Older Americans Act: 106th Congress Legislation
CRS Report for Congress
Older Americans Act:
2000 Reauthorization Legislation
Updated May 14, 2001
Carol V. O’Shaughnessy
Specialist in Social Legislation
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress
Older Americans Act: 2000 Reauthorization Legislation
After unsuccessful attempts by the 104th and 105th Congresses to reauthorize theth
Older Americans Act, the 106 Congress approved the Older Americans Act
Amendments of 2000 (H.R. 782, P.L. 106-501, signed November 13, 2000).
Authorization of appropriations for the Act had expired in FY1995, but
appropriations laws for FY1996 through FY2000 continued funding for the programs.
The Act’s most visible program, the elderly nutrition program (authorized under
Title III), provides 240 million congregate and home-delivered meals to over 3 million
older persons annually. The Act also funds a wide array of supportive services,
including home care, ombudsman services for residents of long-term care facilities,
and a subsidized employment program.
P.L. 106-501 authorizes a new National Family Caregiver Support Program
funded at $125 million in FY2001. The program provides assistance and services to
families who care for the frail elderly. Services authorized include: information and
assistance to caregivers, counseling, support groups, and respite and other home- and
community-based services to provide families temporary caregiver relief. Funds are
allotted to states based on their respective share of the total population aged 70 years
A controversial issue during the 104th, 105th and 106th Congresses was a proposal
to change the way funds are allocated to national and state grantees under the senior
community service employment program (Title V). The law retains the current
funding allocation that distributes 78% of funds to national organizations and 22% to
state agency grantees. However, as funding increases above the FY2000 level,
proportionately more funding would shift to state agencies. The law also requires the
Secretary of the Department of Labor (DoL) to establish performance measures for
the program and includes provisions to encourage transition of enrollees into private
sector employment. A new requirement calling for a State Senior Employment
Services Plan is designed to give states more control over the program and to
promote coordination of employment services for enrollees within the state.
The law retains current policy allowing states to solicit voluntary contributions
from participants for supportive and nutrition services they receive. But it also allows
states to implement cost-sharing for selected supportive services, as long as states do
not use means tests or deny services to older persons who fail to make cost-sharing
payments, among other requirements.
The law clarifies the intent that the Title III formula used for allocation of
supportive and nutrition services funds to states is to be based on the most recent U.S.
Census Bureau data on the number of persons age 60 and over. But it also stipulates
that no state receive less than it received in FY2000. In addition, the law requires the
President to call a White House Conference on Aging by the end of 2005.
Introduction ................................................... 1
Brief Legislative Background.......................................1
106th Congress Activities..........................................3
Issues in Reauthorization..........................................3
National Family Caregiver Support Program.......................3
Consolidation of Older Americans Act Programs....................5
Restructuring the Senior Community Service Employment Program......8
Distribution of Community Service Employment Funds by the
Use of Funds for Enrollee Wages/Fringe Benefits, Administration,
and Other Enrollee Costs.............................11
Negligent or Fraudulent Activities of Project Grantees...........12
Coordination of State and National Organization Grantee Operations13
Placement of Participants in the Private Sector and in Other
Coordination with the Workforce Investment System............14
Interstate Funding Formula for Supportive and Nutrition Services......14
Targeting of Services to Low-Income Minority Older Persons.........15
Low Income Minority Older Persons........................15
Older Persons Residing in Rural Areas.......................16
Cost-Sharing for Services by Older Persons.......................16
List of Tables
Table 1. Authorizations of Appropriations for Older Americans Act Programs in
Table 2. FY2000 Funding to National Organizations and State Sponsors......8
Older Americans Act:
2000 Reauthorization Legislation
After 6 years of congressional debate on reauthorization of the Older Americans
Act, on November 13, 2000, President Clinton signed H.R. 782, the Older Americans
Act Amendments of 2000, which became P.L. 106-501. The law extends the Act’s
programs through FY2005.
In summary, P.L. 106-501 contains the following major provisions:
!authorizes $125 million for a new National Family Caregiver Support Program
under Title III (Congress appropriated $125 million for the program for
!reduces the number of separate authorizations of appropriations by eliminating
authority for several programs that were not funded;
!retains separate authorization of appropriations for the congregate and home-
delivered nutrition programs, and expands a state’s authority to transfer funds
between these programs;
!requires the Secretary of the Department of Labor (DoL) to establish
performance measures for the senior community service employment program,
and retains the prior law division of funds for national organizations (78%) and
states (22%) for FY2001. If funds increase above the FY2001 level ($440
million), state agencies are to receive proportionately more funding;
!retains authority for voluntary contributions by older persons toward the costs
of services, and allows states to impose cost-sharing for certain Title III
services older persons receive;
!clarifies that the Title III formula allocation is to be based on the most recent
population data, while stipulating that no state will receive less than it received
!requires the President to convene a White House Conference on Aging by
Brief Legislative Background
Prior to passage of P.L. 106-501, authorizations of appropriations for programs
under the Older Americans Act expired at the end of FY1995. For the expired period,
FY1996-FY2000, programs continued to be funded through appropriations legislation
for the Departments of Labor, Health and Human Services, and Agriculture, each of
which administer portions of the Act.1
In the past, the Act had received wide bipartisan congressional support.
