Donald B. Moulds
Acting Assistant Secretary for Planning and Evaluation
U.S. Department of Health and Human Services (HHS)
Census Data and Its Use in Federal Formula Funding
Committee on Oversight and Government Reform
Subcommittee on Information Policy, Census and National Archives
United States House of Representatives
Thursday July 9, 2009
Good afternoon Chairman Clay, Ranking Member McHenry, and distinguished members of the Subcommittee. I am Donald Moulds, the newly appointed Principal Deputy Assistant Secretary for Planning and Evaluation in the Department of Health and Human Services (HHS) and the Acting Assistant Secretary. Thank you for the opportunity to appear before you today to discuss the topic of how data from the United States Census Bureau (Census Bureau) are used by HHS in the allocation of federal program funds through formula grants.
The Assistant Secretary for Planning and Evaluation (ASPE) is the principal advisor to the Secretary of the Department of Health and Human Services (HHS) on policy development in health, disability, aging, human services, and science, and provides advice and analysis on economic policy. We also are the departmental focal point for policy research, analysis, evaluation and coordination of department-wide science and data policy activities and issues. Upon receipt of the Committee’s request, ASPE reviewed all grant programs that HHS funds, with a specific focus on how Census data are used in calculating funding amounts for grants and whether adjustments in funding are made based on the population “undercount.” ASPE does not compute (or provide data to other entities within the Department to compute) federal funding allocations for various department formulae grant programs. Each operating agency within the Department is responsible for obtaining the required data for calculating funding levels for individual grantees according to statutory definitions for its programs and for preparing the allocation tabulations for funding in a statistically accurate and apolitical manner.
HHS is the United States government's principal agency for protecting the health of all Americans and providing essential human services, especially for those who are least able to help themselves. HHS administers more than 300 programs, covering a wide spectrum of activities, and representing almost a quarter of all federal outlays. The Department’s Fiscal Year 2009 budget authority, excluding the Recovery Act, is $777 billion.
HHS administers more grant dollars than all other federal agencies combined and awards approximately 60 percent of the federal government’s grant dollars. In order to achieve our strategic goals and objectives, HHS forms partnerships with other federal Departments; State, local, and tribal governments; tribal institutions; hospitals; the business community; nonprofit and community-based organizations; and foreign countries and international organizations. The primary vehicles used to fund these partnerships are grants. Grants are financial assistance awards that provide support or stimulation to accomplish a public purpose authorized by federal statute. HHS manages an array of grant programs in health care financing, basic and applied science, public health and public health services, income support, child development, and health and social services.
HHS awards two types of grants: formula and discretionary. Formula grants are those that a federal agency is required by statute to award if the recipient, usually a State, submits an acceptable State plan or application, and it meets the eligibility or compliance requirements of the statutory and regulatory provisions of the program[s1] . Discretionary grants are those that permit the federal government, according to specific authorizing legislation, to exercise judgment, or “discretion,” in selecting the applicant or recipient organization through a competitive grant process. [s2]
In Fiscal Year 2008, HHS awarded nearly $265 billion in grants. Eighty-five percent of HHS grant funding was directed toward mandatory programs, while 94 percent of grantees received discretionary grants. The Centers for Medicare and Medicaid Services (CMS) awarded the largest amount of grant dollars - $181 billion, or 69 percent of total HHS grant funds. The National Institutes of Health awarded the largest number of grants – 52,000, or 69 percent of all grants awarded – but less than 8 percent of total HHS grant funds.
For most of the formula grants administered by HHS, the formula and data elements that are to be used in allocating grant dollars are specified in statute. Attached to my written statement is a table listing the HHS-supported grants that specify the use of data from the Census Bureau in allocating grant funds. The majority of HHS’ grant allocations are not driven by Census Bureau data.
For purposes of this hearing, I will focus my testimony principally on mandatory grants. Mandatory grants can take the form of block grants and entitlements, which can be either open-ended or closed-ended. The authorizing legislation for block grants, which also may be referred to as formula grants, determines the purpose of the block grant, eligibility, the scope of the program, and the grant allocation methodology. Formula grants are typically based on factors such as population, poverty level, or other relevant data.
Following are some examples of how HHS uses specific Census data elements in several different grant programs. They are representative of the variety of grant programs administered by HHS, as well as the types of Census data that are used in calculating grant award amounts in carrying out statutory intent.
