Mandy HeitzBudget Officer

California Department of Aging

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Overview of Topics That Will Be Covered

• Description of the Intrastate Funding Formula (IFF)

• Description of Federal and State Laws that Govern the IFF

• Part One of Allocation Process– Distribution of Federal Funds & State Match– Calculation of Federal Amount to Allocate

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Overview of Topics That Will Be Covered (Continued)

– Allocation Calculations– Tests in the IFF– Federal Law– Definition of Terms and Factors

• Part Two of Allocation Process– Distribution of Local Administration & Non-

match General Fund– State Law

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Overview of Topics That Will Be Covered (Continued)

• Contract Amendment Process

• Scenarios

• Wrap-up & Questions

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Description of the IFF

• 2009-13 State Plan IFF Description• Per Title III of the Older Americans Act the

CDA is required to develop a formula to distribute Title III Funds within CA

• The Intrastate Funding Formula or “IFF” is this formula

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Laws the Govern the IFF

Two Main Sources of Law Govern the IFF:

1) The Federal Older Americans Act, Sec. 305 (Title 42, Chapter 35,Subchapter III, Part A, Section 3025)

2) Older Californians Act

(Welfare & Institutions Code 9112)

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Laws That Govern the IFF

• These laws create a two-part allocation process

• Federal law dictates the allocation of federal and State matching funds

• State law dictates the allocation of Local Administration and Non-match General Fund

• These laws plus litigation shape the allocation methodology

• Excerpts of the codes are in your packets7

Determining the Federal Amount to Allocate

• CDA must estimate what the Federal grant award will be due to:– The difference between the State and Federal

Fiscal Years– The fact the grant award comes in multiple pieces– The final award amount isn’t available until the

final month of the federal fiscal year

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Determining the Federal Amount to allocate (Continued)

• Typically the award estimate is based on the final grant award from the previous Federal Fiscal Year

• The amount in the Planning Estimate will be updated with new information for the Original Area Plan Contracts

• The differences between the amount in the Original Contract and the actual award goes out in the Amendment process

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Federal Grant Calculation- Local Assistance Amount

Estimated Grant Award- 5% for State Operations- Funding for Ombudsman Program+ $600,000 from State Operations Amount Amount Available for Local Assistance

• 10% of this amount is allocated to Local Area Administration, the rest goes to Program

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Federal Grant Calculation- Comment on CDA’s State Ops

• Since we are using an estimated State Operations number, and further reduce that amount by $600,000, the CDA actually takes less than 5% for Administration.

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Federal Program Funding Allocation Process

• Once the amounts available for allocation to local programs are determined, they are entered into the IFF by program and are distributed based on the applicable Federal factors

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OAA Section 305

• Specifies IFF must use best available data on the geographical distribution of older individuals in the state

• Must account for greatest economic and social need with attention to low-income and minority older individuals

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Definition of Terms

• “Greatest Economic Need” means a need caused by an income at or below the poverty line

• “Greatest Social Need” means a need caused by non-economic factors which include– Physical and mental disabilities– Language barriers

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Definition of Terms (Continued)

– And cultural, social, or geographical isolation caused by racial or ethnic status, that• Restricts the ability of an individual to

perform daily tasks, or• Threatens the capacity of the individual to

live independently

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Factors and Data

• The IFF uses a group of weighted factors to implement the requirements of the OAA

• Factors are meant to measure a PSA’s relative proportion of indicators of need

• Weights are meant to ensure certain indicators are given “preference” & “particular attention”

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IFF Factors (Continued)• When combined these factors & weights

result in an allocation consistent with the OAA• Data comes from

– CA Department of Finance (updated annually)– US Administration on Aging Census Data– CA Dept. of Health Care Services (updated

annually)

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IFF FactorsIndividuals Source Factors WeightsGreatest Economic Need U.S. Census 60+ Low Income 2.0

