Low-Income Home Energy Assistance: A Program Overview

Published by the Government Accountability Office on 1990-10-23.

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

                 United States General Accounting Office
rj* A Q          Briefing Report to the Chairman,
^-^^^^           Subcommittee on Human Resources,
                 Committee on Education and Labor,
                 House of Representatives

October 1990
                 LOW-INCOME HOME
                 ENERGY ASSISTANCE
                 A Program Overview

              United States
GAO           General Accounting Offici-
              Washington, D.C. 2054H

              Human Resources Division


              October 23,1990

              The Honorable Dale Kilclee
              Chairman, Subcommittee on Human Resources
              Committee on Education and Labor
              House of Representatives

              Dear Mr. Chairman:

              This report was prepared, at your request, to provide background infor-
              mation on the Ix)w Income Home Energy Assistance Program (UHEAP) in
              preparation for the program's reauthorization in 1990. We prepared this
              rep<^)rt as a supplement to a larger study on state implementation of
              i.iHEAi', required by the Low Income Home Energy Assistance Act of
               1981 (42 L'.S.C. 8624(,h) I. This report contains no recommendations.

              UHEAP provides eligible households with assistance for home energy
Background    costs. Assistance is available to (1) help families pay heating and cooling
              costs, (2) prevent energy cutoff in ciisis situations, and (3) help families
              make their homes more energy efficient. The Department of Health and
              Human Services (HIis) administers LIHEAP as a state-run block grant to
              help low-income households meet specific home energy needs. The
              Office of Energy Assistance—within HHS'S Family Support Administra-
              tion, Office of Community Services—oversees LHIEAP'S implementation

              iiHS distributes IJIIEAP funds to states using a formula specified by the
              Low Income Home Energy Assistance Act of 1981. The formula con-
              siders such factors as the number of heating degree days, home heating
              expenditures, total residential energy expenditures, and low-income
              population in the state

              We focused our work on the heating and winter crisis program compo-
Scope and     nents because they assist over 90 percent of the households served by
Methodology   UHEAP and account for over 70 percent of funds spent by the states. This
              report primarily (1) traces LIHEAP'S history and its role in meeting
              energy needs of low-iru omi; households and (2) provides information on
              administration, funding, and benefit levels. We conducted our work
              from November 1989 In,lulv 1990.

               Page 1                                        GAO/HRD-91-lBR UHEAP Overview

                   LIHEAP is themost prominent of several federal programs that provide
Results in Brief   energy assistance to the poor. The federal government's objectives in
                   helping to meet energy needs of low-income households have changed
                   somewhat over time. The original focus was on crisis assistance during
                   the mid-1970s. In the 1980s, however, its scope expanded to include
                   more comprehensive energy assistance to low-income households. The
                   federal approach to providing this assistance has also changed from a
                   federally administered program to a state-run block grant.

                   Because states have broad discretion in administering program compo-
                   nents, such activities as application procedures for obtaining benefits
                   vary among states. Each state, however, must submit a program plan to
                   HHS before the beginning of each fiscal year, HHS is responsible for
                   ensuring that each state plan addresses all statutory assurances and fol-
                   lows all federal requirements, HHS also provides the states with technical
                   assistance and promotes the dissemination of information on ideas and
                   issues of common concern.

                   Households receiving assistance spend about 5 percent of their income
                   on home heating costs—compared with about 1 percent for all house-
                   holds. About 6 million households—one-third of those eligible—receive
                   heating or winter crisis benefits. Of these, about 2 million have elderly
                   residents and about 1 million have handicapped residents.

                   Between fiscal years 1985 and 1989, UHEAP funding dropped steadily
                   from $2.3 billion to $1.6 billion. In fiscal year 1989, federal funds com-
                   prised 89 percent of LIHEAP funding. Revenue from overcharges by oil
                   companies contributed 10 percent and state and private sources the
                   remaining 1 percent.

                   As requested by your office, we did not obtain written agency comments
Agency Views       on this briefing report. We did, however, discuss its contents with offi-
                   cials of the Office of Energy Assistance and incorporated their com-
                   ments where appropriate.

                   Page 2                                         GAO/HIU>91-lBR LIHEAP Overview

We are sending copies of this report to the Secretary of HHS, as well as
appropriate congressional conunittees and Members of Congress. We will
also make copies available to others upon request.

Major contributors to the report are listed in appendix VII. If you have
any questions, please contact me on (202) 276-1655.

Sincerely yours,

llyi^        M^\l\ArA4^
Linda G. Morra
Director, Intergovernmental and
  Management Issues

Pages                                        OAO/HHI>«MBBLIIIBAPOv««view

Section 1                                                                                     8
Introduction            Objectives, Scope, and Methodology                                    8

Section 2                                                                                    11
                        1977-81: Programs Provide Crisis Assistance to Help Meet             12
LIHEAP History and          Rising Home Heating Costs            j
Context                 1981-90: LIHEAP Block Grant Emphasizes General                       15
                            Assistance to Help Meet Broader Home Energy Needs
                        Other Federal Programs Provide Energy Assistance                     17
                        Nonfederal Energy Assistance                                         20
                        LIHEAP Is Primarily Federally Funded                                 22
                        LIHEAP Provides Four Types of Assistance                             26

Section 3                                                                                    29
LIHEAP'S Role in        Heating Costs Consume a Higher Percentage of Low-
                             Income Household Earnings Compared to All
Meeting the Heating          Households
Costs of Low-Income     Amount of Heating Costs LIHEAP Benefits Offset Varies                34
                             by Region
Households              Shifts in Household Heating Costs and Benefit Levels                 36
                             (Fiscal Years 1982-89)
                        LIHEAP Helps One-Third of Eligible Households                        37

Section 4                                                                                    40
States Have Primary     Federal Role Is Limited
                        Methods for Obtaining Benefits Differ Among Program
Role in Administering       Components
LIHEAP                  States Have Wide Latitude in Administering LIHEAP                    44
                        States Use Latitude to Administer LIHEAP Differently                 44

Appendixes              Appendix I: Home Heating Costs as a Percentage of                    48
                           Income, by Region (Fiscal Years 1982-89)
                        Appendix II: Home Heating Costs as a Percentage of                   49
                           Income, by Fuel Type (Fiscal Years 1982-89)
                        Appendix III: Average Household Heating and Crisis                   50
                           Benefits, by State (Fiscal Years 1982, 1985, and

                        Page 4                                     GA0/HRD-91-1BR UHEAP Overview

          Appendix IV: Households Receiving Heating and Winter                  52
             Crisis Assistance, by State (Fiscal Years 1982,1985,
             and 1989)
          Appendix V: Fiscal Year 1985 Formula for Distributing                 56
             LIHEAP Block Grant Funds to States
          Appendix VI: Key Legislative Amendments to LIHEAP                     57
             Limiting State Program Discretion
          Appendix VII: Major Contributors to This Briefing Report              59

Tables    Table 2.1: Chronology of Energy Assistance Programs for               11
              Low-Income Households
          Table 2.2: State and Other Funding for LIHEAP (Fiscal                 26
              Years 1985-89)
          Table 4.1: Number of State LIHEAP Administering                       47
              Agencies, by Agency Type and Program Component

Figures   Figure 1.1: Key Report Objectives                                      9
          Figure 2.1: Program Objectives Changed Over Time                      13
          Figure 2,2: LIHEAP Block Grant Created in 1981                        16
          Figure 2.3: Nonfederal Energy Assistance                              20
          Figure 2.4: LIHEAP Funding Sources                                    22
          Figure 2.5: LIHEAP Funding (Fiscal Years 1982-89)                     23
          Figure 2.6: Percentage of LIHEAP Funding From Oil                     25
              Overcharge Funds in 50 States (Fiscal Year 1989)
          Figure 2.7: Types of LIHEAP Benefits                                  27
          Figure 3.1: Energy Costs and the Needy                                30
          Figure 3.2: Home Heating Costs as a Percentage of                     31
              Household Income (Fiscal Years 1982-89)
          Figure 3.3: Home Heating Cost as a Percentage of                      32
              Household Income, by Census Bureau Region (Fiscal
              Year 1989)
          Figure 3.4: LIHEAP Funding Compared With LIHEAP                       33
              Household Heating Costs (Fiscal Years 1982-89)
          Figure 3.5: Home Heating Costs Offset by LIHEAP                        34
              Benefits, by Census Bureau Region (Fiscal Year 1989)
          Figure 3.6: Average LIHEAP Heating Benefits in the 50                  35
              States (Fiscal Year 1989)
          Figure 3.7: Average LIHEAP Heating Benefits Compared                   36
              With LIHEAP Household Heating Costs (Fiscal Years
          Figure 3.8: Households Served by LIHEAP (Fiscal Year                   38

          Pages                                      6AO/HItD-91-lBR LIHEAP Overview

Figure 3.9: Households Receiving LIHEAP Heating and                  39
    Winter Crisis Benefits (Fiscal Years 1982-89)
Figure 4.1: Program Structure                                        40
Figure 4,2: HHS Management                                           41
Figure 4.3: States Administer Program Differently                    45
Figure 4.4: LIHEAP Components Operated by the 50                     46
    States (Fiscal Year 1989)


AFtx:       Aid to Families With Dependent Children
CAA         commimity action agency
HHS         Department of Health and Human Services
LIHEAP      Low Income Home Energy Assistance Program
OEA         Office of Energy Assistance

Page 6                                    GAO/HRD-91-1BH LIHEAP Overview
Page?   GAO/HRD-9MBB UHEAP Overview
Section 1


                         The Low Income Home Energy Assistance Program (LIHEAP) provides eli-
                         gible households with assistance for home heating and cooling, energy
                         crises, and weatherization. In preparation for the 1990 LIHEAP
                         reauthorization hearing, the Chairman of the Subcommittee on Human
                         Resources, House Committee on Education and Labor, requested a
                         briefing and a report on UHEAP'S history and characteristics. We pro-
                         vided the briefing on January 29,1990, and this report summarizes that
                         briefing. The work on which the briefing and this report are based is
                         part of work we are performing for a larger, mandated study on states'
                         implementation of LIHEAP.

