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AGING PROGRAMS

Question: Since the 65 and over population is the fastest growing age group in this country today, I would think that the need for services to that population would also increase. Your budget, however, shows level funding for programs in FY '92. What is the rationale for level funding these programs?

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Answer: The Department of Health and Human Services has assigned a high priority to assuring that adequate resources available to support the program efforts required to address the pressing needs of the Nation's older citizens. We note that Administration on Aging programs have received significant budgetary increases during the past decade. During that period we have also encouraged programs to solicit increased contributions from older recipients able to pay and have emphasized efforts to improve the management of service efforts. We believe that the results have been very positive. For example, over the seven year period 1982-1989, meals provided under the title III-C program have increased by more than one third, from 190,000,00 to 250,000,000. Voluntary contributions have more than doubled from $69,000,000 in 1982 to $150,000,000 in 1989. Where opportunities present themselves, the aging services network will make additional efforts to expand services through increasing voluntary contributions and further improving service program administration.

In addition, the Administration on Aging has recently launched its national Eldercare Campaign designed to mobilize additional resources from both the public and private sectors on behalf of older persons at risk of losing their independence. The Campaign is nation-wide in scope and will assist the aging services network to draw upon significant resources which have not been available in the past.

Question. Congregate and home-delivered meals are provided 5 days a week. Some of the elderly receiving these meals may be unable to prepare food for themselves. Has the Administration given any thought to providing these meal services 7 days a week. What would be the cost of providing meals on a daily basis?

Answer. Generally, congregate and home delivered meals operate 5 days a week. However, the older Americans Act and applicable regulations currently allow State and Area Agencies on Aging to serve for more than 5 days a week. There are cases where this has been tried on a demonstration basis. It is not widely the practice. Some home delivered meals projects have provided needy elderly participants with an extra meal that is easily reheated and can be consumed at a later time. Based on discussions with state and Area Agency staff and others involved in the program, there is not a very large part of the elderly population that need or would want meals every day or more than one publicly provided meal each day. If more is needed, perhaps other services, such as homemaker service, shopping assistance or a group living arrangement should be considered.

We do not doubt that there are circumstances where the need for 7 day service exists and could be appropriately met by expanded service. We have no estimate of the costs of providing 7 day service. However, we would expect it to be more expensive per meal

than regular service because of overtime rates for labor, additional staff costs, and a loss of efficiencies of scale due to a smaller number of clients served on weekends.

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Question. When the Department's request for application was published, over 272 proposals were received, however only 45 were able to be funded. How many children is this program currently serving?

Answer. The first Transitional Living Program projects were funded in September, 1990. It is anticipated that between 900 and 1200 youth will be served, on a residential basis, within the first year.

Question. These Transitional Living Programs have been in operation for almost a year. What types of evaluations have been done to date?

Answer. Although funding was available in fiscal year 1990, the first group of projects were not awarded funds until September 1990. These projects have actually been operating for less than six months. An evaluation strategy has been designed which, when implemented, will determine the cross comparative results of the funded projects, their overall impact and effect, and will make recommendations for the further enhancement of the national program.

In addition, a systematic reporting system is being developed in order to obtain consistent, systematic data from all TLP projects.

OFFICE OF INSPECTOR GENERAL

STATEMENT OF RICHARD P. KUSSEROW, INSPECTOR GENERAL ACCOMPANIED BY DENNIS P. WILLIAMS, DEPUTY ASSISTANT SEC

RETARY FOR MANAGEMENT AND BUDGET

INTRODUCTION Senator HARKIN. The next witness is Mr. Richard Kusserow, the inspector general of the Department of Health and Human Services. Mr. Kusserow has served in this post for 10 years now. In that time, his office has compiled an impressive record of investigation into areas where Government spending could be reduced without compromising program effectiveness or impact on beneficiaries.

Welcome back to the subcommittee, Mr. Kusserow. We are looking forward to an update on the work your office is doing. We are also interested in knowing how your office will implement the new Chief Financial Officers Act, which mandates detailed financial statements of most agency spending.

As always, your complete statement will be made a part of the hearing record. Again, Mr. Kusserow, of the different departments under the jurisdiction of this subcommittee, it is this Senator's feeling that the Inspector General's Office that you head and you, in particular, are doing an outstanding job. We urge you to keep up the good work you are doing. With limited budgets, tight constraints, we have to go after any waste, abuse, fraud, inappropriate indirect costs or whatever we can to make sure that our dollars are being spent wisely.

Again, welcome back, and please proceed as you so desire.

SUMMARY STATEMENT

Mr. KUSSEROW. Thank you, Mr. Chairman. This is my 10th appearance before this committee. I am pleased to be here, and I am very appreciative of your kind remarks. We are prepared to discuss the issue of indirect costs at universities. We are also prepared to discuss any detail you would care to go into with regard to the chief financial officers legislation.