However, beginning with the 104th Congress, and continuing through the 106th
Congress, Members of Congress differed about certain proposals that were under
discussion as part of the reauthorization. These included proposals to change the
formula for allocation of supportive services and congregate and home-delivered
nutrition services to states; consolidate a number of separately authorized programs;
change the way community service employment funds are allocated to national
organizations and states; and change minority targeting requirements, among otherthth
things. As a result of controversy around these issues, the 104 and 105 Congresses
took no final action.
In the 104th Congress, legislation to reauthorize the Act was reported by both the2
House Economic and Educational Opportunities (EEO) Committee and the Senate
Labor and Human Resources Committee, but not with bipartisan agreement.3
However, the bills were not acted upon by either chamber.
In the 105th Congress, legislation to reauthorize the Act was introduced by the
then-Chairman of the Subcommittee on Early Childhood, Youth and Families of the
House Education and the Workforce Committee (H.R. 4099), which had
responsibility for the Act. However, no further action was taken on the bill. The
Chairman of the Subcommittee on Aging of the Senate Labor and Human Resources
Committee, which had responsibility for the Act, did not introduce legislation in the
By early summer 1998, some Members of Congress were concerned that there
was no action on reauthorization. In response to rising criticism from constituents
and constituent organizations about the lack of action, two bills that would have
reauthorized the Act through FY2001 were introduced. These bills would have
simply reauthorized appropriations for programs in the Act, but made no substantive
program changes (S. 2295, Senator McCain and H.R. 4344, Representative DeFazio).
They received substantial congressional support — S. 2295 had 67 co-sponsors, and
1For information on FY1998 through FY2001 funding, see CRS Report 95-917, Older
Americans Act: Programs and Funding, by Carol O’Shaughnessy and Paul Graney.
2This House committee changed its name in the 105th Congress to the House Education and
the Workforce Committee.
3H.R. 2570 was reported by the House Economic and Educational Opportunities (EEO)
Committee on April 25, 1996; S. 1643 was reported by the Senate Labor and Human
Resources Committee on July 31, 1996. For a discussion of these bills, see CRS Report 95-th
32, Older Americans Act: 104 Congress Legislation, by Carol O’Shaughnessy. The Senate
Committee’s name was changed to the Senate Committee on Health, Education, Labor andth
Pensions in the 106 Congress.
H.R. 4344 had 188 co-sponsors. However, no further action was taken on these
106th Congress Activities
Final congressional action was taken on the reauthorization in late October 2000.
On October 25, the House passed H.R. 782, the Older Americans Act Amendments
of 2000, by a vote of 405 to 2. The next day, the bill passed the Senate by a vote of
Activities relating to the reauthorization spanned both sessions of the 106th
Congress. On September 15, 1999, H.R. 782, the Older Americans Act of 1999, was
approved by the House Committee on Education and the Workforce. H.R. 782 was
scheduled to be considered by the House under “suspension of the rules” (which
requires a two-thirds majority vote for passage) on October 4, 1999. However, the
bill was not taken up due to controversy about provisions in the bill, including the
proposal for changing the Title III funding formula to states and restructuring the
Title V senior community service employment program (these issues are discussed
below). In addition, there was concern that the bill was to be brought up under
suspension of the House rules which would have meant that no floor amendments
would have been allowed.
S. 1536, the Older Americans Act Amendments of 1999, was ordered reported
by the Senate Committee on Health, Education, Labor and Pensions (HELP), on July5
21, 2000. Both bills addressed the issues that had been in controversy during the
Issues in Reauthorization
The following discusses proposals that were considered as part of the
reauthorization and their resolution as part of P.L. 106-501.
National Family Caregiver Support Program
The Clinton Administration’s Older Americans Act reauthorization proposal and
the FY2000 and FY2001 budget proposals included a proposal for creation of the
National Family Caregiver Support program that was to be part of Title III of the Act.
The proposal was one part of a multipart Clinton Administration initiative on long-
term care services for persons of all ages. Other parts of the Administration’s
4For a discussion of 105th Congress legislation, see CRS Report 96-976, Older Americans
Act: 105th Congress Issues, by Carol O’Shaughnessy.
5For a detailed description of S. 1536, see CRS Congressional Distribution Memorandum,
Older Americans Act of 2000 (S. 1536): Section-by-Section Analysis of S. 1536, as Approved
by the Committee on Health, Education, Labor and Pensions, by Carol O’Shaughnessy,
August 3, 2000.
initiative included a tax credit for functionally and/or cognitively impaired persons of
all ages, and authority for the Office of Personnel Management (OPM) to offer group
long-term care insurance for federal employees, retirees, and their families.6
About 4 million persons age 65 and over living in the community are estimated
to need long-term care assistance due to a functional disability. The need for long-
term care is measured by need for assistance with activities of daily living (ADL),
and/or instrumental activities of daily living (IADLs). Functional disability is defined
as the inability to perform, without human and/or mechanical assistance, the following
activities of daily living (ADLs): dressing, eating, bathing, moving around indoors,
transferring from a bed to a chair, and toileting. It is also measured by the inability
to perform certain instrumental activities of daily living (IADLs), including light
housekeeping, meal preparation, shopping, taking medications, and managing money,
among others. Of the 4 million older persons with any functional disability, over half
need assistance with one or more ADLs, and almost 40% need assistance with IADLs
Research on disability and long-term care has documented the enormous
responsibilities that families face in caring for relatives who are living in the
community and who have significant impairments. Data from the 1994 National
Long-Term Care Survey sponsored by the Department of Health and Human Services
(DHHS) indicate that over 7 million persons provide 120 million hours of informal,
that is, unpaid, care to about 4.2 million functionally disabled older persons each
week. These data conclude that if the work of these caregivers were to be replaced
by paid home care, costs would range from $45 billion to $94 billion annually.
