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O KEEP THE SECRETARY AND THE CONGRESS FULLY INFORMED ABOUT

PROBLEMS AND DEFICIENCIES IN THE PROGRAM ADMINISTRATION

AND ABOUT THE NEED FOR CORRECTIVE ACTION.

AS CREATED BY CONGRESS, THE OIG HAS THE OVERALL RESPONSIBILITY OF REPORTING THE DEFICIENCIES OF SPECIFIC PROGRAMS WITHIN THE DEPARTMENT. CONSEQUENTLY, OUR REPORT USUALLY CONTAINS REVIEWS ILLUSTRATING PROBLEMS OR POTENTIAL PROBLEMS WITHIN A CERTAIN AREA. HOWEVER, WE WOULD LIKE TO POINT OUT THAT EVEN THOUGH THE AOA IS DEFICIENT IN CERTAIN AREAS AS HIGHLIGHTED BY OUR

TESTIMONY, WE ALSO BELIEVE THAT OVERALL, THE AOA HAS COME A LONG WAY

TOWARD ACHIEVING THE DEALS OF ITS ORIGINATING LEGISLATION UNDER THE GUIDANCE OF DR. JOYCE BERRY.

IN 1965, THE CONGRESS CREATED THE ADMINISTRATION ON AGING THROUGH THE OLDER

AMERICANS ACT. LOCATED WITHIN THE DEPARTMENT OF HEALTH AND HUMAN

SERVICES, AOA OVERSEES SPECIAL PROGRAMS FOR THE AGING UNDER TITLE III, IV, AND VI OF THE ACT. TITLE MI PROGRAMS COVER GRANTS FOR A VARIETY OF ELDERLY SERVICES AND SENIOR CENTERS; TITLE ADDRESSES TRAINING, RESEARCH AND DISCRETIONARY PROJECTS AND PROGRAMS; TITLE VI FOCUSES ON GRANTS FOR NATIVE AMERICANS. TITLE V OF THE ACT, COMMUNITY SERVICE EMPLOYMENT FOR OLDER AMERICANS, IS ADMINISTERED BY THE DEPARTMENT OF LABOR IN CONSULTATION WITH

AOA

IN RECENT YEARS, THE OIG HAS DESIGNED REVIEWS TO 1) ASSESS CERTAIN ADMINISTRATION ON AGING'S ABILITY TO AWARD AND MONITOR DISCRETIONARY

GRANTS; 2) DETERMINE THE DEGREE TO WHICH THE FEDERAL GOVERNMENTS

REVERSIONARY INTEREST IN REAL PROPERTY USED AS MULTIPURPOSE SENIOR CENTERS

IS BEING PROTECTED BY AOA; 3) EXAMINE THE ISSUE OF COST SHARING FOR OLDER

AMERICANS; AND 4) ASSESS WHETHER GRANT INFORMATION WAS BEING PROPERLY

DISSEMINATED

IN ADDITION, DURING THE PAST SEVERAL YEARS, THE OIG HAS EVALUATED AND ISSUED UNDER FEDERAL AUDIT POLICIES APPROXIMATELY 165 AUDIT REPORTS, MOST PERFORMED BY STATE AND NONFEDERAL AUDITORS, ON OLDER AMERICAN PROGRAMS. AS A RESULT OF THIS WORK, WE HAVE RECOMMENDED FINANCIAL ADJUSTMENTS/

SAVINGS OF APPROXIMATELY $26 MILLION. WE ALSO HIGHLIGHTED 175 PROCEDURAL

FINDINGS, GENERALLY INDICATING BREAKDOWNS IN ACCOUNTABILITY CONTROLS OVER FEDERAL RESOURCES IN THESE OLDER AMERICAN PROGRAMS. THE LARGEST AMOUNTS OF RECOMMENDED FINANCIAL ADJUSTMENTS INVOLVE UNDER-MATCHING OF FEDERAL FUNDS AND, INELIGIBLE AND UNALLOWABLE EXPENSES. THE MOST COMMON PROCEDURAL FINDINGS INVOLVED INEFFECTIVE ACCOUNTING SYSTEMS, INADEQUATE INTERNAL CONTROLS, AND DEFICIENT MANAGEMENT OF PROPERTY AND EQUIPMENT. RECOMMENDATIONS HAVE BEEN MADE TO CORRECT THESE DEFICIENCIES. HOWEVER, DUE TO THE RESTRICTIONS OF AOA'S ABILITY TO PERFORM SITE VISITS, AOA CANNOT BE ASSURED OF FULL IMPLEMENTATION.

