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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 IF 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 FOR 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 FOR 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 S54 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

PROGRAMS BENEFITS EVERYONE IN THE LONG RUN. WE HAVE SENT THE DRAFT REPORT

CONTAINING OUR FINDINGS ON DISSEMINATION TO AOA FOR THEIR REVIEW AND

COMMENT.

COST SHARING

BEFORE CLOSING, I WOULD LIKE TO PRESENT OUR FINDINGS ON A FOURTH REPORT

THAT WE BELIEVE IS OF INTEREST TO THE SUBCOMMITTEE. WE RECENTLY UNDERTOOK

A STUDY TO ASSESS THE EXPERIENCE OF STATE PROGRAMS FOR THE ELDERLY WHICH

PROVIDE IN-HOME AND ADULT DAY CARE SERVICES ON A COST SHARING BASIS.

WE SELECTED EIGHT STATES WITH COST SHARING PROGRAMS IN PLACE AND FOUR

STATES WITH OUT SUCH PROGRAMS. WE INTERVIEWED OVER 160 RECIPIENTS WHO ARE

CURRENTLY COST-SHARING FOR THEIR IN-HOME AND ADULT DAY CARE SERVICES IN

THE COST-SHARING STATES WE SELECTED. NEARLY 90 PERCENT OF THE RECIPIENTS

INTERVIEWED CONSIDER IT FAIR THAT THEY HAVE TO PAY SOMETHING FOR THE

SERVICES THEY RECEIVE. IN ADDITION, OVER 90 PERCENT OF THE RECIPIENTS WE

INTERVIEWED REPORTED THAT THE SERVICES THEY RECEIVE ARE WORTH WHAT THEY

PAY FOR THEM.

RECIPIENTS WERE ALSO SATISFIED WITH THE AMOUNT OF MONEY THEY WERE EXPECTED

TO PAY AND WITH THE WAY THEIR SHARE WAS CALCULATED. TYPICALLY, INCOME

RELATED SLIDING FEE SCALES ARE USED TO DETERMINE A RECIPIENTS SHARE, BASED

ON SELF-DECLARED INCOME OF THE RECIPIENT. FEW RECIPIENTS FOUND IT A HARDSHIP

TO PAY THEIR SHARE, AND MOST SAID THAT PROVIDERS HAD TAKEN THEIR FINANCIAL

CIRCUMSTANCES INTO ACCOUNT AND HAVE MADE EVERY EFFORT TO PROVIDE NEEDED

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