United States General Accounting Office
GAO Report to Congressional Requesters
February 2003
FORMULA GRANTS
2000 Census
Redistributes Federal
Funding Among States
GAO-03-178
February 2003
FORMULA GRANTS
2000 Census Redistributes Federal
Highlights of GAO-03-178, a report to Funding Among States
Congressional Requesters
In fiscal year 2000, about $283 The 2000 census count of 281.4 million people exceeded the 1999 population
billion in federal grant money was estimate by 8.7 million people, or 3.2 percent. Three-quarters of this 1-year
distributed to state and local population increase, 6.8 million people, was the result of correcting errors in
governments by formula, about half population estimates over the preceding decade; the remaining portion of the
of it through four formula grant increase, 1.9 million people, was the result of population growth from 1999 to
programs—Medicaid, Foster Care 2000. Every state’s population had been underestimated during the 1990s, but
Title IV-E, Adoption Assistance, the extent varied, from the smallest correction in West Virginia—0.3 percent—to
and the Social Services Block the largest in the District of Columbia—10.2 percent. Twenty-eight states had a
Grant (SSBG). States receive correction below the national average of 2.5 percent, and 23 states had a
money based in part on factors correction above the national average.
such as annual population
estimates derived from the
Correcting population estimates for the 2000 census redistributes among states
previous decennial census, which
is conducted by the Department of about $380 million in federal grant funding for Medicaid, Foster Care, Adoption
Commerce, Bureau of the Census. Assistance, and SSBG. Funding for the 28 states that had below-average
GAO was asked to measure the corrections to their populations decreases by an estimated $380.3 million;
effect that using the 2000 census funding for the 23 states that had above-average corrections increases by an
data has on redistributing funding estimated $388.8 million. Most of the change in funding is concentrated in states
for federal formula grant programs. with larger populations. However, changes in funding are smaller in several
To do this, GAO analyzed the large states because the matching rates for Medicaid, Foster Care, and Adoption
change in the U.S. and state Assistance are limited by statute—matching rates cannot fall below 50 percent.
populations between 1999 and 2000 Some higher-income states would receive matching rates below 50 percent if not
that was the result of correcting for this limitation. Most of the shift in funding occurs in fiscal year 2003 when
prior population estimates and
federal matching rates for the Medicaid, Foster Care, and Adoption Assistance
estimated for the four programs the
extent of any redistribution of programs are based on population estimates derived from the 2000 census. A
federal funding among states. small portion of the shift occurred in fiscal year 2002 because that is when the
SSBG began using the 2000 census counts.
The Department of Commerce provided technical comments on a draft of this
report.
www.gao.gov/cgi-bin/getrpt?GAO-03-178.
To view the full report, including the scope
and methodology, click on the link above.
For more information, contact Kathryn G.
Allen at (202) 512-7114.
Contents
Letter 1
Results in Brief 3
Background 4
Most of Population Difference Between 1999 and 2000 Resulted
from Correction of Errors That Occurred During 1990s 8
2000 Census Correction of Population Estimates Redistributes an
Estimated $380 Million Among States for Four Formula Grant
Programs 12
Agency Comments 16
Appendix I Data for Population Estimates, Decennial Census
Population Counts, and the Error of Closure 17
Appendix II Analysis of Estimated Funding Changes for Four
Formula Grant Programs 21
Medicaid, Foster Care, and Adoption Assistance 21
Social Services Block Grant 29
Tables
Table 1: Definition of Population Terminology Used in This Report 5
Table 2: Federal Formula Grant Program Funding for Fiscal Year
2000 6
Table 3: Population Data Used in Four Selected Formula Grant
Programs, by Fiscal Year 7
Table 4: Estimated Changes in Federal Funding as a Result of the
Correction in Population, by Grant Program 13
Table 5: Comparison of the 1999 Postcensal Population Estimates
and the 2000 Census Counts 17
Table 6: Comparison of the 2000 Postcensal Population Estimates
and the 2000 Census Counts to Determine the Error of
Closure and the Percentage Correction in Population 19
Table 7: Actual and Estimated FMAPs for the Medicaid, Adoption
Assistance, and Foster Care Programs for Fiscal Year 2003,
by State 22
Table 8: Medicaid Program Expenditures and Estimated Federal
Payments, by State 24
Table 9: Foster Care Program Expenditures and Estimated Federal
Payments, by State 26
Page i GAO-03-178 Federal Formula Grant Funding
Table 10: Adoption Assistance Program Expenditures and
Estimated Federal Payments, by State 28
Table 11: SSBG State Allocations, Actual and Estimated, for Fiscal
Year 2002 30
Figure
Figure 1: Percentage Difference in Population Due to the
Correction of the Error in Population Estimates, by State,
on April 1, 2000 11
Abbreviations
FMAP Federal Medical Assistance Percentage
SSBG Social Services Block Grant
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Page ii GAO-03-178 Federal Formula Grant Funding
United States General Accounting Office
Washington, DC 20548
February 24, 2003
The Honorable Tom Davis
Chairman, Committee on Government Reform
House of Representatives
The Honorable Adam H. Putnam
Chairman, Subcommittee on Technology, Information Policy,
Intergovernmental Relations, and the Census
Committee on Government Reform
House of Representatives
The Honorable Dave Weldon
House of Representatives
In fiscal year 2000, the federal government obligated about $332 billion in
grants to state and local governments to help fund an array of programs
ranging from Medicaid to Highway Planning and Construction. Over 85
percent, or about $283 billion, of this grant money was distributed to state1
and local governments using formulas that are based on data such as state
population and personal income. For example, the $196 billion federal-
state Medicaid program finances health care to low-income families with
children and aged, blind, and disabled individuals through a statutory
formula based on state per capita income—the ratio of total personal
income to state population.
To calculate grant amounts, formula grant programs generally rely on
annual population estimates for each state developed by the Bureau of the
Census. State populations are estimated by adding to the prior year’s
population estimate the number of births and immigrants and subtracting
the number of deaths and emigrants. These estimates are subject to error,
mainly because migration between states and between the United States
and other countries is difficult to measure. By the end of each decade,
when the decennial census is taken, a significant gap may have arisen
between the population estimate and the census population count for the
same day of the year, such as April 1, 2000.
1
For this report, we use “state” to refer to the 50 states and the District of Columbia.
Page 1 GAO-03-178 Federal Formula Grant Funding
When population data based on a new census enter into federal formula
grant calculations, states gain or lose funding depending on how the gaps
between their population estimates and their census counts compare with
the U.S. average gap. The larger the gap between a state’s population
estimate and its census count, the larger the shift in funding is. For
formula grant programs that distribute a set amount of federal funding, the
gains in states with increased funding are offset by the losses in states
with decreased funding. For open-ended formula grant programs, such as
Medicaid, states with increased funding do not necessarily offset states
with decreased funding.
To measure the effect of using the 2000 census on the distribution of
formula grant funding among the states, you asked us to examine (1) the
change in the U.S. and each state’s population between 1999 and 2000 due
to correcting prior population estimates and (2) the extent of any
redistribution of federal funding among the states for four selected
formula grant programs as a result of the 2000 census.
To address these objectives, we used information on annual state
population estimates that were derived from the 1990 census and state
estimates that were derived from both the 1990 and 2000 censuses, as
reported by the Census Bureau. To estimate the error in population
estimates, we compared the April 1, 2000, population estimates based on
the 1990 census with the April 1, 2000, census counts. To determine the
effect of correcting the errors in population estimates on the distribution
of formula grant funding to the states, we analyzed 4 federal formula grant
programs of the 172 such programs identified in the Catalog of Federal
Domestic Assistance—Social Services Block Grant (SSBG), Medicaid,
Foster Care Title IV-E, and Adoption Assistance.2 We chose these 4
programs because their formulas use population estimates to distribute
federal assistance, and they represented almost half of all formula grant
funding (46 percent) in fiscal year 2000. The SSBG distributes a set
appropriation exclusively on the basis of population data. The 3
entitlement programs, Medicaid, Foster Care, and Adoption Assistance,
use per capita income—the ratio of personal income to state population—
in identical formulas to determine federal matching rates. We obtained
information on the formulas for these programs from the Department of
Health and Human Services, and we used funding data for each program
2
U.S. General Services Administration, Catalog of Federal Domestic Assistance
(Washington, D.C., December 2001 edition) (CD-ROM version).
