 and above; 
Percent age 60 and older: Indicator of need: 9.6%; 
Percent age 60 and older reporting one or more ADL limitations: 
Indicator of need: 73%. 

Indicator of need: Race; 
Category: Minority; 
Percent age 60 and older: 21%; 
Percent age 60 and older reporting one or more ADL limitations: 37%. 

Indicator of need: Race; 
Category: Non-minority; 
Percent age 60 and older: 84%; 
Percent age 60 and older reporting one or more ADL limitations: 33%. 

Indicator of need: Family Poverty Status; 
Category: At or below poverty threshold; 
Percent age 60 and older: 9%; 
Percent age 60 and older reporting one or more ADL limitations: 49%. 

Indicator of need: English Proficiency; 
Category: Limited English Speaking; 
Percent age 60 and older: 14%; 
Percent age 60 and older reporting one or more ADL limitations: 42%. 

Source: GAO analysis of U.S. Census Bureau, American Community Survey 
3-year average data (2008-2010). 

[End of table] 

To assess the reliability of the ACS, we reviewed the technical 
documentation for these data files, including the coding and 
definition of variables of interest, the procedures for handling 
missing data, coding checks, and imputation procedures for missing 
data. Because the ACS had a very high response rate, a low allocation 
rate, and narrow confidence intervals, we found the ACS data to be 
sufficiently reliable for our study objectives. 

Measuring State Cost Differences: 

Beneficiary equity-based allotment formulas distribute funds so that 
states are able to provide the same levels of services to each person 
in need. Such formulas can include an index that takes into account 
differences in the costs of key inputs used to provide services in 
addition to other formula factors. Developing a cost index including 
such key inputs could serve as a reasonable proxy to reflect general 
differences across states in the cost of providing OAA services. A 
cost of services index is used in the funding formulas for the 
Community Mental Health Services and the Substance Abuse Prevention 
and Treatment block grants. Development of a cost of services index 
for the OAA titles III and VII allotment formulas can draw on a 
methodology employed in prior GAO reports.[Footnote 19] Construction 
of such an index requires estimates of (1) the shares of program 
national average expenditures for broad categories of OAA title III 
funded services; (2) the mix of inputs required to provide those 
services; and (3) geographic variation in the cost of those inputs. 
This yields a broad based index that reflects cost of a typical or 
national average mix of services rather than actual services costs for 
each state. This approach in effect encourages efficiency by rewarding 
states that are more efficient in delivering OAA-funded services. 

There are a variety of measures for the costs of resources or inputs 
that go into providing OAA title III services, which are generally 
beyond the direct control of state agencies, and that are captured in 
various available data sets. These key inputs include wages, food, 
office space, and transportation. These data sets can be used to 
construct an OAA title III cost index as described above. For example, 
AOA compiles annual reports on state expenditures for 14 categories of 
OAA services ranging from home delivered meals to adult day care, 
which could be used to identify the shares of program national average 
expenditures for broad categories of OAA services. Also, there are 
available data sets that capture the costs of such inputs. For 
example, a 1996 Mathematica Policy Research, Inc. report provides 
detailed estimates of input costs for providing nutritional services 
that in fiscal year 2010 represented about 60 percent of title III 
services, including congregate and home delivered meals. There are 
also a number of other federal data sources that may capture 
geographic variations in the costs of key inputs such as labor, food, 
and rents--namely, data from the Bureau of Labor Statistics, the 
United States Department of Agriculture, and the Department of Housing 
and Urban Development. 

Measuring State Financing Capacity: 

A taxpayer equity standard stipulates that funds are distributed so 
that states can provide individuals comparable services using both 
state and federal funds, while each state contributes about the same 
proportion of their resources to a given federal program. This equity 
standard requires a formula to include an indicator of each state's 
ability to finance its share of the costs of a given program from its 
own sources. In a funding formula, a good indicator of a state's 
financing ability would measure all types of taxable resources and 
would not be affected by an individual state's actual fiscal 
decisions. The Department of the Treasury's (Treasury) Total Taxable 
Resources (TTR) estimate is such a measure. A number of prior GAO 
reports have found that TTR is a comprehensive measure of a 
jurisdiction's fiscal capacity, and two specifically found that it is 
not affected by jurisdictions' fiscal choices.[Footnote 20] 
Incorporating TTR estimates into OAA title III and VII formulas could 
achieve taxpayer equity by capturing states' ability to fund program 
services through a measure of the economic activities that underlie 
states' revenue sources--personal and corporate income. Specifically, 
according to Treasury, the objective of TTR is to capture the 
unduplicated sum of per capita Income and gross state product (GSP) 
that is susceptible to taxation by a jurisdiction's government. By 
this means, the entirety of income potentially exposed to taxation is 
measured. In practice, the calculation is relatively simple. A 
jurisdiction's GSP is supplemented with income received by 
jurisdiction residents that originated in other jurisdictions. This 
would include the labor earnings of residents who commute to jobs in 
other jurisdictions, and the capital income (mainly interest, 
dividends, rent, and capital gains) of all jurisdiction residents due 
to asset holdings in other jurisdictions. It excludes indirect 
business taxes paid to the federal government (such as the payroll tax 
and federal excises). TTR is used in allotment formulas for HHS's 
Services' Substance Abuse and Mental Health Services Administration's 
Community Mental Health Service and the Substance Abuse Prevention and 
Treatment block grant programs. 

Analysis of Formula Options: 

For our second objective, we developed three prototype formula options 
based upon equity standards commonly used to design and evaluate 
funding formulas. We also estimated the grant allotments that each 
state would receive under the partial beneficiary equity option, using 
data from the ACS on states' elder populations with one or more ADL 
limitations. See appendix III for a table of our estimates of the 
grant allotments. Specifically, for states' need populations we used 
the ACS 2008-2010, 3-year average state data to limit the effects of 
any year-to-year fluctuations. As described above, we used the six 
questions from the ACS related to the ability to live independently. 

Description of Formula Options: 

The three prototype formula options we developed for revising the OAA 
title III and VII allotment formulas are (1) a partial beneficiary 
equity formula option that distributes funds based only on the size of 
a state's population potentially in need of services, (2) a full 
beneficiary equity formula option with an adjustment for the cost of 
services, and (3) a taxpayer equity formula option with the addition 
of a measure of state fiscal capacity to account for the relative 
ability of a state to finance its share of service costs. 

Partial Beneficiary Equity Formula Option: 

State Allotment: equals: 

Appropriation: times: 
State Need Population divided by the sum of all State Need Populations. 

where: state need population = number of elderly in a state reporting 
limitation in one or more activities of daily living, ADLs. 

This formula would allot funds based on each state's share of the 
total population in need nationally. It would only partially achieve 
beneficiary equity because it does not account for differences among 
states in the cost of providing services. 

Full Beneficiary Equity Formula Option: 

State Allotment: equals: 

Appropriation: times: 
State Cost Adjusted Need Population divided by the sum of all State 
Cost Adjusted Need Populations. 

where: Cost Adjusted Need Population equals Need Population times Cost 
Index. 

The cost index in the formula estimates for each state the relative 
cost of providing OAA-funded services. This formula option thus 
achieves full beneficiary equity by accounting for both a state's need 
population and its costs of providing OAA-funded services. 

Taxpayer Equity Option: 

State Allotment: equals: 

Appropriation: times: 
State Cost Adjusted Need Population times Allotment Percentage divided 
by the sum of all State Cost Adjusted Need Population times Allotment 
Percentage. 

where: Allotment Percentage equals 1 minus 0.15 times [TRR/Cost 
Adjusted Need Population divided by the sum of all TRR/the sum of all 
State Need Population]. 

This formula option would achieve taxpayer equity by basing allotments 
on a state's need population, adjusted for its cost of providing 
services, and its ability to fund the state's share OAA-funded 
services. In this option, the formula includes an "allotment 
percentage" to account for a relative state's ability to finance OAA-
funded services from its own fiscal resources. As we described 
earlier, a number or prior GAO reports have found TTR data to provide 
a comprehensive measure of a state's fiscal resources.[Footnote 21] 
TTR provides a comprehensive indicator of a state's relative ability 
to finance services. A state with fewer fiscal resources compared to 
other states would have a larger allotment percentage and, therefore, 
a larger final allotment (all else being equal). The allotment 
percentage equation indicates each state's required contribution in 
terms of a matching rate to finance the OAA-funded services. 
Nationally, this rate is assumed for illustrative purposes to be 15 
percent, with each state's rate to varying according to its share of 
national TTR.[Footnote 22] 

Literature Review and Interviews and Site Visits: 

To gain perspectives on intrastate funding formulas and options for 
modifying the statutory funding formulas for titles III and VII, we 
first reviewed relevant literature and spoke with AOA officials. In 
addition, we interviewed experts on aging, key national organizations 
to understand the perspectives of program participants, aging network 
practitioners, and service providers. Key national organizations 
included representatives from organizations that represent aging 
network practitioners and service providers, such as Meals On Wheels 
Association of America, National Association of States United for 
Aging and Disability, and National Association of State Long-Term Care 
Ombudsman Programs. We also interviewed representatives from AARP, a 
key national organization that represents program participants. In 
addition, we interviewed other national experts in the aging network. 
We also conducted site visits in two states, Illinois and Wisconsin, 
for which we held on-site, semi-structured interviews with regional, 
state, and local aging officials. These interviews included open-ended 
questions addressing topics related to our research objectives, 
including characteristics of program participants, factors that best 
account for greatest economic and social need, the equity of the 
distribution of funds under the existing funding formulas, and access 
to research or data on OAA funding formulas and services. States were 
selected for geographic efficiency for field office staff conducting 
the work and are not a representative sample of state units on aging. 

[End of section] 

Appendix III: Application of the Partial Beneficiary Equity Option to 
Fiscal Year 2012 Titles III and VII Allotments: 

The following tables show the application of the partial beneficiary 
equity option--distributing funding based on elderly eligible 
population with at least one limitation in ADL--to the fiscal year 
2012 titles III and VII allotments. Title III and title VII allotments 
could also be modified to allow for full beneficiary equity by 
additionally adjusting for differences in the cost of providing 
services in each state, and for taxpayer equity by additionally 
adjusting for differences in each state's ability to finance these 
programs from its own resources. 

