oversight

Federal Formula Programs: Outdated Population Data Used to Allocate Most Funds

Published by the Government Accountability Office on 1990-09-27.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                        Unittvi   States   Genera1   Accounting   Office

                        Report to the Honorable
GAO                     Connie Mack, U.S. Senate



September   1990
                        FEDERAL FORMULA
                        PROGRAMS
                        Outdated Population
                        Data Used to Allocate
                   ,
                        Most Funds




GAO/Hl23MO-I       45
                   united
                     state.9
GAO                General Accounting Office
                   Washington, D.C. 20648

                   Human Resources         Division

                   B-237186

                   September 27,199O

                   The Honorable Connie Mack
                   United States Senate

                   Dear Senator Mack:

                   This report responds to your request that we identify federal formula
                   programs that use outdated population data to distribute funds to state
                   and local governments. As you observed, the use by many programs of
                   decennial census population data when more current population esti-
                   mates are available penalizes fast-growing states.

                   In discussions with your staff, we agreed to

               l identify all formula programs that use Bureau of the Census population
                 data to distribute funds,
               l determine what population data and data sources federal agencies used
                 and were required to use to distribute funds, and
               s determine whether the Census Bureau has provided or could provide
                 more current population data for federal programs now using popula-
                 tion data from the decennial census.


*Scope and
                   Bureau decennial census population data or current population esti-
 Methodology       mates to determine program eligibility or distribute funds to state and
                   local governments in fiscal year 1989. To ensure that we identified all
                   programs, we reviewed the General Services Administration’s 1989 Cat-
                   alog of Federal Domestic Assistance (CFDA), its 1989 Federal Formula
                   Report to the Congress, and the Advisory Commission on Intergovern-
                   mental Relations’ October 1989 catalog of federal grant-in-aid programs.
                   We also referred to our March 1987 report that lists federal formula
                   grants as of 1984.’

                   We interviewed federal program managers to determine what popula-
                   tion data and data sources they used to determine formula program eli-
                   gibility or distribute funds. We asked them to specify the amount of
                   funds distributed by the formula but not funds distributed by other



                    ‘Grant Formulas: A Catalog of Federal Aid to States and Localities (GAO/HRD-87.28),    Mar 23,
                    1987.




                    Page 1                              GAO/HBDso-14B      AUocation   of Federal   Funds by Population
                         B-237186




                         modeling procedures. Such data would affect 12 of the 33 programs
                         where the decennial census data is the most current available. Census
                         could not, however, provide intercensal data on urban and rural area
                         populations that would be needed for most of the other programs.

                         Proposed legislation (S. 477 and H.R. 1631) would require agencies to
                         use the most recent population data for distributing federal formula
                         funds. This legislation would affect only six programs (involving a total
                         of $204 million out of $17.4 billion) because the remaining programs
                         already use the latest available data or are required by statute to use
                         the decennial census. Other issues would need to be addressed in the
                         legislation to enable additional agencies and programs to use current
                         population estimates.


                         The Census Bureau publishes many types of data including population
Background               statistics that describe the number of inhabitants of an area and a wide
                         variety of their social and economic characteristics, such as household
                         composition and income. Information is divided into (1) state and sub-
                         state population (county, city, metropolitan, urban, rural, and census
                         tracts) and (2) population characteristics, such as age, sex, and race.

                         Federal programs use some of these population statistics to allocate
                         funds to states and communities. Some data are produced decennially,
                         while others are estimated monthly, annually, or by some other time
                         frame. Appendix I contains more detailed information on the Census
                         Bureau activities and products.


                         In fiscal year 1989,93 federal programs (listed in app. II) used Census
Formula Programs         Bureau population data, solely or combined with other formula factors,
UShg   POpUhtiOn  Data   to determine program eligibility or distribute funds totaling $27.5 bil-
to Distribute Funds      lion. Thirteen federal agencies administer these programs.


                         Forty-five of the 93 programs used decennial census data to distribute
Decennial Census         5 17.4 billion; the rest used current estimates from the Census Bureau to
Used to Distribute       distribute $10.1 billion (see app. III).
Most Funds
                         Thirty-three of the 45 programs allocated 5 16.7 billion using population
                         data, such as the number of persons living in urban or rural areas or




                         Page 3                     GAO/HRD9&146   Allocation   of Federal   Funds by Population
                    B-237186




                    to the states, saying that the use of annual data would result in fluctu-
                    ating yearly funding.


                    The authorizing statutes of 18 of the 45 programs specify the decennial
Program Statutes    census as the population data source to be used to distribute funds
Specify Decennial   totaling 56.4 billion (see app. VI). Twelve of the programs used either
Census              urban or rural population data to distribute $6 billion. The other six
                    used the decennial census state population data even though more
                    recent state population data are available. Authorizing statutes would
                    need to be amended to remove the references to use the decennial census
                    in order for the programs to use current data.

                                          -
                    Nearly two-thirds of fiscal year 1989 federal formula funds were dis-
Conclusion          tributed, in whole or in part, using population data from the decennial
                    census. In some cases, authorizing legislation required its use; in others,
                    the decennial data were the most current data available. If the Congress
                    wants all federal programs to distribute funds using current population
                    data, it would need to amend authorizing statutes that require federal
                    agencies to use decennial census data and specify how funds are to be
                    distributed. Also, agencies using urban population and low-income data
                    to allocate funds would need to develop alternative means for making
                    such allocations as such data are collected only every 10 years.

                    Legislation introduced in February 1989 in the Senate and in March
                    1989 in the House as the Fair Share Act of 1989 (S.477 and H.R.1631)
                    would require federal agencies to use the most recent annual population
                    data when determining the amount of benefits under federal programs
                    for a state, county, or local unit of government. Other issues, as dis-
                    cussed above, would need to be addressed in the legislation to enable
                    additional agencies and programs to use current population estimates.


                    In its deliberations on how best to distribute federal funds to the states,
Matters for         the Congress may wish to consider directing (1) affected program agen-
Consideration       cies to study the effects of using incorporated or metropolitan area data
by the Congress     rather than urban data to allocate formula funds, and (2) the Bureau of
                    the Census to study t,he feasibility of estimating the low-income popula-
                    tion data on a more current basis. Depending on the outcome of these
                    efforts, the Congress then could consider whether it should amend
                    authorizing statutes to remove requirements that federal agencies use
                    urban and rural population or low-income data from the decennial


                    Page 6                      GAO/HRDM-146   Allocation   of Federal   Fhnds by Population
Page 7   GAO/HRD9@146   Allocation   of Federal   Funda by Population
Appendix VI                                                                                                20
Programs Required
to Use Decennial
Census Data
Appendix VII
Comments From
the Department
of Commerce
Appendix VIII
Major Contributors
to This Report




                     Abbreviations

                                Special Supplemental Food Program for Women, Infants, and
                                   Childrtv
                                Catalog of Fwkral Domestic Assistance


                     page 9                    GAO/HRD-90-146   Allocation   of Federal   Funds by Population
                     Appendix I
                     Bureau of the Census Population   Data




                     The reports present various statistics for blocks, census tracts, block
                     numbering areas, general-purpose local governments, rural and farm
                     areas, urbanized areas, metropolitan statistical areas, congressional dis-
                     tricts, states, and American Indian and Alaska Native areas.