                         Under UHEAP, established by the Low Income Home Energy Assistance
                         Act of 1981,' the federal government distributes funds to states using a
                         legislated formula. States then tailor their own assistance programs to
                         meet the needs of their low-income households. The Department of
                         Health and Human Services (HHS) administers LIHEAP. The Office of
                         Energy Assistance (OEA)—within HHS'S Family Support Administration,
                         Office of Community Services—^is responsible for overseeing LIHEAP'S
                         implementation nationwide.

                         This report:
Objectives, Scope, and
Methodology              traces the evolution of federal energy assistance programs through the
                         establishment of LIHEAP,
                         describes program funding sources,
                         discusses the extent to which LIHEAP covers the heating costs of the poor
                         and serves eligible households,
                         describes the level of benefits provided to assisted households, and
                         provides an overview of federal and state LIHEAP administration.

                         These objectives are summarized in figure 1.1.

                         '7 U.S.C. 2014; 42 U.S.C. 8621-8629 (1981).

                         Pages                                         GAO/HRD-91.1BK LIHEAP Overview
                      Section 1

Figure 1.1

      GAO Key Report Objectives

             Describe Program:
             •history and context
             •role in meeting low
              income heating costs

                      We focused our work on the heating and winter crisis program compo-
                      nents because they assist over 90 percent of the households served by
                      UHEAP and account for over 70 percent of funds spent by the states. This
                      briefing report reviews national trends since 1982 and summarizes state
                      level data for fiscal year 1989, which are the latest available.

                      We reviewed and analyzed UHEAP'S legislative history, as well as pub-
                      lished HHS program and funding data. In addition, we obtained informa-
                      tion on state activities from our review of states' implementation of
                      LIHEAP. We discussed the contents of this report with OEA officials and
                      incorporated their views where appropriate. We conducted our work

                       Page 9                                     GAO/HKD-9MBR UHEAP Overview
Section 1

from November 1989 to July 1990 in accordance with generally
accepted government auditing standards.

Page 10                                   GAO/HHD-91-1BR LIHEAP Overview
Section 2

UHEAP HistDiy and Context

                                            The Congress has been committed to helping the poor with energy costs
                                            for more than a decade. LIH?:AP is the most prominent of several pro-
                                            grams that the Congress enacted in the 1970s and 1980s to provide
                                            energy assistance for the poor. The federal government's objectives in
                                            helping to meet energy needs of low-income households, however, have
                                            changed somewhat over time. Since the mid-1970s, federal energy assis-
                                            tance for the poor hiis evolved from a series of one-time crisis assistance
                                            programs and help in meeting rapidly rising energy costs to a continuing
                                            program of general iissistance for a variety of home energy needs. The
                                            federal approach has changed from a program administered by the fed-
                                            eral government through the states to a state-run block grant. Table 2.1
                                            lists the energy assistance programs enacted since 1977.

Table 2.1: Chronology of Energy Assistance Programs for Low-Income Households
Dollars in millions
                                                                                                                          Fiscal years
Program title                                   Statute_                                                  Dale enacted     authorized
Special Crisis Intervention Program             Supplemental Appropriations Act, 1977
                                                { P L 95-26)                                                   5-4-77            1977
Emergency Energy Assistance Program             Supplemental Appropriations Act, 1978
                                                {P L 95-240)                                                   3-7-78            1978
Crisis Intervention Program                     Appropriations for FY 1979—Continuance
                                                (P L 95482)_                                                  10-18-76           1979
Supplemental Energy Allowance Program for the   Department of Ihe Interior and Related Agencies
Low-Income Population                           Ap^pro^ations for pv 1980 (P L 96-126)                        11-27-79           1980
Lovi/ Income Energy Assistance Program          Crude Oil Windfall Profit Tax Act oT 1980—Home ."
                                                Energy Assistance Act of 1980 (P L, 96-223, title III)         4-2-80            1981
Low Income Home Energy Assistance Program       Omnibus Budget Reconciliation Act of 1981—Low
                                                Income Home Energy Assistance Act of 1981 as
                                                amended (P L 97-35, title XXVI)                               8-13-81         1982-84
                                                Human Services Reauthorization Act of 1984
                                                (P L 98-558, title VI)                                        10-30-84        1985-86
                                                Human Services Re.iuthonzation Act of 1986
                                                (P L 99-425, title V)                                         9-30-86         1987-90

                                            Federal LIHEAP funding for 1990 is about $ 1.4 billion (including a
                                            $50 million supplemental appropriation enacted in May 1990). Energy
                                            assistance to the poor is also available directly or indirectly under sev-
                                            eral other federal programs, including Aid to Families With Dependent
                                            Children (AFDC), subsidized housing, food stamps, and Department of
                                            Energy home weatherization assistance. Data are not collected to iden-
                                            tify the portion of these programs' expenditures used to meet energy
                                            needs. While LIHEAP is primarily funded by the federal government,
                                            additional funds have come from legal settlements against major oil

                                            Page 11                                                      (JAO/HRD-9MBR UHEAP Overview
                     Section 2
                     UHEAP History and Context

                     companies for overcharges during the 1970s. A few states also con-
                     tribute funds to the program, and many other programs operated within
                     the states provide direct and indirect energy assistance other than

1977-81: Programs
Provide Crisis
Assistance to Help
Meet Rising Home
Heating Costs

1977-79              Between 1974 and 1979, total home energy prices rose between 50 and
                     108 percent (depending on fuel source) as a result of economic changes,
                     including increased costs of imported oil and oil price decontrol. The fed-
                     eral government initially provided crisis heating assistance to low-
                     income households in response to these rising energy prices in the 1970s
                     (see fig. 2.1). A series of 1-year programs was developed, the first of
                     which was funded in 1977 to provide assistance limited to meeting
                     emergency needs.' The assistance included restoring heat that was shut
                     off or filling fuel tanks during the winter. States received funds to dis-
                     tribute to eligible households under federal rules. The Congress used
                     this approach for 3 years with funding of about $200 million each year.

                     ' From 1974 through 1976, limited funding was available for energy crisis assistance under programs
                     operated by the Community Services Administration designed to meet various other low-income
                     needs as well. ,

                     Page 12                                                      GAO/HRD-91-1BR UHEAP Overview
                     Section 2
                     LIHEAP History and Context

Figure 2.1

       GAO Program Objectives
           Changed Over Time

             Original focus was on crisis
             assistance between 1977-79
             Scope expanded in 1980

1980-81               ^^^ Congress significantly expanded the program to $ 1.6 billion for
                      fiscal year 1980 in response to an extremely cold winter, the effects of
                      doubled oil prices in the late 1970s, and oil price decontrol in April 1979.
                      For the first time, the new 1-year program provided routine heating
                      assistance to low-income households in addition to crisis assistance.^ HHS
                      distributed some funds directly to individuals and distributed the
                      remainder to states for crisis and heating assistance and established eli-
                      gibility criteria for states to follow in providing benefits. The program

                      -42 U.S.C. 5915(1979).

                      Page 13                                        GAO/HItD-91-lBR UHEAP Overview
UHEAP History and Context

had separate allotments for (1) crisis assistance ($400 million distrib-
uted by the Community Services Administration), (2) heating assistance
for Supplemental Security Income recipients ($400 million), and
(3) heating assistance to other needy households ($800 million). The
funds had to be spent for purposes specified in the law.

For fiscal year 1981, the Congress established a more comprehensive
energy assistance program with the enactment of the Crude Oil Windfall
Profit Tax Act of 1980. In drafting this act, the Congress considered
using tax revenues obtained from oil companies' high profits to fund a
program to help the poor meet increasing heating costs. Although the
program was never financed in this manner, the Congress nevertheless
enacted the Home Energy Assistance Act of 1980, which established
UHEAP, as part of the Windfall Profit Tax Act." The Congress appropri-
ated $1.85 bilUon to fund the program in 1981.*

The new program provided routine heating and medically necessary
cooling assistance in addition to crisis assistance. It replaced the 1-year
program for 1980 and functioned somewhat like a block grant. Two
alternative formulas were used to distribute funds to states; each state
received whichever allotment gave it a larger share of the total funds.
Under the new program, the three components were combined into a
single program with one appropriation. This gave states greater flexi-
bility to use the funds where they believed needs were most critical.

^42 U.S.C. 8601-8612 (19801
""This appropriation was made entirely from general revenues. The measure signed into law used
authority from the Economic Opportunity Act to appropriate the funds rather than the Windfall
Profit Tax Act.

P««el4                                                      GAO/HRD-91-IBR UHEAP Overview
                     Section 2
                     UHEAP History and Context

                     In 1981 the Congress recognized that energy costs were a large part of
1981-90: LIHEAP      low-income-family budgets. The belief that energy was a significant cost
Block Grant          item requiring more sustained attention than intermittent emergency
Emphasizes General   assistance led the Congress to redefine the energy assistance program
                     from one of offsetting "... the rising costs of home energy that are
Assistance to Help   excessive in relation to household income''^ to one of assisting "... eli-
Meet Broader Home    gible households to meet the costs of home energy."«Consequently, the
Energy Needs         program's objective changed from helping to meet rising heating costs to
                     providing assistance for a variety of costly home energy needs. (See fig,

                     ^42 U.S.C. 8601 (1980),
                     H2 U.S.C. 8621 (1981).

                      Page 15                                      GA0/HRD-91-1BS UHEAP Overview
                      Section 2
                      UHEAP History and C^intexl

Figure 2.2

       GAO LIHEAP Block Grant
           Created in 1981

             • Changed emphasis to general
               home energy assistance
             • Added weatherization
              Gave states increased
              •fund transfers

                       The Low Income Home Energy Assistance Block Grant was enacted as
                       part of the Omnibus Budget Reconciliation Act of 1981. It was author-
                       ized for 3 years beginning in fiscal year 1982. UHKAP retained the
                       heating, cooling, and crisis components and continued distributing funds
                       to states by formula. The new law, however, added low-cost home
                       weatherization as an additional form of assistance funded under the
                       block grant and also gav(? states greater flexibility in distributing block
                       grant funds by allowing tbem to carry over 25 percent of these funds to

                       Page 16                                       GAO/HRD-9MBR UHEAP Overview
                    Section 2
                    UHEAP History and Context

                    the following fiscal year' and transfer up to 10 percent to other HHS
                    block grant programs, such as Community Services or Social Services.