Page 2 GAO-03-178 Federal Formula Grant Funding
for the fiscal year in which the program first used population data derived
from the 2000 census to calculate grant awards. To calculate the change in
formula funding resulting from correcting population estimates, we
compared what funding would be if formula grant amounts were
calculated using two different population estimates for the same year, one
based on the 1990 census and the other on the 2000 census. We conducted
our work from July 2001 through January 2003 in accordance with
generally accepted government auditing standards.
The 2000 census count of 281.4 million people exceeded the 1999
Results in Brief population estimate by 8.7 million people, or 3.2 percent. Three-quarters of
this 1-year population increase, 6.8 million people, was the result of
correcting errors in population estimates over the preceding decade; the
remaining portion of the increase, 1.9 million people, was the result of
population growth from 1999 to 2000. The error corrected by the 2000
census was substantially larger than the error reported for the 1990
census—2.5 percent compared with 0.6 percent. The Census Bureau
attributed the increase in the 2000 “error of closure” to underestimates in
the measurement of net international migration and the increased
accuracy of the 2000 census—it counted people who were probably
missed in the 1990 census. Every state’s population had been
underestimated during the 1990s, but the extent varied widely: the largest
correction was in the District of Columbia—10.2 percent—and the
smallest, West Virginia—0.3 percent. Twenty-eight states had a correction
below the national average of 2.5 percent, and 23 states had a correction
above the national average. Of the four Census regions (Northeast, South,
Midwest, and West), only the Midwest showed a pattern: all 12 midwestern
states were close to or below the U.S. average correction to the
population. Overall, the Midwest’s correction was the smallest of the four
regions—1.5 percent.
Correcting population estimates based on the 2000 census redistributes
about $380 million in federal grant funding among states for the four
programs we examined. We estimate that funding for the 28 states that had
below-average corrections to their populations decreases by $380.3 million
in the first year the new population numbers are factored into the formula
grants; funding for the 23 states that had above-average corrections in
their population increases by an estimated $388.8 million. Most of the
change in funding is concentrated in states with larger populations.
However, several large states have only minor changes in funding because
the funding formula used by Medicaid, Foster Care, and Adoption
Assistance limits the effect of the population correction for high-income
Page 3 GAO-03-178 Federal Formula Grant Funding
states by applying a minimum 50 percent federal matching rate. Some
higher-income states would receive matching rates below 50 percent, but
because of the minimum they are guaranteed a rate no lower than 50
percent. Most of the shift in funding occurs in fiscal year 2003 when
federal matching rates for the Medicaid, Foster Care, and Adoption
Assistance programs are based on population estimates derived from the
2000 census. A minor portion of the shift occurred for fiscal year 2002
because the census counts were used in the SSBG that year.
The Department of Commerce provided technical comments on a draft of
this report, which we incorporated as appropriate.
The Census Bureau counts the U.S. population once every decade through
Background its decennial census. For the years in between, the Bureau estimates
states’ populations from annual data on changes in births, deaths, and net
migration (including net movements of military personnel). These annual
population estimates are called postcensal population estimates because
they are based on the prior census (see table 1 for definitions of different
population counts used in this report). This process of making annual
postcensal population estimates continues until the next census. Once the
new census is taken, the Bureau compares the population estimates to the
census population counts for the same date. The difference between the
population estimate and the census count is called the error of closure.
Subsequently, annual population estimates are revised for the prior decade
using the counts from the new census. For example, after the 2000 census,
the annual population estimates from the 1990s were revised to be
consistent with both the 1990 and 2000 censuses. These revised population
estimates are called the intercensal population estimates because they rely
on the preceding and the succeeding censuses.3
3
For more information about Census population estimates see Department of Commerce,
Bureau of the Census, Population Estimates: Concepts and Geography (Washington, D.C.:
Department of Commerce, Dec. 26, 2001),
http://eire.census.gov/popest/archives/place/concepts.php (downloaded Jan. 31, 2003).
Page 4 GAO-03-178 Federal Formula Grant Funding
Table 1: Definition of Population Terminology Used in This Report
Term Description
Census population A population count is made at the beginning of each decade
count as of April 1. It is based on a count of the entire population.
The latest census counted the population as of April 1, 2000.
Postcensal population Population estimates are made annually throughout a
estimate decade, usually as of July 1 of each year. Such estimates are
based on the prior census, and include annual population
changes due to births, deaths, and domestic and international
migration. The postcensal population estimates for July 1,
2001, were based on the April 1, 2000, census and the
population change between April 1, 2000, and June 30, 2001.
Error of closure The error of closure is the difference between the postcensal
population estimate and census population count for the
same date. For example, the error of closure for April 1, 2000,
is the difference between the postcensal population estimate
and the census population count for April 1, 2000.
Intercensal population Once a new census is completed, the annual population
estimate estimates of the prior decade (the postcensal population
estimates) are adjusted to reflect the new census counts. The
resulting population estimates, known as intercensal
population estimates, are calculated using a mathematical
formula that distributes the error of closure across the
postcensal population estimates for the prior decade.
Intercensal population estimates thus have been adjusted
according to counts at both the beginning and the end of the
decade. The intercensal population estimates for 1990
through 1999 were issued in April 2002.
Source: Department of Commerce, Bureau of the Census.
Of the four programs we analyzed, Medicaid is the largest, comprising 43
percent of all federal formula-based programs and 94 percent of the total
funding for the four programs analyzed for this report (see table 2).
Page 5 GAO-03-178 Federal Formula Grant Funding
Table 2: Federal Formula Grant Program Funding for Fiscal Year 2000
Fiscal year 2000
a
federal obligations Percentage of total
Program (millions) federal obligations
Medicaid $121,809 43.0
Foster Care Title IV-E 4,536 1.6
Adoption Assistance 1,008 0.4
SSBG 1,775 0.6
Remaining 168 formula programs 154,221 54.4
Total obligationsb 283,348 100.0
Source: U.S. General Services Administration, Catalog of Federal Domestic Assistance (Washington, D.C.: December 2001 edition)
(CD-ROM version).
Note: Federal obligations do not add to total because of rounding.
a
The obligated amounts shown here will differ slightly from the amounts allocated by formula. The
obligations of the allocations may occur in years other than when the allocations occurred.
b
Total obligations include 23 programs that are both formula and project grants.
The SSBG formula allocates an amount of funding, set by annual
appropriation, directly to the states. A state’s allocation is proportional to
its share of the total U.S. population. State allocations for fiscal year 2002
used the April 2000 census, and allocations for prior years used postcensal
population estimates that were based on the 1990 census.
In contrast with the SSBG’s fixed appropriation, the Medicaid, Foster
Care, and Adoption Assistance programs are open-ended entitlement
programs—the states determine the level of program expenditures, and
the federal government reimburses a share of their expenditures according
to matching rates, called the Federal Medical Assistance Percentages
(FMAP), set by statutory formula. All three programs use the same
formula, which is based on a 3-year average of state per capita income—
the ratio of aggregate personal income to state population. As a state’s per
capita income increases, its matching rate decreases, and vice versa. In
addition, unless a state experiences changes in aggregate personal income,
its federal payment generally declines if the state’s population growth is
less than the national average. Matching rates range from a minimum of 50
percent to a maximum of 83 percent of a state’s Medicaid expenditures.
The minimum 50 percent rate affects only the high per capita income
states. For fiscal year 2002, for example, a high-income state such as
Connecticut would receive a 15 percent federal matching rate if the 50
percent minimum was not in place.
Page 6 GAO-03-178 Federal Formula Grant Funding
For fiscal year 2002, the federal matching rates for Medicaid, Foster Care,
and Adoption Assistance were based on a 3-year average of per capita
income from 1997 through 1999. Rates for fiscal year 2003 are based on a
3-year average from 1998 through 2000. Although the formulas use
overlapping years, the state population numbers used to compute per
capita income differ depending on which fiscal year the grant is for. For
these three programs, the fiscal year 2002 formula calculations used
postcensal population estimates derived from the 1990 census for 1997
through 1999 to calculate per capita income. Fiscal year 2003 formula
calculations used population estimates for 1998 through 2000 derived from
the 2000 census.4 Thus, the 2000 census affects matching rates for these
programs beginning in fiscal year 2003 (see table 3).