                     Current population data from the Census Bureau provide recent esti-
Current Population   mates of population size and characteristics, population projections, and
Data                 the results of special censuses of local areas. They consist of two general
                     categories: (1) survey data and (2) estimates, projections, and special
                     censuses.

                     Much of the current population data are derived from the Current Popu-
                     lation Survey, a household sample survey of the civilian noninstitutional
                     population. The survey’s primary purpose is to produce monthly statis-
                     tics on unemployment and the labor force. The survey also is the source
                     of a series of three publications dealing with population characteristics
                     (the P-20 series), special studies (the P-23 series), and consumer income
                     (the P-60 series). A monthly survey of income and program participa-
                     tion, conducted since October 1983, produces information for household
                     economic studies (the P-70 series). The Current Population Survey and
                     the Survey of Income and Program Participation are generally available
                     only at the national level.

                     Another Census Bureau statistical program prepares updated popula-
                     tion figures. Using population statistics from censuses and administra-
                     tive records, the Bureau prepares population estimates, projections, and
                     special studies. These include intercensal estimates of population and
                     per capita income, projections of the population, and data from special
                     censuses of local areas. Population estimates and projections (the P-25
                     series) include monthly national estimates of the population; annual
                     state population estimates by age, sex, race, and geographic area; and
                     national and state population projections. Local population estimates
                     (the P-26 series) include population estimates for counties and metropol-
                     itan areas and population and per capita income estimates for local gov-
                     ernment jurisdictions. Special censuses (the P-28 series) generally are
                     taken at the request and expense of city or other local governments.




                     Page 11                             GAO/IIBIMW146   Allocation   of Federal   Funds by Population
                                               Appendix I3
                                               Program    Using Census Bureau Population
                                               Data to Allocate Funds (FY 1989)




                                                                                                                                                 Funding,
CFDA no.                       Program                                                                                                            FY 1989
13.671                         Family Vrolence Preventron and Servrces                                                                                    7.6
13.672 -
___~.                          Chrld Abuse Challenge Grants                                                                                               48
13.673                         Grants to States for Planning and Development
                                                                       -~~~       of Dependent Care Programs
                                                                                 _____.~.                                                                11.8
13.991 B                       Preventrve  Health
                                       ~.____~    and  Health Servrces  Block Grant-Rape                                                                  3.5
                                                                                                             ._____
13.992
~.____.        ~.              Alcohol, Drug Abuse and Mental Health Servrces Block Grant                                                               435.3
13.994                         Maternal and ChrldHealthS?Block             Grant                                                  ~..-                  465.3
Total                                                                                                                                               $4.540.2

Department of Housing and Urban Development
14.218                         Communrty Development Block Grants Entrtlement Grants                                                                RO53.1
14.219
~__.~~                         Communrty Development Block Grants. Small Crtres Program                                                                  38.4
14 221                         Urban Development Action Grants                                                                                          101 0
14.228                         Communrty Development Block Grants Slate s Program                                                                       841.5
14.230                         Rental Housrng Rehabrlitatron              ~~~~~~____-                                                                   148.5
Total                                                                                                                                               $3.182.5

Department of Interior
156118                         Wildlrfe Restoration-Hunter   Safety and Education                                                                      $20.6
15.916                         Outdoor Recreatron-Acquisrtron,     Development, and Plannrng                                                             16.7
Total                                                                                                                                                  $37.3

Department of Justice
16.540                         Juvenile Justrce and Delrnouencv Preventron-Allocatron      to States                                                   $45 A
                                                                             -~     .- ~..~~
16575                          Crrme Vrctrm Assrstance
___-                                                                                                                                                 __~ 43.5
16.579                         State and Local Narcotrcs Control Assrstance                                                                            118.8
Total                                                                                                                                                 $209.1

Department of Labor
__-__-
17 235                         Senior Community Service Employment Program                                                                           $141 6
17 247                         Mrgrant and Seasonal Farmworkers                                                                                        66.2
17 250A                        Job Tralnlng PartnershIp Act, Title II-A, Basic Program                                                              1,747 1
17 2508                        Job Tralnlng PartnershIp Act, Title II-B, Summer Youth                                                                 686 3
17.251                         Nahve American Employment and Tralnlng Programs
                                                                                                                                                 .-___ 590
Total                                                                                                                                             $2,700.2

Department of Transportation
20 106B                        Arrport Improvement Program. State    Apportronments                                                                    $155.1
20.205C                        Highway Planntng and Construction     Primary System                                                                   2,313 2
                                                                                                                                         -..-   ~
20.205D                        Hrohwav Plannrna and Construction     Rural Secondarv                                                                    5R4 7
20.205E                        Hlghway Planning and ConstructIon     Urban System                                                                     730.4
20.205F                        Highway Planning and ConstructIon     Urban Transportation    Planning                                                  47 3
                                                                                                                                                (conhnued)




                                                Page 13                            GAO/HRD-90-146       Allocation   of Federal     Funds by Population
                             Appendix II
                             Program8 Using Census Bureau Population
                             Data to Allocate Funds (FY 1989)




                                                                                                                     Funding,
CFDA no.      Program                                                                                                 FY 1989
84.049        Vocational Education: Consumer and Homemakrng Educatron                                                      32.8
84.053        Vocational Educatron: State Councrls                                                                          7.9
84.126        Rehabilitation Servrces: Basrc Suooort                                                                    1.446 4
84 151        Federal, State, and Local Partnershtps for EducatIonal Improvement                                          463 0
84 154        Publrc Lrbrary Constructron                                                                                  22 2
84.161        Clrent Assistance for Handicapped lndivrduals                                                                 78
84.164        State Grants for Strengthenrng the Skulls of Teachers and Instructron In Mathematrcs and
              Science                                                                                                      195
84.169        Comprehensive Serwes for Independent Lrwng                                                                   12.7
84174         Vocational Education, Communrty Based Organrzatrons                                                           8.9
84.176        Paul Douglas Teacher Scholarshrps                                                                            166
84.186        Drug-Free Schools and Communrties: State Grants                                                             287.7
84.187        Supported Employment Serwces for lndrwduals wrth Severe Handicaps                                            27.2
84.196        State Activitres, Education of Homeless Chrldren andYouth                                                     4.8
84.223        State-Admrnistered English Lrteracy                                                                           44
Total                                                                                                                 $7.378.8
Grand total                                                                                                          $27.494.7




                              Page 16                           GAO/HlUMW-146    Allocation   of Federal   Funds by Population
Appendix IV