                    The Congress established LIHEAP as a block grant giving states the flexi-
                    bility to direct funds where they beUeved the greatest needs were. In
                    1981, the authorizing committees believed states had the capacity to
                    identify the neediest households and target benefits to them and that
                    states were better able to target benefits in accordance with numerous
                    variables, such as income, family size, and differing energy costs. The
                    committees intended to provide states with the broadest possible lati-
                    tude in the use of block grant funds. They also intended to minimize
                    federal administrative and regulatory requirements on states.

                    Low-income households also receive indirect and direct energy assis-
Other Federal       tance through other programs administered jointly by the federal gov-
Programs Provide    ernment and the states. Most of this additional assistance is provided
Energy Assistance   indirectly. In these cases, help with energy needs results when benefits
                    are provided to meet another need, such as food or housing. Because
                    states are not required to report data, we do not know the amount of
                    benefits provided that offset energy costs or the number of households
                    served for some of these programs. Examples of programs providing
                    other energy assistance include:*

                    Food stamps: Households receiving food stamps can qualify for addi-
                    tional benefits if they have shelter costs—including home heating—that
                    exceed 50 percent of the net income on which their food stamp eligibility
                    is based. The portion of shelter costs exceeding 50 percent of net income
                    is deducted, lowering the net income and qualifying the household for
                    additional food stamps. These additional food stamps are intended to
                    compensate for higher-than-average shelter costs. About 4.7 million
                    households received $1.5 billion in increased food stamps because of
                    excess shelter costs in fiscal year 1984—the latest year for which data

                    'An amendment to the 1984 reauthorization legislation (P.L. 98-558) reduced the allowable carryover
                    amount to 15 percent of federal funds payable to that state and not transferred to other HHS block
                    '*We did not attempt to develop a comprehensive list of other federal programs providing energy
                     assistance. We identified the programs described here during our review of states' implementation of

                     Page 17                                                      GAO/HRD-91-lBR LIHEAP Overview
Section 2
UHEAP History and Context

are available.^ We are not able to report the amount of deductions attrib-
utable to home heating costs because such data are not collected.

Aid to Families With Dependent Children: All states consider home
energy a basic living need, which AFDC benefits are intended to support.
Ten states designate a portion of AFTX: monthly benefits as energy aid.
These states, however, do not require households to spend this portion
on energy needs. Therefore, we cannot be sure of the actual extent AFtX'
households met their energy costs with these designated benefits. We
were able to develop an estimate of the value of these energy designa-
tions for 1987—the latest year for which data are available. This esti-
mate shows that—on an average monthly basis—about 1.3 million
households received about $49.4 million in AKW.: benefits designated as
energy aid in these 10 states.'"

Ten states also provide AFIX: emergency assistance to eligible households
for energy-related emergencies, such as utility shutoffs or fuel
shortages. Another 14 states and the District of Columbia provide such
assistance for unspecified emergencies. In these cases, it is not clear
whether energy-related emergencies are excluded from coverage. We do
not know the total emergency benefits provided or the numbier of house-
holds served for energy-related needs because states only report com-
bined data for all covered emergencies."

Subsidized housing: When home heating is included with rent, tenants in
federally assisted public housing or section 8 housing receive indirect
heating assistance through rent subsidies. Tenants in units where
heating is not included with rent can receive an allowance in the form of
reduced rent payments to help meet these costs. About 4 million house-
holds received housing assistance under these programs in fiscal year

"Shelter costs include rent, mortgage payments, property taxes, and electricity, as well as heating and
cooling On average, housciiolds claiming a .shelter deduction received additional annual food stamp
benefits of $312.

 '"We made this estimate tor each state by (1) calculating the proportion of assistance designated as
 energy aid in the maximum monthly l)enefit for a family of three, (2) applying the proportion desig-
 nated as energy aid to the average monthly benefit to determine the average monthly energy designa-
 tion, and (3) multiplymg the average monthly energ>' designati<m liy the average monthly number of
 AFtX? families. In addition, some statt>s provide .supplemental AFDC benefits during the winter
 months specifically to iissist with higher heating costs. Wc were not able to readily identify these
 s-tates or determine the total amount of these benefits.

 ' 'All average 19,300 family's a niontii reioived cmei-gency .^FIK) a.ssistant'e for all covered emergen-
 cies in the 10 states providing assistance for energy-related emergencies. Monthly benefits ranged
 from $95 to $41(). Total benefil.s pnivided for the year amounted to nearly $()5 million in these states
 These .statistics are from l!).S7 the latest year for which data are available.

 Page 18                                                          GAO/HRD-91-IBK UHEAP Overview
Section 2
UHEAP History and Context

1987. The amount of benefits that cover home energy cannot be deter^
mined because public housing authorities that administer these pro-
grams are not required to collect and report these data. However, a
recent survey we conducted of households in public and section 8
housing found that tenants whose heat is not included in their rent
receive additional allowances ranging from $10 to $200 per month to
cover utility costs.'2.

Low Income Weatherization Assistance: This program, administered by
the Department of Energy, provides for installation of home weatheriza-
tion materials for low-income households, particularly those of the eld-
erly and handicapped. About 107,000 households received $161 million
in benefits in fiscal year 1988.

 ' ^This review examined data from 1,900 statistically sampled households at 6 public housing authori-
 ties across the United States For further information on energy allowances for subsidized housing
 residents, see Utility Allowances Provided to Public Housing and Section 8 Households and Resulting
 Rent Burdens (GAO/T-RCRD-90-41. Mar 7, 1990).

 Page 19                                                      GAO/HRD-91-tBR UHEAP Overview
                     Section 2
                     UHEAP History and Context

Figure 2.3

       GAD Nonfederal Energy

             Direct programs include:
             •cash assistance
             •fuel funds
             Indirect programs include:
             •percent of income programs
             •moratoria on shut-offs

Nonfederal FnerSV     Many state and local governments, utilities, and charitable organizations
.  .           ^^     provide energy assistance. As figure 2.3 shows, these programs provide
Assistance            both direct and indirect assistance. They provide benefits to both LfflEAP
                      and non-LiHEAP recipients.

                      The extent to which these other programs meet low-income heating
                      needs nationwide is unknown because limited data exist on total funding
                      and households served by them. Available data suggest that most of
                      these programs are relatively small; for example, a total of about
                      $31 million was available nationwide from utility-sponsored fuel funds

                      Page 20                                      GAO/HRIX91-1BR UHEAP Overview
                      Section 2
                      UHEAP History and Context

                      in 1987. In addition, they provide assistance in fewer states than UHEIAP
                      does. However, the impact of some indirect assistance programs is
                      potentially wide; for example, moratoria on utiUty shutoffs existed in at
                      least 38 states (as of 1984), protecting several million low-income house-
                      holds from otherwise losing their heat tmder certain extreme weather

Direct Assistance     Direct assistance programs make cash payments or provide credit to
Programs              needy households or their fuel provider. State or local funds and utility-
                      sponsored fuel funds most often provide this assistance. However, in
                      providing these funds, states often match other federal funding grants,
                      such as emergency assistance provided under APTX:. For example, New
                      Hampshire allocated a total of $200,000 of its AFDC emergency assis-
                      tance funds for energy needs in fiscal years 1990 and 1991. The state
                      matched this with $200,000 of its own funds.

Indirect Assistance   Indirect assistance programs typically offer eligible households credit,
Programs              loans, specially structured payment plans, or protection from loss of
                      heat. Examples of the programs available include:

                      moratoria on heat shutoffs under certain extreme weather conditions or
                      in households with a critical need for heat (however, households con-
                      tinue to accme unpaid heating bills under moratoria),
                      loans to meet heating expenses, and
                      percentage-of-income plans, that require participating households to
                      pay a certain percentage of their income toward heating costs (costs
                      above this percentage can be passed on to utilities' noneligible

                      Page 21                                       GAO/HRD-91-IBR UHEAP Overview
                                 Section 2
                                 UHEAP History and Context

Figure 2.4

       GAO LIHEAP Funding Sources
           (FY 1989)

              • 89% from federal block grants
              • Over 10% from oil overcharge
              • Less than 1 % from state and
                private sources

T ITTF AP Ts P r i m a r i l v   ^^ shown in figure 2.4, about 89 percent of LIHEAP funds in fiscal year
           .j^     , ,           1989 came from federal block grant appropriations. Over 10 percent of
r ederally r undeCl              program funds came from oil overcharge settlements, and less than 1
                                 percent came from states and other nonfederal sources. Since 1986, oil
                                 overcharge settlement funds have become a more significant funding
                                 source. They have offset a portion of the decline in funds from the fed-
                                 eral block grant, which dropped 34 percent between 1985 and 1989.

                                  Page 22                                     GAO/HRD-91-1BB UHEAP Overview
                                            Section 2
                                            LIHEAP History and Context

Figure 2.5

        GAO LIHEAP Funding
            (FY 1982-89)
             2900   OoHaralnimiloin

               1082         toas         1M4
                           Federal BtotH Grant Funds
                           Fnlwal Bbdi Gnnt Funds Pka Oil Overcharse

                                             Note. Fundrng from state and nonfederal sources is not shown

Federal Block Grant                          While the federal block grant remains the dominant source of LIHEAP
Remains Largest Funding                      funds, it has declined about one-third since 1985. Figure 2.5 illustrates
                                             the importance of the block grant as a share of program funding. In
Source                                       fiscal year 1985, total LIHEAP funding was about $2.3 billion of which 99
                                             percent was federal block grant assistance. In fiscal year 1989, LIHEAP
                                             funding was about $1.6 billion, and the block grant funds comprised 89
                                             percent of the entire amount.'^

                                             '•'of the block grant funds, 84 percent are from current year allotments to states and 5 percent from
                                             carryovers to the current year. Most, but not all, carryover amounts are from federal funds.