Table 3: Population Data Used in Four Selected Formula Grant Programs, by Fiscal
Year
Fiscal year allocation
or payment Data used
SSBG
2001a July 1998 postcensal state population estimatesb
c
2002 April 2000 decennial census by state
Medicaid, Foster Care, and Adoption Assistance
2002a July 1997, 1998, and 1999 postcensal state population
b
estimates
c d
2003 July 1998, 1999, and 2000 state population estimates
Sources: Department of Health and Human Services, Administration for Children and Families; and Department of Health and Human
Services, Office of the Assistant Secretary for Planning and Evaluation.
a
The last year the population estimates based on the 1990 census were used in the formula.
b
These postcensal population estimates are based on the 1990 census.
c
The first year that the counts based on the 2000 census were used in the formula.
d
These population estimates were published by the Department of Commerce’s Bureau of Economic
Analysis and were based on the 2000 census.
4
These population estimates were developed as interim estimates by the Department of
Commerce’s Bureau of Economic Analysis.
Page 7 GAO-03-178 Federal Formula Grant Funding
The difference between the 2000 census count and the 1999 postcensal
Most of Population population estimate was 3.2 percent, which is large compared with the 1
Difference Between percent average annual growth rate estimated over the preceding decade.
Most of the difference was due to the correction of the error that had
1999 and 2000 occurred during the 1990s. According to the Census Bureau, the size of the
Resulted from error was the result of an underestimate in the measurement of net
international migration during the 1990s and the improved coverage of the
Correction of Errors 2000 census compared with the 1990 census. Consequently, the postcensal
That Occurred During population estimate for 2000 was smaller than the 2000 census count.
1990s Every state’s population growth was underestimated and needed
correction, but the correction amounts varied widely. Among the four
Census regions, only the Midwest5 showed a consistent pattern: all 12
states were close to or below the national average correction. California,
Florida, and New York accounted for a high percentage of the correction
in population estimates in their respective regions.
Correcting Errors in The 2000 census count of 281.4 million people as reported by the Census
Population Estimates Bureau exceeded the 1999 postcensal population estimate by 8.7 million
Accounted for Three- people, or 3.2 percent. Slightly more than three-quarters of this difference
(2.5 percent) was the result of correcting errors in the population
Quarters of the Difference estimates that occurred over the decade, called the error of closure (see
Between 1999 to 2000 app. I for detailed data for all states). The error of closure was 6.8 million
people, substantially larger than the 1.5 million error of closure associated
with the 1990 census. The error of closure for the 2000 census was four
times the corresponding percentage error for the 1990 census (2.5 percent
compared with 0.6 percent).
The large error of closure in 2000 was due to underestimating the annual
growth in population during the 1990s and to the improved coverage of the
2000 census over the 1990 census. The postcensal population estimates for
the decade grew an average 1.0 percent annually. However, the 2000
census showed that the average annual growth rate in population was 0.2
percent higher than the estimated rate, or 1.2 percent. The Census Bureau
revised its annual population estimates upward when it released its
intercensal population estimates in the spring of 2002.
5
The 12 Midwest states are Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri,
Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.
Page 8 GAO-03-178 Federal Formula Grant Funding
The Census Bureau cited two reasons for the size of the error in its
postcensal estimated population growth through the 1990s. First, the net
international migration was underestimated during the decade, especially
for the Hispanic population. The Hispanic population was underestimated
by approximately 10 percent, four times higher than the national average
population underestimate, 2.5 percent.6 Second, the 2000 census was more
accurate than the 1990 census. The population undercount from the 2000
census was much smaller compared with the 1990 census (1.18 percent,
compared with 1.62 percent, making the 2000 census more accurate7); the
2000 census counted people who were probably missed in the 1990
census.
6
J. Gregory Robinson, Accuracy and Coverage Evaluation: Demographic Analysis Results
(Washington, D.C.: Department of Commerce, Bureau of the Census, March 2001), 9-11,
http://landview.census.gov/dmd/www/ReportRec.htm (downloaded Aug. 29, 2002).
7
The percentages are the net undercounts for the 1990 and 2000 censuses for household
population from the 1990 Post-Enumeration Survey and 2000 Accuracy and Coverage
Evaluation. Howard Hogan, Accuracy and Coverage Evaluation: Data and Analysis to
Inform the ESCAP Report (Washington, D.C.: Department of Commerce, Bureau of the
Census, March 2001), 12-14, http://landview.census.gov/dmd/www/ReportRec.htm
(downloaded Jan. 15, 2003).
Page 9 GAO-03-178 Federal Formula Grant Funding
Size of Population The error of closure shows a wide variation across states. For example,
Correction Differed Widely West Virginia and Michigan had the smallest percentage corrections, 0.27
Across States and 0.34 percent, respectively. The District of Columbia and Nevada had
the largest percentage corrections in their population estimates, 10.2
percent and 7.5 percent, respectively. Twenty-eight states had a lower-
than-average percentage difference, and 23 states had a greater-than-
average percentage difference (see fig. 1 for the correction percentages for
all states).
Among the four Census regions, the Midwest had the smallest correction
in population, 1.5 percent; all 12 Midwest states had corrections close to or
below the national average.8 In the other three regions, a single state
accounted for a large share of the population change for the region. For
example, in the South, Florida’s correction in population of 4.7 percent
constituted about 25 percent of the correction for the entire region.
Similarly, New York’s correction was 44 percent of the northeastern states’
correction, and California’s correction was 26 percent of the correction for
the western states.
8
Nebraska and South Dakota were 0.03 and 0.04 percentage points above the national
average, respectively.
Page 10 GAO-03-178 Federal Formula Grant Funding
Figure 1: Percentage Difference in Population Due to the Correction of the Error in Population Estimates, by State, on
April 1, 2000
West Virginia
Michigan
Ohio
Alaska
Kansas
California
Maine
Alabama
Kentucky
Maryland
Washington
Wisconsin
Iowa
Montana
Missouri
North Dakota
Indiana
Virginia
New Hampshire
Vermont
Illinois
Idaho
Louisiana
Minnesota
Oklahoma
Mississippi
Massachusetts
Pennsylvania
U.S. average correction, 2.5%
Nebraska
South Carolina
South Dakota
Oregon
Texas
Hawaii
New Jersey
Wyoming
Tennessee
Delaware
Connecticut
Utah
Georgia
New York
Arkansas
North Carolina
New Mexico
Colorado
Florida
Rhode Island
Arizona
Nevada
District of Columbia
0 1 2 3 4 5 6 7 8 9 10 11
Percentage
Source: GAO calculations based on data obtained from the Department of Commerce, Bureau of the Census.
Page 11 GAO-03-178 Federal Formula Grant Funding
The correction to the population estimates generally redistributes federal
2000 Census funding for the four programs we analyzed from the states with the
Correction of smallest corrections to those having the largest. Federal funding for the 28
states that had below-average corrections decreases by an estimated
Population Estimates $380.3 million. In contrast, federal funding in the 23 states with above-
Redistributes an average corrections to their population estimates increases by an
estimated $388.8 million. Most of the change in funding is concentrated in
Estimated $380 states with larger populations. Michigan and Ohio, for example, account
Million Among States for 57 percent of the total decrease in funding for states with below-
for Four Formula average population corrections. A number of high-income states, including
California and New York, are largely unaffected by the correction in their
Grant Programs populations because their matching rates for the Medicaid, Foster Care,
and Adoption Assistance programs cannot decrease below the minimum
50 percent matching rate. Without this minimum, more funding would be
shifted among the states. While the redistribution of funding in the four
programs began to occur in fiscal year 2002, almost all of it occurs in fiscal
year 2003, when the 2000 census data are used to determine federal
matching rates in the three open-ended entitlement programs.
Population Correction The correction in state populations resulting from the 2000 census causes
Causes Significant Funding significant changes in the funding levels among the states for the four
Changes for Many States programs we examined. We estimate that the funding for the 28 states that
had below-average corrections in their populations decreases by a total of
$380.3 million. Conversely, funding for the 23 states that had above-
average corrections in their populations increases by an estimated $388.8
million (see table 4).
