1. Mandy Heitz Budget Officer California Department of Aging
INTRASTATE FUNDING FORMULA (IFF) PRESENTATION C4A Board Meeting September 29, 2010
Mandy Heitz
Budget Officer
California Department of Aging

2. Overview of Topics That Will Be Covered
Description of the Intrastate Funding Formula (IFF)
Description of Federal and State Laws that Govern the IFF
Part One of Allocation Process
Distribution of Federal Funds & State Match
Calculation of Federal Amount to Allocate

3. Overview of Topics That Will Be Covered (Continued)
Allocation Calculations
Tests in the IFF
Federal Law
Definition of Terms and Factors
Part Two of Allocation Process
Distribution of Local Administration & Non-match General Fund
State Law

4. Overview of Topics That Will Be Covered (Continued)
Contract Amendment Process
Scenarios
Wrap-up & Questions

5. Description of the IFF 2009-13 State Plan IFF Description
Per Title III of the Older Americans Act the CDA is required to develop a formula to distribute Title III Funds within CA
The Intrastate Funding Formula or “IFF” is this formula

6. Laws the Govern the IFF
Two Main Sources of Law Govern the IFF: 1) The Federal Older Americans Act, Sec. 305 (Title 42, Chapter 35,Subchapter III, Part A, Section 3025) 2) Older Californians Act (Welfare & Institutions Code 9112)

7. Laws That Govern the IFF
These laws create a two-part allocation process
Federal law dictates the allocation of federal and State matching funds
State law dictates the allocation of Local Administration and Non-match General Fund
These laws plus litigation shape the allocation methodology
Excerpts of the codes are in your packets

8. Determining the Federal Amount to Allocate
CDA must estimate what the Federal grant award will be due to:
The difference between the State and Federal Fiscal Years
The fact the grant award comes in multiple pieces
The final award amount isn’t available until the final month of the federal fiscal year

9. Determining the Federal Amount to allocate (Continued)
Typically the award estimate is based on the final grant award from the previous Federal Fiscal Year
The amount in the Planning Estimate will be updated with new information for the Original Area Plan Contracts
The differences between the amount in the Original Contract and the actual award goes out in the Amendment process

10. Federal Grant Calculation- Local Assistance Amount
Estimated Grant Award
- 5% for State Operations
- Funding for Ombudsman Program
+ $600,000 from State Operations Amount
Amount Available for Local Assistance
10% of this amount is allocated to Local Area Administration, the rest goes to Program

11. Federal Grant Calculation- Comment on CDA’s State Ops
Since we are using an estimated State Operations number, and further reduce that amount by $600,000, the CDA actually takes less than 5% for Administration.

12. Federal Program Funding Allocation Process
Once the amounts available for allocation to local programs are determined, they are entered into the IFF by program and are distributed based on the applicable Federal factors

13. OAA Section 305
Specifies IFF must use best available data on the geographical distribution of older individuals in the state
Must account for greatest economic and social need with attention to low-income and minority older individuals

14. Definition of Terms
“Greatest Economic Need” means a need caused by an income at or below the poverty line
“Greatest Social Need” means a need caused by non-economic factors which include
Physical and mental disabilities
Language barriers

15. Definition of Terms (Continued)
And cultural, social, or geographical isolation caused by racial or ethnic status, that
Restricts the ability of an individual to perform daily tasks, or
Threatens the capacity of the individual to live independently

16. Factors and Data
The IFF uses a group of weighted factors to implement the requirements of the OAA
Factors are meant to measure a PSA’s relative proportion of indicators of need
Weights are meant to ensure certain indicators are given “preference” & “particular attention”

17. IFF Factors (Continued)
When combined these factors & weights result in an allocation consistent with the OAA
Data comes from
CA Department of Finance (updated annually)
US Administration on Aging Census Data
CA Dept. of Health Care Services (updated annually)

18. IFF Factors Individuals Source Factors Weights Greatest Economic Need
U.S. Census
60+ Low Income
2.0
Greatest Social Need
DOF Projection Data
60+ Minority
60+ Geographically Isolated
1.5
Other Individuals
60+ Non Minority
1.0
Medical Underserved (III D only)
CA Dept. of Health Services
60+ Medi-Cal Eligible

19. Weighted IFF Factors Individuals Rural Areas Other Areas
Low Income Minority
5.5
4.0
Low Income (Non-Minority)
4.5
3.0
Minority (Not Low Income)
3.5
2.0
Other Individuals
2.5
1.0

20. Federal Program Funding Allocation Process (Continued)
Once the initial Federal allocation has been determined, the combined III B, C1, & C2, federal program allocations are checked against the “Year 2000” test to meet minimum funding requirement
If a PSA fails to meet the minimum funding requirement it gets its Year 2000 base amount
Remaining allocations are re-calculated to exclude that PSA

21. Part Two- The State Allocation Process
The CDA estimates the amount of State General Fund available for allocation using the Proposed Governor’s Budget
These amounts are not guaranteed and funding changes may result in adjustments to Original Contracts via an Amendment
The entire 5% State match requirement for the Title III grant is being made using Nutrition General Fund & is distributed on Federal factors
Allocation methodology for remaining funds is dictated by WIC 9112

22. Allocation of Local Administration
The funding for Local Administration consists of Federal Local Admin funds (as determined by the initial grant allocation) & the State General Fund amount designated for Local Admin
WIC 9112 mandates:
A $50,000 base for each PSA
Remaining funds to be distributed by the population of individuals 60+

23. Allocation of Local Administration Continued
Once the total amount of Local Admin is calculated per PSA, it is divided into types of funding (C1 Federal, C1 General, C2 Federal, etc.) by applying the percentage of each type of funding available to each PSA’s allocation