Table 4 shows the partial beneficiary equity title III allotment for 
each state and the percentage change from their fiscal year 2012 
allotment under the partial beneficiary equity option, which is 
described in appendix II, and compares populations age 60 and over to 
population age 60 and older with at least one ADL limitation. In this 
table, we exclude the hold harmless provision and the minimum 
allotment provided under the current formula, one-half of one percent 
of the total federal funds appropriated to the OAA program, or about 
$5.9 million for fiscal year 2012. 

Table 4: Comparison of Fiscal Year 2012 Title III Allotments to 
Simulated Partial Beneficiary Equity Allotments: 

50 states and DC: Alabama; 
2012 title III allotment amount: $18,218,136; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $22,939,239; 
Difference: 
Amount: $4,721,103; 
Percent: 25.91%. 

50 states and DC: Alaska; 
2012 title III allotment amount: $5,928,086; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $1,868,047; 
Difference: 
Amount: -$4,060,039; 
Percent: -68.49%. 

50 states and DC: Arizona; 
2012 title III allotment amount: $24,054,835; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $22,585,938; 
Difference: 
Amount: -$1,468,897; 
Percent: -6.11%. 

50 states and DC: Arkansas; 
2012 title III allotment amount: $11,499,761; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $14,754,433; 
Difference: 
Amount: $3,254,672; 
Percent: 28.30%. 

50 states and DC: California; 
2012 title III allotment amount: $118,678,094; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $119,007,334; 
Difference: 
Amount: $329,241; 
Percent: 0.28%. 

50 states and DC: Colorado; 
2012 title III allotment amount: $15,803,697; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $14,409,174; 
Difference: 
Amount: -$1,394,523; 
Percent: -8.82%. 

50 states and DC: Connecticut; 
2012 title III allotment amount: $14,327,416; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $13,057,972; 
Difference: 
Amount: -$1,269,444; 
Percent: -8.86%. 

50 states and DC: Delaware; 
2012 title III allotment amount: $5,928,086; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $3,519,079; 
Difference: 
Amount: -$2,409,007; 
Percent: -40.64%. 

50 states and DC: District of Columbia; 
2012 title III allotment amount: $5,928,086; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $1,914,519; 
Difference: 
Amount: -$4,013,567; 
Percent: -67.70%. 

50 states and DC: Florida; 
2012 title III allotment amount: $86,721,589; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $83,634,278; 
Difference: 
Amount: -$3,087,311; 
Percent: -3.56%. 

50 states and DC: Georgia; 
2012 title III allotment amount: $29,451,447; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $32,323,061; 
Difference: 
Amount: $2,871,614; 
Percent: 9.75%. 

50 states and DC: Hawaii; 
2012 title III allotment amount: $5,928,086; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $5,021,178; 
Difference: 
Amount: -$906,908; 
Percent: -15.30%. 

50 states and DC: Idaho; 
2012 title III allotment amount: $5,928,086; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $5,812,438; 
Difference: 
Amount: -$115,648; 
Percent: -1.95%. 

50 states and DC: Illinois; 
2012 title III allotment amount: $46,709,183; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $44,512,237; 
Difference: 
Amount: -$2,196,947; 
Percent: -4.70%. 

50 states and DC: Indiana; 
2012 title III allotment amount: $23,302,596; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $25,032,221; 
Difference: 
Amount: $1,729,624; 
Percent: 7.42%. 

50 states and DC: Iowa; 
2012 title III allotment amount: $13,526,086; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $12,333,812; 
Difference: 
Amount: -$1,192,274; 
Percent: -8.81%. 

50 states and DC: Kansas; 
2012 title III allotment amount: $11,004,841; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $11,268,198; 
Difference: 
Amount: $263,358; 
Percent: 2.39%. 

50 states and DC: Kentucky; 
2012 title III allotment amount: $16,143,866; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $20,414,316; 
Difference: 
Amount: $4,270,450; 
Percent: 26.45%. 

50 states and DC: Louisiana; 
2012 title III allotment amount: $15,655,237; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $19,516,789; 
Difference: 
Amount: $3,861,552; 
Percent: 24.67%. 

50 states and DC: Maine; 
2012 title III allotment amount: $5,940,070; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $6,419,466; 
Difference: 
Amount: $479,396; 
Percent: 8.07%. 

50 states and DC: Maryland; 
2012 title III allotment amount: $19,940,856; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $18,481,809; 
Difference: 
Amount: -$1,459,047; 
Percent: -7.32%. 

50 states and DC: Massachusetts; 
2012 title III allotment amount: $26,370,317; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $23,930,755; 
Difference: 
Amount: -$2,439,563; 
Percent: -9.25%. 

50 states and DC: Michigan; 
2012 title III allotment amount: $37,747,646; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $39,480,132; 
Difference: 
Amount: $1,732,486; 
Percent: 4.59%. 

50 states and DC: Minnesota; 
2012 title III allotment amount: $18,875,651; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $17,178,247; 
Difference: 
Amount: -$1,697,404; 
Percent: -8.99%. 

50 states and DC: Mississippi; 
2012 title III allotment amount: $10,664,774; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $14,204,744; 
Difference: 
Amount: $3,539,970; 
Percent: 33.19%. 

50 states and DC: Missouri; 
2012 title III allotment amount: $23,260,470; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $26,047,187; 
Difference: 
Amount: $2,786,717; 
Percent: 11.98%. 

50 states and DC: Montana; 
2012 title III allotment amount: $5,928,086; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $4,217,026; 
Difference: 
Amount: -$1,711,060; 
Percent: -28.86%. 

50 states and DC: Nebraska; 
2012 title III allotment amount: $7,318,818; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $6,939,319; 
Difference: 
Amount: -$379,499; 
Percent: -5.19%. 

50 states and DC: Nevada; 
2012 title III allotment amount: $9,153,288; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $8,535,407; 
Difference: 
Amount: -$617,881; 
Percent: -6.75%. 

50 states and DC: New Hampshire; 
2012 title III allotment amount: $5,928,086; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $4,653,265; 
Difference: 
Amount: -$1,274,821; 
Percent: -21.50%. 

50 states and DC: New Jersey; 
2012 title III allotment amount: $33,432,655; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $30,046,707; 
Difference: 
Amount: -$3,385,949; 
Percent: -10.13%. 

50 states and DC: New Mexico; 
2012 title III allotment amount: $7,619,473; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $8,599,069; 
Difference: 
Amount: $979,595; 
Percent: 12.86%. 

50 states and DC: New York; 
2012 title III allotment amount: $77,516,307; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $72,048,324; 
Difference: 
Amount: -$5,467,983; 
Percent: -7.05%. 

50 states and DC: North Carolina; 
2012 title III allotment amount: $34,413,733; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $37,998,844; 
Difference: 
Amount: $3,585,110; 
Percent: 10.42%. 

50 states and DC: North Dakota; 
2012 title III allotment amount: $5,928,086; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $2,821,869; 
Difference: 
Amount: -$3,106,217; 
Percent: -52.40%. 

50 states and DC: Ohio; 
2012 title III allotment amount: $45,248,374; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $47,230,601; 
Difference: 
Amount: $1,982,227; 
Percent: 4.38%. 

50 states and DC: Oklahoma; 
2012 title III allotment amount: $13,989,820; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $17,510,491; 
Difference: 
Amount: $3,520,671; 
Percent: 25.17%. 

50 states and DC: Oregon; 
2012 title III allotment amount: $14,965,075; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $15,642,997; 
Difference: 
Amount: $677,922; 
Percent: 4.53%. 

50 states and DC: Pennsylvania; 
2012 title III allotment amount: $57,248,700; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $55,251,803; 
Difference: 
Amount: -$1,996,897; 
Percent: -3.49%. 

50 states and DC: Rhode Island; 
2012 title III allotment amount: $5,928,086; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $4,299,903; 
Difference: 
Amount: -$1,628,183; 
Percent: -27.47%. 

50 states and DC: South Carolina; 
2012 title III allotment amount: $17,656,443; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $19,479,157; 
Difference: 
Amount: $1,822,714; 
Percent: 10.32%. 

50 states and DC: South Dakota; 
2012 title III allotment amount: $5,928,086; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $3,322,323; 
Difference: 
Amount: -$2,605,763; 
Percent: -43.96%. 

50 states and DC: Tennessee; 
2012 title III allotment amount: $23,784,711; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $28,262,888; 
Difference: 
Amount: $4,478,177; 
Percent: 18.83%. 

50 states and DC: Texas; 
2012 title III allotment amount: $73,246,322; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $83,588,174; 
Difference: 
Amount: $10,341,852; 
Percent: 14.12%. 

50 states and DC: Utah; 
2012 title III allotment amount: $6,937,554; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $6,698,915; 
Difference: 
Amount: -$238,639; 
Percent: -3.44%. 

50 states and DC: Vermont; 
2012 title III allotment amount: $5,928,086; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $2,582,999; 
Difference: 
Amount: -$3,345,087; 
Percent: -56.43%. 

50 states and DC: Virginia; 
2012 title III allotment amount: $27,537,616; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $26,778,223; 
Difference: 
Amount: -$759,393; 
Percent: -2.76%. 

50 states and DC: Washington; 
2012 title III allotment amount: $23,443,456; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $23,916,267; 
Difference: 
Amount: $472,811; 
Percent: 2.02%. 

50 states and DC: West Virginia; 
2012 title III allotment amount: $8,828,503; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $10,740,180; 
Difference: 
Amount: $1,911,676; 
Percent: 21.65%. 

50 states and DC: Wisconsin; 
2012 title III allotment amount: $21,426,723; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $19,912,634; 
Difference: 
Amount: -$1,514,089; 
Percent: -7.07%. 

50 states and DC: Wyoming; 
2012 title III allotment amount: $5,928,086; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $2,057,190; 
Difference: 
Amount: -$3,870,896; 
Percent: -65.30%. 

50 states and DC: Total; 
2012 title III allotment amount: $1,162,801,174; 
Formula based on the elderly having an at least one ADL limitation: 
Simulated amount: $1,162,801,174; 
Difference: 
Amount: $0; 
Percent: 0.00%. 

Source: GAO analysis of AOA data on OAA title III state allotments 
(2012) and U.S. Census Bureau, American Community Survey 3-year 
average data (2008-2010). 

[End of table] 

Table 5 shows the partial beneficiary equity title VII allotments for 
each state and the percentage change from their fiscal year 2012 
allotments under the partial beneficiary equity option, which is 
described in appendix II, and compares populations age 60 and over to 
population age 60 and older with at least one ADL limitation. In this 
table, our simulation excludes the hold harmless provision and the 
minimum allotment that the current formula provides, of one-half of 
one percent of the total federal funds appropriated to the OAA 
program, or about $108,000 for fiscal year 2012. 