Administration for Children and Families
The Administration for Children and Families (ACF) is responsible for federal programs that promote the economic and social well-being of families, children, individuals, and communities. ACF programs finance a broad range of programs for children and families to promote stability, economic security, responsibility and self-sufficiency. ACF awarded the second highest percentage of total grants funds (17 percent, or $46 billion), representing 10 percent of the total number of grant awards.
Child Care and Development Fund
The Child Care and Development Fund (CCDF), administered by the Administration for Children, is the primary federal program specifically devoted to providing families with access to child care and improving the quality of child care. It is the largest block grant program administered by ACF that uses Census data in allocating funds. CCDF provides funds to States through three component funding streams, each of which has a separate allocation formula and uses different data elements and sources. Two of the funding streams rely on the use of Census Bureau data in their funding formulae. Shares of the Child Care and Development Block Grant are allocated to States using a formula consisting of three factors, including a State’s share of the nation’s children under age five. Separately, States meeting certain eligibility criteria may be awarded shares of the CCDF Matching Fund based on the number of children under age 13 in the State compared to the national total of children under 13. Data for the ratio of children under age 5 and the ratio of children under age 13 are obtained from the Census Bureau.
Social Services Block Grant
The Social Services Block Grant Program provides funding for social services directed towards achieving economic self-sufficiency, preventing or correcting neglect, abuse, or the exploitation of children and adults, preventing or reducing inappropriate institutionalization, and securing referrals for institutional care. Each grant recipient has the flexibility to determine what services will be provided and then either provides services directly or purchases them from qualified providers. Funds are allocated annually to states based solely on a State’s population as a share of the national population. The source of the population data is the Census Bureau’s Population Estimates Program (with the assistance of the Federal State Cooperative Program for Population Estimates).
Administration on Aging
The Administration on Aging (AoA) allocates formula grants to the States, Territories and tribal organizations to promote the development of a comprehensive and coordinated system of home and community-based services for older people and their family caregivers. Through the aging services network, it plays an important role in delivering services and supporting consumer-centered systems of care that enable older individuals to remain living in their own homes and communities for as long as possible.
Special Programs for the Aging, Title III, Part C, Nutrition
AoA’s nutrition grant programs are the largest of its grants to State and community programs on aging. Nutrition services are provided under the Older Americans Act to reduce hunger and food insecurity, promote socialization of older individuals, and promote the health and well-being of older individuals and delay adverse health conditions through access to nutrition and other disease prevention and health promotion services. The Congregate Nutrition Services and Home-Delivered Nutrition Services programs provide meals and related nutrition services to older individuals in a variety of settings or by home-delivery to help them remain independent and in their communities. Grants for Congregate Nutrition Services and Home-Delivered Nutrition Services are allocated to States and Territories by a formula based on their share of the population aged 60 and over, using data issued by the Census Bureau.
Health Resources and Services Administration
The Health Resources and Services Administration (HRSA) is the principal federal agency charged with increasing access to health care for those who are medically underserved. HRSA’s portfolio includes a range of programs or initiatives designed to increase access to care, improve quality, and safeguard the health and well-being of the Nation’s most vulnerable populations. HRSA distributes approximately 90 percent of its funding in grants to U.S. States and Territories, public and private health care providers, health professions training programs and other organizations.
Maternal and Child Health Block Grant
The mission of the Maternal and Child Health (MCH) Block Grant is to improve the health of mothers, children and their families. As HRSA’s second largest formula grant program, its goals are to improve access to health care, eliminate health disparities, and improve the quality of health care. One component of this program provides grants to the States, District of Columbia and other jurisdictions that, in part, are allotted by a legislated formula that sets aside funds for Special Projects of Regional and National Significance and Community Integrated Service Systems. A portion of the appropriated funds is allocated to States in proportion to a State’s population of low-income children relative to the nation’s. The formula uses Census data[s3] .
Substance Abuse and Mental Health Services Administration
The Substance Abuse and Mental Health Services Administration (SAMHSA) works to ensure that people with or at risk for mental or substance use disorders have the opportunity for recovery and to lead a fulfilling life in the community. SAMHSA funds and administers a rich portfolio of grant programs and contracts that support State and community efforts to expand and enhance prevention and early intervention programs and to improve the quality, availability and range of substance abuse treatment, mental health and recovery support services, in local communities, where people can be served most effectively.