                                              Page 23                                                       GAO/HRD-91-1BR UHEAP Overview
                            Section 2
                            LIHEAP History and Context

Oil Overcharge Settlement   Since 1985, oil overcharge settlement funds have increased as a per-
                            centage share of LIHEAP funds and offset some of the decrease in federal
Funds Replaced Part of      block grant funds. These funds became available from legal settlements
Federal Cuts                related to price overcharges made by those crude oil producers who vio-
                            lated price controls (the controls were aboUshed in 1981). Federal law
                            allows the Department of Energy to recover these funds through regula-
                            tory or court action, after which, it distributes the funds to states and
                            territories from a separate escrow account. States and territories must
                            use most of their oil overcharge funds for LIHEAP and any of four Energy
                            programs.i"" They can also use some of their oil overcharge funds for
                            other discretionary projects that promote energy conservation and are
                            approved by the Department of Energy.

                            The increased importance of overcharge funds in comparison with the
                            block grant funds is shown in figure 2.5. The use of overcharge funds in
                            UHEiAP increased from about $6.2 million in fiscal year 1985 to
                            $173.7 million in fiscal year 1989. The share of total funding from oil
                            overcharge funds increased from less than 1 percent in fiscal year 1985
                            to almost 11 percent in fiscal year 1989. Available oil overcharge funds
                            are decreasing and expected to run out in the mid-1990s.

                            The significance of oil overcharge funds as a share of total LIHEAP
                            funding varies widely among states, as shown in figure 2.6. For
                            example, these funds comprise about 23 percent of Georgia's total
                            UHEAP funding, while New Hampshire uses no oil overcharge funds for
                            LIHEAP. This disparity occurs for two reasons. First, oil overcharge funds
                            are distributed to states on the basis of petroleum-product consumption
                            in each state. This includes gasoline and other nonheating fuels. As a
                            result, the percentage distributions of oil overcharge funds to each state
                            differs from the percentage distributions of federal LIHEAP funds. For
                            example, while Florida received 1.4 percent of federal LIHEAP funds from
                            1982 to 1987, it received 4.6 percent of the total overcharge funds
                            during that time. Second, states may use these funds for non-LiHEAP
                            activities, such as energy conservation. In fiscal year 1989, 27 states
                            apportioned oil overcharge funds to LIHEAP in amounts ranging from 0.1
                            to 46 percent of their total UHEAP funds.

                            '""For more detailed background on the origin, distribution, and uses of oil overcharge settlement
                            funds see, Energy Conservation: Funding State Energy Assistance Programs (GAO/RCED-87-114FB,
                            Mar. 1987) and Low-Income Energy Assistance: State Responses to Funding Reductions (GAO/
                            HBD-88-92BR, Apr. 1988). The four programs are the State Energy Conservation Program, Energy
                            Extension Service, Institutional Conservation Program, and Weatherization Assistance Program.

                            Page 24                                                     GA0/HRD-91-1BR LIHEAP Overview
                                           Section 2
                                           LIHEAP History and Context

Figure 2.6: Percentage of LIHEAP Funding From Oil Overcharge Funds in 50 States (Fiscal Year 1989)

                                                      0 Percent (N.23)

                                                ;   : | 0.1 -9 Percent(N=10)

                                              ^ ^ 1    10-19 Percent (IM=8)

                                                       20 - 29 percent {N=7)

                                                       30 Percent or More (N=2)

Minor Role of State and                     State and nongovernment funding has historiceilly been very low in both
Nongovernment Funds                         total dollars and as a share of LIHF^P funding. The share of funds from
                                            these sources has averaged less than 1 percent since fiscal year 1983.
                                            Moreover, funds from these sources decreased 66 percent—to about

                                            Page 25                                            GAO/HaD-91-lBR UHEAP Overview
                                         Section 2
                                         LIHEAP History and Context

                                         $6.4 million—in fiscal year 1989, from the $17 to $19 million main-
                                         tained in the previous 4 fiscal years. This decrease resulted when Mas-
                                         sachusetts reduced its UHJIAP funding support by about 80 percent in

                                         As shown in table 2.2,13 states contributed their own funds or chan-
                                         neled funds from private sector sources into UHEAP between 1985 and
                                         1989. Six states made contributions in fiscal year 1989, ranging from 0.3
                                         to about 11 percent of their total LIHEAP funding. Each year since 1985,
                                         between three and eight states used their own or private sector funds
                                         for LIHEAP. Private funds come from such sources as utihty-sponsored
                                         fuel fund donations or reimbursements from utilities to cover state
                                         administrative costs. "^'

Table 2.2: State and Other Funding for
LIHEAP (Fiscal Years 1985-89)            Dollars in thousands
                                         State                                     1985          1986          1987          1988          1989
                                         Arkansas                                                              $535          $200            $67
                                         Delaware                                                                                             67
                                         Georgia                                                                 654           313
                                         Indiana                                   1.747
                                         Louisiana                                                               187
                                         Maryland                                                                 48            88         1,198
                                         Massachusetts                            17,000        14,213        14,000        14,000       ' 3,437
                                         Missouri                                                                263         2,213
                                         Oklahoma                                                1,347         1,139                       1,617
                                         Rhode Island                                                                                         50
                                         South Carolina                                             82           159
                                         Texas                                                                                 650
                                         Virginia                                                1,500
                                         Total                                  $18,754      $17,142       $18,985       $17,464         $6,435

                                         Note Figures are reported to HHS by states
                                         Source Low Income Home Energy Assistance Program Report to Congress for Fiscal Years 1985-89
                                         (Washington D.C, HHS, July 1986-Aug 1989, forthcoming, Oct 1990)

                                         Individual households can receive UHEAP benefits under four compo-
LIHEAP Provides Four                     nents: heating, cooling, crisis, and weatherization assistance (see fig.
Types of Assistance                      2.7). Each component has a different purpose.

                                         '^utilities reimburse states for their costs when they request states to provide data on or to process
                                         applications for households that may be eligil^le for utility-sponsored energy assistance programs.

                                         Page 26                                                         GAO/HKD-91-1BR UHEAP Overview
                       UHEAP History and Context

Figure 2.7

       GAO Types of LIHEAP

              Heating assistance
              Cooling assistance
              Crisis assistance
              Weatherization assistance

Heating and Cooling    LIHEAP heating and cooling benefits assist households in paying their
Assistance             costs associated with these needs. Nationwide, heating assistance
                       accounts for 62 percent of LIHEAP spending. Cooling assistance is avail-
                       able for those households in which extreme heat may pose serious med-
                       ical problems to the occupants. It accounts for less than I percent of
                       LIHEAP spending.

Crisis Assistance      Crisis benefits help meet emergency needs. These could occur, for
                       example, when a household has used all its heating benefits or sudden

                       Page 27                                     GAO/HIU>-91-lBR UHEAP Overview
                            Section 2
                            UHEAP History and Context

                            severe weather forces the household to use more heat than it is able to
                            pay for. Households receive benefits to help make a payment that will
                            restore shut-off heating or cooling service, prevent service from being
                            shut off, or meet other energy crisis needs. It comprises about 12 per-
                            cent of LIHEAP spending.

Weatherization Assistance   Households can receive benefits that include free materials and labor to
                            install energy conservation or weatherization features, such as insula-
                            tion and storm windows. This benefit is intended to help a low-income
                            household reduce its energy costs over a period of years. This compo-
                            nent comprises about 9 percent of state LIHEAP spending.'f'

                            "'Transfers to other block grants, carryovers to the following fiscal year, and expenditures for
                            administrative costs account for I(> percent of state LIHEAP expenditures.

                            Page 28                                                        GAO/HRD-91-iBR UHEAP Overview
Section 3

LIHEAP'S Role in Meeting the Heating Costs of
Low-Income Households

               HHS data show that households receiving LIHEAP assistance spend 14 per-
               cent of their income to meet total home energy costs. This is about four
               times greater than the percentage share of income all households spend.
               Home heating costs alone account for about 5 percent of income for
               households receiving UHEAP.' LIHEAP benefits pay about one-half of these
               heating costs, although this amount varies widely by region.? Because
               each state determines benefit levels for its jurisdiction, average heating
               benefits vary.

                'The distinction between total home energy costs and home heating costs is important t)ecause the
                statute only allows LIHEAP to assist with heating or cooling costs. LIHEAP benefits do not cover
                other household energy costs, such as hot water, lighting, and electric appliances. Other studies have
                attempted to assess LIHEAP by the extent to which it helps meet total home energy costs. M^or
                studies that focused on how well energy assistance programs helped low-income households meet
                total home energy costs include: Energy and the Poor—The Forgotten Crisis (Washington, D.C,
                National Consumer Law Center, May 1989), Narrowing the Gap: The Energy Needs of the Poor and
                Federal Funding (Washington, DC , Northeast Midwest Institute, Jan. 1988), and Low Income Energy
                Programs at Mid-Decade: Umits and Opportunities (Arlington, Va., National Association for State ,
                Community Services Programs. June 1986).
                "Low Income Home B^ergy Assistance Program: Report to Congress for Fiscal Year 1989 (Wash-
                ington, D.C, HHS, forthcoming, Oct, 1990). HHS obtains data on low-income households' use of
                energy assistance from the Census Bureau's Current Population Survey and data on home energy
                costs, consumption, and fuel type for low-income households from the Department of Energy's Resi-
                dential Energy Consumption Survey

                Page 29                                                       GAO/HRD-91-1BR UHEAP Overview
                     Section 3
                     UHEAP'S Role in Meeting the Heating Costs
                     of Low-Income Households

Figure 3.1

       GAD Energy Costs
           and the Needy

             Total home energy cost is
             about 14% of LIHEAP
             household income
             Heating cost is about 39% of
             total home energy cost
             LIHEAP benefits offset about
             52% of recipient heating costs
             LIHEAP assists about 1/3 of
             eligible low-income households
                      About one-third of eligible households (6 million) receive heating and
                      winter crisis aissistance. Most of these, about 5.6 million, received UHEAP
                      heating assistance in fiscal year 1989. About one-third of households
                      receiving heating assistance have elderly residents, and 19 percent have
                      handicapped residents.

                      page 30                                       GAO/HRD-91-1BR LIHEAP Overview
                                      UHEAP'S Bale In Meeting the Heating Costs
                                      of Low-Income Households

Figure 3.2: Home Heating Costs as a
Percentage of Household Income        10    Percentage of Household Income
(Fiscal Years 1982-89)

                                           FIsesI Year

                                             [      I LIHEAP Households

                                                         All Households

                                      Note- 1984 figure tor UHEAP households is estimated

                                      LIHEAP households, on average, use about 5 percent of their income
Heating Costs                         ($395 a year in fiscal year 1989) for home heating costs compared with
Consume a Higher                      about 1 percent ($377) for all households. Heating accounts for much of
Percentage of Low-                    home energy costs; it averages about 39 percent of total home energy
                                      costs for LIHEAP households, and about 34 percent for all households.
Income Household                      Nationwide, households receiving LIHEAP assistance use about 14 percent
Earnings Compared to                  of their income for total home energy costs, on average. By comparison,
                                      the average for all households is about 3 percent. Figure 3.2 shows how
All Households                        home heating costs as a percentage of income have generally decreased
                                      since 1982.