Page 12 GAO-03-178 Federal Formula Grant Funding
Table 4: Estimated Changes in Federal Funding as a Result of the Correction in Population, by Grant Program
Dollars in thousands
Entitlement program
Percentage
correction in Social Services Adoption Total estimated
State population Block Grant Medicaid Foster Care Assistance change in funding
States below the U.S. average percentage correction of 2.50
West Virginia 0.27 $-240 $-13,105 $-142 $-38 $-13,526
Michigan 0.34 -1,272 -113,807 -2,311 -1,999 -119,389
Ohio 0.78 -1,150 -92,161 -2,562 -748 -96,620
Alaska 0.90 -59 -5,342 -66 -66 -5,534
Kansas 0.96 -244 -14,672 -218 -122 -15,256
California 1.08 -2,841 0 0 0 -2,841
Maine 1.49 -75 -8,124 -284 -55 -8,538
Alabama 1.51 -256 -12,442 -19 -2 -12,718
Kentucky 1.59 -215 -14,855 -169 -37 -15,275
Maryland 1.65 -263 0 0 0 -263
Washington 1.70 -277 -4,359 -25 -22 -4,682
Wisconsin 1.76 -232 -17,462 -311 -160 -18,165
Iowa 1.77 -124 -7,596 -151 -119 -7,989
Montana 1.77 -38 -1,351 -23 -7 -1,419
Missouri 1.86 -206 -17,177 -194 -71 -17,649
North Dakota 1.90 -22 -1,115 -17 -4 -1,157
Indiana 1.92 -205 -13,430 -166 -98 -13,899
Virginia 1.92 -242 -15,554 -189 -69 -16,054
New Hampshire 1.99 -37 0 0 0 -37
Vermont 2.03 -16 -1,757 -54 -18 -1,846
Illinois 2.06 -312 0 0 0 -312
Idaho 2.09 -32 -1,054 -4 -3 -1,093
Louisiana 2.18 -80 -4,168 -47 -11 -4,307
Minnesota 2.19 -90 0 0 0 -90
Oklahoma 2.20 -59 -1,844 -23 -12 -1,938
Mississippi 2.24 -43 -1,795 -4 -3 -1,844
Massachusetts 2.47 -6 0 0 0 -6
Pennsylvania 2.48 -1 2,078 64 9 2,149
Subtotal -8,639 -361,094 -6,914 -3,654 -380,300
States above the U.S. average percentage correction of 2.50
Nebraska 2.53 5 844 17 5 871
South Carolina 2.54 9 816 3 3 831
South Dakota 2.54 2 120 1 0 124
Oregon 2.63 27 4,433 42 39 4,540
Texas 2.71 242 14,911 140 63 15,356
Hawaii 2.73 19 2,056 31 20 2,125
New Jersey 2.75 124 0 0 0 124
Page 13 GAO-03-178 Federal Formula Grant Funding
Dollars in thousands
Entitlement program
Percentage
correction in Social Services Adoption Total estimated
State population Block Grant Medicaid Foster Care Assistance change in funding
Wyoming 2.77 8 547 6 1 562
Tennessee 3.08 192 19,976 102 35 20,305
Delaware 3.14 29 0 0 0 29
Connecticut 3.41 182 0 0 0 182
Utah 3.59 138 4,942 48 35 5,164
Georgia 3.65 528 32,841 266 167 33,803
New York 3.92 1,560 0 0 0 1,560
Arkansas 3.99 228 11,070 31 31 11,359
North Carolina 4.27 814 66,125 474 230 67,642
New Mexico 4.30 189 11,284 56 65 11,595
Colorado 4.55 495 0 0 0 495
Florida 4.68 1,968 121,783 1,281 537 125,569
Rhode Island 5.41 174 26,137 188 152 26,651
Arizona 5.77 932 42,721 525 354 44,532
Nevada 7.47 534 14,297 227 47 15,105
District of Columbia 10.23 242 0 0 0 242
Subtotal 8,639 374,902 3,439 1,786 388,766
Total 0 $13,808 $-3,475 $-1,868 $8,466
Sources: GAO calculations based on data obtained from the Department of Health and Human Services and the Department of Commerce, Bureau of the Census.
Note: Totals may not add because of rounding.
These results are dominated by a few highly populated states whose
corrections were among the largest—meaning they are estimated to
receive the most additional money or to lose the most. For example,
Michigan, the eighth most populous state,9 has an estimated $119 million
decline in funding because of its 0.34 percent correction in population.
Michigan’s federal funding decrease accounts for about one-third of the
decreases for the 28 states with a below-average correction in population.
Moreover, when Michigan’s decrease is combined with that of Ohio, the
seventh most populous state, the two states account for 57 percent of the
estimated total decline in funding from the corrections of the population
estimates. Conversely, Florida, the fourth most populous state, has the
largest estimated increase in funding (about $126 million) because of the
4.7 percent correction in its population estimate. This is almost double the
national average correction and accounts for about one-third of the
9
State population rankings are based on the 2000 census.
Page 14 GAO-03-178 Federal Formula Grant Funding
estimated increase for the 23 states with an above-average correction in
population.
Funding changes did not occur in some states and were muted in others
because the states’ federal matching rates were fixed by the minimum 50
percent rate for the three open-ended entitlement programs. For example,
on the basis of its fiscal year 2000 spending levels, California would
receive an estimated $305 million less in matching aid in the three
entitlement programs if its matching rate were allowed to fall below the
minimum. Because of the 50 percent minimum federal matching rate,
however, California only receives an estimated $2.8 million decrease—all
of it linked to the SSBG. For the three entitlement programs, the
correction in population had no effect in 11 states that were affected by
the 50 percent minimum, and for 2 states the correction in population had
a diminished effect because of the floor.10
The funding changes due to the population corrections showed little
regional pattern except in the Midwest, where all 12 states had a
correction in population estimates close to or below the national average
that resulted in an estimated $289.5 million loss in funding owing to the
correction in their populations.
Medicaid Accounts for Most of the change in funding resulting from the corrections in population
Most of the Change in estimates is the result of changes in Medicaid funding. The federal share of
Program Funding total Medicaid payments was approximately $111 billion in fiscal year 2000
and constituted 96 percent of the share of funding to the states for the four
programs and approximately 96 percent of the total estimated change in
funding as well.11
The SSBG distributed $1.69 billion for fiscal year 2002, representing 1.5
percent of the funding we analyzed. It accounted for a slightly higher
percentage, 2.2 percent, of the estimated funding changes. Finally, the
Foster Care and Adoption Assistance programs represented 1.6 and 0.6
10
The 11 states are California, Colorado, Connecticut, Delaware, Illinois, Maryland,
Massachusetts, Minnesota, New Hampshire, New Jersey, and New York. The two states
partially affected are Nevada and Washington. In addition, the District of Columbia
receives a special federal matching rate of 70 percent and consequently is unaffected by the
correction in population.
11
See appendix II for additional detail, by state, on the changes in federal matching rates
and estimated shifts in funding under each of the four programs.
Page 15 GAO-03-178 Federal Formula Grant Funding
percent of the funding, respectively. They account for 1.4 and 0.7 percent,
respectively, of the estimated funding changes for 2003.
The earliest effect of the 2000 census on any of the four programs we
analyzed occurred when it was used to calculate fiscal year 2002 SSBG
grants. For the Medicaid, Foster Care, and Adoption Assistance programs,
the 2000 census is first used for fiscal year 2003 payments.
We provided the Department of Commerce a draft of this report for
Agency Comments comment. The department provided technical comments, which we have
incorporated where appropriate.
As arranged with your offices, unless you release its contents earlier, we
plan no further distribution of this report until 30 days after its issuance
date. At that time, we will send copies of this report to interested
congressional committees; the Secretary of Commerce; the Secretary of
Health and Human Services; and the Director, Bureau of the Census. We
will also make copies available to others on request. In addition, the report
will be available at no charge on GAO’s Web site at http://www.gao.gov.
If you or your staffs have questions about this report, please call me at
(202) 512-7114 or Jerry Fastrup at (202) 512-7211. Major contributors to
this report are Gregory Dybalski, Elizabeth T. Morrison, and Michael Rose.
Kathryn G. Allen
Director, Health Care—Medicaid
and Private Health Insurance Issues
Page 16 GAO-03-178 Federal Formula Grant Funding
Appendix I: Data for Population Estimates,
Appendix I: Data for Population Estimates,
Decennial Census Population Counts, and the
Error of Closure
Decennial Census Population Counts, and the
Error of Closure
This appendix compares the postcensal population estimates for July 1,
1999, with the census count for April 1, 2000 (table 5), and compares the
April 1, 2000, postcensal population estimates (based on the 1990 census)
with the census counts (table 6). States are listed in tables 5 and 6 by the
magnitude of the percentage correction in population.
