DA.07
Department of Aging
Operating Budget Data
($ in Thousands)
FY 01 FY 02 FY 03 % Change
Actual Working Allowance Change Prior Year
General Fund $19,094 $22,142 $23,776 $1,634 7.4%
Special Fund 207 231 253 22 9.7%
Federal Fund 18,241 19,901 21,387 1,486 7.5%
Total Funds $37,541 $42,274 $45,416 $3,142 7.4%
Ä The 2003 allowance includes an increase of $2.7 million in general and federal funds for the Older Adults
Medicaid waiver program. Of this amount, $1.1 million is for increasing the number of individuals served
from 2,135 to 3,135 in fiscal 2003.
Ä There is a $410,000 increase in general funds to continue the Long-term Care Ombudsman initiative to
establish appropriate staffing ratios.
Ä There is $150,000 in new funds to support the Innovations in Aging program, created by legislation
passed during the 2001 legislative session.
Personnel Data
FY 01 FY 02 FY 03
Actual Working Allowance Change
Regular Positions 57.00 57.00 53.50 (3.50)
Contractual FTEs 10.00 8.00 7.00 (1.00)
Total Personnel 67.00 65.00 60.50 (4.50)
Vacancy Data: Regular Positions
Budgeted Turnover: FY 03 1.54 2.88%
Positions Vacant as of 12/31/01 7.00 12.28%
Ä Four abolished positions, two of which are related to the Older Adults Medicaid waiver, and one
contractual position were deleted due to cost containment measures.
Ä There is one new 0.5 position to administer the Innovations in Aging program.
Note: Numbers may not sum to total due to rounding.
For further information contact: Suzanne P. Freed Phone: (410) 946-5530
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DA.07 - Department of Aging
Analysis in Brief
Issues
Expanded Medicaid Waiver Helps Seniors Stay in the Community: Since 1993, the State has administered
a Medicaid waiver program helping low-income seniors prevent or delay their admission into nursing homes.
Initially, participation in the waiver was very low due to strict Medicaid eligibility requirements; only 135
seniors qualified in fiscal 2000. During the 1999 session, the General Assembly sought to expand the number
of options for these seniors by requiring an expansion of the Medicaid waiver. Since then, the program has
continued to expand in services as well as individuals served. The Department of Aging (MDOA) should
provide an update on the number of clients enrolled in the program, as well as the extent to which the
client-provider gap has been closed. Also, given that the senior population is expected to grow
significantly, MDOA should discuss how it can help ensure a sufficient level of home- and community-
based service providers.
Recommended Actions
Funds Positions
1. Add budget bill language requiring the Maryland Department of Aging
to identify by subprogram its grant initiatives in the State budget.
2. Reduce funding for expanded case management and administration of $ 1,122,278
the Older Adults Medicaid waiver program because the Department
of Legislative Services already recommended cutting the expanded
waiver services.
3. Delete funding and PIN for requested new administrative specialist 24,861 0.5
position because it does not fulfill the Spending Affordability
Committee’s recommendation for new positions.
Total Reductions $ 1,147,139 0.5
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DA.07
Department of Aging
Operating Budget Analysis
Program Description
The Department of Aging (MDOA) serves as an advocate for the elderly. Its primary mission is to
protect the rights and quality of life for the senior citizens of Maryland. Established in 1975 as the Office of
Aging, the department receives its statutory authority under Article 70B, Annotated Code of Maryland and
the federal Older Americans Act of 1965, as amended. With the enactment of Chapter 573, Acts of 1998, the
department attained cabinet level status.
MDOA is charged with responsibilities delegated to the State under the Older Americans Act, not
otherwise designated by law to some other unit of State government. This includes planning, coordinating,
administering, and assessing public programs and services carried out at State and local levels in the areas
of income maintenance, nutrition, long-term care, public guardianship, housing, advocacy, employment,
education, recreation, and rehabilitation of the physically and mentally disabled.
Fiscal 2002 Actions
Cost containment measures reduced the fiscal 2002 budget by $217,000 in general and special funds,
primarily due to the hiring freeze. However, five contractual employees were added to the budget and will
assist with the processing of provider and client applications for the Older Adults Medicaid waiver.