Programs for Which Decennial CensusData
Were the Latest Available


Dollars in millrons

CFDA no.              Program                                                            Population base
                      Deoartment of Aoriculture
10.203                Payments to Agr&ftu&e Expenment Stations Under Hatch               Rural; Farm
                      Act
10.205                Payments to 1890 Land-Grant Colleges and Tuskegee                  Rural; Farm
                      University                                                                                                                     24 3
10.418                Water and Waste Disposal Systems for Rural Communrtres             Rural,   Rural, below poverty level                         97.5
10.420                Rural Self-Helc Housrna TechnIcal Assrstance                       Rural,   below 10,000                                        8.5
10.427                Rural Rental Assistance Payments                                   Rural;   Rural families-below poverty level                275 3
10.433                Rural Housrno Preservabon Grants                                   Rural                                                       19.1
10.500                Cooperative Extension Servrce                                      Rural;   Farm                                              276.8
10 557A               Specral Supplemental Food Program for Women, Infants,              prs;s      potentially eligrble to partrcrpate
                      Chrldren                                                                                                                    1,927 -4
10.568                Temporary Emergency Food Assistance (Adminrstratrve                Persons in households below poverty
                      Costs)                                                             level                                                       50 0
10569                 Temporary Emergency Food Assrstance (Food Commodrtres)             Persons rn households below poverty
                                                                                         level                                                      1200
10571                 Food Commodities for Soup Krtchens       --                        Fv;ons rn households below poverty
                                                                                                                                                    $40.0

Department of Health and Human Services
13 183                Federal Assrstance for Rural Hosprtals to Improve Health           County, between 73,550.74,000 and
                      Care                                                               between 17,500.17,550                                         14
13 600                Administratron for Chrldren, Youth, and Famrlies-Head    Start     Chrldren aged O-5 in famrlres below
                                                                    ~                    poverty                                                    519.4
13 992                Alcohol, Drua Abuse and Mental Health Servrces Block               Urban, aged 18 -24, 2544, 25-64 years
                      Grant       -                                                                                                                 435.3
13.994                Maternal and Chrld Health Servrces Block Grant                     Low-Income children                                        465.3

Department of Housing and Urban Development
14.221                Urban Development Action Grants                                    Population growth lag of citres and
                                                                                         urban countres                                             101 0

Department of Labor
17.247                Mrarant and Seasonal Farmworkers                                   Farmworkers In poverty                                      66.2
17.250A               Job Training Partnershtp Act, Trtle II-A, Basrc Program
                                                                      ____~~             Below poverty level _ ~-.-.                              1,747.l
17.2508               Job Trainrnq Partnership Act Trtle II-B, Summer Youth              Below poverty                                              6863
17 251                Native Amerrcan Employment and Training Programs                   Indians and Native Amencans below
                                                                                         poverty level                                               59 0

Department of Transportation
20.205C               Highway Plannrng and Constructron     Primary System               Rural, Urban                                             2.313.2
20.2050               Hiohwav Plannrnq and Constructron     Rural Secondary              Rural                                                      584.7
                                                                                                                                              (continued)




                                                 Page 17                               GAO/lIRD90-146      Allocation   of Federal   Funds by Population
Programs Using Decennial CensusWhen Later
Data Were Available (FY 1989)


Dollars tn millrons
           _~.____
                                                                                                                  Funding,             Decennial census
CFDA no.                  Program                                                                                  FY 1989             specified in statute

Department of Health and Human Services
13 614                    Chtld Develooment Assoctate Scholarshtos                                                        $1 5         No
13.991 B                  Preventtve Health and Health Services Block Grant-Rape
                                                                                                                       ___. 3.5        No

Department of the Interior                                                                                                                             -
15.6118                   Wtldltfe RestoratIon-Hunter   Safety and Education                                              20.6     Yes
                                                                                                                  -       ~.___.___~.
15.916     -_____..       Outdoor Recreatton-Acqursttton,     Development and Planntng                                    16.7     No

Department of Transportation
20 106B
____-.~~                  Atroort Improvement Proaram State Apportionments                                               155 1         Yes
                                                                                                                                        _____~
20.205H                   Highway Planntng and Constructton Hrghway Safety Programs                                        99          Yes
20.2051 --___.            Hrghway Planntng
                      _____~~~~          ~~~~and Constructton
                                                  ~~~      ~   Hazard
                                                                 ~~_~~Elrmtnatron                                        1666          Yes
20 218                    Motor Carrter Safety Assistance Program                                                         467          No                     -
20 600                    State and Community Htghway Safety                                                              81 1         Yes    ._____
Environmental Protection Agency
                                                                                                                                                       .__
66.001                    Air Pollutron Control Program Support                                                         $101.5         No

Department of Energy                                                                                   ~          --    --A~---
81.050                    Enerav Extenston Service                                                                       4.0           Yes
81.052                    Energy Conservatton for lnstttutronal BulldIngs                                               34.4           No
                                                                                                                   -______-
Total                                                                                                                   $841.8
                                                Note Allocatrons for all these programs were based, rn whole or rn part, on state populatron




                                                 Page 19                              GAO/HRNW146          Allocation     of Federal    Funds by Population
Appendix VII

Comments From the Department of Commerce



                                                          UNITED      STATES      DEPARTMENT           OF COMMERCE
                                                          The Aasirtant       Secretary    for   Administration
                                                          Washngton      D.C. 20230




               MS.   Linda  G. Morra
               Director,    Intergovernmental
                  and Management       Issues
               U.S. General      Accounting      Office
               Washington,      D.C.     20548
               Dear   Ms.   Morra:

               Thank you for your letter      requesting                 comments      on the draft       report
               entitled,   "Federal   Formula    Programs:                outdated      Population       Data
               Used to Allocate     Most Funds."

               We have reviewed   the enclosed    comments of                   the    Director,   Bureau          of
               the Census and believe     they are responsive                     to   the matters
               discussed   in the report.

                                                            Sincerely,




                                                            Xssistan    Secretary
                                                               for Ad inistration




                            page21                             GAO/HRDSO-14SAUoeationofFederalFundsbyPopulation
                  Appendix W
                  Comments Fran          the Department
                  of commerce




    MS. Linda           G. Morra                                                                                    2

     (enclosed)       as published                   in   the   1980   Census    of   PODUlatiOn,              "Number
     of Inhabitants."

    We appreciate                this      opportunity          to   comment    on the         draft    report.

     Sincerely,


3a.J-w..                      cu;\tt            -Bya--
     Barbara        Everitt            Bryant
     Director
     Bureau        of   the      Census

     Enclosure




                   page-23                                      GAO/HRLMM46       Allocation      of Federal   Fhnds by Population
The following             criteria       are used      in determining          the    eligibility          and
definition    of          the 1980       urbanized       areaal:

An  urbanized       area comprises      an incorporated        place'    and adjacent
densely     settled     surrounding     area that     together      have a minimum
population        of 50,000.3       The densely    settled     surrounding    area
consists     of:

1.     Contiguous      incorporated     or census  designated    places    having:
       a.  A population        of 2,500 or more;   or,
       b.  A population        of fewer than 2,500 but having       a population
           density     of 1,000 persons     per square    mile,  a closely
           settled     area containing     a minimum of 50 percent        of the
           population,       or a cluster   of at least     100 housing    units.