Table 5: Comparison of the 1999 Postcensal Population Estimates and the 2000 Census Counts
Population in thousands
Population count Difference
July 1, 1999,
State April 1, 2000, census postcensal estimate Population Percentage
States below the U.S. average percentage correction of 2.50
West Virginia 1,808 1,807 1 0.08
Michigan 9,938 9,864 75 0.76
Ohio 11,353 11,257 96 0.86
Alaska 627 620 7 1.20
Kansas 2,688 2,654 34 1.29
California 33,872 33,145 727 2.19
Maine 1,275 1,253 22 1.75
Alabama 4,447 4,370 77 1.77
Kentucky 4,042 3,961 81 2.04
Maryland 5,296 5,172 125 2.41
Washington 5,894 5,756 138 2.39
Wisconsin 5,364 5,250 113 2.16
Iowa 2,926 2,869 57 1.98
Montana 902 883 19 2.20
Missouri 5,595 5,468 127 2.32
North Dakota 642 634 9 1.35
Indiana 6,080 5,943 138 2.32
Virginia 7,079 6,873 206 2.99
New Hampshire 1,236 1,201 35 2.88
Vermont 609 594 15 2.54
Illinois 12,419 12,128 291 2.40
Idaho 1,294 1,252 42 3.38
Louisiana 4,469 4,372 97 2.22
Minnesota 4,919 4,776 144 3.01
Oklahoma 3,451 3,358 93 2.76
Mississippi 2,845 2,769 76 2.75
Massachusetts 6,349 6,175 174 2.82
Pennsylvania 12,281 11,994 287 2.39
States above the U.S. average percentage correction of 2.50
Nebraska 1,711 1,666 45 2.72
South Carolina 4,012 3,886 126 3.25
South Dakota 755 733 22 2.96
Page 17 GAO-03-178 Federal Formula Grant Funding
Appendix I: Data for Population Estimates,
Decennial Census Population Counts, and the
Error of Closure
Population in thousands
Population count Difference
July 1, 1999,
State April 1, 2000, census postcensal estimate Population Percentage
Oregon 3,421 3,316 105 3.17
Texas 20,852 20,044 808 4.03
Hawaii 1,212 1,185 26 2.20
New Jersey 8,414 8,143 271 3.33
Wyoming 494 480 14 2.96
Tennessee 5,689 5,484 206 3.75
Delaware 784 754 30 3.99
Connecticut 3,406 3,282 124 3.76
Utah 2,233 2,130 103 4.85
Georgia 8,186 7,788 398 5.11
New York 18,976 18,197 780 4.29
Arkansas 2,673 2,551 122 4.78
North Carolina 8,049 7,651 399 5.21
New Mexico 1,819 1,740 79 4.55
Colorado 4,301 4,056 245 6.04
Florida 15,982 15,111 871 5.76
Rhode Island 1,048 991 58 5.80
Arizona 5,131 4,778 352 7.37
Nevada 1,998 1,809 189 10.45
District of Columbia 572 519 53 10.22
United States 281,422 272,691 8,731 3.20
Source: Department of Commerce, Bureau of the Census, Population Estimates Division (Washington, D.C.), http://www.census.gov (downloaded Oct. 23, 2001).
Notes: The states are listed in order of increasing percentage of population correction. (See table 6.)
Totals may not add because of rounding.
The census is a population count made at the beginning of each decade as of April 1. It is based on a
count of the entire population. Postcensal population estimates are made annually throughout a
decade, usually as of July 1 of each year. Such estimates are based on the prior census and include
annual population changes due to births, deaths, and domestic and international migration.
Page 18 GAO-03-178 Federal Formula Grant Funding
Appendix I: Data for Population Estimates,
Decennial Census Population Counts, and the
Error of Closure
Table 6: Comparison of the 2000 Postcensal Population Estimates and the 2000 Census Counts to Determine the Error of
Closure and the Percentage Correction in Population
Population in thousands
April 1, 2000, population
Postcensal Percentage
estimate (based correction in
State Census count on 1990 census) Error of closure population
States below the U.S. average percentage correction of 2.50
West Virginia 1,808 1,804 5 0.27
Michigan 9,938 9,904 34 0.34
Ohio 11,353 11,265 88 0.78
Alaska 627 621 6 0.90
Kansas 2,688 2,663 26 0.96
California 33,872 33,513 359 1.08
Maine 1,275 1,256 19 1.49
Alabama 4,447 4,381 66 1.51
Kentucky 4,042 3,979 63 1.59
Maryland 5,296 5,211 85 1.65
Washington 5,894 5,796 98 1.70
Wisconsin 5,364 5,271 92 1.76
Iowa 2,926 2,876 51 1.77
Montana 902 887 16 1.77
Missouri 5,595 5,493 102 1.86
North Dakota 642 630 12 1.90
Indiana 6,080 5,967 114 1.92
Virginia 7,079 6,946 132 1.92
New Hampshire 1,236 1,212 24 1.99
Vermont 609 597 12 2.03
Illinois 12,419 12,169 250 2.06
Idaho 1,294 1,268 26 2.09
Louisiana 4,469 4,374 95 2.18
Minnesota 4,919 4,815 104 2.19
Oklahoma 3,451 3,377 74 2.20
Mississippi 2,845 2,783 62 2.24
Massachusetts 6,349 6,196 153 2.47
Pennsylvania 12,281 11,984 297 2.48
States above the U.S. average percentage correction of 2.50
Nebraska 1,711 1,669 42 2.53
South Carolina 4,012 3,913 99 2.54
South Dakota 755 736 19 2.54
Oregon 3,421 3,334 87 2.63
Texas 20,852 20,308 544 2.71
Hawaii 1,212 1,179 32 2.73
New Jersey 8,414 8,191 224 2.75
Wyoming 494 480 13 2.77
Page 19 GAO-03-178 Federal Formula Grant Funding
Appendix I: Data for Population Estimates,
Decennial Census Population Counts, and the
Error of Closure
Population in thousands
April 1, 2000, population
Postcensal Percentage
estimate (based correction in
State Census count on 1990 census) Error of closure population
Tennessee 5,689 5,520 169 3.08
Delaware 784 760 24 3.14
Connecticut 3,406 3,294 112 3.41
Utah 2,233 2,157 76 3.59
Georgia 8,186 7,903 284 3.65
New York 18,976 18,264 713 3.92
Arkansas 2,673 2,572 102 3.99
North Carolina 8,049 7,722 327 4.27
New Mexico 1,819 1,744 75 4.30
Colorado 4,301 4,117 185 4.55
Florida 15,982 15,276 707 4.68
Rhode Island 1,048 995 54 5.41
Arizona 5,131 4,855 276 5.77
Nevada 1,998 1,863 135 7.47
District of Columbia 572 519 53 10.23
United States 281,422 274,608 6,814 2.50
Sources: The postcensal population estimates for April 1, 2000, are from unpublished data provided by Department of Commerce, Bureau of the Census, Population Estimates Division. The April 1, 2000,
census counts are from the Bureau of the Census, http://www.census.gov (downloaded Oct. 23, 2001).
Notes: The states are listed in order of increasing percentage of population correction.
Totals may not add because of rounding.
The census is a population count that is made at the beginning of each decade as of April 1. It is
based on a count of the entire population. Postcensal population estimates are made annually
throughout a decade, usually as of July 1 of each year. Such estimates are based on the prior census
and include annual population changes due to births, deaths, and domestic and international
migration. The error of closure is the difference between the postcensal population estimate and the
census population count for the same date. The percentage correction in population is calculated by
dividing the error of closure by the July 1, 1999, postcensal population estimate.
Page 20 GAO-03-178 Federal Formula Grant Funding
Appendix II: Analysis of Estimated Funding
Appendix II: Analysis of Estimated Funding
Changes for Four Formula Grant Programs
Changes for Four Formula Grant Programs
This appendix contains the supporting data for our calculations of the
estimated change in funding due to correcting the population estimates.
Specifically, for each state, we provide the funding amounts for the four
programs and the estimated funding changes due to the correction in
population estimates. States are listed in tables 7 through 11 by the
magnitude of the percentage correction in population.
The Medicaid, Foster Care, and Adoption Assistance programs are open-
Medicaid, Foster ended entitlement programs for which states determine the level of
Care, and Adoption program expenditures. The federal government reimburses states for a
share of eligible state spending based on state per capita income. To
Assistance calculate the effect of the population correction on the Federal Medical
Assistance Percentages (FMAP)—also called federal matching rates—we
compared actual matching rates for fiscal year 2003,1 based on the 2000
census, with the estimated matching rates based on the 1990 census
(shown in table 7). Subtracting the estimated rates from the actual fiscal
year 2003 rates shows the effect on the matching rates of correcting
population estimates.
