oversight

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)

                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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