Moreover, research has shown that the informal, or unpaid, care provided by family
members can prevent or delay entry into long-term care facilities.7
Data from the 1994 survey and previous surveys indicate that most persons who
need long-term care receive no formal, or paid, assistance. Most assistance they
receive is provided by family members. Almost 60% of impaired elderly rely
exclusively on informal care provided by family members. Typically, elderly persons
rely on their spouses and adult children for assistance.
The National Family Caregiver support program, authorized by P.L. 106-501,
is intended to meet some of the needs of family caregivers. It authorizes $125 million
in grants to state agencies on aging to establish the family caregiver support program.
For FY2001, Congress appropriated $125 million for the program.
The legislation authorizes the following services: information to caregivers
about available services; assistance to caregivers in gaining access to services;
6For further information on the Clinton Administration’s proposal, see CRS Report RL30254,
Long-Term Care: The President’s FY2000 Initiative and Related Legislation, by Carol
O’Shaughnessy, Bob Lyke and Carolyn Merck.
7Doty, Pam. Informal Caregiving, Compassion in Action. U.S. Department of Health and
Human Services. Office of Assistant Secretary for Planning and Evaluation, 1998. Data are
from the 1994 National Long-Term Care Survey, a nationally representative sample of
functionally impaired Medicare beneficiaries living in the community.
individual counseling, organization of support groups, and caregiver training; respite
services to provide families temporary relief from caregiving responsibilities; and
supplemental services (such as respite, adult day care or home care services, for
example), on a limited basis, that would complement care provided by family and
other informal caregivers.
All caregivers eligible to receive services could receive information and
assistance, and individual counseling, access to support groups, and caregiver training.
Services that tend to be more individualized, such as respite, home care, and adult day
care, would be directed to persons who have specific care needs. These are defined
in the law as persons who are unable to perform at least two activities of daily living
(ADL) without substantial human assistance, including verbal reminding, or
supervision; or due to a cognitive or other mental impairment, require substantial
supervision because of behavior that poses a serious health or safety hazard to the
individual or other individuals. ADLs include bathing, dressing, toileting, transferring
from a bed or a chair, eating, and getting around inside the home.
Priority is to be given to older persons and their families who have the greatest
social and economic need, with particular attention to low income individuals, and to
older persons who provide care and support to persons with mental retardation and
developmental disabilities. In addition, under certain circumstances, grandparents and
certain other caregivers of children may receive services.
The law allows states to establish cost-sharing policies for individuals who would
receive respite and supplemental services provided under the program, that is, persons
could be required to contribute toward the cost of services received.
Funds are to be allotted to states based on a state’s share of the total population
aged 70 and over. However, persons under age 70 would be eligible for caregiver
services. The federal matching share for the specified caregiver services is 75%, with
the remainder to be paid by states. This is a lower federal matching rate than is
applied to other Title III services (such as congregate and home-delivered nutrition
services, and other supportive services) where the federal matching rate is 85%.
In its proposal, the Clinton Administration projected that the $125 million level
would provide one or more of the caregiver support services to about 250,000
families each year. The number of persons served will be affected by several factors,
including the number of persons who meet the specified eligibility requirements and
actually apply for services, capabilities and readiness of service providers, and relative
spending by states on specific services.
Consolidation of Older Americans Act Programs
The law that existed prior to P.L. 106-501 authorized 20 programs (although
some had never been funded). A major issue in the 106th Congress, but especially in
the two prior Congresses was a congressional initiative to streamline the Act, in part,
by consolidating separately authorized programs. Some Members of Congress
wanted to simplify certain requirements of law, and consolidate smaller programs.
The House bill as originally approved by the House Committee on Education and
Labor in 1999 would have reduced the number of authorized programs to 11; among
other things, it would have eliminated a separate title (but not authorization) for
training, research and demonstration activities in the field of aging. S. 1536 as
approved by the Senate Committee on Health, Education, Labor and Pensions in 20008
would have reduced the number of programs to 15. Both bills would have eliminated
authority for a number of programs that had never been funded.
P.L. 106-501 did not consolidate major programs, but eliminated authority for
programs that had not received funding in FY2000 and prior years as well as authority
for a number of demonstration projects. For example, the law eliminated authority
for the Federal Council on Aging, and assistance for special needs, and separate
authority for school-based meals and intergenerational activities. Also eliminated was
authority for supportive activities for caregivers and in-home services for the frail
elderly, which may be funded under the Title III supportive services program and the
family caregiver support program.