In general, the states that had a below-average correction in population
have a decrease in federal matching rates, while the states that had an
above-average correction in population have an increase in matching
rates. For 13 high-income states, the correction in population had no effect
or had a diminished effect because of the minimum 50 percent matching
rate. (Under the matching rate formula, no state can receive less than a 50
percent matching rate.) In our analysis, 11 states receive the 50 percent
matching rate for fiscal year 2003; hence, under the estimated rates, the
correction in population shows no change in these states’ matching rates.
Two additional states, Washington and Nevada, are partially affected.
Washington’s actual fiscal year 2003 matching rate is at the 50 percent
minimum, while its estimated matching rate is slightly above the 50
percent minimum. Conversely, Nevada’s actual fiscal year 2003 matching
rate is above the minimum, and its estimated matching rate is at the 50
percent minimum.
The 70 percent matching rate for the District of Columbia is established by
a special statutory provision. Accordingly, the District of Columbia’s
1
The matching rates for fiscal year 2003 are for the first year in which population estimates
based on the 2000 census are used.
Page 21 GAO-03-178 Federal Formula Grant Funding
Appendix II: Analysis of Estimated Funding
Changes for Four Formula Grant Programs
matching rate remains unchanged, and the correction in population has no
effect on funding.
Table 7: Actual and Estimated FMAPs for the Medicaid, Adoption Assistance, and Foster Care Programs for Fiscal Year 2003,
by State
FMAP
Actual rate based on population Estimated rate based on
estimate derived from the 2000 postcensal population estimate
State census derived from the 1990 census Difference
States below the U.S. average percentage correction of 2.50
West Virginia 75.04 75.99 -0.95
Michigan 55.42 57.10 -1.68
Ohio 58.83 60.05 -1.22
Alaska 58.27 59.33 -1.06
Kansas 60.15 61.19 -1.04
California 50.00 50.00 0
Maine 66.22 66.90 -0.68
Alabama 70.60 71.06 -0.46
Kentucky 69.89 70.37 -0.48
Maryland 50.00 50.00 0
Washington 50.00 50.11 -0.11
Wisconsin 58.43 58.96 -0.53
Iowa 63.50 63.96 -0.46
Montana 72.96 73.26 -0.30
Missouri 61.23 61.66 -0.43
North Dakota 68.36 68.62 -0.26
Indiana 61.97 62.35 -0.38
Virginia 50.53 51.10 -0.57
New Hampshire 50.00 50.00 0
Vermont 62.41 62.75 -0.34
Illinois 50.00 50.00 0
Idaho 70.96 71.14 -0.18
Louisiana 71.28 71.40 -0.12
Minnesota 50.00 50.00 0
Oklahoma 70.56 70.67 -0.11
Mississippi 76.62 76.71 -0.09
Massachusetts 50.00 50.00 0
Pennsylvania 54.69 54.67 0.02
States above the U.S. average percentage correction of 2.50
Nebraska 59.52 59.44 0.08
South Carolina 69.81 69.78 0.03
South Dakota 65.29 65.26 0.03
Oregon 60.16 59.95 0.21
Texas 59.99 59.85 0.14
Page 22 GAO-03-178 Federal Formula Grant Funding
Appendix II: Analysis of Estimated Funding
Changes for Four Formula Grant Programs
FMAP
Actual rate based on population Estimated rate based on
estimate derived from the 2000 postcensal population estimate
State census derived from the 1990 census Difference
Hawaii 58.77 58.45 0.32
New Jersey 50.00 50.00 0
Wyoming 61.32 61.07 0.25
Tennessee 64.59 64.19 0.40
Delaware 50.00 50.00 0
Connecticut 50.00 50.00 0
Utah 71.24 70.63 0.61
Georgia 59.60 58.84 0.76
New York 50.00 50.00 0
Arkansas 74.28 73.58 0.70
North Carolina 62.56 61.35 1.21
New Mexico 74.56 73.64 0.92
Colorado 50.00 50.00 0
Florida 58.83 57.22 1.61
Rhode Island 55.40 53.16 2.24
Arizona 67.25 65.33 1.92
Nevada 52.39 50.00 2.39
District of Columbia 70.00 70.00 0
Source: 66 Fed. Reg. 59792 (2001) and GAO calculations of Department of Commerce, Bureau of the Census and Bureau of Economic Analysis data.
Notes: The states are listed in order of increasing percentage of population correction (see table 6).
The census is a population count made at the beginning of each decade as
of April 1; it is based on a count of the entire population. Postcensal
population estimates are made annually throughout a decade, usually as of
July 1 of each year. Such estimates are based on the prior census and
include annual population changes due to births, deaths, and domestic and
international migration.
Analysis of Funding To measure the effect of the correction in the population estimates on
Changes for Medicaid for federal payments, we estimated what federal payments would be using
Fiscal Year 2003 matching rates calculated on the basis of postcensal population estimates
derived from the 1990 census. Specifically, multiplying the two sets of
state matching rates in table 7 by program expenditures (fiscal year 2000
Medicaid expenditures) yields the estimated payments. The 2000 program
expenditures were the latest year for which the data were available. (See
table 8.)
Page 23 GAO-03-178 Federal Formula Grant Funding
Appendix II: Analysis of Estimated Funding
Changes for Four Formula Grant Programs
Overall, the states that had a below-average correction in population show
a decrease in payments, while the states that had an above-average
correction in population show an increase in payments. As discussed in
the previous section, 11 states show no effect, and 2 states show a partial
effect because of the minimum 50 percent federal matching rate. The
District of Columbia is also unaffected because of its special statutorily set
matching rate.
Table 8: Medicaid Program Expenditures and Estimated Federal Payments, by State
Dollars in thousands
Estimated federal Medicaid payments Difference
FY 2000 Medicaid Based on
expenditures (combined Based on actual FY estimated FY 2003
State federal and state)a 2003 FMAP FMAP Amount Percentage
States below the U.S. average percentage correction of 2.50
West Virginia $1,379,499 $1,035,176 $1,048,281 -$13,105 -1.25
Michigan 6,774,253 3,754,291 3,868,098 -113,807 -2.94
Ohio 7,554,151 4,444,107 4,536,268 -92,161 -2.03
Alaska 503,994 293,677 299,020 -5,342 -1.79
Kansas 1,410,785 848,587 863,259 -14,672 -1.70
California 21,164,278 10,582,139 10,582,139 0 0
Maine 1,194,667 791,109 799,232 -8,124 -1.02
Alabama 2,704,806 1,909,593 1,922,035 -12,442 -0.65
Kentucky 3,094,832 2,162,978 2,177,833 -14,855 -0.68
Maryland 3,170,221 1,585,111 1,585,111 0 0
Washington 3,962,522 1,981,261 1,985,620 -4,359 -0.22
Wisconsin 3,294,787 1,925,144 1,942,607 -17,462 -0.90
Iowa 1,651,264 1,048,553 1,056,149 -7,596 -0.72
Montana 450,228 328,486 329,837 -1,351 -0.41
Missouri 3,994,735 2,445,976 2,463,154 -17,177 -0.70
North Dakota 428,777 293,112 294,227 -1,115 -0.38
Indiana 3,534,321 2,190,219 2,203,649 -13,430 -0.61
Virginia 2,728,848 1,378,887 1,394,442 -15,554 -1.12
New Hampshire 792,027 396,014 396,014 0 0
Vermont 516,874 322,581 324,339 -1,757 -0.54
Illinois 7,524,230 3,762,115 3,762,115 0 0
Idaho 585,831 415,706 416,760 -1,054 -0.25
Louisiana 3,473,131 2,475,648 2,479,816 -4,168 -0.17
Minnesota 3,322,283 1,661,142 1,661,142 0 0
Oklahoma 1,676,208 1,182,732 1,184,576 -1,844 -0.16
Mississippi 1,993,936 1,527,754 1,529,548 -1,795 -0.12
Massachusetts 6,396,706 3,198,353 3,198,353 0 0
Page 24 GAO-03-178 Federal Formula Grant Funding
Appendix II: Analysis of Estimated Funding
Changes for Four Formula Grant Programs
Dollars in thousands
Estimated federal Medicaid payments Difference
FY 2000 Medicaid Based on
expenditures (combined Based on actual FY estimated FY 2003
State federal and state)a 2003 FMAP FMAP Amount Percentage
Pennsylvania 10,387,923 5,681,155 5,679,078 2,078 0.04
Subtotal 105,666,121 59,621,606 59,982,700 -361,094 -0.60
States above the U.S. average percentage correction of 2.50
Nebraska 1,055,079 627,983 627,139 844 0.13
South Carolina 2,720,980 1,899,516 1,898,700 816 0.04
South Dakota 399,231 260,658 260,538 120 0.05
Oregon 2,110,836 1,269,879 1,265,446 4,433 0.35
Texas 10,650,570 6,389,277 6,374,366 14,911 0.23
Hawaii 642,350 377,509 375,454 2,056 0.55
New Jersey 6,109,609 3,054,804 3,054,804 0 0
Wyoming 218,851 134,200 133,653 547 0.41
Tennessee 4,993,965 3,225,602 3,205,626 19,976 0.62
Delaware 523,748 261,874 261,874 0 0
Connecticut 3,151,669 1,575,835 1,575,835 0 0
Utah 810,161 577,158 572,217 4,942 0.86
Georgia 4,321,247 2,575,463 2,542,622 32,841 1.29
New York 30,191,583 15,095,792 15,095,792 0 0
Arkansas 1,581,362 1,174,636 1,163,566 11,070 0.95
North Carolina 5,464,863 3,418,818 3,352,693 66,125 1.97
New Mexico 1,226,572 914,532 903,248 11,284 1.25
Colorado 1,944,315 972,158 972,158 0 0
Florida 7,564,164 4,449,998 4,328,215 121,783 2.81
Rhode Island 1,166,831 646,424 620,287 26,137 4.21
Arizona 2,225,045 1,496,342 1,453,622 42,721 2.94
Nevada 598,189 313,391 299,094 14,297 4.78
District of Columbia 834,958 584,470 584,470 0 0
Subtotal 90,506,178 51,296,320 50,921,418 374,902 0.74
United States $196,172,298 $110,917,926 $110,904,118 $13,808 0.01
Source: Fiscal year 2000 program expenditures obtained from the Department of Health and Human Services, Centers for Medicare & Medicaid Services. GAO computed the estimated payments.