NOW, WE WOULD LIKE TO DEVOTE THE REST OF OUR TESTIMONY TO FOUR SPECIFIC REPORTS OF INTEREST TO THE SUBCOMMITTEE WE CAN MAKE THESE REPORTS AVAILABLE TO THE SUBCOMMITTEE AND FOR THE RECORD F THEY WISH.

REVERSIONARY INTEREST REPORT

IN 1989, WE UNDERTOOK AN AUDIT ON THE REVERSIONARY INTEREST OF THE UNITED STATES GOVERNMENT IN MULTIPURPOSE SENIOR CENTERS. THE OLDER AMERICANS ACT

ENTITLES AOA TO OBTAIN THEIR FINANCIAL SHARE OF FEDERALLY FUNDED PROPERTY

WHEN NO LONGER USED FOR INTENDED PURPOSES. OVER THE YEARS, WE HAVE

REPORTED THAT THIS HAS BEEN A PROBLEM WITH VARIOUS DEPARTMENT GRANT

PROGRAMS WITH SIMILAR PROVISIONS. IN OUR REVIEW, WE EXAMINED THREE STATES TO DETERMINE WHAT STEPS THESE STATES WERE TAKING TO TRACK REAL ESTATE FUNDED BY THE AGING PROGRAMS AND WHETHER APPROPRIATE PROCEDURES WERE IN PLACE TO PROTECT OUR INVESTMENT INTEREST IN THESE PROPERTIES.

WE FOUND THAT AN INADEQUATE MANAGEMENT INFORMATION SYSTEM HINDERS THE

ABILITY OF AOA TO ENSURE THAT THE FEDERAL GOVERNMENT WILL RECEIVE ITS FAIR SHARE - THE ORIGINAL INVESTMENT AND ITS SHARE OF THE INCREASED VALUE - IN THE EVENT THAT THE PROPERTIES ARE SOLD OR CEASE TO BE USED TO PROVIDE SERVICES TO SENIOR CITIZENS. NONE OF THESE STATES HAD ADEQUATE PROCEDURES TO ENSURE THAT OUR FINANCIAL INTEREST WAS FULLY PROTECTED, AND ONLY ONE STATE MAINTAINED A INVENTORY LISTING OF MULTIPURPOSE SENIOR CENTERS. WE HAVE IDENTIFIED PROPERTIES WITH THE FEDERAL SHARE OF MARKET VALUES ESTIMATED AT $38 MILLION IN THESE THREE STATES ALONE THAT POTENTIALLY ARE AT RISK OF BEING LOST. WE COULD NOT IDENTIFY OR ESTIMATE WITH ANY ACCURACY THE TOTAL FINANCIAL RISK NATIONWIDE BECAUSE OF THE INADEQUACY OF PROPERTY RECORDS.

THE AOA AGREED WITH OUR ASSESSMENT OF THE PROBLEM AND ACCORDINGLY REPORTED IT AS A MATERIAL WEAKNESS IN THE SECRETARY'S 1990 REPORT UNDER FMFIA. AS PART OF ITS CORRECTIVE ACTION PLAN, AOA HAS ISSUED GUIDANCE TO THE STATES REQUIRING THEM TO HAVE A SYSTEM TO RECOVER FUNDS, WHEN APPROPRIATE

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ADDITIONALLY, AOA HAS INSTRUCTED ITS REGIONAL OFFICES TO INSURE THAT REQUIRED INVENTORIES ARE MAINTAINED. THE TARGET DATE POR COMPLETION OF

CORRECTIVE ACTION IS SEPTEMBER 1991.

DISCRETIONARY GRANTS

NOW I WOULD LIKE TO TURN TO THE TOPIC OF DISCRETIONARY GRANTS. WE EXAMINED THIS ISSUE FROM TWO DIFFERENT PERSPECTIVES: MONITORING AND DISSEMINATION OF

GRANT RESULTS.