Governor’s Proposed Budget
As shown in Exhibit 1, the fiscal 2003 allowance grows by $3.1 million, or 7.4% over the fiscal 2002
working appropriation. The largest increase is due to the expansion of the Older Adults Medicaid waiver,
discussed below. Personnel changes account for 5.4% of the fiscal 2003 growth. Four positions responsible
for the Medicaid waiver (two), monitoring the continued care community (one), and agency accounting tasks
(one) were abolished due to cost containment. Also, one contractual position was abolished. These position
reductions are offset by a new 0.5 position designated for providing support to the Innovations in Aging
Advisory Council and administering the Innovations in Aging competitive grant program.
Older Adults Medicaid Waiver Expands by 1,000
The 2003 allowance includes an increase of $2.7 million in general and federal funds for the Older Adults
Medicaid waiver. Of this amount, a little less than a half, $1.1 million, is dedicated toward increasing the
number served from 2,135 to 3,135. There is also $0.65 million to annualize the fiscal 2002 expansion to
2,135 individuals. In addition, the allowance demonstrates an increase of $0.87 million in federal
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DA.07 - Department of Aging
Exhibit 1
Governor’s Proposed Budget
Department of Aging
($ in Thousands)
General Special Fund Federal
How Much It Grows: Fund Fund Total
2002 Working Appropriation $22,142 $231 $19,901 $42,274
2003 Governor’s Allowance 23,776 253 21,387 45,416
Amount Change $1,634 $22 $1,486 $3,142
Percent Change 7.4% 9.7% 7.5% 7.4%
Where It Goes:
Personnel Expenses
Employee and retiree health insurance and retirement contribution increases . . . . . . . . . $278
Decreased deferred compensation match, end of SB 1 surcharge, elimination of sick
leave incentive pilot and other adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Annualize fiscal 2002 general salary increase and fiscal 2003 increments . . . . . . . . . . . 130
Net fiscal 2003 cost containment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (305)
Four abolished positions offset by a 0.5 new position . . . . . . . . . . . . . . . . . . . . . . . . . . (121)
Expansion of Older Adults Medicaid Waiver
Annualization of fiscal 2002 expansion to 2,135 participants ($654,000) plus expansion
to 3,135 participants in fiscal 2003 ($1,122,278) and an accounting correction so that
federal reimbursements are reflected in MDOA ($875,000) . . . . . . . . . . . . . . . . . . . . . 2,651
Grants to Area Agencies on Aging and Other Operating Expenses
Continuation of Long-term Care Ombudsman initiative to establish staffing ratios . . . . 410
New funding for the Innovations in Aging Services Advisory Council and grant awards
for new models of service delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Reduction in the Senior Health Insurance Counseling and Advocacy federal grant . . . . . (78)
Reduction in contractual staff, telecommunications, and computer equipment offset by
increases for a new office workstation and other operating expenses . . . . . . . . . . . . . . . (159)
Total $3,142
Note: Numbers may not sum to total due to rounding.
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DA.07 - Department of Aging
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DA.07 - Department of Aging
funds for the program. This increase, however, only reflects an accounting correction MDOA must make in
order to show its federal fund reimbursements from DHMH as a revenue source.
Program Grants to Local Aging Agencies
In fiscal 2003, the department will continue to allocate the majority of funds to cover local agencies on
aging (LAAs) case management and direct services. Exhibit 2 shows the distribution of the grants among
the various programs administered by LAAs.
Very few programs will receive increased grants in fiscal 2003. The Long-term Care Ombudsman
initiative, in its third year of improving staff ratios for monitoring elder care facilities, increases by $410,000
in general funds. According to MDOA, due to budget constraints, the program will receive only half of the
planned funding needed for the third year of the program, with hopes to complete the initiative in fiscal 2004.
Also, $150,000 in new funding is provided for the Innovation in Aging Services Program. This program
was developed during the 2001 legislative session to promote new models of service delivery for the senior
population. The legislation authorizes the creation of an Aging Services Advisory Council and a competitive
grant process for nonprofits and other organizations developing innovative ways to serve the growing senior
population.