Table 5: Comparison of 2012 Title VII Allotments to Simulated Partial 
Beneficiary Equity Allotments: 

50 states and DC: Alabama; 
2012 title VII allotment amount: $336,116; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $417,659; 
Difference: 
Amount: $81,543; 
Percent: 24.26%. 

50 states and DC: Alaska; 
2012 title VII allotment amount: $107,898; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $34,012; 
Difference: 
Amount: -$73,886; 
Percent: -68.48%. 

50 states and DC: Arizona; 
2012 title VII allotment amount: $446,777; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $411,226; 
Difference: 
Amount: -$35,551; 
Percent: -7.96%. 

50 states and DC: Arkansas; 
2012 title VII allotment amount: $211,423; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $268,637; 
Difference: 
Amount: $57,214; 
Percent: 27.06%. 

50 states and DC: California; 
2012 title VII allotment amount: $2,187,718; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $2,166,787; 
Difference: 
Amount: -$20,931; 
Percent: -0.96%. 

50 states and DC: Colorado; 
2012 title VII allotment amount: $294,722; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $262,350; 
Difference: 
Amount: -$32,372; 
Percent: -10.98%. 

50 states and DC: Connecticut; 
2012 title VII allotment amount: $257,340; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $237,749; 
Difference: 
Amount: -$19,591; 
Percent: -7.61%. 

50 states and DC: Delaware; 
2012 title VII allotment amount: $107,898; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $64,072; 
Difference: 
Amount: -$43,826; 
Percent: -40.62%. 

50 states and DC: District of Columbia; 
2012 title VII allotment amount: $107,898; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $34,858; 
Difference: 
Amount: -$73,040; 
Percent: -67.69%. 

50 states and DC: Florida; 
2012 title VII allotment amount: $1,581,700; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $1,522,744; 
Difference: 
Amount: -$58,956; 
Percent: -3.73%. 

50 states and DC: Georgia; 
2012 title VII allotment amount: $549,939; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $588,512; 
Difference: 
Amount: $38,573; 
Percent: 7.01%. 

50 states and DC: Hawaii; 
2012 title VII allotment amount: $107,898; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $91,421; 
Difference: 
Amount: -$16,477; 
Percent: -15.27%. 

50 states and DC: Idaho; 
2012 title VII allotment amount: $107,898; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $105,828; 
Difference: 
Amount: -$2,070; 
Percent: -1.92%. 

50 states and DC: Illinois; 
2012 title VII allotment amount: $830,033; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $810,442; 
Difference: 
Amount: -$19,591; 
Percent: -2.36%. 

50 states and DC: Indiana; 
2012 title VII allotment amount: $429,683; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $455,766; 
Difference: 
Amount: $26,083; 
Percent: 6.07%. 

50 states and DC: Iowa; 
2012 title VII allotment amount: $228,715; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $224,564; 
Difference: 
Amount: -$4,151; 
Percent: -1.81%. 

50 states and DC: Kansas; 
2012 title VII allotment amount: $191,820; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $205,162; 
Difference: 
Amount: $13,342; 
Percent: 6.96%. 

50 states and DC: Kentucky; 
2012 title VII allotment amount: $298,426; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $371,687; 
Difference: 
Amount: $73,261; 
Percent: 24.55%. 

50 states and DC: Louisiana; 
2012 title VII allotment amount: $291,260; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $355,346; 
Difference: 
Amount: $64,086; 
Percent: 22.00%. 

50 states and DC: Maine; 
2012 title VII allotment amount: $108,575; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $116,880; 
Difference: 
Amount: $8,305; 
Percent: 7.65%. 

50 states and DC: Maryland; 
2012 title VII allotment amount: $369,048; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $336,502; 
Difference: 
Amount: -$32,546; 
Percent: -8.82%. 

50 states and DC: Massachusetts; 
2012 title VII allotment amount: $463,743; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $435,711; 
Difference: 
Amount: -$28,032; 
Percent: -6.04%. 

50 states and DC: Michigan; 
2012 title VII allotment amount: $697,750; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $718,822; 
Difference: 
Amount: $21,072; 
Percent: 3.02%. 

50 states and DC: Minnesota; 
2012 title VII allotment amount: $346,545; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $312,767; 
Difference: 
Amount: -$33,778; 
Percent: -9.75%. 

50 states and DC: Mississippi; 
2012 title VII allotment amount: $195,712; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $258,628; 
Difference: 
Amount: $62,916; 
Percent: 32.15%. 

50 states and DC: Missouri; 
2012 title VII allotment amount: $423,498; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $474,246; 
Difference: 
Amount: $50,748; 
Percent: 11.98%. 

50 states and DC: Montana; 
2012 title VII allotment amount: $107,898; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $76,780; 
Difference: 
Amount: -$31,118; 
Percent: -28.84%. 

50 states and DC: Nebraska; 
2012 title VII allotment amount: $124,937; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $126,345; 
Difference: 
Amount: $1,408; 
Percent: 1.13%. 

50 states and DC: Nevada; 
2012 title VII allotment amount: $171,053; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $155,406; 
Difference: 
Amount: -$15,647; 
Percent: -9.15%. 

50 states and DC: New Hampshire; 
2012 title VII allotment amount: $107,898; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $84,723; 
Difference: 
Amount: -$23,175; 
Percent: -21.48%. 

50 states and DC: New Jersey; 
2012 title VII allotment amount: $607,466; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $547,066; 
Difference: 
Amount: -$60,400; 
Percent: -9.94%. 

50 states and DC: New Mexico; 
2012 title VII allotment amount: $138,638; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $156,565; 
Difference: 
Amount: $17,927; 
Percent: 12.93%. 

50 states and DC: New York; 
2012 title VII allotment amount: $1,342,758; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $1,311,796; 
Difference: 
Amount: -$30,962; 
Percent: -2.31%. 

50 states and DC: North Carolina; 
2012 title VII allotment amount: $637,783; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $691,852; 
Difference: 
Amount: $54,069; 
Percent: 8.48%. 

50 states and DC: North Dakota; 
2012 title VII allotment amount: $107,898; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $51,378; 
Difference: 
Amount: -$56,520; 
Percent: -52.38%. 

50 states and DC: Ohio; 
2012 title VII allotment amount: $833,389; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $859,936; 
Difference: 
Amount: $26,547; 
Percent: 3.19%. 

50 states and DC: Oklahoma; 
2012 title VII allotment amount: $258,023; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $318,817; 
Difference: 
Amount: $60,794; 
Percent: 23.56%. 

50 states and DC: Oregon; 
2012 title VII allotment amount: $277,005; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $284,815; 
Difference: 
Amount: $7,810; 
Percent: 2.82%. 

50 states and DC: Pennsylvania; 
2012 title VII allotment amount: $994,623; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $1,005,979; 
Difference: 
Amount: $11,356; 
Percent: 1.14%. 

50 states and DC: Rhode Island; 
2012 title VII allotment amount: $107,898; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $78,289; 
Difference: 
Amount: -$29,609; 
Percent: -27.44%. 

50 states and DC: South Carolina; 
2012 title VII allotment amount: $328,382; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $354,660; 
Difference: 
Amount: $26,278; 
Percent: 8.00%. 

50 states and DC: South Dakota; 
2012 title VII allotment amount: $107,898; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $60,490; 
Difference: 
Amount: -$47,408; 
Percent: -43.94%. 

50 states and DC: Tennessee; 
2012 title VII allotment amount: $440,583; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $514,587; 
Difference: 
Amount: $74,004; 
Percent: 16.80%. 

50 states and DC: Texas; 
2012 title VII allotment amount: $1,359,212; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $1,521,904; 
Difference: 
Amount: $162,692; 
Percent: 11.97%. 

50 states and DC: Utah; 
2012 title VII allotment amount: $127,819; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $121,968; 
Difference: 
Amount: -$5,851; 
Percent: -4.58%. 

50 states and DC: Vermont; 
2012 title VII allotment amount: $107,898; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $47,029; 
Difference: 
Amount: -$60,869; 
Percent: -56.41%. 

50 states and DC: Virginia; 
2012 title VII allotment amount: $510,806; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $487,556; 
Difference: 
Amount: -$23,250; 
Percent: -4.55%. 

50 states and DC: Washington; 
2012 title VII allotment amount: $435,392; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $435,448; 
Difference: 
Amount: $56; 
Percent: 0.01%. 

50 states and DC: West Virginia; 
2012 title VII allotment amount: $154,347; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $195,548; 
Difference: 
Amount: $41,201; 
Percent: 26.69%. 

50 states and DC: Wisconsin; 
2012 title VII allotment amount: $393,789; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $362,553; 
Difference: 
Amount: -$31,236; 
Percent: -7.93%. 

50 states and DC: Wyoming; 
2012 title VII allotment amount: $107,898; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $37,456; 
Difference: 
Amount: -$70,442; 
Percent: -65.29%. 

50 states and DC: Total; 
2012 title VII allotment amount: $21,171,324; 
Formula based on the elderly having at least one ADL limitation: 
Simulated amount: $21,171,324; 
Difference: 
Amount: $0; 
Percent: 0.00%. 

Source: GAO analysis of AOA data on OAA title VII state allotments 
(2012) and U.S. Census Bureau, American Community Survey 3-year 
average data (2008-2010). 

[End of table] 

[End of section] 

Appendix IV: Transition Measures for Moderating Impact of Formula 
Modifications: 

To moderate the decrease in allotments presented in appendix III, we 
present two transition measures. As illustrated in appendix III, 
implementing a partial beneficiary equity formula option using a 
measure of the elderly with at least one ADL limitation will result in 
allotment changes as large as 20 percent. The changes are due in part 
to a change in how the formula measures the need population, as well 
the exclusion of two significant provisions under current law. 
Specifically, our analysis in appendix III did not include the hold 
harmless provision and the one-half of one percent minimum allotment. 
The following two transition measures moderate significant allotment 
changes by gradually introducing the new formula over a number of 
years or limiting the yearly allotment changes using a hold harmless 
provision, as well by including the one-half of one percent minimum 
allotment. To illustrate the moderating effect of these transition 
options, we have simulated two transitions for the partial equity 
formula. In the first transition, the new formula is phased-in over 6 
years and lessens the year-to-year changes. In the second transition, 
the changes in allotments are limited annually, and the number of 
years to complete transition may vary. In the two transitions 
presented, the allotments under the partial beneficiary equity formula 
include the one-half of one percent minimum allotment, approximately 
$5.9 million for fiscal year 2012. The comparisons are made for fiscal 
2012 title III allotments using the same funding amount. 