Notes: States are listed in order of increasing percentage of population correction.
Totals may not add because of rounding.
a
Excludes administrative expenditures.
Analysis of Funding The effects on the funding for Foster Care and Adoption Assistance are
Changes for Foster Care similar to the effects on the Medicaid programs because these programs
and Adoption Assistance use the same matching rates. Table 9 shows the Foster Care program
expenditures for fiscal year 2000, the estimated federal payments, and
for Fiscal Year 2003 changes in funding for Foster Care based on these estimated payments.
Page 25 GAO-03-178 Federal Formula Grant Funding
Appendix II: Analysis of Estimated Funding
Changes for Four Formula Grant Programs
Table 10 shows the Adoption Assistance program expenditures for fiscal
year 2000, the estimated federal payments, and the changes in funding for
the program based on the estimated payments.
Table 9: Foster Care Program Expenditures and Estimated Federal Payments, by State
Dollars in thousands
Estimated federal Foster Care payments Difference
FY 2000
Foster Care Based on
expenditures Based on actual estimated
a
State (federal and state) FY 2003 FMAP FY 2003 FMAP Amount Percentage
States below the U.S. average percentage correction of 2.50
West Virginia $14,979 $11,240 $11,382 -$142 -1.25
Michigan 137,531 76,219 78,530 -2,311 -2.94
Ohio 209,987 123,536 126,097 -2,562 -2.03
Alaska 6,199 3,612 3,678 -66 -1.79
Kansas 20,985 12,623 12,841 -218 -1.70
California 759,267 379,633 379,633 0 0
Maine 41,730 27,633 27,917 -284 -1.02
Alabama 4,080 2,881 2,900 -19 -0.65
Kentucky 35,113 24,540 24,709 -169 -0.68
Maryland 132,096 66,048 66,048 0 0
Washington 22,699 11,349 11,374 -25 -0.22
Wisconsin 58,765 34,337 34,648 -311 -0.90
Iowa 32,746 20,794 20,944 -151 -0.72
Montana 7,639 5,574 5,596 -23 -0.41
Missouri 45,115 27,624 27,818 -194 -0.70
North Dakota 6,503 4,445 4,462 -17 -0.38
Indiana 43,766 27,122 27,288 -166 -0.61
Virginia 33,079 16,715 16,903 -189 -1.12
New Hampshire 11,782 5,891 5,891 0 0
Vermont 15,881 9,911 9,965 -54 -0.54
Illinois 145,408 72,704 72,704 0 0
Idaho 2,288 1,624 1,628 -4 -0.25
Louisiana 39,562 28,200 28,248 -47 -0.17
Minnesota 50,706 25,353 25,353 0 0
Oklahoma 20,457 14,434 14,457 -23 -0.16
Mississippi 4,440 3,402 3,406 -4 -0.12
Massachusetts 37,332 18,666 18,666 0 0
Pennsylvania 318,222 174,036 173,972 64 0.04
Subtotal 2,258,354 1,230,144 1,237,058 -6,914 -0.56
States above the U.S. average percentage correction of 2.50
Nebraska 21,072 12,542 12,525 17 0.13
South Carolina 9,555 6,670 6,667 3 0.04
Page 26 GAO-03-178 Federal Formula Grant Funding
Appendix II: Analysis of Estimated Funding
Changes for Four Formula Grant Programs
Dollars in thousands
Estimated federal Foster Care payments Difference
FY 2000
Foster Care Based on
expenditures Based on actual estimated
a
State (federal and state) FY 2003 FMAP FY 2003 FMAP Amount Percentage
South Dakota 3,887 2,538 2,537 1 0.05
Oregon 19,950 12,002 11,960 42 0.35
Texas 100,329 60,187 60,047 140 0.23
Hawaii 9,747 5,728 5,697 31 0.55
New Jersey 70,203 35,101 35,101 0 0
Wyoming 2,220 1,361 1,356 6 0.41
Tennessee 25,604 16,538 16,435 102 0.62
Delaware 3,943 1,972 1,972 0 0
Connecticut 71,404 35,702 35,702 0 0
Utah 7,928 5,648 5,600 48 0.86
Georgia 35,038 20,883 20,617 266 1.29
New York 530,264 265,132 265,132 0 0
Arkansas 4,386 3,258 3,227 31 0.95
North Carolina 39,165 24,502 24,028 474 1.97
New Mexico 6,132 4,572 4,516 56 1.25
Colorado 15,512 7,756 7,756 0 0
Florida 79,566 46,808 45,527 1,281 2.81
Rhode Island 8,401 4,654 4,466 188 4.21
Arizona 27,341 18,387 17,862 525 2.94
Nevada 9,490 4,972 4,745 227 4.78
District of Columbia 41,299 28,909 28,909 0 0
Subtotal 1,142,436 625,822 622,383 3,439 0.55
United States $3,400,790 $1,855,966 $1,859,441 -$3,475 -0.19
Source: Fiscal year 2000 program expenditures obtained from the Department of Health and Human Services, Administration for Children and Families. GAO computed the estimated payments.
Note: States are listed in order of increasing percentage of population correction.
Totals may not add because of rounding.
a
Excludes administrative expenditures.
