Older Americans Act (OAA) Administration and Funding | Administration 5600 Manual

The Older Americans Act (OAA) is a federal program that was first passed in 1965 to help older adults remain active in their communities and benefits from offered services. This legislation was reauthorized in 2006 to include guidance materials (i.e., FAQ section) for the aging network, in 2016 to include provisions aimed at the protection of vulnerable elders, and in 2020 to include provisions aimed at removing barriers to the aging network and providing some allocation flexibility to the states and localities. New regulations that aim to clarify policies, guide newly authorized programs, and incorporate lessons learned from the COVID-19 pandemic were updated to take effect on March 15, 2024.

The Older Americans Act (OAA) is a federal program that was first passed in 1965 to help older adults remain active in their communities and benefits from offered services. This legislation was reauthorized in 2006 to include guidance materials (i.e., FAQ section) for the aging network, in 2016 to include provisions aimed at the protection of vulnerable elders, and in 2020 to include provisions aimed at removing barriers to the aging network and providing some allocation flexibility to the states and localities. New regulations that aim to clarify policies, guide newly authorized programs, and incorporate lessons learned from the COVID-19 pandemic were updated to take effect on March 15, 2024.

Figure 1: Administration of the OAA

Usually, OAA funding is comprised of 85% federal funds, 5% state funds, and 10% local match. In Figure 2, federal funding is shown to be provided to support direct services to older Georgians. In brief, the federal agencies award funding to the State of Georgia Department of Human Services (DHS) Division of Aging Services (DAS) who allocates funds to the AAAs to contract for services with providers. As these funds flow down, State of Georgia DAS needs to match certain percentages of the federal funding to add to the money given to AAAs. The money that providers eventually receive is a combination of the federal funds, state match, and local match. State matching can vary by service. The state is required to give a 15% match towards supportive services, congregate, and home-delivers nutrition programs; in Georgia the AAAs provide 10% of this while DAS provides the remaining 5%. The Family Caregiver Program requires a 25% state match; in Georgia the AAAs provide 10% of this while DAS provides the remaining 15%.

Local funds make up about 10% of total funds in Georgia, inclusive of local donations from providers, counties, cities, or multiple other methods local providers have of receiving donations.

Figure 2: Funding of the OAA

The purpose of the UCM is to determine the full costs of a particular service, regardless of fund source and to allocate costs using the same allocation statistic. Providers and AAAs complete the UCM as part of the Request for Proposal (RFP) process initiated by the AAAs to acquire service providers to bid on services. This methodology will provide AAAs with information about all aging programs/services administered by a single provider, and how costs are shared between programs/services in one complete annual budget. AAAs review the RFP responses to select service providers based on multiple criteria, not solely the lowest unit cost.

While DAS budgets each AAA’s dollars from federal and state funds, this does not necessarily mean a provider with costs outside of this budget will not be chosen, as cost is only one component of the provider selection criteria. Hence, providers should complete the UCM to accurately reflect the costs of providing services independent of the budget allocated to AAAs.

Once full costs have been determined and the cost pools have allocated indirect or shared costs between all aging programs appropriately, then providers must have a plan for adequate resources to cover all costs - both cash and non-cash. Each Area Agency on Aging is required to report not only federal, state, program income and minimum required match to the Division, but other funds which support these programs as well. This is in accordance with the federal Older Americans Act.

Providers can use this information to effectively manage their programs and assure they are capturing all their costs when using the UCM Spreadsheet - regardless of who pays for these services. Providers must then be able to assure to the AAA that adequate revenues are available to cover all costs proposed for each service as outlined in their RFP. These funds will include the federal and state funds allocated from the AAA, as well as other community resources that support aging programs in Georgia.

The UCM submission and funding processes are separate, but parallel. Figure 3 below shows these processes. The blue arrows illustrate the current processes: the providers submit their UCMs to AAAs as part of the Request for Proposal (RFP) to bid on providing services to older adults. The AAAs then review the UCMs and select a provider to deliver OAA services. Separately, the federal government awards funds to DAS. DAS will distribute funds to AAAs, so they can reimburse providers after service completion.

The grey arrows show a potential future process addition, which shows how the UCM submission and the funding process may interconnect. This includes DAS using data from the UCMs to inform the budget needs for older Georgians.

Figure 3: UCM and Funds Flow

Accuracy of the UCM is critical for providers to be able to plan their services correctly. If providers underestimate their costs, this could lead to potential need for them to pay out-of-pocket. Another implication of inaccuracy would be DAS being impeded from being able to accurately capture funding needs for older Georgians.