FIRST, WE ASSESSED THIS PROCESS FROM THE PERSPECTIVE OF AWARDING AND MONITORING. WE FOUND THAT AOA WAS NOT ALWAYS ADHERING TO ESTABLISHED POLICIES AND PROCEDURES POR MONITORING DISCRETIONARY GRANTS. THE AOA AGREED WITH OUR RECOMMENDATIONS THAT OUR FINDINGS BE INCLUDED IN THE SECRETARY'S REPORT TO CONGRESS AS A MATERIAL WEAKNESS.

THE AOA HAS DEVELOPED A CORRECTIVE ACTION PLAN WHICH INCLUDES MONITORING

GRANTEE PERFORMANCE THROUGH AN ON-GOING EVALUATION OF PROGRESS AND FINANCIAL REPORTS SUBMITTED QUARTERLY BY GRANTEES. IN ADDITION, THE PRESIDENTS BUDGET FOR FY 1992 HAS INCLUDED MORE RESOURCES FOR THIS PURPOSE

WE ARE ALSO EXAMINING THE TOPIC OF DISCRETIONARY GRANTS FROM THE PERSPECTIVE OF WHETHER SUCCESSFUL GRANT RESULTS ARE EFFECTIVELY BEING DISSEMINATED TO OTHER PERSONS IN THE FIELD AS MANDATED BY TITLE IV.

OUR INITIAL FINDINGS ILLUSTRATE THAT SUCCESSFUL GRANT RESULTS ARE NOT

GETTING OUT TO OTHERS IN THE FIELD. ONE OF THE DISTINGUISHING CHARACTERISTICS OF AOA 'S DISCRETIONARY FUNDS PROGRAM IS THE WIDE VARIETY OF GRANTEES,

WHICH RANGE FROM SMALL NONPROFIT COMMUNITY ORGANIZATIONS TO MAJOR NATIONAL GERONTOGICAL ASSOCIATIONS AND UNIVERSITIES. AS A RESULT, THE CAPABILITIES OF THESE ORGANIZATIONS TO CARRY OUT EFFECTIVE DISSEMINATION

VARY:

FURTHER, IN EVALUATING GRANT APPLICATIONS, THE VALUE AOA ASSIGNS TO

DISSEMINATION ACTIVITIES HAS DECLINED, BUT THE REQUIREMENTS ON DISSEMINATION HAVE BECOME MORE SUBSTANTIAL WE HAVE FOUND THAT THE GRANTEES ARE DISSEMINATING THE RESULTS OF THEIR ACTIVITIES, BUT THAT THE DISSEMINATION PLANS DO NOT GO FAR ENOUGH TO ASSURE THAT PROJECT RESULTS ARE REACHING THE PEOPLE MOST LIKELY TO USE THEM.

RESPONDENTS IN OUR STUDY NOTED A NUMBER OF PROBLEMS WITH AOA'S

DISSEMINATION EFFORTS WHICH RESULT IN AOA PURSUING A BROAD DISSEMINATION

STRATEGY WITH TOO LIMITED RESOURCES. CONGRESS WITHDREW AUTHORIZATION FOR THE AGENCY'S OWN INFORMATION CLEARINGHOUSE IN 1982 AND AOA HAS NOT HAD A STAFF DEVOTED TO DISSEMINATION SINCE THEN. IN ADDITION, FUNDING FOR THE TITLE

IV PROGRAM HAS BEEN REDUCED FROM A HIGH OF $54 MILLION IN 1980 TO $26 MILLION

THIS YEAR.

WE WOULD LIKE TO POINT OUT THAT EVEN WITH THESE LIMITED RESOURCES, AOA HAS

TRIED TO MAINTAIN A WIDE RANGE OF DISSEMINATION ACTIVITIES ALONG WITH THEIR

OTHER DUTIES. HOWEVER, WE BELIEVE GREATER EMPHASIS SHOULD BE GIVEN TO THIS

FUNCTION SINCE THE DISSEMINATION OF GOOD, COST-EFFICIENT AND EFFECTIVE

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