                                       Page 31                                              GAO/HRD-91-1BR UHEAP Overview
                                          Section a
                                          UHEAFs Role in Meeting the Heating Coste
                                          of Low-Income Households

Figure 3.3: Home Heating Cost as a
Percentage of Household Income, by
                                              Percentage ot Income
Census Bureau Region (Fiscal Year 1989)

                                              Northeast              North Central   South     West

                                                       LIHEAP Households

                                                       All Households

                                          Average heating costs, however, vary significantly by region and fuel
                                          type. By region, the costs for UHEAP households range from 2 percent of
                                          income in the West to over 7 percent in the North Central states. Figure
                                          3.3 shows the differences among Census Bureau regions. By fuel type,
                                          costs range from 4 percent of income for electric heat to almost 7 per-
                                          cent for fuel oil. Appendix I details heating costs as a percentage of
                                          income for each region. Appendix II details these costs by fuel type.

                                          Page 32                                            GAO/HRI>»l-lBK UHEAP Ovenriew
                                      Section 3
                                      UHEAP'S Role in Meeting the Heating Costs
                                      of Low-Income Households

Figure 3.4: LIHEAP Funding Compared
With LIHEAP Household Heating Costs   2500   Dollars In Millions                                                Dollara par Household    500
(Fiscal Years 1982-89)

                                      2000                                                                                              •400

                                      1500                                                                                               300

                                      tooo                                                                                               200

                                       500                                                                                               100

                                             — ^       Total LIHEAP Funding
                                             ••>•••    Average Annual LIHEAP Household Heating Costs

LIHEAP Funding and                    Average home heating costs for LIHEAP households have decreased
Household Heating Costs               overall since 1982 due in part to stable or declining fuel prices, LIHEAP
                                      funding peaked in 1985 and roughly corresponded to the overall
                                      decrease in heating cosl-s, as shown in figure 3.4.

                                      Page 33                                                          GAO/HRD-91-1BR LIHEAP Overview
                                        Section 3
                                        UHEAFs Role in Meeting the Heating Costs
                                        of Low-Income Households

Figure 3.5: Home Heating Costs Offset
by LIHEAP Benefits, by Census Bureau
Region (Fiscal Year 1989)

                                          Census Bureau Region

                                               I       \ Average LIHEAP Household Heating Cost

                                               ^ ^ Q    Average LIHEAP Heating Benefit

                                        The proportion of household heating costs UHEAP benefits offset varies
Amount of Heating                       across regions of the country. It ranges from a household average of 41
Costs LIHEAP                            percent of heating costs in the North Central states to an average of 88
                                        percent in the West.' Figure 3.5 shows the differences among Census
Benefits Offset Varies                  Bureau regions.
by Region

                                         •'The average offset nationwide is about 52 percent.

                                         Page 34                                                 GA0/HRI^91-1BR UHEAP Overview
                                            Section 3
                                            LIHEAP's Bole in Meeting tlie Heating Cost»
                                            of Low-Income Houseliolds

Figure 3.6: Average LIHEAP Heating Benefits in the 50 States (Fiscal Year 1989)

                                                       Less than $100 (N=5)

                                              [.   :: I $100-$199(N=20)

                                              »    •   $200-$299(N=14)
                                                       $300 - $399 (N=6)
                                                       $400 or More (N=5)

                                             Average household heating benefits also varied among states, ranging
                                             from $51 in Texas to $473 in Connecticut for the fiscal year 1989
                                             season. Figure 3.6 shows how these benefit levels vary across the
                                             country. Nationally, heating benefits averaged $182. Average household
                                             winter crisis benefits varied as well, ranging from $67 in Florida to $640

                                             Page 35                                      GA0/HRD-91-1BR LIHEAP Overview
                                     Section 3
                                     LIHEAFs Role in Meeting the Heating Costa
                                     of Low-Income Houseliolds

                                     in Minnesota for the fiscal year 1989 season.* Nationally, they averaged
                                     $208. Appendix III shows average household heating and winter crisis
                                     benefits for all states and the District of Columbia.

Figure 3.7: Average LIHEAP Heating
Benefits Compared Witli LIHEAP
                                     Dollars Par Household
Household Heating Costs
                                     500 ^
(Fiscal Years 1982-89)










                                       1982           1983         1984         1985          1986         1987          1988          1989
                                       Fiscal Year

                                                 •mm Average LIHEAP Heating Benefits
                                                 • " Average Annual LIHEAP Household Heating Costs

                                     Average LIHEAP household heating costs, nationwide, declined by 19 per-
Shifts in Household                  cent between fiscal years 1982-89. Nationwide, average heating benefits
Heating Costs and                    declined about 4 percent during this time (although they increased
Benefit Levels (Fiscal               steadily to 1985 then gradually fell), Figure 3.7 compares these trends.
                                     Appendix III shows the change in benefit levels for each state between
Years 1982-89)                       fiscal years 1982-89.

                                     ''These averages do not include three states that did not provide winter crisis benefits and two states
                                     that placed crisis applicnnts into their heating programs.

                                     Page 36                                                         GA0/HRD-91-IBR LIHEAP Overview
                    Section 3
                    LIHEAFs Role in Meeting tlie Heating Costs
                    of Low-Income Housetiolds

                    About 6 miUion households receive LIHEAP assistance out of about 17
LIHEAP Helps One-   million that are eligible nationwide, based on income eligibility stan-
Third of Eligible   dards set by the states. While the number of eligible households
Households          remained relatively constant since 1986, the number of households
                    receiving assistance decreased about 12 percent. The LIHEAP statute
                    allows states to set maximum income eligibility up to 160 percent of the
                    poverty-level income or 60 percent of the state median income, which-
                    ever is higher.^ Nonetheless, a state cannot exclude from eligibility any
                    household whose income is less than 110 percent of its poverty level.
                    Twenty-nine states have set their standards below 150 percent. If all
                    states used the maximum federal income eligibility standard of 150 per-
                    cent of poverty or 60 percent of state median income, about 25 million
                    households would be eligible. Therefore, at existing program funding
                    levels, about one-fourth of ehgible households would receive benefits if
                    all states used this standard."

                     •''Since states have the option of .setting income eligibility at 60 percent of state median income, the
                     poverty level income eligibility standards for seven states are greater than 150 percent. The highest
                     level is 183 percent.
                     '"Because we do not have accurate data on the number of eligible households in each state, we caimot
                     determine individual state differences in the percentage of eligible households receiving LIHEAP

                     Page 37                                                          GAO/HRD-911BR LIHEAP Overview
                      Section 3
                      LIHEAP's Role in Meeting the Heating Costs
                      of Low-Income Households

Figure 3.8

      GAO Households Served by
          LIHEAP (FY 1989)

             5.6 million households received
             heating benefits
             •2 million are elderly
             •1 million are handicapped
             1 million households received
             crisis benefits

                      About 5.6 million households received heating assistance from LIHEAP in
                      fiscal year 1989, including about 2 million households with elderly
                      residents and about 1 million with handicapped residents.^ (See fig. 3.8.)
                      About 1 million households received crisis assistance in fiscal year 1989;
                      about two-thirds of these also received heating assistance.

                      'The totals for households with elderly or handicappied members may overlap; i.e., some elderly
                      households may also be handicapped households.

                      Page 38                                                      GAO/HltD-91-lBR LIHEAP Overview
                                               Section 3
                                               LIHEAP's Role in Meeting the Heating Costs
                                               of Low-Income Households

Figure 3.9

       GAD Households Receiving LIHEAP
           Benefits (FY 1982-89)
             7   MDUong of HouMholds

             1962         1983
             FlKtl Yiar

                          Heaung SeneliB
                          Winter and Year.Round Grists Benetits

                                                Figure 3.9 shows that the number of households receiving heating assis-
                                                tance between fiscal years 1982-87 was relatively stable, and declined
                                                about 14 percent thereafter. This parallels the pattern for LIHEAP
                                                funding shown in figure 2.5. Figure 3.9 also shows that the number of
                                                households receiving winter crisis assistance increased from about
                                                700,000 in fiscal year 1982 to about 900,000 in fiscal year 1989.
                                                Appendix IV shows the change in households served in individual states
                                                between 1982 and 1989.

                                                 Page 39                                    6AO/HBD-9MBR UHEAP Overview
Section 4

States Have Primary Role in
Adrmnistering LIHEAP

                        States have primary responsibility for administering LIHEAP and distrib-
                        uting benefits. Although the federal government has placed some limits
                        on state discretion, states continue to have a wide range of options in
                        determining and distributing benefits. Figure 4.1 outlines the key admin-
                        istrative characteristics of the program.

Figure 4.1

       GAO Program Structure

              Administered by HHS
              Broad state discretion
              •lessened in recent years
              •tighter eligibility, reporting

              States administer program
              components differently

Fpdpral Rolf Ts         HHS'S responsibilitiesinclude distributing funds to states; reviewing state
                        plans and uses of funds; monitoring state compHance with the law; pro-
 Lirtllted.             viding technical assistance; and gathering and reporting data, such as
                        (1) national trends in energy use, (2) energy costs for low-income house-
                        holds, and (3) state activities and accomplishments (see fig. 4.2). By law,

                        Page 40                                      GAO/HRD-9I-IBR LIHEAP Overview
                            Section 4
                            States Have Primary Role in
                            AdnUnistering LIHEAP

                            States undertake major program activities, such as determining and pro-
                            viding benefits to needy households, conducting outreach to eligible
                            households, and controlling and auditing the use of funds.