Phase-In Transition: 

In the first example, a 6 year transition is demonstrated, which 
incrementally phases in the new formula. In the first year, the 
allotments are based on a 50-50 split between the current formula and 
the partial beneficiary equity formula option. In a 50-50 split, half 
of the allotment is based on the current formula and half from the 
partial beneficiary equity formula option. In the second year, the 
split is 40-60 between the current formula and the partial beneficiary 
equity formula option. The split in the succeeding years are 30-70, 20-
80, 10-90, and 0-100. By the sixth year the entire allotment is based 
on the partial beneficiary equity formula option. Table 6 shows the 
first, second, and fifth year allotments under a 6-year phase-in. This 
transition could be made faster or more gradually by changing the 
splits between the current and alternative formulas and number of 
years. Other split combinations could be used for the initial and 
subsequent years, such as 80-20, 60-40, 40-60, 20-80, and 0-100. 

Table 6 shows the allotments under the partial beneficiary equity 
formula option using this transition method and compares the changes 
to the current allotments. For example, the allotment to Alabama rises 
by 12 percent in the first year of transition (using the 50-50 split). 
In comparison, if no transition was provided its allotment would have 
risen by 27 percent. By the fifth year, the allotment to Alabama rises 
to over 20 percent. In contrast, the allotment to New Jersey in the 
first year falls by 6 percent, and without the transition its 
allotment falls by 10 percent. By the fifth year, the allotment falls 
by over 11 percent. 

Appendix IV: Transition Measures for Moderating Impact of Formula 
Modifications: 

Table 6: Transition Combining the FY 2012 Current Formula Allotments 
and Partial Beneficiary Equity Formula Option, Comparison of 
Allotments: 

State: Alabama; 
Actual 2012 title III: $18,218: 
Year 1: 50:50 Allotments: 
Partial equity: $20,458; 
Difference: 
Amount: $2,240; 
Percent: 12.29%; 
Year 2: 40:60 Allotments: 
Partial equity: $20,835; 
Amount: $2,617; 
Percent: 14.37%; 
Year 5: 10:90 Allotments: 
Partial equity: $21,967; 
Amount: $3,749; 
Percent: 20.58%. 

State: Alaska; 
Actual 2012 title III: $5,928; 
Year 1: 50:50 Allotments: 
Partial equity: $5,928; 
Difference: 
Amount: $0; 
Percent: 0.00%; 
Year 2: 40:60 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: 10:90 Allotments: Partial 
equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: Arizona; 
Actual 2012 title III: $24,055; 
Year 1: 50:50 Allotments: 
Partial equity: $23,189; 
Difference: 
Amount: -$866; 
Percent: -3.60%; 
Year 2: 40:60 Allotments: 
Partial equity: $22,951; 
Amount: -$1,104; 
Percent: -4.59%; 
Year 5: 10:90 Allotments: 
Partial equity: $22,238; 
Amount: -$1,817; 
Percent: -7.55%. 

State: Arkansas; 
Actual 2012 title III: $11,500; 
Year 1: 50:50 Allotments: 
Partial equity: $13,053; 
Amount: $1,553; 
Percent: 13.50%; 
Year 2: 40:60 Allotments: 
Partial equity: 
$13,317; 
Amount: $1,817; 
Percent: 15.80%; 
Year 5: 10:90 Allotments: 
Partial equity: $14,108; 
Amount: $2,608; 
Percent: 22.68%. 

State: California; 
Actual 2012 title III: $118,678; 
Year 1: 50:50 Allotments: 
Partial equity: $118,144; 
Amount: -$534; 
Percent: -0.45%; 
Year 2: 40:60 Allotments: 
Partial equity: $117,700; 
Amount: -$979; 
Percent: -0.82%; 
Year 5: 10:90 Allotments: 
Partial equity: $116,367; 
Amount: -$2,311; 
Percent: -1.95%. 

State: Colorado; 
Actual 2012 title III: $15,804; 
Year 1: 50:50 Allotments: 
Partial equity: $15,069; 
Amount: -$735; 
Percent: -4.65%; 
Year 2: 40:60 Allotments: 
Partial equity: $14,862; 
Amount: -$942; 
Percent: -5.96%; 
Year 5: 10:90 Allotments: 
Partial equity: $14,242; 
Amount: -$1,561; 
Percent: -9.88%. 

State: Connecticut; 
Actual 2012 title III: $14,327; 
Year 1: 50:50 Allotments: 
Partial equity: $13,479; 
Amount: -$848; 
Percent: -5.92%; 
Year 2: 40:60 Allotments: 
Partial equity: $13,327; 
Amount: -$1,000; 
Percent: -6.98%; 
Year 5: 10:90 Allotments: 
Partial equity: $12,871; 
Amount: -$1,456; 
Percent: -10.16%. 

State: Delaware; 
Actual 2012 title III: $5,928; 
Year 1: 50:50 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 2: 40:60 Allotments: 
Partial equity: 
$5,928; 
Amount: $0; 
Year 2: 
Percent: 0.00%; 
Year 5: 10:90 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: District of Columbia; 
Actual 2012 title III: $5,928; 
Year 1: 50:50 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 2: 40:60 Allotments: 
Partial equity: 
$5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: 10:90 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: Florida; 
Actual 2012 title III: $86,722; 
Year 1: 50:50 Allotments: 
Partial equity: $84,503; 
Difference: 
Amount: -$2,218; 
Percent: -2.56%; 
Year 2: 40:60 Allotments: 
Partial equity: $83,896; 
Amount: -$2,826; 
Percent: -3.26%; 
Year 5: 10:90 Allotments: 
Partial equity: $82,074; 
Amount: -$4,648; 
Percent: -5.36%. 

State: Georgia; 
Actual 2012 title III: $29,451; 
Year 1: 50:50 Allotments: 
Partial equity: $30,768; 
Difference: 
Amount: $1,317; 
Percent: 4.47%; 
Year 2: 40:60 Allotments: 
Partial equity: $30,911; 
Year 2: 40:60 
Amount: $1,460; 
Percent: 4.96%; 
Year 5: 10:90 Allotments: 
Partial equity: $31,342; 
Amount: $1,890; 
Percent: 6.42%. 

State: Hawaii; 
Actual 2012 title III: $5,928; 
Year 1: 50:50 Allotments: 
Partial equity: $5,928; 
Difference: 
Amount: $0; 
Percent: 0.00%; 
Year 2: 40:60 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: 10:90 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: Idaho; 
Actual 2012 title III: $5,928; 
Year 1: 50:50 Allotments: 
Partial equity: $5,928; 
Difference: 
Amount: $0; 
Percent: 0.00%; 
Year 2: 40:60 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: 10:90 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: Illinois; 
Actual 2012 title III: $46,709; 
Year 1: 50:50 Allotments: 
Partial equity: $44,310; 
Amount: -$2,399; 
Percent: -5.14%; 
Year 2: 40:60 Allotments: 
Partial equity: 
$44,120; 
Amount: -$2,589; 
Percent: -5.54%; 
Year 5: 10:90 Allotments: 
Partial equity: $43,549; 
Amount: -$3,160; 
Percent: -6.77%. 

State: Indiana; 
Actual 2012 title III: $23,303; 
Year 1: 50:50 Allotments: 
Partial equity: $24,048; 
Difference: 
Amount: $745; 
Percent: 3.20%; 
Year 2: 40:60 Allotments: 
Partial equity: $24,115; 
Year 2: 40:60 
Amount: $812; 
Percent: 3.49%; 
Year 5: 10:90 Allotments: 
Partial equity: $24,316; 
Amount: $1,014; 
Percent: 4.35%. 

State: Iowa; 
Actual 2012 title III: $13,526; 
Year 1: 50:50 Allotments: 
Partial equity: $12,229; 
Amount: -$1,297; 
Percent: -9.59%; 
Year 2: 40:60 Allotments: 
Partial equity: $12,186; 
Amount: -$1,340; 
Percent: -9.91%; 
Year 5: 10:90 Allotments: 
Partial equity: $12,057; 
Amount: -$1,469; 
Percent: -10.86%. 

State: Kansas; 
Actual 2012 title III: $11,005; 
Year 1: 50:50 Allotments: 
Partial equity: $10,746; 
Amount: -$259; 
Percent: -2.35%; 
Year 2: 40:60 Allotments: 
Partial equity: $10,792; 
Amount: -$213; 
Percent: -1.93%; 
Year 5: 10:90 Allotments: 
Partial equity: $10,930; 
Amount: -$75; 
Percent: -0.68%. 

State: Kentucky; 
Actual 2012 title III: $16,144; 
Year 1: 50:50 Allotments: 
Partial equity: $18,171; 
Amount: $2,028; 
Percent: 12.56%; 
Year 2: 40:60 Allotments: 
Partial equity: $18,514; 
Amount: $2,371; 
Percent: 14.68%; 
Year 5: 10:90 Allotments: 
Partial equity: $19,543; 
Amount: $3,399; 
Year 5: 10:90 
Percent: 21.05%. 

State: Louisiana; 
Actual 2012 title III: $15,655; 
Year 1: 50:50 Allotments: 
Partial equity: $17,482; 
Amount: $1,827; 
Percent: 11.67%; 
Year 2: 40:60 Allotments: 
Partial equity: $17,788; 
Amount: $2,133; 
Percent: 13.62%; 
Year 5: 10:90 Allotments: 
Partial equity: $18,705; 
Amount: $3,050; 
Year 5: 10:90 
19.48%. 

State: Maine; 
Actual 2012 title III: $5,940; 
Year 1: 50:50 Allotments: 
Partial equity: $6,115; 
Amount: $175; 
Percent: 2.94%; 
Year 2: 40:60 Allotments: 
Partial equity: $6,143; 
Amount: $202; 
Percent: 3.41%; 
Year 5: 10:90 Allotments: 
Partial equity: $6,225; 
Amount: $285; 
Percent: 4.80%. 