Based on preliminary information from the Center for Medicare/Medicaid Services, formerly the Health
Care Financing Administration, MDOA anticipates a reduction of $78,005 in the Senior Health Insurance
Counseling and Advocacy program federal grant.
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DA.07 - Department of Aging
Exhibit 2
Two-year Trend in Direct Services Funding
Fiscal 2002 Appropriation Fiscal 2003 Allowance Overall
GF FF Total GF FF Total Increase
Vulnerable Elderly
Ombudsman/
Elder Abuse $1,372,776 $439,231 $1,812,007 $1,782,776 $439,231 $2,222,007 $410,000
Guardianship 872,676 0 872,676 872,676 0 872,676 0
Client Services
Senior Care 7,059,299 0 7,059,299 7,059,299 0 7,059,299 0
Health Insurance
Counseling 143,854 273,646 417,500 143,854 195,641 339,495 (78,005)
General Support
Services/Other 244,000 5,690,431 5,934,431 244,000 5,690,431 5,934,431 0
Community Services
Health Promotion 0 299,062 299,062 0 299,062 299,062 0
Senior Centers 97,856 0 97,856 97,856 0 97,856 0
Info and Assistance 990,155 0 990,155 990,155 0 990,155 0
Curbing Medicaid
Abuse 0 170,023 170,023 0 170,023 170,023 0
Innovations in Aging 150,000 150,000 150,000
Nutrition Services
Congregate Meals * 852,011 6,159,766 7,011,777 852,011 6,159,766 7,011,777 0
Home Delivered
Meals 818,401 2,520,383 3,338,784 818,401 2,520,383 3,338,784 0
Housing Services
Assisted Living
Subsidy 3,537,328 0 3,537,328 3,537,328 0 3,537,328 0
Congregate Housing
* 1,777,128 0 1,777,128 1,777,128 0 1,777,128 0
Medicaid Waiver 1,353,915 1,680,429 3,034,344 2,242,054 3,443,137 5,685,191 2,650,847
Info Technology 171,000 0 171,000 171,000 0 171,000 0
Total $19,290,399 $17,232,971 $36,523,370 $20,588,53 $19,067,674 $39,656,212 $3,132,842
* Independent Living
Source: Maryland Department of Aging
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DA.07 - Department of Aging
Performance Analysis: Managing for Results
Exhibit 3 demonstrates MDOA’s Managing for Results (MFR) submission. This is the first year that
performance could be analyzed for three consecutive years for all agencies. However, MDOA revised its
outcome indicators from last year making it difficult to establish trends.
Exhibit 3
Program Measurement Data
Department of Aging
Fiscal 1999 through 2003
Ann. Ann.
Actual Actual Est. Actual Est. Est. Chg. Chg.
1999 2000 2001 2001 2002 2003 99-01 01-03
Enable seniors to live in the most appropriate setting in the community for
as long as possible
% of disabled seniors
receiving community-
based support services n/a 14.14% n/a 14.30% 17.89% 17.47% n/a 10.5%
Ensure vulnerable seniors are treated with dignity and protected against abuse,
exploitation, and consumer fraud
% of long-term care
resident complaints
resolved to satisfaction n/a 57% n/a 70% 75% 80% n/a 6.9%
Provide expanded choices in services, vendors, and activities
Enrolled Medicaid
providers 127 150 500 309 600 750 98.4% 55.8%
Enhance the quality and quantity of nutrition, health education, fitness, and social activities
Home-delivered meals
(thousands) 1,380 1,374 1,400 1,406 1,413 1,420 0.7% 0.5%
Serve as primary resource of information on aging issues
Referrals made by
MDOA and aging
network n/a 104,664 n/a 100,590 101,596 102,602 n/a 1.0%
Source: Maryland Department of Aging
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DA.07 - Department of Aging
MDOA, in partnership with the local area agencies on aging, is dedicated to promoting and enhancing
choice, independence, and dignity within the senior population. With the recent Olmstead decision requiring
that the disabled be placed in the least restrictive possible environment, MDOA is working to help seniors
stay in their homes and/or receive community-based services. As Exhibit 3 demonstrates, MDOA anticipates
a growing number of disabled seniors receiving services between fiscal 2001 and 2003. Many of these
individuals will be served through the Older Adults Medicaid waiver, the Congregate Housing Services
program, and the Senior Care program. In turn, MDOA expects growth in the number of providers.