Page 27 GAO-03-178 Federal Formula Grant Funding
Appendix II: Analysis of Estimated Funding
Changes for Four Formula Grant Programs
Table 10: Adoption Assistance Program Expenditures and Estimated Federal Payments, by State
Dollars in thousands
Estimated federal Adoption
Assistance payments Difference
FY 2000 Adoption
Assistance Based on
expenditures Based on actual estimated FY
State (federal and state)a FY 2003 FMAP 2003 FMAP Amount Percentage
States below the U.S. average percentage correction of 2.50
West Virginia $4,048 $3,037 $3,076 -$38 -1.25
Michigan 119,003 65,951 67,951 -1,999 -2.94
Ohio 61,308 36,068 36,816 -748 -2.03
Alaska 6,254 3,644 3,711 -66 -1.79
Kansas 11,684 7,028 7,150 -122 -1.70
California 205,556 102,778 102,778 0 0
Maine 8,093 5,359 5,414 -55 -1.02
Alabama 341 241 242 -2 -0.65
Kentucky 7,657 5,351 5,388 -37 -0.68
Maryland 18,512 9,256 9,256 0 0
Washington 19,734 9,867 9,889 -22 -0.22
Wisconsin 30,116 17,597 17,757 -160 -0.90
Iowa 25,825 16,399 16,518 -119 -0.72
Montana 2,347 1,712 1,720 -7 -0.41
Missouri 16,547 10,132 10,203 -71 -0.70
North Dakota 1,396 954 958 -4 -0.38
Indiana 25,750 15,957 16,055 -98 -0.61
Virginia 12,045 6,086 6,155 -69 -1.12
New Hampshire 1,557 779 779 0 0
Vermont 5,268 3,288 3,306 -18 -0.54
Illinois 68,226 34,113 34,113 0 0
Idaho 1,620 1,149 1,152 -3 -0.25
Louisiana 9,533 6,795 6,806 -11 -0.17
Minnesota 16,959 8,479 8,479 0 0
Oklahoma 11,081 7,819 7,831 -12 -0.16
Mississippi 2,852 2,185 2,188 -3 -0.12
Massachusetts 6,368 3,184 3,184 0 0
Pennsylvania 43,264 23,661 23,652 9 0.04
Subtotal 742,943 408,871 412,524 -3,654 -0.89
States above the U.S. average percentage correction of 2.50
Nebraska 6,242 3,715 3,710 5 0.13
South Carolina 9,336 6,518 6,515 3 0.04
South Dakota 1,602 1,046 1,046 0 0.05
Oregon 18,611 11,196 11,157 39 0.35
Texas 45,057 27,030 26,967 63 0.23
Hawaii 6,290 3,697 3,677 20 0.55
Page 28 GAO-03-178 Federal Formula Grant Funding
Appendix II: Analysis of Estimated Funding
Changes for Four Formula Grant Programs
Dollars in thousands
Estimated federal Adoption
Assistance payments Difference
FY 2000 Adoption
Assistance Based on
expenditures Based on actual estimated FY
State (federal and state)a FY 2003 FMAP 2003 FMAP Amount Percentage
New Jersey 27,734 13,867 13,867 0 0
Wyoming 390 239 238 1 0.41
Tennessee 8,811 5,691 5,656 35 0.62
Delaware 1,560 780 780 0 0
Connecticut 16,949 8,475 8,475 0 0
Utah 5,815 4,143 4,107 35 0.86
Georgia 22,006 13,116 12,949 167 1.29
New York 277,214 138,607 138,607 0 0
Arkansas 4,386 3,258 3,227 31 0.95
North Carolina 18,973 11,869 11,640 230 1.97
New Mexico 7,097 5,292 5,227 65 1.25
Colorado 14,170 7,085 7,085 0 0
Florida 33,369 19,631 19,094 537 2.81
Rhode Island 6,793 3,763 3,611 152 4.21
Arizona 18,463 12,416 12,062 354 2.94
Nevada 1,969 1,031 984 47 4.78
District of Columbia 3,268 2,288 2,288 0 0
Subtotal 556,105 304,752 302,966 1,786 0.59
United States $1,299,048 $713,623 $715,490 -$1,868 -0.26
Source: Fiscal year 2000 program expenditures obtained from the Department of Health and Human Services, Administration for Children and Families. GAO computed the estimated payments.
Notes: The states are listed in order of increasing percentage of population correction.
Totals may not add because of rounding.
a
Excludes administrative expenditures.
The fiscal year 2002 formula allocations for the SSBG are based on the
Social Services Block April 1, 2000, decennial census population counts. To calculate the effect
Grant of the correction in population estimates, we compared fiscal year 2002
allocations that were calculated using the April 1, 2000, decennial census
(actual allocations) with allocations using the 1990 postcensal population
estimates for April 1, 2000 (estimated allocations). The differences in these
allocations represent the effect of the population correction reflected in
the 2000 census. The change in funding is directly proportional to the
percentage correction in population because the SSBG allocations are
calculated exclusively on the basis of population data (see table 11).
Page 29 GAO-03-178 Federal Formula Grant Funding
Appendix II: Analysis of Estimated Funding
Changes for Four Formula Grant Programs
Table 11: SSBG State Allocations, Actual and Estimated, for Fiscal Year 2002
Dollars in thousands
Formula allocations for FY 2002 Difference
Estimated using the
Using the census 2000 postcensal
State population counts population estimates Amount Percentage
States below the U.S. average percentage correction of 2.50
West Virginia $10,863 $11,103 -$240 -2.16
Michigan 59,700 60,973 -1,272 -2.09
Ohio 68,199 69,348 -1,150 -1.66
Alaska 3,766 3,825 -59 -1.55
Kansas 16,149 16,393 -244 -1.49
California 203,468 206,309 -2,841 -1.38
Maine 7,658 7,734 -75 -0.98
Alabama 26,714 26,970 -256 -0.95
Kentucky 24,279 24,494 -215 -0.88
Maryland 31,816 32,079 -263 -0.82
Washington 35,406 35,683 -277 -0.78
Wisconsin 32,220 32,452 -232 -0.71
Iowa 17,578 17,703 -124 -0.70
Montana 5,420 5,458 -38 -0.70
Missouri 33,611 33,817 -206 -0.61
North Dakota 3,858 3,879 -22 -0.56
Indiana 36,526 36,730 -205 -0.56
Virginia 42,521 42,763 -242 -0.57
New Hampshire 7,423 7,460 -37 -0.49
Vermont 3,657 3,674 -16 -0.45
Illinois 74,603 74,915 -312 -0.42
Idaho 7,773 7,805 -32 -0.41
Louisiana 26,845 26,926 -80 -0.30
Minnesota 29,551 29,642 -90 -0.30
Oklahoma 20,728 20,787 -59 -0.29
Mississippi 17,088 17,130 -43 -0.25
Massachusetts 38,139 38,146 -6 -0.02
Pennsylvania 73,773 73,774 -1 0
Subtotal 959,332 967,970 -8,639 -0.89
States above the U.S. average percentage correction of 2.50
Nebraska 10,280 10,275 5 0.05
South Carolina 24,100 24,091 9 0.04
South Dakota 4,534 4,532 2 0.05
Oregon 20,552 20,526 27 0.13
Texas 125,257 125,016 242 0.19
Hawaii 7,278 7,259 19 0.26
New Jersey 50,545 50,422 124 0.25
Page 30 GAO-03-178 Federal Formula Grant Funding
Appendix II: Analysis of Estimated Funding
Changes for Four Formula Grant Programs
Dollars in thousands
Formula allocations for FY 2002 Difference
Estimated using the
Using the census 2000 postcensal
State population counts population estimates Amount Percentage
Wyoming 2,966 2,958 8 0.28
Tennessee 34,176 33,984 192 0.56
Delaware 4,707 4,678 29 0.62
Connecticut 20,457 20,275 182 0.90
Utah 13,415 13,277 138 1.04
Georgia 49,176 48,648 528 1.09
New York 113,992 112,432 1,560 1.39
Arkansas 16,059 15,831 228 1.44
North Carolina 48,352 47,539 814 1.71
New Mexico 10,927 10,738 189 1.76
Colorado 25,838 25,342 495 1.96
Florida 96,007 94,038 1,968 2.09
Rhode Island 6,297 6,123 174 2.84
Arizona 30,820 29,888 932 3.12
Nevada 12,004 11,469 534 4.66
District of Columbia 3,436 3,195 242 7.57
Subtotal 731,176 722,537 8,639 1.20
United States $1,690,508 $1,690,508 0 0
Source: Department of Health and Human Services, Administration for Children and Families (Washington, D.C.), http://www.acf.hhs.gov (downloaded July 19, 2002). GAO computed the allocations for
fiscal year 2002 based on the April 1, 2000, postcensal population estimates.
Notes: The states are listed in order of increasing percentage of population correction.
Totals may not add because of rounding.
The census is a population count that is made at the beginning of each decade as of April 1. It is
based on a count of the entire population. Postcensal population estimates are made annually
throughout a decade, usually as of July 1 of each year. Such estimates are based on the prior census
and include annual population changes due to births, deaths, and domestic and international
migration.
(290093)
Page 31 GAO-03-178 Federal Formula Grant Funding
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Formula Grants: 2000 Census Redistributes Federal Funding Among States
Published by the Government Accountability Office on 2003-02-24.
Below is a raw (and likely hideous) rendition of the original report. (PDF)