State: Maryland; 
Actual 2012 title III: $19,941; 
Year 1: 50:50 Allotments: 
Partial equity: $19,147; 
Amount: -$794; 
Percent: -3.98%; 
Year 2: 40:60 Allotments: 
Partial equity: $18,918; 
Amount: -$1,023; 
Percent: -5.13%; 
Year 5: 10:90 Allotments: 
Partial equity: $18,231; 
Amount: -$1,709; 
Year 5: 10:90 
Percent: -8.57%. 

State: Massachusetts; 
Actual 2012 title III: $26,370; 
Year 1: 50:50 Allotments: 
Partial equity: $24,369; 
Amount: -$2,001; 
Percent: -7.59%; 
Year 2: 40:60 Allotments: 
Partial equity: $24,158; 
Amount: -$2,213; 
Percent: -8.39%; 
Year 5: 10:90 Allotments: 
Partial equity: 
$23,522; 
Amount: -$2,848; 
Percent: -10.80%. 

State: Michigan; 
Actual 2012 title III: $37,748; 
Year 1: 50:50 Allotments: 
Partial equity: $38,391; 
Amount: $643; 
Percent: 1.70%; 
Year 2: 40:60 Allotments: 
Partial equity: $38,404; 
Amount: $656; 
Percent: 1.74%; 
Year 5: 10:90 Allotments: 
Partial equity: $38,444; 
Amount: $696; 
Percent: 1.84%. 

State: Minnesota; 
Actual 2012 title III: $18,876; 
Year 1: 50:50 Allotments: 
Partial equity: $17,936; 
Amount: -$940; 
Percent: -4.98%; 
Year 2: 40:60 Allotments: 
Partial equity: $17,695; 
Amount: -$1,180; 
Percent: -6.25%; 
Year 5: 10:90 Allotments: 
Partial equity: $16,973; 
Amount: -$1,902; 
Year 5: 10:90 
Percent: -10.08%. 

State: Mississippi; 
Actual 2012 title III: $10,665; 
Year 1: 50:50 Allotments: 
Partial equity: $12,323; 
Amount: $1,658; 
Percent: 15.55%; 
Year 2: 40:60 Allotments: 
Partial equity: $12,626; 
Amount: $1,961; 
Percent: 18.39%; 
Year 5: 10:90 Allotments: 
Partial equity: $13,534; 
Amount: $2,869; 
Difference : Percent: 26.90%. 

State: Missouri; 
Actual 2012 title III: $23,260; 
Year 1: 50:50 Allotments: 
Partial equity: $24,390; 
Amount: $1,130; 
Percent: 4.86%; 
Year 2: 40:60 Allotments: 
Partial equity: $24,587; 
Amount: $1,326; 
Percent: 5.70%; 
Year 5: 10:90 Allotments: 
Partial equity: $25,176; 
Amount: $1,915; 
Percent: 8.23%. 

State: Montana; 
Actual 2012 title III: $5,928; 
Year 1: 50:50 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 2: 40:60 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: 10:90 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: Nebraska; 
Actual 2012 title III: $7,319; 
Year 1: 50:50 Allotments: 
Partial equity: $6,806; 
Amount: -$513; 
Percent: -7.01%; 
Year 2: 40:60 Allotments: 
Partial equity: $6,796; 
Amount: -$522; 
Percent: -7.14%; 
Year 5: 10:90 Allotments: 
Partial equity: $6,769; 
Amount: -$550; 
Percent: -7.52%. 

State: Nevada; 
Actual 2012 title III: $9,153; 
Year 1: 50:50 Allotments: 
Partial equity: $8,859; 
Amount: -$295; 
Percent: -3.22%; 
Year 2: 40:60 Allotments: 
Partial equity: $8,750; 
Amount: -$404; 
Percent: -4.41%; 
Year 5: 10:90 Allotments: 
Partial equity: $8,423; 
Amount: -$730; 
Percent: -7.98%. 

State: New Hampshire; 
Actual 2012 title III: $5,928; 
Year 1: 50:50 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 2: 40:60 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: 10:90 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: New Jersey; 
Actual 2012 title III: $33,433; 
Year 1: 50:50 Allotments: 
Partial equity: $31,279; 
Amount: -$2,154; 
Percent: -6.44%; 
Year 2: 40:60 Allotments: 
Partial equity: $30,877; 
Amount: -$2,556; 
Percent: -7.65%; 
Year 5: 10:90 Allotments: 
Partial equity: $29,670; 
Amount: -$3,763; 
Percent: -11.25%. 

State: New Mexico; 
Actual 2012 title III: $7,619; 
Year 1: 50:50 Allotments: 
Partial equity: $8,081; 
Amount: $462; 
Percent: 6.06%; 
Year 2: 40:60 Allotments: 
Partial equity: $8,140; 
Amount: $521; 
Percent: 6.84%; 
Year 5: 10:90 Allotments: 
Partial equity: $8,317; 
Amount: $698; 
Percent: 9.16%. 

State: New York; 
Actual 2012 title III: $77,516; 
Year 1: 50:50 Allotments: 
Partial equity: $71,902; 
Amount: -$5,614; 
Percent: -7.24%; 
Year 2: 40:60 Allotments: 
Partial equity: $71,558; 
Amount: -$5,959; 
Percent: -7.69%; 
Year 5: 10:90 Allotments: 
Partial equity: $70,525; 
Amount: -$6,991; 
Year 5: 10:90 
Percent: -9.02%. 

State: North Carolina; 
Actual 2012 title III: $34,414; 
Year 1: 50:50 Allotments: 
Partial equity: $36,036; 
Amount: $1,622; 
Percent: 4.71%; 
Year 2: 40:60 Allotments: 
Partial equity: $36,232; 
Amount: $1,818; 
Percent: 5.28%; 
Year 5: 10:90 Allotments: 
Partial equity: $36,819; 
Amount: $2,405; 
Percent: 6.99%. 

State: North Dakota; 
Actual 2012 title III: $5,928; 
Year 1: 50:50 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 2: 40:60 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: 10:90 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: Ohio; 
Actual 2012 title III: $45,248; 
Year 1: 50:50 Allotments: 
Partial equity: $45,835; 
Amount: $587; 
Percent: 1.30%; 
Year 2: 40:60 Allotments: 
Partial equity: $45,870; 
Amount: $621; 
Percent: 1.37%; 
Year 5: 10:90 Allotments: 
Partial equity: $45,972; 
Amount: $724; 
Percent: 1.60%. 

State: Oklahoma; 
Actual 2012 title III: $13,990; 
Year 1: 50:50 Allotments: 
Partial equity: $15,609; 
Amount: $1,619; 
Percent: 11.57%; 
Year 2: 40:60 Allotments: 
Partial equity: $15,899; 
Amount: $1,909; 
Percent: 13.64%; 
Year 5: 10:90 Allotments: 
Partial equity: $16,767; 
Amount: $2,777; 
Year 5: 10:90 
Percent: 19.85%. 

State: Oregon; 
Actual 2012 title III: $14,965; 
Year 1: 50:50 Allotments: 
Partial equity: $15,249; 
Amount: $284; 
Percent: 1.90%; 
Year 2: 40:60 Allotments: 
Partial equity: $15,247; 
Amount: $282; 
Percent: 1.88%; 
Year 5: 10:90 Allotments: 
Partial equity: $15,240; 
Amount: $275; 
Percent: 1.84%. 

State: Pennsylvania; 
Actual 2012 title III: $57,249; 
Year 1: 50:50 Allotments: 
Partial equity: $53,936; 
Amount: -$3,312; 
Percent: -5.79%; 
Year 2: 40:60 Allotments: 
Partial equity: $53,913; 
Amount: -$3,336; 
Percent: -5.83%; 
Year 5: 10:90 Allotments: 
Partial equity: $53,843; 
Amount: -$3,406; 
Percent: -5.95%. 

State: Rhode Island; 
Actual 2012 title III: $5,928; 
Year 1: 50:50 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 2: 40:60 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: 10:90 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: South Carolina; 
Actual 2012 title III: $17,656; 
Year 1: 50:50 Allotments: 
Partial equity: $18,461; 
Amount: $805; 
Percent: 4.56%; 
Year 2: 40:60 Allotments: 
Partial equity: $18,564; 
Amount: $908; 
Percent: 5.14%; 
Year 5: 10:90 Allotments: 
Partial equity: $18,872; 
Amount: $1,215; 
Percent: 6.88%. 

State: South Dakota; 
Actual 2012 title III: $5,928; 
Year 1: 50:50 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 2: 40:60 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: 10:90 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: Tennessee; 
Actual 2012 title III: $23,785; 
Year 1: 50:50 Allotments: 
Partial equity: $25,931; 
Amount: $2,146; 
Percent: 9.02%; 
Year 2: 40:60 Allotments: 
Partial equity: $26,251; 
Amount: $2,466; 
Percent: 10.37%; 
Year 5: 10:90 Allotments: 
Partial equity: $27,211; 
Amount: $3,426; 
Percent: 14.40%. 

State: Texas; 
Actual 2012 title III: $73,246; 
Year 1: 50:50 Allotments: 
Partial equity: $77,997; 
Amount: $4,751; 
Percent: 6.49%; 
Year 2: 40:60 Allotments: 
Partial equity: $78,682; 
Amount: $5,436; 
Percent: 7.42%; 
Year 5: 10:90 Allotments: 
Partial equity: $80,737; 
Amount: $7,491; 
Percent: 10.23%. 

State: Utah; 
Actual 2012 title III: $6,938; 
Year 1: 50:50 Allotments: 
Partial equity: $6,773; 
Amount: -$164; 
Percent: -2.37%; 
Year 2: 40:60 Allotments: 
Partial equity: $6,724; 
Amount: -$214; 
Percent: -3.08%; 
Year 5: 10:90 Allotments: 
Partial equity: $6,575; 
Amount: -$363; 
Percent: -5.23%. 

State: Vermont; 
Actual 2012 title III: $5,928; 
Year 1: 50:50 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 2: 40:60 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: 10:90 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: Virginia; 
Actual 2012 title III: $27,538; 
Year 1: 50:50 Allotments: 
Partial equity: $27,117; 
Amount: -$421; 
Percent: -1.53%; 
Year 2: 40:60 Allotments: 
Partial equity: $26,910; 
Amount: -$628; 
Percent: -2.28%; 
Year 5: 10:90 Allotments: 
Partial equity: $26,291; 
Amount: -$1,247; 
Percent: -4.53%. 