2.     Contiguous    unincorporated                   area    which     is connected            by road and
       has a population       density                of at    least     1,000 persons            per square
       mile.4

3.     Other    contiguous       unincorporated          area with       a density           of less
       than 1,000 persons            per square       mile,     provided        that    it:
       a. Eliminates        an enclave       of less        than 5 square          miles      which     is
           surrounded       by built-up         area.
       b. Closes      an indentation          in the boundary           of the densely
           settled      area that       is no more than           1 mile      across       the open
           end and encompasses             no more than 5 square                miles.
       c. Links      an outlying        area of qualifying             density,        provided       that
           the outlying        area is:
            (1)    Connected      by road to,         and is not more than 1 l/2                    miles
                   from,    the main body of the urbanized                      area.
            (2)    Separated       from the main body of the urbanized                          area by
                   water    or other       undevelopable          area,     is connected           by
                   road to the main body of the urbanized                           area,      and is


lAl1       references        to     population       counts    and densities           relate       to   data
from   the         1980   census.

21n Hawaii,        incorporated      places    do not exist      in the sense of
functioning        local    governmental     units.     Instead,    census  designated
places      are used in defining          a central   city    and for applying
urbanized       area criteria.

3Tho       rural
               portions       of extended      cities,      as defined    in the Census
Bureau’s    extended      city     criteria,     are excluded       from the urbanized
area.    In addition,          for an urbanized        area to be recognized,        it
must include      a POpUlation           of at least     25,000   that   does not reside
on a military       base.

IAny area of extensive                    nonresidential          urban land         use, such as
railroad    yards,   airports!                factories,        parks,  golf         courses,     and
cemeteries,      is excluded               In computing         the population           density.
                                                        2




              Page25                                  GAO/~~14SAUocationofFederal                   Fundsby      Populrtion
           Appendix Vll
           CQmmenta From the Department
           ofCommerce




Bureau     of the      Census,        census      designated         places       are    recognized           as
central      cities.

New SMSA Standards

New standards          for designating      and defining       metropolitan       statistical
areas were published             in the Federal     Register      on January      3, 1980.
The SMSAs recognized             for the 1980 census        COmpriSe      (1) all    areas    as
defined       on January      1, 1980, except     for one area which was defined
provisionally          during    the 1970's    on the basis       of population
estimates        but whose qualification         was not confirmed           by 1980 census
counts:       and (2) a group of 36 new areas             defined     on the basis         of
1980 census         counts    and the new standards         that   were published          on
January       3, 1980.
The new standards          will not be applied         to the areas     existing                         on
January     1, 1980, until      after     data on commuting       flows    become
available     from 1980 census         tabulations.       At that    time,     the
boundaries,      definitions,       and titles      for all   SMSAs Will       be
reviewed.

To aid users           who want to          become familiar      with   the             SMSA standards
and how they           are applied,          documents    are available                 from the Office
of Management            and Budget,         Washington,     D.C. 20503.

Relationshin         Between
yrbanized        Areas and
Metrooolitan         Areas
Although        the urbanized            area and the metropolitan                     area are closely
related       in concept,           there      are important           differences.              The urbanized
area has a more limited                    territorial          extent.         The urbanized            area
consists        of the physically                continuously          built-up        territory         around
each larger          city      and thus corresponds                generally         to the core of high
and medium population                  density         at the heart          of the metropolitan
area.       In concept,           a metropolitan             area is always            larger       than its
core urbanized             area,      even if the metropolitan                    area is defined             in
terms     of small         building        blocks,        because       it includes          discontinuous
urban and suburban                development            beyond the periphery                of the
continuously           built-up         area.        The metropolitan             area may also            include
some rural         territory          whose residents            commute to work in the city                       or
its     immediate         environs,        while       the urbanized           area does not include
such territory.                In practice,            because     the SMSA definitions                  use
counties         as building          blocks,        considerable           amounts      of rural
territory         with      few commuters            are often       included.           However,        even in
New England,           where cities            and towns are used as building                         blocks,
SMSAs are generally                  much larger           in extent        than their         core
urbanized         areas.
 It   sometimes     occurs,    because             of boundary           anomalies,    that     a portion
 of   the urbanized       area extends               across  the         SMSA boundary      into   a


                                                         4




             page27                                    GAO/HRB9&146           Allocation of Federal Funds by Population
Appendix VIII

Major Contributors to This Report


                    Carl R. Fenstermaker, Assistant Director, (202) 276-6169
Human Resources     John M. Kamensky, Assistant Director,
Division,           Robert F. Derkits, Evaluator-in-Charge
Washington, D.C.    William A. Brown, Staff Evaluator
                    Mark S. Vinkenes, Social Science Analyst


                    Robert G. Crystal, Assistant General Counsel
Office of General   Jane R. Sajewski, Attorney Advisor
Counsel,
Washington, D.C.




(L18844)            Page 29                   GAO/HBDIIo145   Allocation of Federal Funde by Population
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            AppendixW
            CommentaFromthe         Department
            ofCommerce




nonsetropolitan          county      or another  SMSA.         However,   such   portions    are
usually      quite     small   in    area and population.
The new standards       provide    that   each SMSA be associated          with    an
urbanized    area.     However,    the reverse       is not true--there       are some
urbanized    areas   that    are not in any SMSA.           This situation      occurs
when an urbanized        area does not quality           as an SMSA of at least
100,000   population       (75,000   in new England),        and the urbanized        area
has no city     with   at least    50,000    population.

In addition,          some SMSAs contain         more   than    one urbanized     area.     This
occurs    when--

1.      Two or more urban     concentrations         not far apart       and of
        generally    similar  size    have separate       urbanized      areas but
        qualify   as a single    SMSA (for       example,    Greensboro,      High Point,
        and Winston-Salem,      North    Carolina).       Often    the SMSA title
        includes   the name of the largest           city   of each of the component
        urbanized    areas.

2.      A very    large    SMSA includes      one or more          smaller   separate
        urbanized      areas within     its boundaries.             Examples    are the
        separate     urbanized    areas    around  Joliet,          Aurora,   and Elgin
        within    the Chicago     SMSA.




                                                 5




             Page28                              GAO/MUTSO-14SAUoeationofFederalFundsby            Population
              AppendixM
              Comments From the Department
              ofcemmerce




                       not more    than 5 miles         from    the   main    body    of   the
                       urbanized     area.

4.       Large      concentrations        of   nonresidential       urban    area (such as
         industrial        parks,    office     areas,      and major   airports),     which
         have at least          one-quarter       of their     boundary     contiguous    to an
         urbanized       area.