Already, the number of Medicaid providers has more than doubled between fiscal 1999 and 2001 and is
expected to do so again by the end of fiscal 2002.
A second major initiative of the agency is the Long-term Care Ombudsman program. As mentioned earlier,
legislation was enacted to increase the number of ombudsman monitoring long-term care facilities to ensure
seniors’ safety. Since fiscal 2000, the number of advocates (staff and volunteers) has doubled. In that time,
these advocates have received an increase of 1,000 complaints, reflecting the greater coverage of facilities
the program is supporting. The number of complaints resolved satisfactorily increased 13 percentage points.
This improvement is anticipated to continue, with 80% of complaints resolved successfully by fiscal 2003.
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DA.07 - Department of Aging
Issues
1. Expanded Medicaid Waiver Helps Seniors Stay in the Community
Since 1993, the State has administered a Medicaid waiver program for low-income seniors wanting to
prevent or delay their admission into nursing homes. MDOA provides case management and administration,
while the Department of Health and Mental Hygiene (DHMH) provides the waiver services.
Participation in the waiver was very low due to strict Medicaid eligibility requirements; only 135 seniors
qualified in fiscal 2000. During the 1999 session, the General Assembly sought to expand the number of
options for these seniors by requiring an expansion of the Medicaid waiver. Since then, the program has
continued to expand in services as well as individuals served.
Older Adults Medicaid Waiver Continues to Expand
As required by 1999 legislation, MDOA applied to, and was approved by, the federal government to make
its program less restrictive and to serve more individuals. In July 2000, the waiver was expanded to serve
five jurisdictions formerly not participating in the waiver program: Caroline, Frederick, Kent, Harford, and
Talbot counties. Beginning in January 2001, the age eligibility limit was lowered from 62 to 50 years of age.
The expanded waiver also increased the types of services eligible for Medicaid reimbursement, listed below
in Exhibit 4. These changes are expected to bring total participation to 2,135 by the end of fiscal 2002. In
fiscal 2003, the program will provide services to 3,135 people at a cost of $36.7 million (cost includes funds
in the DHMH budget).
Howard County currently has the largest enrollment with 198 participants. Baltimore and Anne Arundel
counties follow with 114 and 98 participants, respectively. The smallest enrollments are in Allegany, Calvert,
Kent, Somerset, and Talbot. These counties have two or fewer enrolled participants, although 30 applicants
are currently pending enrollment in these areas. Reasons for the low enrollment in these jurisdictions include:
shorter participation time in the waiver; lack of available local government funding to support staffing; and
few certified providers.
Lack of Certified Providers Holding Back Enrollment of Program Participants
With the expansion of waiver slots and services, there is a greater demand for certified providers. Because
more families are selecting services provided in their own home, such as personal care, MDOA expects a
higher demand for home-directed services. Moreover, other similar waivers, such as Maryland Community
Choices for disabled adults between ages 29 and 50, are seeking the same types of providers. Yet, the supply
of providers is not keeping pace with this demand.
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DA.07 - Department of Aging
Exhibit 4
Older Adults Medicaid Waiver Services
Service Medicaid Maximum Reimbursement Rate
Assisted Living $1,530 per month for Level II care
$1,930 per month for Level II care
Assistive Devices $100 maximum cap
Behavior Consultation Services $35/hour
Dietitian/Nutritionist Services $55/hour
Environmental Accessibility Adaptations $3,000 limit per participant over a lifetime
Environmental Assessments $350 per assessment
Family or Consumer Training $55 per hour
Home Health Medicaid’s current reimbursement methodology
for State Plan home health services
Home-Delivered Meals $5 per delivered meal
Personal Care $9 to $15 per hour for aide services
$55 per hour for agency nurse monitors
Personal Emergency Response Systems Medicaid pays the actual approved cost
Respite Care $64 to $138 per day, or $9 to $11.50 per hour
Senior Center Plus $40 per day
Case Management Administered through Area Agencies on Aging
Source: Department of Aging
Exhibit 5 demonstrates the supply/demand gap. Of the 2,412 seniors who have applied to the program,
only 888, or 36% are enrolled. The remainder are still in the process of finding approved providers and
establishing a service plan. According to MDOA, the supply of providers is not evenly distributed throughout
the State, preventing enrollment of participants. In many counties, for example, there are no providers that
can provide environmental adaptation and environmental assessment. Also, providers have not yet been
identified in certain jurisdictions for dietitian/nutrition services and home delivered meals.