Figure 4.2

       GAO HHS Management

                 Distributes funds by formula
                 Monitors state compliance
                 Provides technical assistance
                 Gathers data on state
                 activities and accomplishments

F u n d s Distributed t o   ^'^ originally distributed funds to states by a formula established under
States bv Formula           ^^^ ^^^^ Home Energy Assistance Act. The formula considers such fac-
                            tors as the number of heating degree days, home heating expenditures,
                            total residential energy expenditures, and the low-income population in
                            each state. This distribution formula was first used in 1981.

                             Page 41                                     GAO/HRD-91-1BR LIHEAP Overview
                          Section 4
                          States Have Primary Role in
                          Administering LIHEAP

                          The current LIHEAP statute provides that funds be distributed to states
                          according to the percentage distributions calculated in fiscal year 1984,
                          in any year appropriations are $1,975 billion or less. As a result, the
                          relative proportion of total funds distributed to each state in fiscal year
                          1990 is the same as it was in fiscal year 1984. Funds were distributed in
                          this manner every year except fiscal years 1985 and 1986. The 1984
                          reauthorization amendments changed the distribution formula, but also
                          provided that it would be used only if funding exceeded $1,975 billion.
                          When funding fell below this level in 1987, the percentage distribution
                          used before 1985 was restored (see app. V).

State Plan Review and     HHS annually reviews each state's program plan before the beginning of
                          the fiscal year in which it is to take effect, HHS must ensure that each
Monitoring                plan addresses all statutory assurances and meets all statutory require-
                          ments for completeness. It awards funds as soon as it determines a
                          state's application is complete. Potential compliance problems are noted
                          for later resolution, HHS then reviews all applications for compliance
                          with the statute and also conducts eight or nine detailed state compli-
                          ance reviews each year based on more detailed program documents sub-
                          mitted by these states, HHS also makes site visits to a number of these

Technical Assistance to   HHS provides guidance to grantees describing relevant issues, and tech-
States                    nical assistance through the LIHEAP Clearinghouse. The Clearinghouse
                          serves as a centralized source of information and advice on providing
                          energy assistance and administering programs. It responds to specific
                          questions and concerns of individual states, and issues memoranda to
                          states on ideas or issues of common concern.

                           In addition, HHS issues periodic bulletins advising states of new program
                           developments and other relevant issues and responds to inquiries from
                           states, HHS also promotes the dissemination and exchange of ideas for
                           implementing UHEAP by preparing an annual catalog of state program
                           characteristics and funding research, conferences, and workshops.

HHS Data Gathering and     Throughout the year, HHS gathers and analyzes data on state programs
Reporting                  and national patterns of energy use and costs in low-income households.
                           These data include state-reported statistics on sources and uses of funds
                           and households servt^d, and Census Bureau and the Department of
                           Energy statistics on low-income household energy use, costs, income.

                           Page 42                                       GAO/HRD-91-1BR LIHEAP Overview
                            Section 4
                            States Have Primary Role in
                            Administering LIHEAP

                            and financial assistance, HHS prepares several reports on its analyses of
                            these data for distribution to the Congress, states, and any other inter-
                            ested parties.

                            Based on our discussions with HHS, the following generally summarizes
Methods for Obtaining       state practices in applying for benefits. Although states typically estab-
Benefits Differ Among       lish their own application procedures, they are basically similar among
Program Components          all states for each of the program components.

Heating and Cooling         A household generally must apply for benefits each year. To apply for
Assistance                  heating or cooling assistance, a household member typically completes a
                            written application for assistance and presents it at the appropriate
                            local assistance or social services agency (e.g., a community action
                            agency (CAA) or local welfare office) or, less frequently, to their utility
                            company or fuel supplier. Applications can only be filed during the
                            state-specified application period. This period can range from a few
                            weeks to a full year. The state processes completed applications to
                            determine eligibility and benefit amoimts. Depending on the state, appli-
                            cations may be processed by local or state agencies. The processing
                            agency notifies the household and/or its energy supplier when eligibility
                            and benefits have been determined. Most states pay benefits directly to
                            the energy supplier and notify the household of these payments. The
                            household then receives credit on its bill.

Crisis Assistance           To apply for crisis assistance, a household member typically applies at a
                            local assistance agency. This agency determines eligibility and benefits.
                            Federal law requires local agencies to provide enough assistance to
                            resolve the crisis within 48 hours of the time an application is filed (18
                            hours in life-threatening situations). Households generally do not have
                            to be receiving heating or cooling assistance to qualify for crisis assis-
                            tance. The local assistance agency usually makes payment directly to
                            the energy supplier.

Weatherization Assistance    Typically, a hou.sehold member applies for benefits at a local adminis-
                             tering agency, which sometimes does not administer the heating or crisis
                             components. In many states, this agency may also select the household
                             for priority weatherization because it has unusually high heating costs.
                             Typically, the agency then retains a private contractor to determine

                             Page 43                                      OAO/HRD-911BB LIHEAP Overview
                         Section 4
                         States Have Primary Role In
                         Administering LIHEAP

                         what weatherization features the household needs and to install them.
                         The contractor usually receives cash payments directly from the s^ency.

                         states have broad discretion to meet the statutory requirements of
States Have Wide         UHEAP and distribute benefits. Because it is a block grant, states can—
Latitude in              within the statutory requirements—choose their methods of administra-
Administering            tion, eligibility criteria, benefit levels, and funding levels for the various
                         program activities, such as weatherization and crisis assistance. For
LIHEAP                   example, the statute requires states to agree to provide, in a timely
                         manner, the highest benefits to households with the lowest incomes and
                         highest energy costs in relation to income, taking into account family
                         size. It prescribes no more detailed requirements for varying benefits in
                         this manner. As a result, each state has developed different combina-
                         tions of factors to use in varying benefits.

                         The original statute (P.L. 97-35) did contain some limits to state discre-
                         tion in specific areas, such as placing upper limits for states' income eli-
                         gibility standards. However, the Congress has set additional limits over
                         the past 6 years in response to specific instances in which it felt states
                         were not meeting the program's objectives. For example in 1984, the
                         Congress prohibited states from setting income eligibility lower than 110
                         percent of the poverty level (effective from fiscal year 1986 on). The
                         Congress took this action after discovering that some states were setting
                         income eligibility levels far lower than intended. Appendix VI lists the
                         more significant congressional actions limiting state discretion since the
                         program was created in 1981.

                         Because they are given broad discretion, states vary in how they
States Use Latitude to   operate their UHHAP programs. This includes the primary state and local
Administer LfflEAP       administering agencies and the types of activities performed by state
Differently              and local agencies (see fig. 4.3).

                          Page 44                                        GA0/HRIK91-1BR UHEAP Overview
                                      Section 4
                                      States Have Primary Role in
                                      Administering LIHEAP

Figure 4.3

       GAO States Administer
           Program Differently

                     Components are different
                     State administering agencies
                     Local administering agencies
                     Local agencies have varied
                     level of activity

S t a t e s O p e r a t e Different   ^" fiscal year 1989, every state and the District of Columbia provided
P r o g r a m ComoonentS              heating and crisis assistance. Only 9 states and the District of Columbia
                                      provided cooling assistance, while 42 states and the District of Columbia
                                      provided weatherization assistance. Figure 4.4 shows the program com-
                                      ponents operated by each state.

                                      Page 48                                      GAO/HRD-91-lBR LIHEAP Overview
                                          Section 4
                                          States Have Primary Role in
                                          Administering LIHEAP

Figure 4.4: LIHEAP Components Operated by the 50 States (Fiscal Year 1989)

                                             I   . I Heating and Crisis (N=5)

                                                      j Heating, Crisis, and Cooling ( N ^ )

                                             PiS^       Heating, Crisis, and Weatherization (N=33)

                                                  I     Heating, Crisis, Cooling, and Weathenzation (N=10)

State and Local                            State public welfare and social services departments most commonly
Administering Agencies                     administer the LIHEAP heating and crisis components. In a smaller
Vary                                       number of states, however, economic opportunity, conamunity affairs, or
                                           state energy departments or offices administer these components. Social
                                           services departments and state economic opportunity offices most com-
                                           monly administer the cooling component. Community affairs depart-
                                           ments are the most common administering agencies of the

                                           Page 46                                                           GAO/HRD-91-1BR UHEAP Overview
                                         Section 4
                                         States Have Primary Role in
                                         Administering UHEAP

                                         weatherization component. Table 4.1 shows the number of states in
                                         which various types of state agencies administer LIHEAP.
Table 4.1: Number of State LIHEAP
Administering Agencies, by Agency Type                                         Number of states administering program component
and Program Component                    Type of agency                          Heating   Cooling       Crisis    Weatherization
                                         Public welfare department                    13          2          12                 4
                                         Social services departmeni                   17          3    '     18                 6
                                         Economic opportunity office                   8          3           7                 6
                                         ComiTiunity affairs department                6          2           8                 9
                                         State energy office                           3          1      3                     '5
                                         Otfier agency                                 9          2           5                13
                                         Note Colunnn totals may be gfealer itian 51 because some states designate more tfian one adminis-
                                         tering agency to operate a LIHEAP component
                                         Source Catalog of Fiscal Year 1989 State Low Income Home Energy Assislance Program Ctiaractens-
                                         lics (Washiington, D.fc National Center for Appropriate Technology, Nov 1969)

                                         At the local level, CA.\S and county or local welfare offices are the most
                                         common LIHEAP administering agencies. They differ, however, in the
                                         number of LIHEAP components they administer. In some states, the same
                                         local agency administers all components operated in that state; in most
                                         states, two or more local agencies administer different components. For
                                         example, in New Hampshire and Idaho, CAAS administer all components
                                         of their states' programs at the local level, while in Ohio, CAAS admin-
                                         ister the crisis and weatherization components, but other local agencies
                                         administer the heating < omjjonent.