Standard        Metrooolitan
Statistical         Areas

Definition
The general         concept      of a metropolitan               area is one of a large
population        nucleus,       together         with    adjacent       communities      which have a
high degree         of economic           and social        integration       with   that     nucleus.
The standard         metropolitan            statistical         area     (SMSA) classification          is
a statistical          standard,          developed       for use by Federal           agencies       in
the production,           analysis,          and publication            of data on metropolitan
areas.        The SMSAs are designated                   and defined        by the Office        of
Management        and Budget,           following        a set of official          published
standards        developed       by the interagency                Federal    Committee       on Stand-
ard Metropolitan            Statistical            Areas.

Each SMSA has one or more central                      counties      containing        the area's
main population            concentration:         an urbanized         area with at least
50,000      inhabitants.            An SMSA may also         include      outlying       counties
which have close            economic      and social       relationships           with the
central       counties.         The outlying       counties       must have a specified
level     of commuting          to the central         counties      and must also meet
certain       standards       regarding      metropolitan         character,        such as
population        density,        urban   population!        and population           growth.       In
New England,          SMSAs are composed           of cities        and towns rather           than
whole     counties.

The population            living    m SMSAs may also be referred           to as the
metropolitan           population.        The population     is subdivided     into     "inside
central      city      (or cities)"       and "outside   central    city    (or cities)".
The population            living    outside   SMSAs constitutes       the nonmetropolitan
population.

SMSA Titles

Most    SMSAs have at least            one central    city.       The titles       of SMSAs
include     up to three       city     names, as well       as the name of each state
into    which   the SMSA extends.            For the 1980 census,            central     cities
of SMSAs are those           named in the titles          of the SMSAs, with           the
exception      of Nassau-Suffolk,           N.Y.,   which      has no central        city,      and
Northeast      Pennsylvania,         the central    cities       of which are Scranton,
Wilkes-Barre,       and Hazleton.           Data on central        Cities      of SMSAs
include     the entire       population      within   the legal        city   boundaries.          In
Hawaii,     where there       are ho incorporated           places     recognized      by the

                                                    3




              Page26                               GAO/HRDSO-14SAUoeationofFederalFunds                  byPopulation
            AppendixW
            GmunentaFromtheDepartment
            ofcemmerce




1980 Census of Population,                  PCBO-l-lA,        Number     of   Inhabitants,         U. S.
Summary (excerpts)

Incornorated         Places
Incorporated         places      recognized        in the reports       of the census are
those     which     are incorporated            under the laws of their            respective
states     as cities,         boroughs,       towns,    and villages,       with     the
following        exceptions:          boroughs       in Alaska    and New York and towns
in the six New England                states,      New York,     and Wisconsin.          The towns
in the New England             states,       New York,     and Wisconsin,        and the
boroughs       in New York are recognized                 as minor    civil    divisions      for
census     purposes;        the boroughs         in Alaska     are county      equivalents.

Some incorporated         places      include     narrow   strips      of land    (frequently
only    the rights-of-way         of streets)        which   typically      have no
population      or housing       units.       These areas,       termed   "corporate
corridors,"      are generally          not shown on the maps or in the tables                            of
1980 census      reports.

In Connecticut,             a unique       situation      exists       in which     one
incorporated          place       (Woodmont borough)            is subordinate         to another
 (Milford      city).         The city       of Milford       is coextensive         with    the town
of Milford.            In the tables           for the Connecticut           report      in this
series     and other          series     of 1980 census           reports,     data shown for
Milford      city      exclude       those     for Woodmont borough,             and the user      must
therefore        refer      to data for Milford             town (which        include     those   for
the borough)           for data for Milford             city.

Yrban    and Rural        Residence
As defined          for the 1980 census,              the urban population                    comprises   all
persons       living       in urbanized         areas and in places                of 2,500 or sore
inhabitants           outside      urbanized       areas.        More      specifically,           the urban
population          consists       of all      persons     living        in (1) places           of 2,500 or
more inhabitants              incorporated         as cities,         villages,           boroughs
 (except      in Alaska         and New York)           and towns          (except        in the New
England       states,        New York,       and Wisconsin)             but excluding            those
persons       living       in the rural         portions       of ixtended            cities:       (2)
census      designated          places     of 2,500 or more inhabitants;                        and (3)
other     territory,          incorporated         or unincorporated,                 included       in
urbanized         areas.        The population          not classified              as urban
constitutes           the rural        population.

Urbanized       Areas

The major       objective     of the         Census Bureau           in delineating        urbanized
areas     is to provide       a better          separation         of urban      and rural
population        in the vicinity            of large      cities.       An urbanized         area
consists      of a central       city        or cities,        and surrounding         closely
settled     territory      ("urban         fringe").


                                                     1




            Page24
                            Appendix VU
                            Comments From the Department
                            of chllmercc




                                                                                                                                           1
                                                      fg%?                            UNITED STATES DEPARTMENT          OF COMMERCE

                                                      .-F!J
                                                      a
                                                          .
                                                              “.T., o-
                                                                         *.*
                                                                            I
                                                                                .     Bummu of the Cf!nsus
                                                                                      wssllmgton. 0 c 20233
                                                                                      OFFICEOF THE DIRECTOR


                                                                                       August 2, 1990




               Ms. Linda     G. Morra
               Director,      Intergovernmental
                  and Management         Issues
               General     Accounting       Office
               Washington,        D.C.     20548

               Dear   Ms.      Morra:

               Thank you for your letter          to Secretary      Mosbacher     requesting                                 the
               Department's      conunents   on the draft      General   Accounting       Office
               report   entitled     Federal   Formula    Proorams-Outdated         Pooulation                                Data
               Used to Allocate       Most Funds.
               This     is an interesting           and useful         report,      and we concur          in its
               description        of the availability              of postcensal         population
               estimates.         We expect       to prepare         postcensal        population        estimates
               annually     for states,         counties,        and metropolitan            statistical         areas
               and biennially         for large        incorporated           places,     but we will         not be
               able to prepare          postcensal        estimates        of the "urban"            population.
               AlSO, we can examine             the possibility             of preparing         postcensal
               estimates       of the low-income            population          for the 1990s but will
               require     additional        resources        to do so.           We stand     ready to discuss
               the possibility          of producing          estimates         of the low-income
               population       with    Congressional           staff.

               To clarify         responsibilities,        we suggest                          a minor    rewording     of    the
Now on p. 5.   first    part      of paragraph        1 on page 10 to                          read:

                  "In its deliberations            on how best to distribute             Federal     funds
                    to the states,         Congress     may wish to consider         directing
                     (1) affected     program       agencies      to study   the effects       of using
                    incorporated      or metropolitan           area data rather       than urban
                    data to allocate         formula      funds,     and (2) the Census Bureau to
                    study    the feasibility         of estimating       the low-income        population
                    for states     on a more current            basis."