I would like to take advantage of your offer and just submit my formal statement for the record. I will just highlight some of our request to allow a maximum amount of time for explanation and questioning.

As you pointed out in your introduction of me here this morning, we are a kind of a rare commodity for this committee in the fact that we are not policymakers. You have plenty of policymakers come before you. Our job really is to look at the way things are operating and determine whether they could operate better. As to whether you cap programs or eliminate programs, raise taxes or

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lower taxes, there are plenty of other folks in this town who can address those issues.

Our mission is to look at the programs to see if they are working as intended, to measure how well they are performing, and to see if there are possibilities of effecting savings as a result of more efficient or effective operation of the programs-without adversely affecting the intended beneficiaries. That, of course, is our mainline objective at any given time.

During 1990 alone, we were able to effect a total of about $5.8 billion in savings which were posted. These savings came from the areas of program improvements, restitution, and recoveries to our Department's programs. We believe that inspector general recommendations have made a major contribution to departmental programs over the last 5 years. If you were to add all the savings up, you would see a total of about $28 billion over 5 years.

Also in the area of insuring that our programs and beneficiaries are not abused in any fashion, we also have taken action against individuals and entities who have attempted to defraud these programs. We had 900 administrative sanctions that emanated from that part of our program in fiscal year 1990.

Of course, the last thing we want to have is people engaging in criminal conduct against our programs. We have had a very strong policing effort in this area. In this last year we have convicted, in the courts, 1,310 individuals and entities for criminal conduct. So we feel that we are making a contribution on that side of our mission.

We also make it a point to develop our OIG “Cost Savers Handbook” and “Management Improvement Recommendations Handbook," the so-called red and orange books. These documents provide recommendations on how we can put funds to better use and how we can make improvements in the operation of the Department.

Again staying on the area of savings, in the OBRA 90 legislative package there were a number of OIG recommendations contained in the more than $31 billion that was scored for the next 5 years in that legislative effort. We made contributions to about 72 percent of all the Medicare savings provisions. These contributions included a lot of things. One of them I would like to highlight because you played a major role in it. We had hearings in which we were trying to find a better way in which to deal with durable medical equipment and the abuses in that program, and to find ways in which we could eliminate some of the unnecessary spending, the waste and, quite frankly, just out-and-out fraud. That portion of the package was about $2.1 billion. We were very pleased to see that you and your colleagues were able to have that provision added.

The savings picture looks very good in the President's budget to the Congress. We feel that there are a lot of other opportunities for savings without adversely affecting the programs, so we hope that you in the Congress will take a close look at the recommendations that we put in there. Again, we are focusing on areas where you could effect savings without adversely affecting either the programs or the beneficiaries.

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BUDGET REQUEST In fiscal year 1992, we are requesting $111,189,000 in obligational authority. This breaks down to $63,842,000 from appropriations and $47,347,000 from trust fund transfers for the work that we do for the trust fund programs, primarily Social Security and Medicare. This also does not include authority for the roughly $2.2 million that we are reimbursed by other departments for work that we perform on their behalf and for which they pay.

We are requesting a total of 1,510 FTE's. That includes 95 FTE's for the Chief Financial Officers Act of 1990 to which you have previously alluded. This is a rather ambitious piece of legislation. From a financial management viewpoint, I think it is probably the most significant piece of legislation that Congress has passed in my conscious memory:

Among other things, it understates the importance of having better financial management in the executive branch of Government. In furtherance of that goal, they have created a controllership function, a chief financial officer who will be responsible for improving management in the executive branch.

Also as part of that legislation, Congress said that for all trust funds, commercial-type activities, and revolving funds, they want to have financial statements prepared. These funds will then be audited by the inspectors general to give a clear picture as to how the agencies are performing. So 95 FTE's are line itemed and dedicated for that purpose in our Department, and the total cost comes to $9.5 million. That amount includes both the support of the FTE's and contracting for specialized services to evaluate computerized systems or to add actuarial services to the Inspector General's Office.

The CFO Act activities are probably the most significant change that we have seen in the submission of our budget in the 10 years that I have been appearing before this committee. What it, in fact, means is that we will have 60 major line items and program oper: ations that will fall within the category of agencies that should have financial statements prepared and audited. When that is done, it will account for 80 percent of the outlays of the Department's program.

Congress specifically referred to the Social Security trust funds as an area of high priority that would be audited both in the current year and from now on. We have already been doing that. That is already in our budget. We are not asking for any additional funding to audit those financial statements. That is our contribution. Although we were never funded to do it before now, we feel that it is something we have already done and, therefore, we should not ask for anything additional for it.

The add-ons will include a host of programs, particularly in the Public Health Service and the Medicare programs. One of the primary users of this information, I think, will be this committee and your sister committees in the House, since it will provide you with financial information on the operations of the agencies in a way that you have never had available before. So I think that offers a lot of promise for you as well.

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