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DA.07 - Department of Aging
Exhibit 5
Supply and Demand for Older Adults Medicaid Waiver Services
Enrolled/Approved Pending Total
Clients 888 1,524 2,412
Providers* 764 675 1,439
• Assisted Living 351 153 504
• In-Home Services 413 522 935
* Providers can serve more than one program participant.
Source: Department of Aging
Reimbursement rates have also held back the amount of participating providers. While rates for
professional services have generally been sufficient to attract providers, some services are not attracting
providers due to low reimbursement rates. For example, assisted living rates have attracted facilities with 16
or fewer beds. But, large facilities do not find these rates high enough to cover their costs. Also,
reimbursement rates for personal care, $11.50 to $15 per hour, are not enough to attract providers into the
program.
According to MDOA, the provider gap is beginning to close, thereby helping more individuals enroll in
the program. Reasons for this recent growth include:
Ä the number of authorized providers is increasing, particularly for in-home services;
Ä staff in local aging agencies are becoming more experienced in designing care plans that use providers
already available in the community; and
Ä MDOA, together with other State agencies, has launched a provider recruitment initiative, including job
fairs and other outreach.
MDOA should provide an update on the number of clients enrolled in the program, as well as the
extent to which the client-provider gap has been closed. Also, given that the senior population is
expected to grow significantly in the future, particularly the baby boom generation, MDOA should
discuss how it can help ensure a sufficient level of home- and community-based service providers.
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DA.07 - Department of Aging
Recommended Actions
1. Add the following language:
Provided that the Maryland Department of Aging (MDOA) shall establish separate subprograms
through the State Budget and Financial Management Information System for each program initiative
included in its budget. MDOA shall work with the Department of Legislative Services to determine
the appropriate subprograms to be identified in the budget. In addition, MDOA shall conform its
2002 actual and 2003 working appropriations to these subprograms.
Explanation: The Maryland Department of Aging does not currently identify its grant programs
separately in the State budget. As a result, it is difficult to monitor the changes in resources
associated with each program. It is particularly critical to monitor expenditures for the Older Adults
Medicaid waiver program, which is not currently budgeted separately from other grant programs.
Amount Position
Reduction Reduction
2. Reduce funding for expanded case management and $ 561,139 GF
related administrative costs for the Older Adults $ 561,139 FF
Medicaid waiver program. The program plans to expand
to 3,135 participants in fiscal 2003. However, the
Department of Legislative Services has recommended
cutting these expanded services in the Medicaid budget
due to underfunding of base Medicaid costs for current
program levels. Therefore, expanded case management
and related administrative costs are not needed.
3. Delete funding and PIN for the requested administrative 24,861 GF 0.5
specialist position. The Spending Affordability
Committee recommended that new positions be limited
to: critical public safety and homeland needs; facilities
scheduled to open fiscal 2003; and those addressing
workload increases in higher education and essential
services at 24-hour facilities. This position does not fulfill
these requirements.
Total Reductions $ 1,147,139 0.5
Total General Fund Reductions $ 586,000
Total Federal Fund Reductions $ 561,139
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DA.07 - Department of Aging
Appendix 1
Current and Prior Year Budgets
Current and Prior Year Budgets
Department of Aging
($ in Thousands)
General Special Federal Reimb.