Table 1 presents authorization of appropriations for each program as contained
in the law.
8 For example, H.R. 782 would have eliminated a separate title authorizing appropriations for
research, training, and demonstration activities that are the responsibility of the Assistant
Secretary for Aging. Instead, H.R. 782 would have authorized these activities under Title I.
S. 1536 would have retained the separate title. H.R. 782 would have consolidated
authorizations of appropriations for the long-term care ombudsman and elder abuse prevention
programs. On the other hand, S. 1536 would have retained separate authorization of
appropriations for ombudsman, elder abuse prevention programs.
Table 1. Authorizations of Appropriations for Older Americans
Act Programs in P.L. 106-501
Older Americans Act ProgramsAuthorization of Appropriations
Title II, Administration on Aging
Administration on Aging FY2001-FY2005, such sums as may be necessary.
Eldercare Locator FY2001-FY2005, such sums as may be necessary.
Pension counseling and informationFY2001-FY2005, such sums as may be necessary.
Title III, State and Community Programs on Aging
Supportive services and centers FY2001-FY2005, such sums as may be necessary.
Congregate nutrition servicesFY2001-FY2005, such sums as may be necessary.
Home-delivered nutrition servicesFY2001-FY2005, such sums as may be necessary.
Disease prevention and healthFY2001-FY2005, such sums as may be necessary.
Family caregiver supportFY2001, $125 million if the aggregate amount for
supportive services and centers, congregate and home-
delivered nutrition services, and disease prevention and
health promotion is not less than the amount
appropriated for FY2000. For FY2002-FY2005, such
sums as may be necessary.
Nutrition services incentive programFY2001-FY2005, such sums as may be necessary
(formerly named the USDA commodity
Title IV, Training, Research, and Discretionary Programs
FY2001-FY2005, such sums as may be necessary
Title V, Community Service Employment Program
FY2001, $475 million and for FY2002-2005, such sums as may be necessary, and such
additional sums for each fiscal year to support 70,000 part-time employment positions.
Title VI, Grants for Native Americans
Indian and Native Hawaiian programsFY2001-FY2005, such sums as may be necessary.
Native American caregiver supportFY2001, $5 million, and for FY2002-FY2005 such
programsums as may be necessary.
Title VII, Vulnerable Elder Rights Protection Activities
Long-term care ombudsman programFY2001-FY2005, such sums as may be necessary.
Elder abuse, neglect, and exploitationFY2001-FY2005, such sums as may be necessary.
Legal assistance development programFY2001-FY2005, such sums as may be necessary.
Native American elder rights programFY2001-FY2005, such sums as may be necessary.
Restructuring the Senior Community Service Employment
The Senior Community Service Employment program, authorized under Title
V of the Act, provides opportunities for part-time employment in community service
activities for unemployed, low-income older persons who have poor employment
prospects. The program is funded at $440.2 million in FY2001, representing 26%
Older Americans Act funds. It is administered by DoL, which awards funds directly
to national sponsoring organizations and to states. The grantees and their FY2000
funding levels are shown in Table 2.
Table 2. FY2000 Funding to National Organizations and State
Sponsor(millions)Percent of total
American Association of Retired Persons$50.611.6
Asociación Nacional Por Personas Mayores13.23.0
National Caucus and Center on the Black Aged13.03.0
National Council on the Aging38.08.7
National Council of Senior Citizens64.314.7
National Urban League15.33.5
National Indian Council on Aging6.11.4
National Asian Pacific Center on Aging 6.01.4
U.S. Forest Service28.56.5
National organization sponsors, total$341.578.0
State agencies, total$96.3a22.0
Total $437.8b 100.0
a This amount includes funds allocated to the territories.
b This amount differs from the total appropriation of $440.2 million due to a set-aside by DoL of $2.4
million for experimental projects under Section 502(e) of the Act.
Beginning in the 104th Congress and continuing through the 106th Congress,
some Members of Congress were concerned about how the program was
administered. Some Members wanted more funds to be distributed to states, rather
than having the majority of funds distributed to the same national organizations every
year, as had been required by Appropriation Committee directives for many years.
Other issues included concerns that funding to the 10 national organizations was
awarded by DoL on a noncompetitive basis and about how much funding was used
by the organizations for administration. A General Accounting Office (GAO) report
completed in 1995 focused attention on these issues. GAO reviewed DoL’s method
of awarding funds, the allocation of funds to states, and grantee use of funds. It
concluded that the program could be improved by assuring more equitable distribution
of funds nationally, by enforcing statutory limits on use of funds for administration,
and by applying procedures for competition for funds by sponsors, among other9
Like the 104th and 105th Congress reauthorization proposals, H.R. 782 and S.
1536 would have restructured the program, in part, to respond to the GAO findings
although they differed in approach. Both proposals gave states more control of the
administration of the program and introduced competition for funds among
prospective grantee organizations. The bills made changes in (1) the distribution of
funds by the federal government; (2) formula allocations to grantees; and (3)
requirements regarding use of funds by grantees for administration and other enrollee
costs. These and other issues, and their resolution in P.L. 106-501, are discussed
Distribution of Community Service Employment Funds by the
Federal Government. For many years, Appropriations Committee directives
stipulated that national organizations were to receive 78% of the total Title V funds,10
and states, 22%. The Committee directives differed from the authorizing statute
that was in force. The statute stipulated that funds be awarded to national public and
non-profit private organizations at the level they received funds in 1978; 55% of any
funds in excess of the 1978 funding level was to be distributed to state agencies, and
45% to national organizations. However, for most years since 1978, the
Appropriations Committee directives stipulated the 78%/22% split of funds.
