LAO 2003-04 Budget Analysis: Health and Social Services

Legislative Analyst's Office

Analysis of the 2003-04 Budget Bill

Department of Aging (4170)

The California Department of Aging (CDA) administers funds allocated to California under the federal Older Americans Act. These funds are used to provide services to seniors, including supportive services, nutrition programs, employment services, and preventive health services. In addition, CDA administers a range of programs, supported by state and federal funds, that provide noninstitutional services for older Californians and functionally impaired adults, including the Multipurpose Senior Services Program (MSSP), Linkages, Adult Day Health Care, and the Alzheimer's Day Care Resource Centers. Finally, CDA administers the Foster Grandparent, Senior Companion, Respite Purchase of Services, Respite Registry, and Brown Bag programs.

The budget proposes total expenditures of $181.8 million, a reduction of $2.2 million (1.2 percent) compared to estimated expenditures in 2002-03. While total spending remains relatively flat, the Governor's budget proposes to reduce General Fund support by $6.4 million (17 percent), down to a total of $31.9 million. This 17 percent savings is primarily due to reductions in nutrition programs and special projects (Respite Registry, Brown Bag programs, Foster Grandparent, and Senior Companions).

Consolidate All Aging Programs In the Department of Social Services

The California Department of Aging (CDA) and the Department of Social Services (DSS) operate programs that support the state's senior population. In order to improve program operation, we recommend eliminating the CDA and shifting departmental functions to DSS. By eliminating 37 positions, this consolidation results in net savings of $3,419,000 ($908,000, General Fund). (Reduce Item 4170 by $31,910,000 for state operations and local assistance, and increase Item 5180 by $31,002,000 for state operations and local assistance.)

Two Departments With Overlapping Missions. As described above, the CDA provides many services to the state's senior citizens. These include nutrition programs, supportive services, employment services, and preventive health services. The CDA administers federal Older Americans Act programs for supportive services, in-home services, and nutrition. The CDA contracts with, and provides guidance to 33 Area Agencies on Aging (AAAs). The AAAs coordinate and deliver services to senior citizens at the community level.

The DSS also operates several programs that serve older Californians, including the Supplemental Security Income/State Supplementary Program (SSI/SSP), the In-Home Supportive Services program (IHSS), and the Adult Protective Services program. These programs are housed within DSS's Disability and Adult Programs Division. With the exception of SSI/SSP, these services are delivered by county welfare departments working under the guidance of DSS.

Consolidation Should Improve Service Delivery. We believe that combining programs that serve senior citizens into one division at DSS should result in program efficiencies, because one division would oversee the bulk of services for California senior citizens. For example, CDA operates the Linkages Program and MSSP. The purpose of these programs is to assist frail elderly clients in avoiding institutionalization. The IHSS program operated by DSS has the same mission—providing home-based services so that clients can live independently. Moreover, recipients of the DSS programs could be more easily linked to other services currently offered by the CDA, such as the nutrition programs, if most aging programs were under the control of one department. In order to improve service delivery to California' senior population, we recommend that the program functions of the CDA be shifted to the Disability and Adult Programs Division at DSS.

Economies of Scale. For 2002-03, DSS has 4,625 authorized positions. About 82 percent of these positions are in program divisions, which either directly provide social services to clients or assist counties in providing services. About 18 percent of DSS positions are distributed among the executive office, legal division, research and development division, information systems division, and the administration division. By contrast, the CDA has 169 authorized positions for 2002-03. About 58 percent of these positions are in program divisions (delivering services), while 42 percent are in the executive office or the administration division. Because it is a larger department, DSS achieves economies of scale and needs proportionately fewer staff for executive and administrative activities than does CDA. Specifically, for every one program staff at DSS there are .22 administrative (nonprogram) staff. Conversely, at CDA, for every one program staff, there are .72 nonprogram staff. Combining these departments would build on the economies of scale at DSS.

Most States Locate Aging Programs Inside a Larger Agency. Currently 21 states (including California) operate their Older Americans Act programs under a stand-alone department. Twenty-nine states operate these programs with an office housed in a larger agency—specifically, 6 within health agencies, 16 with human services agencies, and 7 within combined health and human services agencies. Although both the Department of Health Services and DSS operate programs that serve California seniors, we believe DSS programs have more in common with the mission of CDA—fostering the independence and improving the quality of life of senior citizens.

Estimated Administrative Savings. For 2002-03, the CDA had 169 authorized positions distributed as follows: 23 in the directorate (14 percent), 48 in administration (28 percent), and 98 positions for program operations (58 percent). We recommend that all of the program positions be shifted to DSS, thus retaining all program capabilities of CDA. Within the directorate, we recommend eliminating 9 positions, and moving 14 positions to DSS (10 ombudsman positions, 1 deputy director, 1 legal counsel, and 2 support staff). Of CDA's administration division, we recommend eliminating 28 positions and shifting 20 positions to DSS (12 auditors, 2 humans resources staff, and 6 fiscal staff). In total, this results in a reduction of 37 positions and $1,860,000 in salary costs. When staff benefits and operating expenses and equipment are incorporated, total savings are approximately $3.4 million. Based on the current 27 percent General Fund share of state operations costs at CDA, General Fund savings from this consolidation are estimated to be $908,000.

Retain AAA Delivery Structure. Under our consolidation proposal, AAAs would continue to deliver aging services. The DSS would contract and guide the AAAs in the same manner as the CDA.

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