               To show the differences       between  population                                   in the metropolitan              or
               incorporated   areas    and urban population,                                    we suggest      you include
               as an appendix    to your report,     a copy of                                  the definitions




                             past?22                                                GAO/HRD-9O-146.4llocation   ofFederal Funds by Population
Appendix,

Programs Required to Use
Decennial CensusData


Dollars rn mllllons
                                                                                                                                    Fundina.
CFDA no.              Program                                                     Statutory citation                                 FY 19l%

Department of Agriculture                                                                                                      ~-
10 203                Payments to Agrrcultural Experiment Statrons Under Hatch    7 US C. 361~
                      Art.-.                                                                                                          $155.5
10 205                Payments to 1890 Land-Grant Colleges and Tuskegee           7 u.s c 3222
                      Unrversrty                                                                                                         24 3
10500                 Cooperatrve Extension Servrce                               7 u.s c 343                                           276.8

Department of Health and Human Services
13 183                Federal Assrstance for Rural Hosprtals to Improve Health    P.L. 100607, Sec. 638,704.5 as
                      Care                                                        amended by P L. 100-690, Sec. 2603-4                    14

Department of the Interior
156118                Wtldltfe RestoratIon-Hunter     Safety and Educatron        16 U S C. 669c(b)                                      20.6

Department of Transportation
20 106B               Arrport Improvement Program State Apportronments            49   U.S.C.   App 2206(e)                             155.1
20 205C               Hrghway Planning and Construction: Prrmary System           23   U.S C.   104(b)(l)                             2,313 2
20 205D               Htghway Plannrng and Construction. Rural Secondary          23   US C     104(b)(2)                               584.7
20 205E               Hrghway Plannrng and Constructron, Urban System             23   U SC.    104(b)(2)                             $730.4
20 205F               Hrghway Planning and Constructron. Urban Transportabon      23   U.S.C    104(f)(2)
                      Planntng                                                                                                           47.4
20 205H               HIghway Plannrng and Constructron Hrghway Safety            23 U S C 402(c)
                      Programs                                                                                                            9.9
20 2051               HrohwavPt~~andConstruction~          Hazard Elrmrnatton      23 U.S.C. 152(e), 402(c)                             1666
20 205J               Hrghway Plannrng and Constructron: Rarl-Highway Crossrng     23 U.S C 130: 1’04(b);2). 104(b)(6)                  157.6
20 507A               Urban Mass Transportatron Caprtal and Operatrng              49 U S C. App 1604(a)(2) (A)(I)
                      Assrstance Grants-Large     Urban                                                                               1,448.O
20 5078               Urban Mass Transportation Capital and Operating              49 U S C App 1604(a)(2) (A)(k)
                      Assrstance Grants-Small    Urban                                                                                  147.6
20 509                Publrc Transportation for Nonurbanrzed Areas                 49 U SC. App 1614(a)                                  66 4
20 600                State and Communrty Hrghway Safety                           23 U S C. 402(c)                                      81 1

Department of Energy
81 050                 Enerav Extension Servrce                                    42 USC. 7010(c)(2)                                      4.0
Total                                                                                                                               $6390.6




                                                    Page 20                      GAO/HRIHM46        Allocation of Federal Funds by Population
                                                Appendix IV
                                                Pro@uns for Which Decennial Census Data
                                                Were the Latest Available




                                                                                                                                  Funding,
CFDA no.           Program                                                           Population base                               FY 1989
20 205E            Highway Planning and Constructron~ Urban System                   Urban                                           730.4
20 205F            Hrghway Planning and Construction: Urban Transportation           Urban
                   Planntnq                                                                                                            47 4
20.205J            Highway Plannrng and Construction- Rail-Hrghway Crossing          Rural, Urban                                     157.6
20 505             Urban Mass Transportatton Techntcal Studtes Grants                Urban                                             40 5
20 507A            Urban Mass Transportatton Capital and Ooerattno                   Large urban
                   Asststance Formul’a Grants-Lbrge    Urban       -                                                                1,446.O
20 5078            Urban Mass Transportatton Capttal and Operating                   Small urban
                   Asststance Formula Grants-Small     Urban                                                                          147 6
20.509             Publtc Transportatton for Nonurbantzed Areas                      Nonurbanized                                      664

Department of Education
84.002             Adult Educatton      State-Admtntstered   B&c   Grant Program     Adults wtth no graduation certtftcate and
                                                                                     not requtred to be in school                     115.4
84.010             Educattonally Deprived Chtldren Local EducatIonal                 Chtldren aged 5~17 tn famtlies below and
                   Agenctes                                                          above poverty level                            3,987.g
84 196             State Achvtties Educatton of Homeless Chtldren and Youth          Chtldren aged 5-17 rn famtltes below and
                                                                                     above poverty level                                4.6
84 223             State-Admtntstered     Englrsh Ltteracy                           Number
                                                                                     -..       of rndrvtduals wtth limited
                                                                                     tngllsn-speaking    abtltty                        4.4
Total                                                                                                                            $16,723.7




                                                 Page 18                           GAO/HRLMM-146 Allocation of Federal Funds by Population
Appendix III

Federal Agencies and BasesUsed to Allocate
Progrm Funds (F-Y 1989)

               Dollars in mllllons
                                                  Allocations based on
                                                  Decennial          Current            Total
               Department/agency                     census        estimates     allocations
               Agnculture                           $2,994 4               $0       $2,994.4
               Commerce                                     0            46 2           46.2
               Health and Human Serwces              1,426 4          3,157 8        4,584.2
               Housing and Urban Dcwloylment           101 0      3,081______        3.162.5
               Interior                                  37 3                0          37.3
               JustIce                                      0          208 1           208.1
               Labor                                 2,558 6           141 6         2,700.2
               Transportation                        5,995 2                 0       5,995.2
               Arts and HumaWes                             0            49 5           49.5
               Enwronmental Protectit II Aoenci
                                          ,.            101 5          ii?---          213.7
               Energy                                    38 4             9.5           47.9
               Federal Emergency Ma;qc men’
               Agency                                       0            57 0            57.0
               Education                             4.1126           3.266 0         7.378.6
               Totals                             W7J65.4          $10,129.3      $27,494.;




               Page 16
                                                 Appendix II
                                                 Programs Using Census Bureau Population
                                                 Data to Allocate Funds (E-Y 1989)




                                                                                                                                       Funding,
CFDA no.                          Program                                                                                               FY 1969
20.205H                           Htghway Planntng and Constructron, Htghway Safety Programs                                                  9.9
20 2051                           Htghway
                               _ -___.--    Planning and Constructton, Hazard Eltmrnatton                                                   166.6
20.205J         .___-             Htghway Planntng and ____-~
                                                         Construction Ratl-Htghway Crosstng                                                 157.6
20 218                            Motor Carrier Safety Asststance Program                                                                    46.7
20 505                            Urban Mass Transportatton Techntcal Studtes Grants                                                         40 5
20 507A                           Urban Mass Transportatron Capttal and OpemGe                 Formula Grants-Large
                                  Urban                                              ~      ~-__                                           1,448.O
20 5078    -.                     Urban Mass Transportatron Capital and Operahng Asststance Formula Grants-Small
                                  Urban                                                                                                     147 6
20.509                            Publrc Transportation for Nonurbanized Areas~~ ._ _____-____.                                               664
20-                     ___.__~ State and Gmmuntty Highway Safety                                                                             81 1
Total                                                                                                                                   $6,995.2