In its 1995 report, GAO noted that there is inequitable distribution of funding
within some states, as well as duplication of effort among national and state sponsors.
Some state agencies have had long-standing concerns about the duplication of
national organizations’ activities that is caused by the distribution of funds to multiple
organizations within a state. In addition, states maintained that because they
administer only 22% of total funds in a state, their ability to coordinate operations of
the program is very limited. In many states, multiple national organizations administer
programs in addition to a designated state agency (usually the state agency on aging).
For example, in six states, each with Title V FY2000 funding of $15 million or more,
eight or nine national sponsors administer the program in addition to the state agency
(California, Florida, New York, Ohio, Pennsylvania, and Texas). In most states, at
least three or four national organizations administer the program in addition to the
9U.S. General Accounting Office. Senior Community Service Employment Program Delivery
Could Be Improved Through Legislative and Administrative Actions. GAO/HEHS-96-4.
10This has been a long-standing issue. For example, in the 1978 reauthorization of the Older
Americans Act, the Senate Labor and Human Resources Committee expressed concern about
the “circumvention” by the Appropriations Committee of the authorizing committee formula.
These concerns lead to various proposals during the 104th, 105th, and 106th
Congress to restructure the program, primarily by giving states more authority over
the program, and by increasing their share of total funding and decreasing the national
organizations’ share. Proponents of shifting funds to states indicated that costs of
program administration and duplication of effort would decrease since there would
be fewer organizations to administer the program within a state. Proponents also said
that giving states more leverage in funding decisions would increase coordination of
effort among all grantees in states.
The restructuring of the senior community service employment program
generated substantial controversy during the 104th and 105th Congresses, and theth
controversy continued during the 106 Congress. Some national organization
grantees expressed concern that their continued existence would be threatened if more
program funding were to be shifted to states. They were also concerned that
restructuring could result in disruption of jobs for some existing enrollees. A number
of organizations and some Members of Congress indicated that the program operated
well under the national organizations’ administration, and that because of their long-
standing association, they had the needed expertise to continue administering the
majority of funds.
Both H.R. 782 and S. 1536 would have changed the 78%/22% split of funds
between national organizations and states, and transferred more funds to states;
however, they took different approaches. H.R. 782 would have gradually transferred
funds to states so that by FY2004, national organizations would have received 55%
of total funds and state agencies would have received 45%. S.1536 would have
applied a different division of funds to national organizations and state agencies only
when total funding exceeded the FY2000 appropriations level.
P.L. 106-501 ultimately retains the 78%/22% split by requiring that state
agencies and national organizations be “held harmless” at their FY2000 level of
activities – that is, they are to receive no less than the amount they received in
FY2000 to maintain the FY2000 level of activity.11 But when appropriations exceed
the FY2000 level, proportionately more funds are to be distributed to state grantees.
Specifically, any excess in appropriations over the FY2000 level – up to the first $35
million – is to be allocated so that 75% will be provided to states, and 25% to national
organizations. Funds appropriated above the first $35 million in excess of the
FY2000 level are to be divided equally between state agencies and national
When appropriations are in excess of the amount needed to maintain the FY2000
hold harmless level, the excess is to be allotted among the states according to a state’s
11For purposes of allocation of funds and determining the FY2000 hold harmless amount,
“level of activities” is defined as “the number of authorized positions multiplied by the cost
per authorized position.”“Cost per authorized position” is defined as the sum of: 1) the
hourly minimum wage specified in the Fair Labor Standards Act of 1938, multiplied by 1,092
hours (21 hours times 52 weeks); 2) an amount equal to 11% of the above amount to cover
federal payments for fringe benefits; and 3) an amount determined by the Secretary to cover
federal payments for all other remaining program and administrative costs.
relative population aged 55 and over and its relative per capita income. (The relative
population and per capita income factors were contained in prior law.) But, each
state is to receive a percentage increase over its FY2000 allotment, that is, at least
Use of Funds for Enrollee Wages/Fringe Benefits, Administration,
and Other Enrollee Costs. Title V funds are used for (1) enrollee wages and
fringe benefits; (2) administration; and (3) other enrollee costs. For many years, DoL
regulations required that at least 75% of funds be used for enrollee wages and fringe
benefits, but this was never specified by law. By law, grantees are allowed to use up
to 13.5% of federal funds for administration (and up to 15% of federal funds under
a waiver approved by Secretary of DoL). Any remaining funds may be used for
“other enrollee costs,” including, for example, recruitment and orientation of enrollees
and supportive services for enrollees, among other things.