Greatest Social NeedDOF Projection Data 60+ Minority 2.0

Greatest Social Need U.S. Census60+ Geographically Isolated 1.5

Other IndividualsDOF Projection Data 60+ Non Minority 1.0

Medical Underserved (III D only)

CA Dept. of Health Services 60+ Medi-Cal Eligible 1.0

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Weighted IFF FactorsIndividuals Rural Areas Other Areas

Low Income Minority 5.5 4.0

Low Income (Non-Minority) 4.5 3.0

Minority (Not Low Income) 3.5 2.0

Other Individuals 2.5 1.0

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Federal Program Funding Allocation Process (Continued)

• Once the initial Federal allocation has been determined, the combined III B, C1, & C2, federal program allocations are checked against the “Year 2000” test to meet minimum funding requirement

• If a PSA fails to meet the minimum funding requirement it gets its Year 2000 base amount

• Remaining allocations are re-calculated to exclude that PSA

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Part Two- The State Allocation Process

• The CDA estimates the amount of State General Fund available for allocation using the Proposed Governor’s Budget

• These amounts are not guaranteed and funding changes may result in adjustments to Original Contracts via an Amendment

• The entire 5% State match requirement for the Title III grant is being made using Nutrition General Fund & is distributed on Federal factors

• Allocation methodology for remaining funds is dictated by WIC 9112

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Allocation of Local Administration

• The funding for Local Administration consists of Federal Local Admin funds (as determined by the initial grant allocation) & the State General Fund amount designated for Local Admin

• WIC 9112 mandates:– A $50,000 base for each PSA– Remaining funds to be distributed by the

population of individuals 60+

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Allocation of Local AdministrationContinued

• Once the total amount of Local Admin is calculated per PSA, it is divided into types of funding (C1 Federal, C1 General, C2 Federal, etc.) by applying the percentage of each type of funding available to each PSA’s allocation

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Final Steps in the Allocation Process

• Once Local Admin and the State match are calculated, the remaining General Funds are allocated per WIC 9112

• The amount of General Fund available once local admin and match have been allocated is termed “Overmatch”

• Overmatch is used to bring each PSA up to its Maintenance of Effort Level (MOE)

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Maintenance of Effort

• The MOE is calculated by comparing the Original Contract amounts for III B, C1, C2, D and Title VII Elder Abuse to the total initial allocation amounts for the same categories for the current year’s allocation

• If a PSA falls below its MOE level, it is given Overmatch to make up the difference

• Only PSAs that fall below MOE get Overmatch

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Maintenance of Effort Continued

• If there is not enough Overmatch to bring all PSAs up to MOE, PSAs are funded to the level of funding that is available

• Each PSA would receive the same percentage of the amount needed to bring it up to MOE (for example, everyone may get 50% of the funds they need to make MOE)

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Surplus Overmatch & the 1984-85 Hold Harmless Test

• If there is enough Overmatch to meet MOE, the additional funding is termed “Surplus Overmatch”

• If MOE is fully met, the allocations are tested to make sure they meet the 1984-85 Hold Harmless test

• The Hold Harmless test looks at the allocations for IIIB, C1, C2, D, and part of Title VII and compares them to the amounts listed in your handout

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Hold Harmless Continued

• If a PSA falls below its Hold Harmless level, Surplus Overmatch is used to bring it up to the 1984-85 level

• If there is not enough Surplus Overmatch available to bring a PSA up to its Hold Harmless level, the test is met by reducing the amount of Overmatch each PSA received

• This reduces the percentage level that MOE is funded at, and Overmatch is recalculated

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The Washington Formula

• Comes into play when Surplus Overmatch exists

• Adopted from the methodology Washington State used

• Consists of 7 Factors each of which is assigned a percentage used to calculate the final value used for the allocation distribution

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The Washington Formula (Continued)

Factor Percentage

60 + Population 20%

65+ SSI/SSP Population 35%

75+ Population 15%

60+ Minority Population 10%

Square Miles 10%

60+ Lives Alone Population 7%

60+ Non-English Speaking 3%

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Surplus Overmatch

• All PSAs participate in Washington unless they received funds from the Hold Harmless test

• Once Washington is run, this completes the allocation process for regular Title III Federal and State General Funds. NSIP & Ombudsman have their own allocation methodologies.