24. Final Steps in the Allocation Process
Once Local Admin and the State match are calculated, the remaining General Funds are allocated per WIC 9112
The amount of General Fund available once local admin and match have been allocated is termed “Overmatch”
Overmatch is used to bring each PSA up to its Maintenance of Effort Level (MOE)

25. Maintenance of Effort
The MOE is calculated by comparing the Original Contract amounts for III B, C1, C2, D and Title VII Elder Abuse to the total initial allocation amounts for the same categories for the current year’s allocation
If a PSA falls below its MOE level, it is given Overmatch to make up the difference
Only PSAs that fall below MOE get Overmatch

26. Maintenance of Effort Continued
If there is not enough Overmatch to bring all PSAs up to MOE, PSAs are funded to the level of funding that is available
Each PSA would receive the same percentage of the amount needed to bring it up to MOE (for example, everyone may get 50% of the funds they need to make MOE)

27. Surplus Overmatch & the 1984-85 Hold Harmless Test
If there is enough Overmatch to meet MOE, the additional funding is termed “Surplus Overmatch”
If MOE is fully met, the allocations are tested to make sure they meet the Hold Harmless test
The Hold Harmless test looks at the allocations for IIIB, C1, C2, D, and part of Title VII and compares them to the amounts listed in your handout

28. Hold Harmless Continued
If a PSA falls below its Hold Harmless level, Surplus Overmatch is used to bring it up to the level
If there is not enough Surplus Overmatch available to bring a PSA up to its Hold Harmless level, the test is met by reducing the amount of Overmatch each PSA received
This reduces the percentage level that MOE is funded at, and Overmatch is recalculated

29. The Washington Formula
Comes into play when Surplus Overmatch exists
Adopted from the methodology Washington State used
Consists of 7 Factors each of which is assigned a percentage used to calculate the final value used for the allocation distribution

30. The Washington Formula (Continued)
Factor
Percentage
60 + Population
20%
65+ SSI/SSP Population
35%
75+ Population
15%
60+ Minority Population
10%
Square Miles
60+ Lives Alone Population 7%
60+ Non-English Speaking 3%

31. Surplus Overmatch
All PSAs participate in Washington unless they received funds from the Hold Harmless test
Once Washington is run, this completes the allocation process for regular Title III Federal and State General Funds. NSIP & Ombudsman have their own allocation methodologies.
All allocation amounts are then entered into budget displays & become part of the contract

32. The Amendment Process
Original Contracts are adjusted via the Contract Amendment Process
Amendments are done to reallocate unspent federal funding from the previous year, to respond to changes in State funding, and to allocate grant reconciliation funding

33. Prior Year Unexpended Federal Funds
PSAs receive up to 5% of their unspent prior year allocated amounts per program (as calculated by the CDA budget unit)
Remaining prior year funds (carryover) are reallocated to each PSA based on its factors

34. Grant Reconciliation OTO
Grant reconciliation is the result of the difference between the State and federal fiscal years and the difference between the estimated and final federal grant awards
State contracts include funding from two federal fiscal years and the amounts estimated to be available for those years may not be the actual final amount of the grant
OTO is allocated purely on factors

35. Funding Scenarios/Aberrations
Policies in the IFF may produce allocations that could appear odd when compared to previous allocations
This section will answer some of the common questions we get regarding allocations

36. Question #1
Question #1- Why does my allocation look lower than expected? What happened to the MOE?
Check to see if you are comparing the correct numbers. MOE checks Original Contract amount for federal & state funds (exclusive of admin) for III B, C1, C2, D, & part of VII.
This is different than guaranteeing a set amount of funding like the test, or a certain amount of funding by program since it checks the total.

37. Question #1 Continued
It is hard to compare year-end totals since they contain OTO.
OTO includes carryover and grant reconciliation that can distort the final funding received in a fiscal year.

38. Question #2
Question #2- Why does it look like my C1 & C2 General Fund went up or down?
This is due to the role of General Fund
First role is to provide the 5% match
Remainder is for MOE, then Washington
MOE requirement is dependent on a PSA’s population characteristics and how the level of Federal funding is changing

39. Question #2 Continued
Even if Federal grant is increasing, a PSA’s Federal funds may fall due to changes in the characteristics of the PSA’s population
If a PSA requires Overmatch for MOE & it is available, they will get a greater amount of General Fund than in previous years
The opposite is true as well, what may look like a decrease in General Fund, may be a total increase in overall funding because the Federal funds grew

40. Question #2 Continued YEAR PSAs NEEDING OVERMATCH MOE % 2008/09 22 90%
2009/10 19
81.5%
2010/11 10
100% plus Washington was run

41. Question #2 Continued
When sufficient Overmatch is available, negative factor changes are muted and will not be fully felt until a year when MOE cannot be funded at 100%
Effects of MOE not being fully funded will be on-going, unless the PSA’s factors increase or the Federal grant increases substantially since the new MOE level is based on the previous year’s reduced allocation

42. Question #3
Question #3- Why is my allocation going down if my factors are the same or increasing?
Even if your factors are stable or increasing, you may still get a lower allocation because they may not be growing at the same rate as the State as a whole

43. Question #3 Continued
Your allocation is based on a relative percentage, so your allocation can go down even if your population is growing
The relative size of a PSA may magnify the differences in populations. Smaller PSA’s growth may be dwarfed when compared to the level of growth experienced by a large PSA.

44. Wrap Up
Feel free to any questions particular to your allocations at: General Questions?

45. List of Handouts Provided
California Department of Aging Intrastate Funding Formula (IFF) Descriptive Statement of Formula from the State Plan on Aging
Federal Year 2000 Test
1984/85 Hold Harmless Levels
IFF Federal Regulations Excerpt
Welfare and Institutions Code 9112
Summary of Allocation Process