In its review of the program, GAO found that most national organizations and
some state sponsors had budgeted administrative costs in excess of the statutory limit
by inappropriately classifying them as “other enrollee costs,” thus increasing the total
amount for administration above the statutory limits. During consideration of the
reauthorization, some Members of Congress noted that there should be legislative
language clarifying the classification of these activities in order to avoid use of
program funds for administration in excess of the statutory limit, as GAO found in the
In response to this concern and to clarify the various cost categories, P.L. 106-
Definition of administrative costs. Costs of administration are personnel and
non-personnel, and direct and indirect costs, associated with the following:
!accounting, budgeting, financial, and cash management;
!procurement and purchasing;
!coordinating the resolution of audits, reviews, investigations, and incident
!general legal services;
!development of systems and procedures, including information systems,
required for administration; and
!oversight and monitoring.
Administration also includes goods and services used for administration; travel;
and information systems related to administration.
P.L. 106-501 retains the prior law limit on administrative costs, that is, a grantee
may use up to 13.5% of its funds (with a waiver up to 15%) for administration. The
law also requires that, to the maximum extent practicable, Title V grantees provide
for payment of administrative expenses from nonfederal sources.
“Programmatic activities.” Funds not used for administration are to be used
for programmatic activities. This includes primarily enrollee wages and fringe benefits
(including physical exams) – the law stipulates that no less than 75% of grant funds
be used to pay wages and fringe benefits. The remainder of funds may be used for:
!job placement assistance, including job development and search assistance;
!enrollee supportive services, including transportation, health and medical
services, special job-related or personal counseling, incidentals (work shoes,
badges, uniforms, eyeglasses and tools); child and adult care, temporary
shelter, and follow-up services; and
!outreach, recruitment and selection, intake, orientation, and assessments.
Performance Standards. One of the areas that was under discussion during
the 104th and 105th Congresses was the need to establish performance standards forth
Title V grantees. This discussion continued during the 106 Congress, and ultimately
P.L. 106-501 added new provisions requiring the Secretary of Labor to establish
standards and performance indicators, addressing the following areas:
!number of persons served, with particular consideration to individuals with
greatest economic or social need, poor employment history or prospects, and
those over the age of 60;
!community services provided;
!placement and retention into unsubsidized public or private employment;
!satisfaction of enrollees, employers, and their host agencies with the
experiences and services provided; and
!any additional indicators determined appropriation by the Secretary.
The law set up procedures for corrective action if a grantee or a subgrantee of
the state does not achieve specified levels of performance. This may include
transferring funds from the grantee/subgrantee, under competition requirements, in
Negligent or Fraudulent Activities of Project Grantees. In the past,
GAO performed audits of national organizations and found that Title V funds allotted
to certain national organizations were used inappropriately. During the 106th
Congress, there was concern among some Members of Congress about the findings
of an audit of the National Council of Senior Citizens (NCSC) Title V grant by the
Inspector General (IG) of DoL. The NCSC is the second largest of the national
organization recipients; in FY2000, it received $64.3 million, representing 15% of the
total Title V appropriation. In February 1999, the IG issued a final audit of NCSC
(and its successor grantee, the National Senior Citizens Education and Research
Center (NSCERC). The audit covered operations of the grantee for 1992-1994. It
questioned more than $6 million of a total of more than $180 million audited.
Partially in response to these audit findings, P.L. 106-501 adds provisions
designed to assure that Title V applicants are capable of administering federal funds.
The law adds a set of responsibility tests that applicants must meet in order to receive
funds. Failure to meet the following two tests would establish that the applicant is not
responsible to administer federal funds: unsuccessful efforts by the organization to
recover debts established by DoL and failure to comply with requirements for debt
repayment; and established fraud or criminal activity. Other responsibility tests
include the presence of serious administrative deficiencies, willful obstruction of the
audit process, and failure to correct deficiencies, among other things.
Coordination of State and National Organization Grantee
Operations. A recurring issue during the review of the program has been concern
by some observers about the lack of coordination among project grantees within
states, including the distribution of employment positions within states. As mentioned
earlier, in some states, seven or eight grantees administer the program along with state
P.L. 106-501 contains provisions designed to address coordination among the
various grantees. It adds new requirements for a State Senior Employment Services
Plan. Each Governor is required to submit to the Secretary of DoL an annual plan
that will identify the number of persons eligible for the program, and their
characteristics and distribution within the state. The plan must also include a
description of the planning process used to ensure the participation of relevant
agencies and organizations with an interest in employment of older persons, including
state and area agencies on aging, national organizations administering the Title V
program, and state and local workforce investment boards, among others. The
Secretary of DoL is required to monitor state implementation of these requirements
to assure that the statewide planning and coordination of Title V activities are taking
Placement of Participants in the Private Sector and in Other
Unsubsidized Employment. The purpose of Title V is to place low-income older
individuals with poor employment prospects in subsidized employment so that they
may increase their income and provide a source of labor to expand community
services. While this goal substantially defines the program, in the past legislative
provisions have given some attention to placement of participants in unsubsidized
employment. For example, amendments to the Act in 1981 required DoL to use some
Title V funds for experimental projects designed to place participants in second career
training and in private business (Section 502(e) of the Act). In addition, DoL
regulations have required that grantees attempt to achieve placement of enrollees in
unsubsidized employment. The regulations require that each grantee strive to place
at least 20% of their authorized positions in unsubsidized employment. Generally,
projects have been successful at meeting or exceeding this goal.