Activities of                             State and local agencies also vary in the types of activities they perform.
Administering Agencies                    For example, in New Hampshire, CAAS perform most administrative
                                          activities, including outreach, accepting and processing applications,
Vary                                      determining benefits, and making benefit payments. Also, the state divi-
                                          sion of human resources conducts financial management and oversight
                                          activities. In Ohio, by contrast, CAAS only conduct outreach for the
                                          state's heating component, but conduct nearly all administrative activi-
                                          ties for the crisis con\i)t)nent. The Ohio Department of Development's
                                          Home Energy Assistance Program office conducts most other adminis-
                                          trative activities for the heating component, distributes funds to CAAS,
                                          and conducts oversight for the crisis component.

                                          Page 47                                                      GAO/HRD-911BR UHEAP Overviewr
Appendix I            •

Home Heating Costs as a Percentage of Income,
by Region (Fiscal Years 1982-89)

Region                                                         19820   1983     1984      igss      1966     1987     1986      1969
                          -   •   —                        -

United States
  All households                                                         1.6      17        16        14       1.2      1,2       1.1
  LIHEAP households                                              68      70       72        6.6       6.2      5,2      5.4       5.4
  All households                                                         26       27        22        2.1      17       1,7       15
  LIHEAP households                     —                 _      89     110      10 1       7,8       7.1      6,4      8,0       6.9
North Central
  All households                                                         19       2.2       21       1.8       15       15        15
  LIHEAP households                                              77      89       9.0       8.7      8,2       6.9      7,3       74
  All households                                                  •      12        1.3      1.1       1.1      0,9       1,1      09
  LIHEAP households                                              43      5.0       5.5      50        47       37        45       4.2
  All households                                                         09       09        09        07       0.7       0.6      0.6
  LIHEAP households                                              30      3.3      3.3       3.8       3.2      28        2.3      2.3
                                      ^Data for all housetiolds are not available.
                                      Source Low Income Home Energy Assistance Program Report to Congress; for Fiscal Years 1982-89
                                      (Washington, D C , HHS, AnnualReporl) The 1984 data for LIHEAP households is estimated by GAO

                                      Page 48                                                     GAO/HRD-91-1BB LIHEAP Overview
Appendix II

Home Heating Costs as a Percentage of Income,
by Fuel Type (Fiscal Years 1982-89)

Type of Fuel                                       1982' 1983 1984»                   1985      1986   1987    1988 1989
Natural gas
  All households                                         •         1.6        17        17       1 4     13     1,2     12
  LIHEAP households                                   59          72            •       72       62      5,5    58      5,8
  All households                                         •         12         1,3       1 1      1 1     10     10      09
  LIHEAP households                                   48          52                . 6 , 2      58      51     4.4     43
Fuel oil
  All households                                         •        31          2,9       25       24      1,6     17     16
  LIHEAP households                                  10 8         12 6          •       8,8      90      6.4    72      65
Kerosene     *
  All households                                         •               <=         '=1.7        17      1,2     11     09
  LIHEAP households                                          ••          •=     •       8,9      64      46     4.5     53
Liquefied petroleum gas
  All households                                         •         23         18        18       1,7     1,1     14     1,2
  LIHEAP households                                   6.2          57           «       4.7      65      5.8    62      56

                          ^Data for all households are not available
                          •'Data for LIHEAP households are not available
                          •^Kercsene is included with fuel oil
                          Source Low Income Home Energy Assistance Program. Report to Congress for Fiscal Years 1982-89
                          (Washington, D C . HHS, Annual Report) '

                          Page 49                                                             GAO/HRD.91-1BB UHEAP Ovenievf
Appendix III

Average Household Heating and Crisis Benefits,
by State (Fiscal Years 1982,1985, and 1989)

Rounded to the nearest dollar
                                                                 FY 1985'''                      FY1969'''
                                    . FY1982»'>«                              Winter                           Winter
State                              Heating       Crisis    Heating             crisis       Heating             crisis
Alabama                                $53        $124"      $112"                             $112              $100
Alaska                                    430       229        485^             $300            381                377
Arizona                                   136*    ' 165      ""i"25^           ^125             127"               100
Arkansas                                  139     ' 111"                       _l"27""          102                120
California                                 73       124                          150"            73"               161
Colorado                                  263
                                                    217          3"4r          _ ^i             255                473
                                          521       279    _   _520              200"           473                119
Delaware                                  270       106                           99            326                100
District of Columbia                      293       150          334           _200             241                163
Florida                                   152*       92          139"            "o'             80"              ' 67
Georgia                                   146       118          150'            150             129               194
Hawaii                                     57"    " 229           58"            151             195"                b
Idaho                                     265        72"         228             100             165               126
Illinois                                  212       285          226            "290"            205              '325
Indiana                                   234       212          272            "'l89'           258               157
Iowa                                      267       209'        J.79             103             175               150
Kansas                                    133       155         _2U~                             205               "0
Kentucky                                  159       148          130^            260             105               162
Louisiana                                  46          •        ' 64"              0               79                0
Maine                                     431       197"        "340^            117             297               152
Maryland                                  228       170"        "253~              *           '"'2"5"4'^
Massachusetts                             477          •         560^           • "fl 2 '       439
Michigan                                  116     " 369         '"129           " 474            147               407
Minnesota                                 438                    473                0           330                640
Mississippi                               155                    160~               0          "127"               T3J
Missouri                                  198       256          241 •            180            "198"            "l94
Montana                                   337       250"         462'               0           292               250
Nebraska                                  308       164'         409             265            226               226
Nevada                                    218       118          239_             _44_           168              135
New Hampshire                             443       148         "4_54_          ""l'39          431               134
New Jersey                                234       163          312~             145"          388_              163
New Mexico                                237 "        •         294_              70          """l"32             90
New York                                  149       221.        '2l"5~           299             174             _335
North Carolina                            147       138'        '"l75~              0            112'             114
North Dakota                              560       175         '625              187           437'              171
Ohio                                      187       200"        "IBO'             155            123              178
Oklahoma                                  126                    135                             105          ~ " 114

                                Page SO                                          GAO/HKD-91-1BR LIHEAP Overview
                 Appendix III
                 Average Household Heating and Crisis
                 Benefits, by State (Fiscal Years 1982,1985,
                 and 1989)

                                                               FY ises*"                            FY1969»'«'
                         FY 1982*-'''                                       Wintnr                               Winter
State                Heating          Crisis             Heating             crisis           Heating             crisis
Oregon                      174             195                202              147                192              167
Pennsylvania                256             130                317              177                222              250
Rhode Island                221             263                256              263                360              100
South Carolina              145              55                123                 0                 83             117
South Dakota                353             137                339              136                318              141
Tennessee                   167                                189              193                 191             118
Texas                        81                                 66              155                  51             134
Utah                        285              73                268                64               214              210
Vermont                     417             200                440              178                450              170
Virginia                    332             150                326                 0               267              176
Washington                  191             135                162              168                204              143
West Virginia               170                                162              216                 141             143
Wisconsin                   237             236                309               180                250             163
Wyoming                     429             131                391              188                258              215

                 Source Low lncx)me Home Energy Assistance Program, Report to Congress1 for Fiscal Years 1982, 1985,
                 and 1989 (Washington, D C , HHS, Office of Energy Assistance, Family Support Administration, Annual
                 ^Figures were reported by states and are not necessarily the results obtained by dividing dollars for
                 heating or winter/yearround crisis assistance benefits by the numtier of households assisted
                 ''For 1982, HHS did not prescribe a format for reporting the numtser of households assisted
                 ''May include data for states that operated summer crisis programs Summer and winter crisis benefits
                 were not reported separately in this year
                 ''includes average benefits for households assisted by states that operated year-round crisis programs
                 (i.e, 10-12 months)
                 "Figures include cooling benefits provide under combined heating and cooling assistance programs

                  Page 51                                                        GA0/HBD-91-1BR UHEAP Overview
Appendix IV

Households Receiving Heating and Winter Crisis
Assistance, by State (Fiscal Years 1982,1985,
and 1989)
               State                                Heating             crisis
               Alabama                               160,692           17,270
               Alaska                                  10,526             372
               Arizona                                 34,746"          7,663
               Arkansas                               35,742            3,168
               California                            468,305           83,902
               Colorado                                82,220           9,235
               Connecticut                             63,430           1,678
               Delaware                                12,589           2,819
               Distnct of Columbia                     10,574           3,824
               Florida                               104,418"           6,275
               Georgia                                 96,434             221
               Hawaii                                  28,392"            874
               Idaho                                   25,853             414
               Illinois                              382,119           17,893
               Indiana                               115,132           49,048
               Iowa                                    77,139          13,015
               Kansas                                  61,058           7,669
               Kentucky                                31,701          41,974
               Louisiana                             113,247                 •
               Maine                                   44,683           1,822
               Maryland                                69,324          21,549
               Massachusetts                         133,773                •
               Michigan                              368,858           100,125
               Minnesota                             104,394                 •
               Mississippi                             56,722                 •
               Missoun                               157,263             5,081
               Montana                                 14,802            1,000
               Nebraska                                35,346            2,857
               Nevada                                    7,948           1,067
               New Hampshire                           23,929            6,168
               New Jersey                            205,325            16,000
               New Mexico                              35,528                 •
                                     —   __
               New York                              970,056            43,840
               North Carolina                         143.400           16,939
               North Dakota                             13,137           1,180
               Oh"io~ J^7~                           320,759            85,723
               Oklahoma                             ~^5,67T

               Page 52                       GAO/HIlD-91-lBH LIHEAP Overvievr
                             Appendix rv
                             Households Receiving Heating and Winter
                             Crisis Assistance, by State (Fiscal Years 1982,
                             1985, and 1989)