Fund Fund Fund Fund Total
Fiscal 2001
Legislative
Appropriation $19,362 $198 $17,075 $0 $36,635
Deficiency
Appropriation 0 0 0 0 0
Budget
Amendments 525 72 3,365 0 3,962
Reversions and
Cancellations (793) (63) (2,199) 0 (3,055)
Actual
Expenditures $19,094 $207 $18,241 $0 $37,541
Fiscal 2002
Legislative
Appropriation $22,358 $232 $17,905 $0 $40,495
Budget
Amendments (216) (1) 1,996 0 1,779
Working
Appropriation $22,142 $231 $19,901 $0 $42,274
Note: Numbers may not sum to total due to rounding.
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DA.07 - Department of Aging
Fiscal 2001
There were $792,875 in general fund reversions as a result of receiving federal fund reimbursements
related to expenditures incurred in fiscal 2000. Also, $2.2 million in federal funds were cancelled because
no funds from the Baltimore City Older American Fund Act were drawn down.
Fiscal 2002
Cost containment reduced the 2002 working appropriation $217,000 in general and special funds. This
is offset by a $2.0 million increase in federal funds for the Older Adults Medicaid Waiver. These funds
correct the accounting error MDOA had made in not budgeting the federal fund match for the Medicaid
waiver in the original appropriation.
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Object/Fund Difference Report
Department of Aging
FY02
FY01 Working FY03 FY02 - FY03 Percent
Object/Fund Actual Appropriation Allowance Amount Change Change
Positions
01 Regular 57.00 57.00 53.50 (3.50) (6.1%)
02 Contractual 10.00 8.00 7.00 (1.00) (12.5%)
Total Positions 67.00 65.00 60.50 (4.50) (6.9%)
Objects
01 Salaries and Wages $ 4,181,347 $ 4,506,982 $ 4,674,912 $ 167,930 3.7%
02 Technical & Spec Fees 229,138 257,830 248,817 (9,013) (3.5%)
03 Communication 101,174 96,927 69,628 (27,299) (28.2%)
04 Travel 15,042 44,938 47,938 3,000 6.7%
07 Motor Vehicles 4,060 16,038 13,736 (2,302) (14.4%)
08 Contractual Services 148,273 158,956 161,848 2,892 1.8%
09 Supplies & Materials 104,590 25,130 26,130 1,000 4.0%
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10 Equip - Replacement 105,414 7,500 80,484 72,984 973.1%
11 Equip - Additional 0 54,885 1,250 (53,635) (97.7%)
12 Grants, Subsidies, Contr 32,506,970 37,023,370 40,006,212 2,982,842 8.1%
13 Fixed Charges 82,125 81,203 84,865 3,662 4.5%
14 Land & Structures 63,088 0 0 0 0.0%
DA.07 - Department of Aging
Total Objects $ 37,541,221 $ 42,273,759 $ 45,415,820 $ 3,142,061 7.4%
Funds
01 General Fund $ 19,093,689 $ 22,141,853 $ 23,775,747 $ 1,633,894 7.4%
03 Special Fund 206,912 230,887 253,303 22,416 9.7%
05 Federal Fund 18,240,620 19,901,019 21,386,770 1,485,751 7.5%
Total Funds $ 37,541,221 $ 42,273,759 $ 45,415,820 $ 3,142,061 7.4%
Note: Full-time and contractual positions and salaries are reflected for operating budget programs only.
Appendix 2
Fiscal Summary
Department of Aging
FY02 FY02
FY01 Legislative Working FY01 - FY02 FY03 FY02 - FY03
Unit/Program Actual Appropriation Appropriation % Change Allowance % Change
01 General Administration $ 37,541,221 $ 39,994,815 $ 41,773,759 11.3% $ 44,915,820 7.5%
02 Senior Centers Operating Fund 0 500,000 500,000 500,000 0%
Total Expenditures $ 37,541,221 $ 40,494,815 $ 42,273,759 12.6% $ 45,415,820 7.4%
General Fund $ 19,093,689 $ 22,357,853 $ 22,141,853 16.0% $ 23,775,747 7.4%
Special Fund 206,912 231,887 230,887 11.6% 253,303 9.7%
Federal Fund 18,240,620 17,905,075 19,901,019 9.1% 21,386,770 7.5%
Total Appropriations $ 37,541,221 $ 40,494,815 $ 42,273,759 12.6% $ 45,415,820 7.4%
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DA.07 - Department of Aging
Appendix 3