REVERSIONARY INTEREST IN REAL PROPERTY USED AS MULTIPURPOSE SENIOR CENTERS IS BEING PROTECTED BY A0A; 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 A¤A'S ABILITY TO PERFORM SITE VISITS, A0A 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.

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 PRESIDENT'S 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

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 RECIPIENT'S 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