P.L. 106-501 further emphasizes the role of the program regarding unsubsidized
private placement of enrollees in a number of ways. First, it states that the purpose
of Title V includes not only placement of participants in community service activities,
but also placement of participants in the private sector. Second, it increases the
amount of funds to be spent by the Secretary on projects to place participants in
unsubsidized employment to 1.5% of total funds (rather than 1% to 3% of the amount
above the 1978 hold harmless amount required by prior law). This would mean, for
example, that the Secretary would have to reserve $6.6 million of FY2000 funds
($440.2 million) for Section 502(e) projects, rather than the $2.4 million that was set
aside in FY2000.
Third, the law codifies the regulation regarding placement of enrollees into
unsubsidized employment. The Secretary is required to establish, as part of the
performance measures, a requirement that grantees place at least 20% of enrollees
into unsubsidized employment. The law defines “placement into public or private
unsubsidized employment” as full- or part-time employment in the public or private
sector by an enrollee for 30 days within a 90-day period without using a federal or
state subsidy program.
Coordination with the Workforce Investment System. The Workforce
Investment Act (WIA) was enacted in 1998 with the aim of consolidating and
coordinating employment and training programs across the Nation. P.L. 106-501
establishes a number of requirements aimed at coordinating the Title V program with
the workforce investment system established by WIA. Among other things, it
requires that Title V projects to participate in one-stop delivery systems in the local
workforce investment area established under WIA. It also allows assessments of
older individuals for participation in either Title V projects or under WIA (Subtitle B
of Title I) to be used for the other program, and deems Title V participants to be
eligible under Title I of WIA.
Interstate Funding Formula for Supportive and Nutrition
The way in which the Administration on Aging (AoA) distributes nutrition and
supportive funds to states continued to be of concern in the 106th Congress, as it was
in the 104th and 105th Congresses. In general, prior law required AoA to distribute
Title III funds for supportive and nutrition services to states based on their relative
share of the population aged 60 and older. In addition to specifying certain minimum
funding amounts, the law contained a “hold harmless” provision requiring that no
state receive less than it received in FY1987. P.L. 106-501 changed the requirements
regarding the formula distribution.
By way of background, prior to the recent law change, AoA distributed funds
for supportive and nutrition services in the following way. First, states were allotted
funds in an amount equal to their FY1987 allocations, which were based on estimates
of each state’s relative share of the total population age 60 and older in 1985.12
Second, the balance of the appropriation was allotted to states based on their relative
share of the population aged 60 and over as derived from the most recently available
estimates of state population. And third, state allotments were adjusted to assure that
the minimum grant requirements are met. The effect of this methodology was that the
majority of funds were distributed according to population estimates that do not
reflect the most recent population trends. For example, for FY1999, 85% of total
Title III funds was distributed according to the FY1987 “hold harmless.” The
remainder of funds appropriated was distributed according to 1997 population data.
The method that AoA used to meet the 1987 “hold harmless” provision has been
criticized. In a 1994 report, GAO concluded that Title III funds were not distributed
12There is usually a 2-year time lag in availability of estimates of state population from the
U.S. Census Bureau.
according to the requirements of the statute.13 GAO concluded that the method
employed by AoA did not distribute funds proportionately according to states’
relative share of the older population, based on the most recent population data and,
therefore, negatively affected states whose older population is growing faster than
others. GAO recommended that AoA revise its method to allot funds to states, first,
on the basis of the most current population estimates, and then, adjust the allotments
to meet the hold harmless and statutory minimum requirements.
P.L. 106-501 followed the GAO recommendation by requiring that funds be
distributed according to the most recent data on states’ relative share of persons 60
years and older. The law then stipulates that no state would receive less than it
received in FY2000, thereby creating a FY2000 “hold harmless” requirement. The
intent of this approach is to have funding distributed, first, according to the most
recent population data (as compared to the prior methodology which distributed the
majority of funds to states based on state population data that was 13 years old), but
at the same time assuring that individual state allotments would not go below their
If appropriations for Title III services increase over the FY2000 level, the effect
of the proposal would be that states which are gaining a larger share of the total U.S.
population over 60 years compared to other states would receive a proportionately
larger share of the increased appropriation. However, the 1987 hold harmless would
still affect the distribution of funds up to the current hold harmless threshold since the
FY2000 hold harmless amount is effectively based on the 1987 amount.
Congress also wanted to assure that if there were an increase in appropriations
over the FY2000 level, each state would receive a share of the increase. Therefore,
the law requires that each state will receive at least 20% of the percentage increase
in the total allotment over the FY2000 amount.
Targeting of Services to Low-Income Minority Older Persons
Low Income Minority Older Persons. Targeting of services to low-income
minority older persons continued to be a subject of review during the 106th Congress,thth
as it has during past reauthorizations of the Act. Bills in the 104 and 105
Congresses would have deleted either some or most of current law provisions
regarding targeting services to minority older individuals. The deletion of these
provisions became quite controversial with some Members of Congress as well as
with national aging organizations. Some Members wanted deletion of the targeting
provisions to create a level playing field for services among all elderly, but still wanted
to keep references to those in greatest social and economic need. Others held that
since minority elderly are most disadvantaged with respect to certain need
characteristics, such as income, the special targeting provisions should have been
13U.S. General Accounting Office. Older Americans Act: Title III Funds Not Distributed
According to Statute. GAO/HEHS-94-37. January 1994.