National Foundation on the Arts and Humanities
_-___..
45.007                            Promohon of the Arts, State Programs                                ______                                $24.5
45 129                            Promotton of the Humanities State Programs                                                                 25.0
Total                                                                                                                                       649.5

Environmental Protection Agency
66.001           ..________-___   Air Polluhon
                                           _. Control Program Support                                                                      $101 5
66.432                            State Publtc Water System Supervtsion                                                                      32.1
66 433                            State Underaround Water Source Protectron                                                                   9.5
66 700                            PestZZforcement         ProgramGrants                                                                       3.8
66.801                            Hazardous Waste Management State Program Support                                                           66.7
Total                                                                                                                                      $213.6

Department of Energy                                                                                                                       ___-
81
___-041 ______                    State Energy Conservatton                                                                                   $9.5
81.050                            Energy Extensron Service                                                                                      4.0
81.052                            Energy Conservahon for lnstttuttonal BulldIngs                                                  __-___     34 4
Total                                                                                                                                       $47.9

Federal Emergency Management Agency                       _.~~~
63.503 -                 CIVII Defense. State and Local Emergency Management Asststance
                                                                                ____--                                                       $57.0
Total                                                                                                                                       $57.0
                                                                                                                                                   -
Department of Education                                                        ~~___
84.002
_-___                             Adult Educahon State-Administered Baste Grant Program                                                    $115.4
                                                   -____~-~                                 -___
84.010                            Educattonally Deprived Chtldren, Local Educattonal Agenctes                                             3,987.9
a4 034                            Library Servtces, Tttle I                                                                                   79 4
                                                                                       .-_-___
84 035                            InterlIbrary Cooperation
                                                   -__._____and Resource Sharing
                                                                          ~~~ ~~                                                              187
84.048                            VocatIonal Educatton. Baste Grants to States
                                                                                                                                        __.- 815.3
                                                                                                                                      (continued)



                                                  Page 14                          GAO/HRD9&146     AUocation   of Federal   Funds by Population
Appendix II

Programs Using CensusBureau Population Data
to Allocate F’unds(FY 1989)


Dollars in millions
                                                                                                                                     Funding,
CFDA no.                    Program                                                                                                   FY 1999

Department of Agriculture
10 203                      Payments to Agrrcultural Experiment Statrons Under Hatch Act                                                $155.5
10 205                      Payments to 1890 Land-Grant Colleges and Tuskegee Unrversrty                                                   24.3
10418                       Water and Waste Drsposal Systems for Rural Communrtres                                                         97.5
10 420                      Rural Self-Help Housrng Techntcal Assrstance                                                                    85
IO 427                      Rural Rental Assrstance Payments                                                                              275 3
10 433                      Rural Housing Preservatron Grants                                                                              19 1
10 500                      Cooperatrve Extensron Servrce                                                                                 276 8
IO 557A                     Special Supplemental Food Program for Women, Infants. and Chrldren (WIC)                                    1,927 4
10568                       Temporary Emergency Food Assrstance (Admrnrstratrve Costs)                                                     50.0
10.569                      Temporary Emergency Food Assrstance (Food Commodrtres)                                                        1200
10 571                      Food Commodrtres for Soup Krtchens                                                                             40 0
Total                                                                                                                                $2,994.4

Department of Commerce
i 1 3078                    Specral Economrc Development and Adjustment Assrstance Program-Long-Term
                            Economrc Deterroratron                                                                                       $12.3
11419                       Coastal Zone Management Program Admrnrstratron Grants                                                         33.9
Total                                                                                                                                    $46.2

Department of Health and Human Services
13 138                      Protectron and Advocacy
                                              -        for Mentally III lndrwduals                                                       $126
13 183                      Federal Assrstance for Rural Hosortals
                                                              I- ~~ to lmnrove     Health Care_
                                                                            r- I z-z:                                                     $1.4
13 600                      Admrnrstratron for Chrldren. Youth and Famrlres-Head Start                                                   5194
13.614                      Chrld Development Associate Scholarshrps                                                                       15
13.623                      Admrnistratron for Chrldren. Youth and Famrlres-Runaway         and Homeless Youth                            24 2
13.630A                     AdministratIon on Developmental Drsabrlrtres-Basic Support Grants                                             59 8
13.6308                     Admrnrstratron on Developmental Drsabrlltres-Protectron        and Advocacy GranTs-~    -~~                   19.8
13 6338                     Specral Programs for the Agrng-Title     Ill Part B-Grants for Supportrve Serwces and
                            Sensor Centers
13 635A                     Specral Programs for the Agrng-Trtle Ill Part Cl-Congregate         Nutrrtron Servtces                         27 5
136358         --           Special Programs for the Agrng-Trtle Ill Part C2-Home Delrvered Nutrrtron Servrces                              61
13641                       Special Programs for the Agrng-Title     ill Part D-InHome      Serwces for Frarl Older
                            lndrvrduals                                                                                                      n7
13 643                      Children’s Justice Grants to States                                                                            36
13645                       Child Welfare Servrces State Grants                                                                          246 7
13 667                      Socral Servrces Block Grant                                                                                2,700 0
13 669                      Admrnrstratron for Chrldren, Youth and Famrlres-Chrld Abuse and Neglect State Grants                          11.6
                                                                                                                                   (contmued)




                                            Page 17.                          GAO/HRLHJO-146    Allocation   of Federal   Funds by Population
Bureau of the CensusPopulation Data


                   The Bureau of the Census collects and publishes various statistics about
                   the people of the IJnited States in two basic ways: (1) the decennial
                   census that counts the population and (2) surveys and other periodic
                   programs that provide current population data estimated between the
                   censuses. The Bureau also conducts special censuses on a cost-
                   reimbursable basis.

                   The censuses and surveys furnish information about the number and
                   characteristics of the population, including social and economic charac-
                   teristics such as household composition, ethnicity, and income, and pro-
                   vide the basis for population estimates, projections, and special studies.
                   Data are used, among other things, to allocate billions of dollars of fed-
                   eral financial assistance.


                   A census of the population has been taken every 10 years since 1790,
Decennial Census   and a census of housing has been taken as part of the decennial census
                   since 1940. The 1980 Census of Population and Housing, the 20th decen-
                   nial census, was conducted April 1, 1980.

                   Certain questions are asked of all persons (100 percent or complete-
                   count) to provide precise data needed for congressional apportionment,
                   legislative redistricting, and other purposes where units of analysis may
                   be as small as a city block. Other questions are asked of a fraction of the
                   households (a sample) with the resulting data reported as estimates
                   rather than actual counts for larger geographic areas, such as census
                   tracts, which average about 4,000 people. The same is true regarding
                   questions about housing.

