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CHAPTER 2. STATE APPROACHES TO DISTRIBUTION OF SSBG FUNDS

The objective of this chapter is to give examples of the planning processes used by States and local communities for the allocation of SSBG funds. Each year, the designated agency within each State is given the authority to disburse SSBG funds as it deems appropriate. States choose to disburse their allocations of SSBG funds and conduct fiscal and programmatic planning in a variety of ways. A review of States' pre-expenditure reports revealed a wide range of strategies for determining how funds were allocated to various programs and services within each State.

In order to receive its SSBG allotment, each State is required to develop and submit an annual pre-expenditure report that describes how the State plans to administer its SSBG funds for the coming year. No specific format is required for the pre-expenditure report; however, the intended use of SSBG funds, including the types of activities to be supported and the categories or characteristics of individuals to be served, must be included. The State plan must be made available to the public during development as well as after it has been finalized. The pre-expenditure report may be revised during the course of the fiscal year to reflect changes. Although States vary greatly in terms of the information they provide and the structure of the report, the pre-expenditure report typically describes how the State plans to use SSBG funds and the mechanisms States use to disburse the funds across agencies, programs, and services.

States typically undertake three major steps in planning for their use of SSBG funds. These steps are prioritization, allocation, and public review. During prioritization, States determine the social needs to be addressed, the types of services to be provided to meet those needs, the objectives for services, and the individuals to be served. Following the process of prioritization, States allocate funds based on the established priorities. According to Federal regulation, during the public review process States must make public a copy of the pre-expenditure report for inspection and copies must be provided, upon request, to any interested public agency.

This chapter describes two strategies States used to allocate SSBG funds to specific programs and services, after the States' priorities were determined, formula funding and requests for proposals.¹

Formula Funding

A State's management of a block grant such as the SSBG includes planning for the fiscal aspects of distributing the dollars, as well as the details of planning the social services that will be funded. Several States, Arizona, New Jersey, and New York, used formulas to determine how or to whom the SSBG dollars were allocated, leaving the details of service planning to the recipient agencies. In their 2001 pre-expenditure reports, these States provided examples of planning based on allocation formulas.

Arizona

The disbursement of SSBG funds in Arizona occurred at both the State and local levels. Locally planned services were provided through three separate delivery systems, the Councils of Governments (COGs) in Arizona's 6 planning districts, 19 of the State's Indian Tribes that belong to the Intra-Tribal Council of Arizona (ITCA), and 3 additional Tribes that do not belong to ITCA. The COGs and Tribes received varying amounts of SSBG funds based on allocation formulas.

Approximately 25 percent of the total SSBG allocation was made available to the six planning districts through COGs. The exact amount that each COG received was determined by a formula that equally weighed two factors, the district's percentage of the State's population and the district's percentage of the State population living below the Federal poverty line. Each of the planning districts developed an annual District SSBG Service Plan, which was later incorporated into the State SSBG Plan. The appropriate administration within the Department of Economic Security (DES), the agency administering the SSBG program in the State, contracted with local providers in each of the six planning districts to provide the locally planned services.

Almost 7 percent of Arizona's total SSBG allocation was earmarked for services on Arizona's Indian reservations. The base allocation for each tribe was $13,600, with increases based on population. The DES contracted with ITCA to plan the SSBG-funded home- and community-based services for the elderly for the 19 ITCA tribal members' reservations. Three additional Tribes, which are not members of ITCA, used their SSBG funds for children's services.

The remaining 68 percent of Arizona's SSBG dollars were allocated to the DES, whose staff planned services throughout Arizona.

New Jersey

New Jersey's Department of Human Services adopted a Òformula funding policyÓ in order to guarantee that SSBG funds were equitably distributed among its counties. This policy allocated both new funds for SSBG Purchase of Service Programs and lost funds to each county. Lost funds referred to a decrease in the State SSBG allocation at the Federal level which then had to be distributed across New Jersey's counties. The formula for disbursing the funds was an equal proportion of a county's percentage of statewide Medicaid-eligible population and its percentage of statewide SSBG-eligible population, as determined by the State of New Jersey.

New York

Using an allocation formula that was modified as needed to support the State's social services delivery system, New York State allocated 98 percent of its SSBG funds among 58 social services districts, reserving no more than 2 percent for training purposes. The original formula, developed in 1972 to disburse Federal funds among social services districts, was based equally on each district's proportion of the State's population and on the proportion of federally reimbursable services expenditures. A funding ceiling, each district's allocation could be no more than twice its Federal expenditure amount, was also in effect. Any remaining Federal funds were then reallocated among those districts whose initial allocations were less than their ceilings. After several years of making allocations using this formula, it was determined that a floor would be set at $6 per person in each county; thereafter, additional dollars were used to achieve that floor in each county. Additional amounts in subsequent years were allocated among the social services districts proportionately in the same manner used for allocation of funds for Federal FY 1983.

Requests for Proposals

Several States focused on program and service criteria rather than population or geographic criteria to distribute SSBG dollars. One method was to request proposals from governmental agencies and private organizations and distribute SSBG dollars based on the merit or need described in the proposals. Two States in particular, Mississippi and Delaware, employed this method.

Mississippi

Mississippi dedicated 1 percent of SSBG funds for administration of the grant at the State level and 1 percent of SSBG funds for use at the Governor's discretion. The remaining 98 percent of SSBG funds were awarded to three State agencies for service delivery. In order to receive the SSBG funds, these State agencies: the Department of Human Services, the Department of Health, and the Department of Mental Health, were required to submit proposals to the Mississippi Department of Human Services, the State agency designated to administer the SSBG, outlining the services they planned to provide. Each of the proposals defined the services to be funded, the method of delivery, service goals and objectives, recipients and geographical areas served, the cost to provide the service, performance criteria, and expected results and outcomes. The proposals were evaluated based on merit and past expenditures; awards were granted accordingly.

The rules governing the competition of SSBG funds were developed according to the Mississippi Negotiated Investment Strategy (NIS). The NIS was a formal process of negotiations by participants who included representatives of social services agencies, the administering agency, and citizens' advocates. Negotiations between the Mississippi Department of Human Services and each individual agency were conducted in 1987 and determined service definitions, targeted populations, service priorities, criteria for review and evaluation of proposal applications, and guiding principles. Proposals were accepted and services provided based on these criteria.

Delaware

Delaware split its SSBG allocation between the Department of Health and Social Services (DHSS) and the Department of Services for Children, Youth and Their Families (DSCYF). The budgeting and planning strategies for these Departments followed different policies as mandated by the Division of Social Services (DSS), which had overall responsibility for planning and administering the SSBG.

DSS requested budget and program proposals from DHSS agencies. Following their submission, the proposals were evaluated by review teams that included staff from divisions in DHSS. These ratings were then submitted to the appropriate Division Directors for consideration in the proposed plan. DSCYF, on the other hand, budgeted its dollars for purchased services, direct services, and administrative functions within DSCYF.

Future Use of Pre-expenditure Reports

Although the pre-expenditure reports from the States varied in the scope and detail in which they discussed their proposed SSBG plans, they provided important and useful information on the use of SSBG program funds within each State. The Office of Community Services (OCS) has awarded an additional contract to document the planning processes used by State and local communities in allocating SSBG funds, designating target populations, and coordinating with other Federal, State, and local funding sources. The 2002 Annual Report will include information gathered as part of this contract.

¹  The specific State strategies contained in this chapter were verified by representatives from each State.