State: Washington; 
Actual 2012 title III: $23,443; 
Year 1: 50:50 Allotments: 
Partial equity: $23,541; 
Amount: $98; 
Percent: 0.42%; 
Year 2: 40:60 Allotments: 
Partial equity: $23,492; 
Amount: $49; 
Percent: 0.21%; 
Year 5: 10:90 Allotments: 
Partial equity: $23,345; 
Amount: -$98; 
Percent: -0.42%. 

State: West Virginia; 
Actual 2012 title III: $8,829; 
Year 1: 50:50 Allotments: 
Partial equity: $9,444; 
Amount: $616; 
Percent: 6.98%; 
Year 2: 40:60 Allotments: 
Partial equity: $9,648; 
Amount: $819; 
Percent: 9.28%; 
Year 5: 10:90 Allotments: 
Partial equity: $10,258; 
Amount: $1,430; 
Percent: 16.20%. 

State: Wisconsin; 
Actual 2012 title III: $21,427; 
Year 1: 50:50 Allotments: 
Partial equity: $20,486; 
Amount: -$941; 
Percent: -4.39%; 
Year 2: 40:60 Allotments: 
Partial equity: $20,268; 
Amount: -$1,159; 
Percent: -5.41%; 
Year 5: 10:90 Allotments: 
Partial equity: $19,614; 
Amount: -$1,812; 
Percent: -8.46%. 

State: Wyoming; 
Actual 2012 title III: $5,928; 
Year 1: 50:50 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 2: 40:60 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: 10:90 Allotments: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: Total; 
Actual 2012 title III: $1,162,801; 
Year 1: 50:50 Allotments: 
Partial equity: $1,162,801; 
Amount: $0; 
Percent: 0.00%; 
Year 2: 40:60 Allotments: 
Partial equity: $1,162,801; 
Amount: $0; 
Percent: 0.00%; 
Year 5: 10:90 Allotments: 
Partial equity: $1,162,801; 
Amount: $0; 
Percent: 0.00%. 

Source: GAO analysis of AOA data on OAA Titles III and VII state 
allotments (2012) and U.S. Census Bureau, American Community Survey 3-
year average data (2008-2010). 

[End of table] 

Hold Harmless Transition: 

The second transition method utilizes a hold harmless provision. The 
hold harmless provision works by constraining the losses of states 
that could lose funding under an alternative formula. The additional 
funding needed to raise the allotments to the states losing more than 
a certain percentage is obtained by proportionally lowering the 
allotments to the states not affected by the hold harmless provision. 
In the example presented in table 7, the hold harmless losses are 2 
percent in the first year, 4 percent in the second year, 6 percent in 
the third year, 8 percent in the fourth year, and, 10 percent in the 
fifth year. 

Table 7 shows the allotments under the partial equity formula using 
this hold harmless transition method and compares the changes to the 
current allotments. The allotment to Alabama rises by 13 percent in 
the first year of transition. In comparison, if no transition was 
provided for its allotment would have risen by 26 percent. By the 
fifth year, the allotment to Alabama rises to 22 percent. In contrast, 
the allotment to New Jersey in first year falls by 2 percent, the 
maximum permissible loss. Without the transition, New Jersey’s 
allotment falls by 10 percent. By the fifth year, the allotment to New 
Jersey falls by 10 percent. 

Table 7: Transition Using a Hold Harmless, Comparison of FY 2012 
Allotments to Allotments for the Partial Beneficiary Equity Formula 
Option: 

State: Alabama; 
Actual 2012 title III: $18,218; 
Year 1: Allotments Include 2% HH: 
Partial equity: $20,602; 
Difference: 
Amount: $2,384; 
Percent: 13.09%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $21,435; 
Difference: 
Amount: $3,217; 
Percent: 17.66%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $22,299; 
Difference: 
Amount: $4,081; 
Percent: 22.40%. 

State: Alaska; 
Actual 2012 title III: $5,928; 
Year 1: Allotments Include 2% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: Arizona; 
Actual 2012 title III: $24,055; 
Year 1: Allotments Include 2% HH: 
Partial equity: $23,574; 
Difference: 
Amount: -$481; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $23,093; 
Difference: 
Amount: -$962; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $21,955; 
Difference: 
Amount: -$2,100; 
Percent: -8.73%. 

State: Arkansas; 
Actual 2012 title III: $11,500; 
Year 1: Allotments Include 2% HH: 
Partial equity: $13,251; 
Difference: 
Amount: $1,751; 
Percent: 15.23%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $13,787; 
Difference: 
Amount: $2,287; 
Percent: 19.89%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $14,342; 
Difference: 
Amount: $2,843; 
Percent: 24.72%. 

State: California; 
Actual 2012 title III: $118,678; 
Year 1: Allotments Include 2% HH: 
Partial equity: $116,305; 
Difference: 
Amount: -$2,374; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $113,931; 
Difference: 
Amount: -$4,747; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $115,685; 
Difference: 
Amount: -$2,993; 
Percent: -2.52%. 

State: Colorado; 
Actual 2012 title III: $15,804; 
Year 1: Allotments Include 2% HH: 
Partial equity: $15,488; 
Difference: 
Amount: -$316; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $15,172; 
Difference: 
Amount: -$632; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $14,223; 
Difference: 
Amount: -$1,580; 
Percent: -10.00%. 

State: Connecticut; 
Actual 2012 title III: $14,327; 
Year 1: Allotments Include 2% HH: 
Partial equity: $14,041; 
Difference: 
Amount: -$287; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $13,754; 
Difference: 
Amount: -$573; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $12,895; 
Difference: 
Amount: -$1,433; 
Percent: -10.00%. 

State: Delaware; 
Actual 2012 title III: $5,928; 
Year 1: Allotments Include 2% HH: 
Partial equity: $5,928; 
Difference: 
Amount: $0; 
Percent: 0.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: District of Columbia; 
Actual 2012 title III: $5,928; 
Year 1: Allotments Include 2% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $5,928; 
Difference: 
Amount: $0; 
Percent: 0.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: Florida; 
Actual 2012 title III: $86,722; 
Year 1: Allotments Include 2% HH: 
Partial equity: $84,987; 
Difference: 
Amount: -$1,734; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $83,253; 
Difference: 
Amount: -$3,469; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $81,299; 
Difference: 
Amount: -$5,422; 
Percent: -6.25%. 

State: Georgia; 
Actual 2012 title III: $29,451; 
Year 1: Allotments Include 2% HH: 
Partial equity: $29,030; 
Difference: 
Amount: -$421; 
Percent: -1.43%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $30,203; 
Difference: 
Amount: $752; 
Percent: 2.55%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $31,421; 
Difference: 
Amount: $1,969; 
Percent: 6.69%. 

State: Hawaii; 
Actual 2012 title III: $5,928; 
Year 1: Allotments Include 2% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 
0.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: 
$5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: Idaho; 
Actual 2012 title III: $5,928; 
Year 1: Allotments Include 2% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: 
$5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $5,928; 
Year 5: 
Amount: $0; 
Year 5: Allotments 
Percent: 0.00%. 

State: Illinois; 
Actual 2012 title III: $46,709; 
Year 1: Allotments Include 2% HH: 
Partial equity: $45,775; 
Difference: 
Amount: -$934; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $44,841; 
Difference: 
Amount: -$1,868; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $43,269; 
Difference: 
Amount: -$3,440; 
Percent: -7.36%. 

State: Indiana; 
Actual 2012 title III: $23,303; 
Year 1: Allotments Include 2% HH: 
Partial equity: $22,837; 
Difference: 
Amount: -$466; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $23,391; 
Difference: 
Amount: $88; 
Percent: 0.38%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $24,333; 
Difference: 
Amount: $1,031; 
Percent: 4.42%. 

State: Iowa; 
Actual 2012 title III: $13,526; 
Year 1: Allotments Include 2% 
HH: Partial equity: $13,256; 
Year 1: Allotments Include 2% HH: 
Difference: 
Amount: -$271; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $12,985; 
Difference: 
Amount: -$541; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $12,173; 
Difference: 
Amount: -$1,353; 
Percent: -10.00%. 

State: Kansas; 
Actual 2012 title III: $11,005; 
Year 1: Allotments Include 2% 
HH: Partial equity: $10,785; 
Year 1: Allotments Include 2% HH: 
Difference: 
Amount: -$220; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $10,565; 
Difference: 
Amount: -$440; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $10,954; 
Difference: 
Amount: -$51; 
Percent: -0.47%. 

State: Kentucky; 
Actual 2012 title III: $16,144; 
Year 1: Allotments Include 2% HH: 
Partial equity: $18,334; 
Difference: 
Amount: $2,191; 
Percent: 13.57%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $19,076; 
Difference: 
Amount: $2,932; 
Percent: 18.16%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $19,844; 
Difference: 
Amount: $3,700; 
Percent: 22.92%. 

State: Louisiana; 
Actual 2012 title III: $15,655; 
Year 1: Allotments Include 2% HH: 
Partial equity: $17,528; 
Difference: 
Amount: $1,873; 
Percent: 11.97%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $18,237; 
Difference: 
Amount: $2,582; 
Percent: 16.49%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $18,972; 
Difference: 
Amount: $3,317; 
Percent: 21.19%. 

State: Maine; 
Actual 2012 title III: $5,940; 
Year 1: Allotments Include 2% HH: 
Partial equity: $5,928; 
Amount: -$12; 
Percent: -0.20%; 
Year 2: Allotments Include 4% HH: 
Partial equity: 
$5,998; 
Amount: $58; 
Percent: 0.98%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $6,240; 
Amount: $300; 
Percent: 5.05%. 

State: Maryland; 
Actual 2012 title III: $19,941; 
Year 1: Allotments Include 2% HH: 
Partial equity: $19,542; 
Difference: 
Amount: -$399; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $19,143; 
Difference: 
Amount: -$798; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $17,966; 
Difference: 
Amount: -$1,975; 
Percent: -9.90%. 

State: Massachusetts; 
Actual 2012 title III: $26,370; 
Year 1: Allotments Include 2% HH: 
Partial equity: $25,843; 
Difference: 
Amount: -$527; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $25,316; 
Difference: 
Amount: -$1,055; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $23,733; 
Difference: 
Amount: -$2,637; 
Percent: -10.00%. 

State: Michigan; 
Actual 2012 title III: $37,748; 
Year 1: Allotments Include 2% HH: 
Partial equity: $36,993; 
Difference: 
Amount: -$755; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $36,891; 
Difference: 
Amount: -$857; 
Percent: -2.27%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $38,378; 
Difference: 
Amount: $630; 
Percent: 1.67%. 