Substance Abuse Prevention and Treatment Block Grant
The Substance Abuse Prevention and Treatment (SAPT) Block Grant is the largest block grant [s4] administered by SAMHSA. It is intended to be used by States for planning, carrying out, and evaluating activities to prevent and treat substance abuse and other substance-related HIV and tuberculosis activities as defined in statute. The Block Grant provides 34 percent of State expenditures on substance abuse treatment and 64 percent of State expenditures on prevention. The formula for allotment of funds is primarily based on the relative size of the State’s at-risk population, the relative costs of providing substance abuse prevention and treatment services in a State, and its relative ability to pay for these services. The formula uses the most recent data from various sources including the U.S. Census Bureau.
Example of a Non-Formula Competitive Grant
In addition to these formula grant programs, HHS awards discretionary grants to a variety of types of organizations. The types of activities commonly supported by discretionary grants include demonstration, research, training, service, and construction projects or programs. Discretionary grant awards account for 94 percent of the total number of grant awards made in FY 2008, although they comprise only 16 percent of the grant funds.
The Centers for Disease Control and Prevention (CDC) administers several programs that use population data in the award making process. CDC works with partners throughout the nation and world to protect health and safety, by providing credible information to enhance health decisions, and promoting health through strong partnerships. One example of a CDC discretionary grant program that uses Census data is the recent funding opportunity announcement “Collaborative Chronic Disease, Health Promotion, and Surveillance Program Announcement: Healthy Communities, Tobacco Control, Diabetes Prevention and Control, and Behavioral Risk Factor Surveillance System.” Both the tobacco and diabetes components of this funding announcement use state population based data as a factor in determining funding level decisions. In addition, CDC releases bridged-race population estimates of the United States based on Census counts for use in calculating vital statistics[s5] . CDC also has just launched the debut of a new web-based tool, the National Environmental Public Health Tracking Network (NEPHTN) to track health, exposure, and hazard information and data from a variety of national, state, and city sources. Census data is critical to the NEPHTN in providing information about a population’s income, race, or occupation.[s6]
The authorizing statutes that specify funding allocation formulae for HHS grant programs vary in their data sources and elements. Those that identify the use of population data from the Census Bureau specify the use of either the Decennial population figures or the most recent population estimates from the Population Estimates Program or the [s7] Current Population Survey published by the Census Bureau. The statutory formulae do not direct the Department to use the Census data that have been adjusted for population undercount, and HHS does not make such adjustments either. We, therefore, accept the Census data as authoritative and apply them to the formulae. It is fair to assume that the annual Census population estimates do reflect the effects of [s8] challenges, which Census has accepted in previous years. However, HHS does not make any adjustments of its own.
HHS uses a variety of data from the Census Bureau in calculating funding levels for federal grant programs. Many of the formula grant examples I have cited use tabulations of population counts by State and by various age groups to distribute grant funds. Of the 300 programs administered and managed by the Department of Health and Human Services, 50 are grant programs, representing approximately 37 percent of HHS expenditures in FY 2008. Of the 50 grant programs, Census data are used to calculate funding levels in about 35 of them. Census data are not used, however, for some of our largest programs including, for example, Medicare, which makes direct payments to providers, and the Temporary Assistance for Needy Families (TANF) block grant program, which is allocated to States on the basis of their past welfare expenditures.
Census data are used by HHS in all cases where authorizing legislation dictates its use and the manner in which it is to be used. HHS does not exercise any discretion to adjust funding formulae because of undercounts in urban areas.
Thank you for the opportunity to testify. I would be pleased to answer any questions you may have.
HHS Formula Grant Programs Utilizing Census Data
[s1]Comments submitted by OMB: Are these “mandatory” because the Secretary must award a specific amount if a State meets the requirements for award? It seems that “formula” grants might be a clearer distinction. [The term is introduced below without a definition]. Would it be appropriate to distinguish these from discretionary grants because HHS must award a specific amount to eligible applicants? For discretionary grants, does HHS have the authority to determine both who receives the
[s2]Comments submitted by OMB: Is this use of the term “mandatory” consistent with the definition used at the top of the paragraph? The use in this sentence appears to be more consistent with the definition used for budget purposes.
[s3]Comments submitted by Commerce: This paragraph ends differently than others that indicate that the source is census bureau data. I know that decennial census no longer provides income data. The new data source is the annual survey The American Community survey which provides annual estimates on income. I would recommend removing the word decennial and ending the sentence after census data.
[s4]Comments submitted by OMB.
[s5]What are “vital rates?”
[s6]New text submitted by OMB.
[s7]Comments submitted by OMB.
[s8]Comments submitted by OMB.
Last revised: April 19, 2011