• All allocation amounts are then entered into budget displays & become part of the contract

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The Amendment Process

• Original Contracts are adjusted via the Contract Amendment Process

• Amendments are done to reallocate unspent federal funding from the previous year, to respond to changes in State funding, and to allocate grant reconciliation funding

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Prior Year Unexpended Federal Funds

• PSAs receive up to 5% of their unspent prior year allocated amounts per program (as calculated by the CDA budget unit)

• Remaining prior year funds (carryover) are reallocated to each PSA based on its factors

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Grant Reconciliation OTO

• Grant reconciliation is the result of the difference between the State and federal fiscal years and the difference between the estimated and final federal grant awards

• State contracts include funding from two federal fiscal years and the amounts estimated to be available for those years may not be the actual final amount of the grant

• OTO is allocated purely on factors

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Funding Scenarios/Aberrations

• Policies in the IFF may produce allocations that could appear odd when compared to previous allocations

• This section will answer some of the common questions we get regarding allocations

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Question #1

Question #1- Why does my allocation look lower than expected? What happened to the MOE?

• Check to see if you are comparing the correct numbers. MOE checks Original Contract amount for federal & state funds (exclusive of admin) for III B, C1, C2, D, & part of VII.

• This is different than guaranteeing a set amount of funding like the 1984-85 test, or a certain amount of funding by program since it checks the total.

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Question #1 Continued

• It is hard to compare year-end totals since they contain OTO.

• OTO includes carryover and grant reconciliation that can distort the final funding received in a fiscal year.

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Question #2

Question #2- Why does it look like my C1 & C2 General Fund went up or down?

• This is due to the role of General Fund• First role is to provide the 5% match• Remainder is for MOE, then Washington• MOE requirement is dependent on a PSA’s

population characteristics and how the level of Federal funding is changing

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Question #2 Continued

• Even if Federal grant is increasing, a PSA’s Federal funds may fall due to changes in the characteristics of the PSA’s population

• If a PSA requires Overmatch for MOE & it is available, they will get a greater amount of General Fund than in previous years

• The opposite is true as well, what may look like a decrease in General Fund, may be a total increase in overall funding because the Federal funds grew

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Question #2 ContinuedYEAR PSAs NEEDING

OVERMATCHMOE %

2008/09 22 90%

2009/10 19 81.5%

2010/11 10 100% plus Washington was run

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Question #2 Continued

• When sufficient Overmatch is available, negative factor changes are muted and will not be fully felt until a year when MOE cannot be funded at 100%

• Effects of MOE not being fully funded will be on-going, unless the PSA’s factors increase or the Federal grant increases substantially since the new MOE level is based on the previous year’s reduced allocation

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Question #3

Question #3- Why is my allocation going down if my factors are the same or increasing?

• Even if your factors are stable or increasing, you may still get a lower allocation because they may not be growing at the same rate as the State as a whole

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Question #3 Continued

• Your allocation is based on a relative percentage, so your allocation can go down even if your population is growing

• The relative size of a PSA may magnify the differences in populations. Smaller PSA’s growth may be dwarfed when compared to the level of growth experienced by a large PSA.

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Wrap Up

Feel free to email any questions particular to your allocations at: mheitz@aging.ca.gov

General Questions?

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List of Handouts Provided

• California Department of Aging Intrastate Funding Formula (IFF) Descriptive Statement of Formula from the 2009-13 State Plan on Aging

• Federal Year 2000 Test• 1984/85 Hold Harmless Levels• IFF Federal Regulations Excerpt• Welfare and Institutions Code 9112• Summary of Allocation Process

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