P.L. 106-501 retained all prior law provisions regarding targeting to low income
minority individuals. These include requirements that state and area agencies on
aging target services to persons in greatest social and economic need, with particular
attention on low-income minority older persons. It requires that states, in developing
their intrastate funding formulas, take into account the distribution within the state of
persons with the greatest economic and social need, with particular attention to low-
income minority older persons.
It also requires that the agencies set specific objectives for serving low-income
minority older persons and that program development, advocacy, and outreach efforts
be focused on these groups. Service providers are required to meet specific
objectives set by area agencies for providing services to low-income minority older
persons, and area agencies are required to describe in their area plans how they have
met these objectives.
Older Persons Residing in Rural Areas. Many advocates maintain that
service needs of older persons in rural area are often overlooked. Delivery of social
services in rural areas may be particularly difficult due to the lack of service personnel
and high transportation costs, among other things. During the 106th Congress some
Members of Congress were concerned that the Act did not place enough focus on the
needs of older persons living in rural and sparsely populated areas.
In order to respond to this concern, P.L. 106-501 contains a number of new
provisions that are designed to recognize the special problems of older persons in
rural areas. Among other things, the law requires that in providing services and in
developing planning objectives, state and area agencies take into consideration the
needs of persons in rural areas. In addition, state agencies are required to consider
the needs of rural older persons when developing advocacy and systems development
Cost-Sharing for Services by Older Persons
One of the most frequent issues to arise in past reauthorization legislation has
been whether the Act should allow mandatory cost sharing for certain social services.
Under long-standing federal policy, mandatory fees for Older Americans Act services
have been prohibited, but nutrition and supportive services providers have always
been encouraged to solicit voluntary contributions from older persons toward the
costs of services. Congress has intended that older persons not be denied a service
because they will not or cannot make a contribution. Funds collected through
voluntary contributions are to be used to expand services. Prior to the 104th and 105th
Congresses, Members resisted proposals to allow Older Americans Act programs to
conduct cost-sharing for services.
Since the late 1980s, state and area agencies on aging have been in favor of a
policy that would allow them to impose cost-sharing for certain services, arguing, in
part, that such a policy would eliminate barriers to coordination with other state-
funded services programs that do require cost-sharing, such as home care and adult
day care services. They also have argued that cost-sharing would improve targeting
of services if cost-sharing policies were to be applied to persons who have higher
incomes while exempting low income persons.
Some representatives of aging services programs, such as those representing
minority/ethnic elderly, have been opposed to cost-sharing, arguing, in part, that a
mandatory cost-sharing policy would discourage participation by low-income and
minority older persons. They have also argued that cost-sharing would create a
welfare stigma for Older Americans Act programs which has not existed because of
the absence of “means testing” or cost-sharing policies.
The Clinton Administration’s proposed that state agencies be allowed to conduct
cost-sharing for certain services, with limitations. It specified that certain services be
exempted from cost-sharing policies. The Senate and House proposals differed on
cost-sharing. H.R. 782 would have retained the voluntary nature of contributions, but
S. 1536 contained elements of the Administration’s proposal and added other
P.L. 106-501 ultimately made a distinction between cost-sharing for certain
services and voluntary contributions by older persons. The law contains the
Cost-Sharing. The law allows states to implement cost sharing by recipients for
certain services. There are exceptions, however. Cost-sharing would not be
permitted for the following services: information and assistance, outreach,
benefits counseling, case management, ombudsman, elder abuse prevention, legal
assistance, consumer protection services, congregate and home-delivered
nutrition services, and services delivered through tribal organizations.
States may not apply cost-sharing for services to persons who have low income
(defined as income at or below the federal poverty level) and from considering
assets, savings, or other property owned by individuals when creating a sliding
scale for cost sharing, or when seeking contributions. In addition, states may
exclude from their cost-sharing policies other low income persons who have
income above the poverty level.
Cost-sharing must be applied on a sliding scale, based on income, and the cost
of services. Income is to be established by individuals on a confidential self-
declaration basis, with no requirement for verification. Service providers and
area agencies on aging would be prohibited from denying services to older
individuals due to their income or failure to make cost-sharing payments.
The law requires the Secretary to conduct an evaluation of cost-sharing practices
that are conducted by states in order to determine the impact of these practices
on participation under the Act. The evaluation is to be conducted at least 1 year
after enactment, and annually thereafter.
Voluntary Contributions. The law provides that each recipient of services have
an opportunity to voluntarily contribute toward the cost of all services. It
stipulates that voluntary contributions must be allowed, and may be solicited, for
all services provided under the Act, as long as the method of solicitation is non-
coercive. Among other things, older persons may not be denied services if they
do not contribute toward the costs of services.
The law requires that both the cost-sharing and the voluntary contributions
policies protect the privacy of each recipient of services. State and area agencies must
establish appropriate procedures to safeguard and account for cost share payments,
and use funds collected through cost sharing to expand services for which payment