                   From the decennial census, the Census Bureau prepares three major
                   groups of reports:

                   1. Population census reports, which display results from population
                   questions concerning age, sex, race, commuting methods, prior years’
                   income and poverty status, employment, and other topics;

                   2. Housing census reports, which focus on housing subjects such as rent,
                   value, fuels, facilities, number of rooms, and others; and

                   3. Population and housing reports, which combine the results of the pop-
                   ulation and housing censuses.




                   Page 10                    GAO/HRD9@-146   Allocation   of Federal   Funds by Population
Contents


Letter                                                                                                           1

Appendix I                                                                                                  10
Bureau of the Census     Decennial Census                                                                   10
                         Current Population Data                                                            11
Population Data
Appendix II
Programs Using
Census Bureau
Population Data
to Allocate Funds
(FY 1989)
Appendix III                                                                                                16
Federal Agencies and
Bases Used to Allocate
Program Funds
(FY 1989)
Appendix IV                                                                                                  17
Programs for Which
Decennial Census
Data Were the
Latest Available
Appendix V                                                                                                   19
Programs Using
Decennial Census
When Later Data Were
Available (FY 1989)



                         Page 8                    GAO/HltD~l48   Allocathm   of Federal   Funda by Population
                                     --
                  B-237186




                  census to allocate funds and instead require that the funds be distrib-
                  uted using some other basis and data.


                  A draft of this report was provided to the Department of Commerce,
Agency Comments   which commented on it (see app. VII). Commerce found the report inter-
                  esting and useful and concurred in its description of the availability of
                  population estimates. Commerce stated that the Census Bureau will be
                  preparing population estimates annually for states, counties, and metro-
                  politan areas and biennially for large incorporated places. It also said
                  the Census Bureau could examine the possibility of preparing estimates
                  of the low-income population, but would require additional resources to
                  do so.

                  Commerce suggested that we slightly reword our matters for Congres-
                  sional consideration in order to clarify responsibilities, and we have
                  done this. Commerce also thought it useful to provide population defini-
                  tions for urban areas, metropolitan areas, and incorporated places, and
                  attached these to its comments.


                  Copies of this report are being sent to the Bureau of the Census, the
                  Department of Commerce, the heads of the departments and agencies
                  whose programs were studied, and other appropriate congressional com-
                  mittees Copies also will be made available to interested parties upon
                  request.

                  Please call me on (202) 275-1655 if you or your staff have any questions
                  about this report. Other major contributors to it are listed in appendix
                  VIII.

                  Sincerely yours,




                  Linda G. Morra
                  Director, Intergovernmental
                  and Management Issues




                  Page 6                        GAO/HRBS@146   Allocation   of Federal   Funds by Population
                       B2.37186




                       living below the poverty level, that are available only from the decen-
                       nial census (see app. IV). The Census Bureau develops these data every
                       10 years and does not prepare more current estimates on a state-by-
                       state basis.

                       At our request, the Census Bureau explored the possibility of providing
                       current data on the number of inhabitants living below the poverty level
                       and the number living in urban and rural areas. For persons below the
                       poverty level, Census officials believe that “modeled” estimates could be
                       obtained by using data from the most recent census and other sources.
                       These data would be more current than those in the decennial census.
                       Census officials who have carried out some preliminary feasibility
                       studies using the modeling procedures say the study results appear
                       promising.

                       Census does not estimate the urban population between censuses. It
                       does, however, estimate population inside incorporated areas and popu-
                       lation in metropolitan areas. Incorporated areas are more restrictive or
                       smaller than urban areas, while metropolitan areas are more inclusive
                       or larger than urban areas. Each of the three population areas-urban,
                       incorporated, and metropolitan-would      result in different fund distri-
                       butions among the states. Whether incorporated or metropolitan popula-
                       tion data should be substituted for urban population data in federal
                       formulas so that later data can be used to allocate funds is a matter that
                       will require further analysis.


                       Twelve of the 45 programs did not use the most current population data
Latest Data Not Used   to distribute $641 million (see app. V). State population from the decen-
in Some Programs       nial census was used rather than available annual estimates. For 6 of
                       the 12 programs, authorizing statutes required the use of the decennial
                       census.

                       Although six programs’ st,atutes do not specify the data source required,
                       these programs (distributing $204 million) used the decennial census.
                       When we discussed the reasons for this with program officials, one pro-
                       gram manager said hc was unaware that more recent data were avail-
                       able. A senior public hea1t.h advisor for another program told us that the
                       agency wanted to use current estimates in 1989 but said it was too late
                       in publishing the change in the Federal Register. He added that the
                       agency published its intent to use current estimates to distribute 1990
                       funds. Two other ljrogram managers wanted to maintain “level” funding



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                       8237136




                       methods such as set-asides and hold-harmless provisions.2 Also, we
                       interviewed Census officials to determine whether they had data more
                       current than the decennial census data used by many program man-
                       agers. Finally, we analyzed program laws and regulations to identify the
                       population data and sources required to be used.

                       We conducted our review from September 1989 to March 1990 in accor-
                       dance with generally accepted government auditing standards.


                       In fiscal year 1989, 93 federal formula programs involving funds
Results in Brief       totaling $27.5 billion used Census Bureau population data, in whole or in
                       part, to determine program eligibility or distribute funds to state and
                       local governments. Of these 93 programs,

                   l   48 used current population estimates to distribute $10.1 billion, and
                   l   45 used 1980 decennial census population data to distribute $17.4 bil-
                       lion. Statutes for 18 programs (distributing $6.4 billion) specify using
                       the decennial census as the source of population data for distributing
                       funds.

                       For 33 of the 45 programs, the decennial population data used to dis-
                       tribute $16.7 billion were the most current available. These consisted
                       primarily of data on the populations living in urban and rural areas and
                       below the poverty level. These data are not estimated between decennial
                       censuses. Additionally, 12 of the 33 programs are required by law to use
                       the decennial data.

                       Twelve of the 45 programs used state population data from the decen-
                       nial census to distribute $641.6 million, even though more current state
                       population data are available annually from the Census Bureau. Six pro-
                       grams are required by law to use decennial census data and six pro-
                       grams had various reasons for not using current estimates.

                       The Census Bureau believes that it could develop and provide
                       intercensal data (data between censuses) on poverty by using statistical

                       ‘A set-aside is a prescribed percentage or dollar amount of grant funds that is earmarked for a spe
                       cific purpose at the national or at the state level and may not be used for other purposes. For
                       example, in a program that alknvs a department secretary to use 16 percent of program funds for
                       discretionary purposes, the 16 percent would be a set-aside. A hold-hamless provision guarantees
                       that a grant recipient will not receive less funding than it did under a previous program or under a
                       preceding formula. For example, in a program that guarantees that states will receive no less than the
                       dollar amount they received in a prior year, the guarantee would be a hold-harmless provision. In
                       either case, the set-aside or hold-harmless amounts would not be distributed by formula.



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