      FY 1985'"'                FY 1989*'<'                                   Percentage change for heating
                   Winter                         Winter                     FY                 FY                   FY
Heating             crisis    Heating              crisis               1982-89            1962-85              1985-89
 88,627                  •     65,103               5,720                      -59            -45                   -27
 11,372               384        8,194              2,158                      -22               8                  -28
 34,072"            12,264      33,754              3,306                       -3              -2                   -1
 73,822              1,139     59,616              16,968                       67             107                  -19
434,448"           107,828    460,015              99,463                       -2              -7                     6
 55,403              1,892      62,904                368                      -23             -33                    14
 76,140              4,017      74,620              3,191                       18              20                   -2
 13,238              4,800      11,274                713                      -10               5                  -15
 14,268              1,987      12,570               1,503                      19              35                  -12
157,749"             6,089    179,342              13.838                       72              51                    14
 91,707             11,498      83,770             25,673                      -13              -5                   -9
 26,969"                 •       5,919                   0                     -79              -5                  -78
 40,971              1,676      34,091               1,517                      32              58                  -17
364,108             17,763    277,924              12,874                      -27              -5                  -24
151,271             14,425     135,266             14.754                       17              31                  -11
106,556               396       92,607               1,750                      20              38                  -13
 46,511                  •      48,318                   0                     -21             -24                     4
113,778             23,316      48,783             84,380                       54             259                  -57
124,589 -                0      58,167                   0                     -49              10                  -53
 60,741              4,041      51,501        •     9,776                       15              36                  -15
 89,833              4,018      80,221              8,765                       16              30                  -11
142,769                  •     120,610             15,328                      -10               7                  -16
305,943             79,913     262,403             83,927                      -29             -17                  -14
 134,382            18,396     108,299             13,119                        4              29                  -19
 63,085              2,738      53,224              2,289                       -6              11                  -16
147,173             16,189     119,779             20.800                      -24              -6                  -19
 22,460                  •      21,224                379                       43              52                    -6
 37,103              2,676      30,678              8,752                      -13               5                  -17
  11,339            11,339      12,115                678                       52              43                     7
 26,546              7,056      21,540               1,950                     -10              11                  -19
 190,593            23,847     128,662             12,533                      -37              -7                  -32
  55,857             5,171      40,180               5,612                       13             57                  -28
991,820             60,334     770,053             54,703                      -21               2                  -22
 160,800            48,168     166,073             37,193                       16              12                     3
  20,107             1,347      17,626               1,595                      34              53                  -12
423,635            122,065     365,420            121,962                       14              32                  -14
  84,451                 •      88,877              6,034                       35              29                     5

                             Page 53                                                  GAO/HR0-91-IBR UHEAP Overvievr
Appendix IV
Households Receiving Heating and Winter
Crisis Assistance, by State (Fiscal Years 1982,
1989, and 1989)

                                                              FY 1982**-«
State                                                   Heating              crisis
Oregon                                                     79,482            3,193
Pennsylvania                                             297,942 .          54,188
Rhode Island                                               30,401           17,819
South Carolina                                             60,631           10,128
South Dakota                                               15,865             1,392
Tennessee                                                  84,757             1,465
Texas                                                    264,163                  •
Utah                                                       33,188                41
Vermont                                                    19,432             2,988
Virginia                                                  100,000             2,000
Washington                                                 94,099            14,966
West Virginia                                              55,937             9,707
Wisconsin                                                 163,722            18,608
Wyoming                                                     8,766                13
Total                                                  5,993,620            707,173

 Page 54                                          GAO/HRIV^91 IBH LIHEAP Overview
                             Appendix IV
                             Households Receiving H e a t i i ^ and Winter
                             Crisis Assistance, by State (Fiscal Years 1982,
                             1985, and 1989)

       FY1985'''                FY 1989»«'                                       Percentage change for heatinq
                   Winter                           Winter                      FY                 FY                            FY
 Heating            crisis    Heating                crisis                1982-89            1982-85                       1985-89
  87,797             4,406      61,199                2,652                      -23                       10                    -30
 356,510            93,958     311,179               86,549                         4                     20                     -13
   29,655           19,096      23,005                5,497                      -24                      -2                     -22
   84,351           11,726      84,826                7,914                       40                      39                        1
   23,068            2,581      20,990                   377                      32                       45                      -9
   82,918           13,214      58,856               12,920                      -31                      -2                     -29
  296,048           17,881     354,545               26,506                       34                       12                      20
   42,841              138      40,575                   295                      22                       29                      -5
   20,038            2,252      15,916                 1,457                     -18                        3                    -21
  113,553                •     112,492                 8,480                       12                      14                     -1
  113,156           42,589      64,711               25,121                      -31                       20                    -43
   73,352           15,303      69,700                14,335                       25                      31                     -5
  214,091           14,873     160,292                 4,217                      -2                       31                    -25
   14,002               78       11,036                  725                      26                       60                    -21
6,545,616          857,809   5,800,044             890,616                        -7                        9                    -14

                             Source Low Income Home Energy Assistance Program Report to Congress for Fiscal Years 1982,1985,
                             and 1989 (Washington, D C , HHS. Office of Energy Assistance, Family Support Administration, Annual
                             Fleport)                                                       }
                             ^Figures were reported by states
                             ''For 1982; HHS did not prescribe a format tor reporting the number of households assisted
                             "^May include data for states that operated summer crisis programs Summer and winter cnsis assis-
                             tance were not reported separately in this year
                              "includes households assisted by states ttiat operated year-round crisis programs (i e , 10-12 months)
                              "Figures include households that received cooling benefits provided under combined heating and
                              cooling assistance programs

                              Page 55                                                         GAO/HRD-91-1BR UHEAP Overview
Appendix V

Fiscal Year 1985 Fonnula for Distributing
LIHEAP Block Grant Funds tD States

                Allocations are made to states, territories, and Indian tribes. Territories
                receive approximately 0.14 percent of the total appropriation (which is
                based on the amount they received in fiscal year 1981). HHS may set
                aside up to $500,000 each year for training and technical assistance
                activities. The remainder is allocated among states based on each state's
                share of total heating and cooling costs of low-income households in the

                Payments shall be made only to eligible households with incomes at or
                under the greater of 150 percent of the poverty level for that state or 60
                percent of a state's median income. Tribal allocations are taken out of
                each state's allotment based on a tribe's share of eligible households in
                that state, or by state-tribal agreement. Funds are distributed under the
                1985 formula only in the event annual appropriations exceed $1,975 bil-
                lion. Otherwise, funds are distributed based on the percentage of the
                total funds the states received in fiscal year 1981.

                MATHEMATICAL STRUCTURE: (Fiscal Year 1985 or thereafter)


                COST = home heating and cooling costs of all low-income households in
                each state.

                COSTTOTAL = home heating and cooling costs of all low- income house-
                holds in the United States.

                There are two hold-harmless provisions: (1) In fiscal year 1985, states
                were guaranteed to receive not less than they did in fiscal year 1984. (2)
                In fiscal year 1986, no state would receive less than it would have in
                fiscal year 1984 if the appropriation had been $1,975 billion. In addi-
                tion, if appropriations reached or exceeded $2.25 billion and if any state
                received less than 1 percent of the total allocation, it would receive the
                percentage share it would have received if the appropriation were based
                on $2.14 billion (the amount authorized, though not appropriated, for
                fiscal year 1985).

                Page 56                                       GAO/HRD-SMBR UHEAP Overview
Appendix VI

Key Legislative Amendments to LJEEAP
Limiting State Program Discretion

Human Services
Reauthorization Act of
1984 (P.L. 98-558)

Section 8623(C)'            Requires states to operate the crisis component through public or non-
                            profit agencies with (1) experience in administering the crisis compo-
                            nent under the Low Income Energy Assistance Act of 1980 or the Low
                            Income Home Energy Assistance Act of 1981, (2) experience in assisting
                            low-income individuals in their community, and (3) the ability to
                            operate an effective crisis program. The former provision did not
                            specify agencies to operate the crisis component at the state level.

Section 8626(bX2XB)         Reduces the maximum carryover allowance from 25 percent to 15 per-
                            cent of the net state allotment,^ less amounts transferred to other block
                            grants and set aside for Indian tribes.

Section 8626(bX2)(A)        Adds requirement that states explain why they are requesting to carry
                            forward a portion of their allotment to the following fiscal year and
                            describe the types of assistance to be provided with these amounts.

Section 8623(E)             Eliminates the option for states to request direct payments to Supple-
                            mental Security Income households by the federal government.

Section 8624(bX2XB)(iXii)   Maintains the maximum household income eligibility limits (150 percent
                            of poverty or 60 percent of state median income), but prohibits states
                            from setting eligibility limits lower than 110 percent of the poverty level
                            income in fiscal year 1986 and thereafter.

Section 8624(bX5)           Provides that states agree not to give differential treatment in awarding
                            benefits to categorically eligible and income eligible households.

                            'Citations Are for the U.S. CiKie, Title 42
                            -Net allotment means the amount payable to the .state that is not carried over from the prior fiscal
                            year and not transferred to ot hi^r blo<k grants.

                            Page 57                                                        GAO/HKD-91-1BR UHEAP Overview
                         Appendix VI
                         Key Legislative Amendments to UHEAP
                         Limiting State Program Discretion

Section 8624(b)(8)       Provides that states give assurances not to exclude income eligible
                         households from receiving UHEAP benefits.

Human Services
Reauthorization Act of
1986 (P.L. 99-425)

Section 8623(cXlX2)      Requires states to (1) provide crisis assistance that will address the
                         crisis within 48 hours after the household has applied for it (18 hours in
                         life-threatening situations), (2) accept crisis applications at geographi-
                         cally accessible sites, and (3) provide special assistance in applying for
                         crisis benefits to the physically infirm. These requirements can be
                         waived by HHS during natural disasters or other emergencies.

Section 8624(c)(1)(B)    Provides that the .stale plan shall describe the benefit levels to be used
                         for each type of assistance, including crisis and weatherization and
                         other energy-related home repair.

Section 8624(cXlXC)      Provides that the state plan shall describe alternatives for use of funds
                         reserved for but not spent on crisis assistance.

                         Page 38                                        GAO/HRI>.91-lBR UHEAP Overview
Appendix VII

Mgjor Contributors to This Briefing Report

                      Carl R. Fenstermaker, Assistant Director, (202) 275-6169
Human Resources       John M. Kamensky, Assistant Director
Division,             Richard H. Horte, Assignment Manager
Washington, D.C.      Joel R. Marus, Evaluator-in-Charge
                      Linda C. Diggs, Evaluator

                      Michael F. McGuire, Senior Evaluator
Cincinnati Regional   George J. Buerger, Senior Evaluator

                      Patricia L. Elston, Evaluator
San Francisco
Regional Office

(118851)              Page 59                                     GAO/HRD-91-1BR UHEAP Overview
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