State: Minnesota; 
Actual 2012 title III: $18,876; 
Year 1: Allotments Include 2% HH: 
Partial equity: $18,498; 
Difference: 
Amount: -$378; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $18,121; 
Difference: 
Amount: -$755; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $16,988; 
Difference: 
Amount: -$1,888; 
Percent: -10.00%. 

State: Mississippi; 
Actual 2012 title III: $10,665; 
Year 1: Allotments Include 2% HH: 
Partial equity: $12,758; 
Difference: 
Amount: $2,093; 
Percent: 19.62%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $13,273; 
Difference: 
Amount: $2,608; 
Percent: 24.46%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $13,808; 
Difference: 
Amount: $3,143; 
Percent: 29.47%. 

State: Missouri; 
Actual 2012 title III: $23,260; 
Year 1: Allotments Include 2% HH: 
Partial equity: $23,393; 
Difference: 
Amount: $133; 
Percent: 0.57%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $24,339; 
Amount: $1,079; 
Percent: 4.64%; 
Year 5: Allotments Include 10% HH: 
Partial equity: 
$25,320; 
$2,059; 
Percent: 8.85%. 

State: Montana; 
Actual 2012 title III: $5,928; 
Year 1: Allotments Include 2% HH: 
Partial equity: $5,928; 
Difference: 
Amount: $0; 
Percent: 0.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: Nebraska; 
Actual 2012 title III: $7,319; 
Year 1: Allotments Include 2% HH: 
Partial equity: $7,172; 
Difference: 
Amount: -$146; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $7,026; 
Difference: 
Amount: -$293; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $6,746; 
Difference: 
Amount: -$573; 
Percent: -7.83%. 

State: Nevada; 
Actual 2012 title III: $9,153; 
Year 1: Allotments Include 2% HH: 
Partial equity: $8,970; 
Amount: -$183; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $8,787; 
Amount: -$366; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $8,297; 
Amount: -$856; 
Year 5: 
Percent: -9.35%. 

State: New Hampshire; 
Actual 2012 title III: $5,928; 
Year 1: Allotments Include 2% HH: 
Partial equity: $5,928; 
Difference: 
Amount: $0; 
Percent: 0.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: New Jersey; 
Actual 2012 title III: $33,433; 
Year 1: Allotments Include 2% HH: 
Partial equity: $32,764; 
Difference: 
Amount: -$669; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $32,095; 
Difference: 
Amount: -$1,337; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $30,089; 
Difference: 
Amount: -$3,343; 
Percent: -10.00%. 

State: New Mexico; 
Actual 2012 title III: $7,619; 
Year 1: Allotments Include 2% HH: 
Partial equity: $7,723; 
Difference: 
Amount: $104; 
Percent: 1.36%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $8,035; 
Amount: $416; 
Percent: 5.46%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $8,359; 
Amount: $740; 
Percent: 9.71%. 

State: New York; 
Actual 2012 title III: $77,516; 
Year 1: Allotments Include 2% HH: 
Partial equity: $75,966; 
Difference: 
Amount: -$1,550; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $74,416; 
Difference: 
Amount: -$3,101; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $70,037; 
Difference: 
Amount: -$7,480; 
Percent: -9.65%. 

State: North Carolina; 
Actual 2012 title III: $34,414; 
Year 1: Allotments Include 2% HH: 
Partial equity: $34,127; 
Difference: 
Amount: -$286; 
Percent: -0.83%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $35,507; 
Difference: 
Amount: $1,093; 
Percent: 3.18%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $36,938; 
Difference: 
Amount: $2,524; 
Percent: 7.33%. 

State: North Dakota; 
Actual 2012 title III: $5,928; 
Year 1: Allotments Include 2% HH: 
Partial equity: $5,928; 
Difference: 
Amount: $0; 
Percent: 0.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: Ohio; 
Actual 2012 title III: $45,248; 
Year 1: Allotments Include 2% 
HH: Partial equity: $44,343; 
Year 1: Allotments Include 2% HH: 
Difference: 
Amount: -$905; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $44,133; 
Difference: 
Amount: -$1,115; 
Percent: -2.46%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $45,912; 
Difference: 
Amount: $664; 
Percent: 1.47%. 

State: Oklahoma; 
Actual 2012 title III: $13,990; 
Year 1: Allotments Include 2% HH: 
Partial equity: $15,727; 
Difference: 
Amount: $1,737; 
Percent: 12.41%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $16,362; 
Difference: 
Amount: $2,372; 
Percent: 16.96%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $17,022; 
Difference: 
Amount: $3,032; 
Percent: 21.67%. 

State: Oregon; 
Actual 2012 title III: $14,965; 
Year 1: Allotments Include 2% 
HH: Partial equity: $14,666; 
Year 1: Allotments Include 2% HH: 
Difference: 
Amount: -$299; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $14,617; 
Difference: 
Amount: -$348; 
Percent: -2.33%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $15,206; 
Difference: 
Amount: $241; 
Percent: 1.61%. 

State: Pennsylvania; 
Actual 2012 title III: $57,249; 
Year 1: Allotments Include 2% HH: 
Partial equity: $56,104; 
Difference: 
Amount: -$1,145; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $54,959; 
Difference: 
Amount: -$2,290; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $53,709; 
Difference: 
Amount: -$3,540; 
Percent: -6.18%. 

State: Rhode Island; 
Actual 2012 title III: $5,928; 
Year 1: Allotments Include 2% HH: 
Partial equity: $5,928; 
Difference: 
Amount: $0; 
Percent: 0.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: South Carolina; 
Actual 2012 title III: $17,656; 
Year 1: Allotments Include 2% HH: 
Partial equity: $17,495; 
Difference: 
Amount: -$162; 
Percent: -0.92%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $18,202; 
Difference: 
Amount: $545; 
Percent: 3.09%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $18,935; 
Difference: 
Amount: $1,279; 
Percent: 7.24%. 

State: South Dakota; 
Actual 2012 title III: $5,928; 
Year 1: Allotments Include 2% HH: 
Partial equity: $5,928; 
Difference: 
Amount: $0; 
Percent: 0.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: 
$5,928; 
Amount: $0; 
Percent: 0.00%. 

State: Tennessee; 
Actual 2012 title III: $23,785; 
Year 1: Allotments Include 2% HH: 
Partial equity: $25,383; 
Difference: 
Amount: $1,599; 
Percent: 6.72%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $26,409; 
Amount: $2,625; 
Percent: 11.04%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $27,474; 
Amount: $3,689; 
Percent: 15.51%. 

State: Texas; 
Actual 2012 title III: $73,246; 
Year 1: Allotments Include 2% 
HH: Partial equity: $75,072; 
Year 1: Allotments Include 2% HH: 
Difference: 
Amount: $1,826; 
Percent: 2.49%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $78,106; 
Amount: $4,860; 
Percent: 6.64%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $81,254; 
Amount: $8,008; 
Percent: 10.93%. 

State: Utah; 
Actual 2012 title III: $6,938; 
Year 1: Allotments Include 2% HH: 
Partial equity: $6,799; 
Amount: -$139; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $6,660; 
Amount: -$278; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $6,512; 
Amount: -$426; 
Percent: -6.14%. 

State: Vermont; 
Actual 2012 title III: $5,928; 
Year 1: Allotments Include 2% HH: 
Partial equity: $5,928; 
Difference: 
Amount: $0; 
Percent: 0.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: 
$5,928; 
Amount: $0; 
Percent: 0.00%. 

State: Virginia; 
Actual 2012 title III: $27,538; 
Year 1: Allotments Include 2% HH: 
Partial equity: $26,987; 
Difference: 
Amount: -$551; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $26,436; 
Difference: 
Amount: -$1,102; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $26,031; 
Difference: 
Amount: -$1,507; 
Percent: -5.47%. 

State: Washington; 
Actual 2012 title III: $23,443; 
Year 1: Allotments Include 2% HH: 
Partial equity: $22,975; 
Difference: 
Amount: -$469; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $22,506; 
Difference: 
Amount: -$938; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $23,249; 
Difference: 
Amount: -$195; 
Percent: -0.83%. 

State: West Virginia; 
Actual 2012 title III: $8,829; 
Year 1: Allotments Include 2% HH: 
Partial equity: $9,646; 
Difference: 
Amount: $817; 
Percent: 9.26%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $10,036; 
Amount: $1,207; 
Percent: 13.68%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $10,440; 
Amount: $1,612; 
Percent: 18.26%. 

State: Wisconsin; 
Actual 2012 title III: $21,427; 
Year 1: Allotments Include 2% HH: 
Partial equity: $20,998; 
Difference: 
Amount: -$429; 
Percent: -2.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $20,570; 
Difference: 
Amount: -$857; 
Percent: -4.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $19,357; 
Difference: 
Amount: -$2,070; 
Percent: -9.66%. 

State: Wyoming; 
Actual 2012 title III: $5,928; 
Year 1: Allotments Include 2% HH: 
Partial equity: $5,928; 
Difference: 
Amount: $0; 
Percent: 0.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $5,928; 
Amount: $0; 
Percent: 0.00%. 

State: Total; 
Actual 2012 title III: $1,162,801; 
Year 1: Allotments Include 2% 
HH: Partial equity: $1,162,801; 
Year 1: Allotments Include 2% HH: 
Difference: 
Amount: $0; 
Percent: 0.00%; 
Year 2: Allotments Include 4% HH: 
Partial equity: $1,162,801; 
Amount: $0; 
Percent: 0.00%; 
Year 5: Allotments Include 10% HH: 
Partial equity: $1,162,801; 
Amount: $0; 
Percent: 0.00%. 

Source: GAO analysis of AOA data on OAA Titles III and VII state 
allotments (2012) and U.S. Census Bureau, American Community Survey 3-
year average data (2008-2010). 

[End of table] 

While the preceding illustrations show the application of transition 
options to the OAA title III formula allotments, these options for 
moderating formula changes could also be applied to title VII. These 
transition options could also be used to moderate the impact of the 
application of the full beneficiary equity option by additionally 
adjusting for differences in cost of providing services in each state, 
and the taxpayer equity option by additionally adjusting for 
differences in each state's ability to finance these programs from its 
own resources. Finally, the change in formula allotments could also be 
moderated if additional program funding were available. 

[End of section] 

Appendix V: Comments from the Department of Health and Human Services: 

Department of Health & Human Services: 
Office of the Secretary: 
Assistant Secretary for Legislation: 
Washington, DC 20201: 

November 1, 2012: 

Charles A. Jeszeck: 
Director, Education, Workforce, and Income Security Issues: 
U.S. Government Accountability Office: 
441 G Street NW: 
Washington, DC 20548: 

Dear Mr. Jeszeck: 

Attached are comments on the U.S. Government Accountability Office's 
(GAO) report entitled, "Older Americans Act: Options to Better Target 
Need and Improve Equity" (GAO-13-74). 

The Department appreciates the opportunity to review this report prior 
to publication. 

Sincerely, 

Signed by: 

Jim R. Esquea: 
Assistant Secretary for Legislation: 

Attachment: 

General Comments Of The Department Of Health And Human Services (HHS) 
On The Government Accountability Office's (GAO) Draft Report Entitled, 
"Older Americans Act: Options To Better Target Need And Improve 
Equity" (GAO-13-74): 

The Department appreciates the opportunity to comment on this report. 
We understand the desire to examine options for better targeting 
funding and assistance to those with the greatest needs and applaud 
GAO for acknowledging that phasing in or moderating the impacts of any 
changes to the formula is particularly important during periods when 
funding remains relatively flat. 

As GAO is aware, the Administration for Community Living within HHS 
actively and regularly interacts with states, territories, tribal 
organizations and stakeholders regarding the importance of these 
programs for older Americans and their families, and would like to 
call to its attention issues that may be raised if any of these 
options are actively considered by Congress. 

Very rural or "frontier" states report that the costs of providing and 
maintaining cost-effective nutrition and supportive systems are often 
driven up by large distances and the lack of economies of scale. Based 
on the large percentage reductions that would be applied to many of 
these rural and frontier states as reported in Table 4, questions may 
be raised about how the formula accounts for the needs and 
characteristics of older Americans who reside in these areas. 

While we understand the interest in trying to incorporate the cost of 
services as a possible index within a funding formula option, given 
the wide variation in the frequency, collection and weighting of these 
elements among different states and communities, questions may be 
raised about the accuracy and reliability of the elements used to 
comprise the costs of services across states. 

Should Congress choose to implement a different formula in the 
reauthorization of the Older Americans Act, we will implement it and 
will work with Congress to ensure that any such formula involves 
appropriate available data. 

[End of section] 

Appendix VI: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Charles A. Jeszeck, Director, (202) 512-7215, or jeszeckc@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, David Lehrer, Assistant 
Director; Amber Yancey-Carroll, Analyst-in-Charge; Gregory Dybalski, 
Jessica Gray, Sharon Hermes, DuEwa Kamara, Luann Moy, and Michael 
Springer made significant contributions to the engagement. Also 
contributing to this report were Jessica Botsford, David Chrisinger, 
Holly Dye, Monika Gomez, Kathy Leslie, Ashley McCall, Sheila McCoy, 
Mimi Nguyen, Lorin Obler, Anna Maria Ortiz, Max Sawicky, Sal Sorbello, 
and Craig Winslow. 

[End of section] 

Footnotes: 

[1] Pub. L. No. 89-73, 79 Stat. 218 (codified as amended at 42 U.S.C. 
§§ 3001 and 3058ff). 

[2] 42 U.S.C. §§ 3024, 3030s-1(f), and 3058b. Under the current OAA 
authorization, for titles III and VII, the formula considers each 
state's proportion of elderly U.S. residents--60 years of age and over 
or 70 years of age and over depending on the program--but the statute 
also provides that each state will receive at least as much funding as 
it received in a specified prior fiscal year and that no state receive 
less than one-half percent of the funds appropriated. 

[3] 42 U.S.C. § 3025(a)(2)(E). 

[4] 42 U.S.C. § 3002(23) and (24). 

[5] U.S. Census Bureau, Population Division, "Table 2. Projections of 
the Population by Selected Age Groups and Sex for the United States: 
2010 to 2050 (NP2008-T2)," released August 14, 2008. Note our analysis 
is of people age 60 and over. 

[6] GAO, Older Americans Act: More Should Be Done to Measure the 
Extent of Unmet Need for Services, [hyperlink, 
http://www.gao.gov/products/GAO-11-237] (Washington, D.C.: February 
28, 2011). 

[7] Title III funding has fluctuated between a little over $1.2 
billion and a little over $1.4 billion from fiscal years 2004 to 2012. 
For the same period, title VII funding has fluctuated between a little 
over $19 million and just under $22 million. 

[8] Eight states and the District of Columbia are single planning and 
service areas and are not required to use an intrastate funding 
formula to distribute title III funds; nevertheless, three of these 
states use an intrastate funding formula. We did not review intrastate 
funding formulas in the U.S. territories. 

[9] In the briefing slides, we summarized the statutory funding 
formula and federal and state actions in using the funds for 
authorized purposes, generally using the terms "allotment" and 
"allocation." In accordance with the statutory framework, we have now 
updated the terminology in this letter to use the term "allotment" 
when referring to the manner in which the federal agency provides 
funding to the states See 42 U.S.C. §§ 3024, 3030s-1(f) and 3058b. We 
now use the term "distribution" when referring to the states' actions 
in providing funds to local areas. See 42 U.S.C. § 3025(a)(2)(C). 
Thus, references to allotment or allocation in the briefing slides 
should be interpreted according to the federal action or the state 
actions as described here. 

[10] In the briefing slides, we sometimes referred to the availability 
of state resources, in which case we are referring to states' fiscal 
capacity (see appendix I). 

[11] States that designated a single planning and service area 
covering all older individuals in the state on or before October 1, 
1980, may continue to operate in that manner. 42 U.S.C. § 
3025(a)(1)(E) and (b)(5). 

[12] There are two standards concerning the concept of equity that 
have commonly been used to design and evaluate funding formulas. The 
first--known as beneficiary equity--stipulates that funds should be 
distributed to states according to the needs of their respective 
populations and adjusted for the cost of providing services. Partial 
beneficiary equity is achieved when funds are distributed based on the 
size of a state's population potentially needing services, without 
adjusting for differences across states in terms of the cost of 
providing services. The second standard--known as taxpayer equity--
applies to programs, such as OAA title III, in which states also 
contribute funds. This standard, like the first, seeks to provide 
individuals in need with the same level of services, but it also 
considers a state's ability to finance a given program from its own 
resources. 

[13] The statute provides that no state receive less than one-half of 
one percent of the title III and VII funds appropriated. 42 U.S.C. §§ 
3024(a)(3)(A), 3030s-1(f)(2)(B)(i)and 3058b(a)(2)(B)(i). 

[14] The statute provides, for example, that notwithstanding the 
current formula no state is to receive less funds under title III 
(other than Part E) than it did in 2006. 42 U.S.C. § 3024(a)(3)(D)(i). 

[15] Some states are single service-area states and are not required 
to use an intrastate funding formula to distribute title III funds. 42 
U.S.C. § 3025(b)(5)(A). We did not review intrastate funding formulas 
in the U.S. territories. 

[16] Beneficiary equity stipulates that funds should be distributed to 
states according to the needs of their respective populations, so that 
each state, with its federal allotment, can provide the same level of 
services to each person in need. Taxpayer equity stipulates that funds 
are distributed so that states can provide individuals comparable 
services using both state and federal funds, while each state 
contributes about the same proportion of its resources to a given 
federal program. 

[17] One limitation of the ACS for purposes of allotting OAA funds, 
however, is that the data are not available for the other U.S. 
territories. 

[18] GAO, Older Americans Act: More Should Be Done to Measure the 
Extent of Unmet Need for Services, [hyperlink, 
http://www.gao.gov/products/GAO-11-237] (Washington, D.C.: February 
28, 2011). 

[19] GAO, Older Americans Act: Funding Formula Could Better Reflect 
State Needs, [hyperlink, http://www.gao.gov/products/GAO/HEHS-94-41] 
(Washington, D.C.: May 12, 1994) and Vocational Rehabilitations 
Funding Formula: Options for Improving Equity in State Grants and 
Considerations for Performance Incentives, [hyperlink, 
http://www.gao.gov/products/GAO-09-798] (Washington, D.C.: September 
30, 2009). 

[20] For example, GAO, School Finance: Options for Improving Measures 
of Effort and Equity in Title I, [hyperlink, 
http://www.gao.gov/products/GAO/HEHS-96-142] (Washington, D.C.: August 
30, 1996); Ryan White Care Act of 1990: Opportunities to Enhance 
Funding Equity, [hyperlink, 
http://www.gao.gov/products/GAO/HEHS-96-26] (Washington, D.C.: 
November 13, 1995); Older Americans Act: Funding Formula Could Better 
Reflect State Needs, [hyperlink, 
http://www.gao.gov/products/GAO/HEHS-94-41] (Washington, D.C: May 
12,1994); and Medicaid Formula: Fairness Could Be Improved, 
[hyperlink, http://www.gao.gov/products/GAO/T-HRD-91-5] (Washington, 
D.C.: December 7, 1990). See also, GAO, Federal Disaster Relief: 
Improved Criteria Needed to Assess a Jurisdiction's Capability to 
Respond and Recover on Its Own, [hyperlink, 
http://www.gao.gov/products/GAO-12-838] (Washington, D.C.: September 
12, 2012) and Vocational Rehabilitation Funding Formula: Options for 
Improving Equity in State Grants and Considerations for Performance 
Incentives, [hyperlink, http://www.gao.gov/products/GAO-09-798] 
(Washington, D.C.: September 30, 2009), which found that TTR is not 
affected by jurisdictions' fiscal choices. 

[21] See [hyperlink, http://www.gao.gov/products/GAO-12-838], 
[hyperlink, http://www.gao.gov/products/GAO-09-798], [hyperlink, 
http://www.gao.gov/products/GAO/HEHS-96-142], [hyperlink, 
http://www.gao.gov/products/GAO/HEHS-96-26], [hyperlink, 
http://www.gao.gov/products/GAO/HEHS-94-41], and [hyperlink, 
http://www.gao.gov/products/GAO/T-HRD-91-5]. 

[22] States are required to provide a matching share of 15 percent in 
order to receive funds for OAA title III supportive services and 
congregate and home-delivered nutrition programs. 42 U.S.C. § 
3024(d)(1)(D). Similarly, a matching share of 25 percent is required 
for the title III National Family Caregiver Support Program. However, 
no match is required for title III disease prevention and health 
promotion services or for any title VII programs. 42 U.S.C. § 
3029(b)(1). 

[End of section] 

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