2010 Census
Population Measures Are Important for Federal Funding Allocations Gao ID: GAO-08-230T October 29, 2007The decennial census is a constitutionally-mandated activity that produces critical data used to apportion congressional seats, redraw congressional districts, and allocate billions of dollars in federal assistance. This testimony discusses (1) the various measures of population used to allocate federal grant funds (2) how the accuracy of the population count and measurement of accuracy have evolved and the U.S. Census Bureau's (Bureau) plan for coverage measurement in 2010; and (3) the potential impact that differences in population estimates can have on the allocation of grant funds. This testimony is based primarily on GAO's issued work in which it evaluated the sensitivity of grant formulas to population estimates.
In fiscal year 2000, GAO found that 85 percent of federal government obligations in grants to state and local governments were distributed on the basis of formulas that use data such as state population and personal income. The decennial census is the foundation for measuring the nation's population. It provides a count of the population every 10 years, and is the starting point for estimates of population made in years between the censuses. Obtaining an accurate population count through the decennial census has been a concern since the first census in 1790. Concern that the decennial census undercounted the population has continued since then. To measure accuracy, the Bureau since 1940 has used demographic analysis, in which it compares census counts with information on births, deaths, and other information. With the exception of 1990, the Bureau's demographic analysis shows that the extent to which the census undercounted the population has declined. More recently, the Bureau has used statistical techniques in which it compares the census count with the results of an independent sample survey of the population. For 2010, the Bureau plans to use similar statistical techniques to measure the accuracy and coverage of the census. Evaluating the accuracy of the census is essential given the importance of the data, the need to know the nature of any errors, and the cost of the census overall. GAO's prior work has illustrated that the accuracy of state and local population estimates may have some effect on the allocation of grant funds. Specifically, to show the sensitivity of grant programs to alternative population estimates, GAO simulated how two grant program formulas would allocate federal funds to states if population estimates were substituted for census counts. This simulation was done for illustrative purposes only. While only actual census numbers should be used for official purposes, this simulation showed some shifting of grant funds among the states when estimates were used. For example, recalculating allocations of Social Services Block Grant funds using estimates of population for 2000, rather than the census count, would result in shifting $4.2 million--or 0.25 percent--of $1.7 billion in fiscal year 2004 funds. Specifically, 27 states and the District of Columbia would have gained $4.2 million and 23 states would have lost a total of $4.2 million.
GAO-08-230T, 2010 Census: Population Measures Are Important for Federal Funding Allocations
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Testimony:
Before the Subcommittee on Information Policy, Census, and National
Archives, Committee on Oversight and Government Reform, House of
Representatives:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 10:00 a.m. EDT:
Monday, October 29, 2007:
2010 Census:
Population Measures Are Important for Federal Funding Allocations:
Statement of Mathew Scire:
Director, Strategic Issues:
GAO-08-230T:
GAO Highlights:
Highlights of GAO-08-230T, a testimony before the Subcommittee on
Information Policy, Census, and National Archives, Committee on
Oversight and Government Reform, House of Representatives.
Why GAO Did This Study:
The decennial census is a constitutionally-mandated activity that
produces critical data used to apportion congressional seats, redraw
congressional districts, and allocate billions of dollars in federal
assistance. This testimony discusses (1) the various measures of
population used to allocate federal grant funds (2) how the accuracy of
the population count and measurement of accuracy have evolved and the
U.S. Census Bureau‘s (Bureau) plan for coverage measurement in 2010;
and (3) the potential impact that differences in population estimates
can have on the allocation of grant funds. This testimony is based
primarily on GAO‘s issued work in which it evaluated the sensitivity of
grant formulas to population estimates.
What GAO Found:
In fiscal year 2000, GAO found that 85 percent of federal government
obligations in grants to state and local governments were distributed
on the basis of formulas that use data such as state population and
personal income. The decennial census is the foundation for measuring
the nation‘s population. It provides a count of the population every 10
years, and is the starting point for estimates of population made in
years between the censuses.
Obtaining an accurate population count through the decennial census has
been a concern since the first census in 1790. Concern that the
decennial census undercounted the population has continued since then.
To measure accuracy, the Bureau since 1940 has used demographic
analysis, in which it compares census counts with information on
births, deaths, and other information. With the exception of 1990, the
Bureau‘s demographic analysis shows that the extent to which the census
undercounted the population has declined. More recently, the Bureau has
used statistical techniques in which it compares the census count with
the results of an independent sample survey of the population. For
2010, the Bureau plans to use similar statistical techniques to measure
the accuracy and coverage of the census. Evaluating the accuracy of the
census is essential given the importance of the data, the need to know
the nature of any errors, and the cost of the census overall.
GAO‘s prior work has illustrated that the accuracy of state and local
population estimates may have some effect on the allocation of grant
funds. Specifically, to show the sensitivity of grant programs to
alternative population estimates, GAO simulated how two grant program
formulas would allocate federal funds to states if population estimates
were substituted for census counts. This simulation was done for
illustrative purposes only. While only actual census numbers should be
used for official purposes, this simulation showed some shifting of
grant funds among the states when estimates were used. For example,
recalculating allocations of Social Services Block Grant funds using
estimates of population for 2000, rather than the census count, would
result in shifting $4.2 million”or 0.25 percent”of $1.7 billion in
fiscal year 2004 funds. Specifically, 27 states and the District of
Columbia would have gained $4.2 million and 23 states would have lost a
total of $4.2 million.
What GAO Recommends:
At this time, GAO is not making any new recommendations.
To view the full product, including the scope and methodology, click on
GAO-08-230T. For more information, contact Mathew Scire at (202) 512-
6806 or sciremj@gao.gov.
[End of section]
Mr. Chairman, Mr. Turner, and Members of the Subcommittee:
Thank you for the opportunity to be here today to discuss the role that
the nation's population count plays in the allocation of federal funds
to states and localities. My remarks today describe (1) the various
measures of population used to allocate federal grant funds (2) how the
accuracy of the census count and measurement of accuracy have evolved,
and (3) the potential impact that differences in the census count and
population estimates can have on the allocation of grant funds.
As you know, the decennial census is a critical national effort
mandated by the Constitution. Census data are used to apportion
congressional seats, redraw congressional districts, and allocate
billions of dollars in federal assistance to state and local
governments. The census count also serves as a foundation for annual
estimates of the nation's population. Along with the decennial census
count, these annual estimates directly and indirectly affect the
distribution of federal assistance to state and local governments. The
U.S. Census Bureau (Bureau) puts forth tremendous effort to conduct an
accurate count of the nation's population. However, some degree of
error in the form of persons missed or counted more than once is
inevitable. Further, because of limitations in methods for annually
estimating the population during the years between censuses, the
difference between an annual estimate of the population on census day
and the census count itself can emerge. Because many federal grant
programs rely directly or indirectly on population measures,
inaccuracies in census counts and methodological problems with
population estimates can affect the allocation of funds.
My remarks are based primarily on reports we have previously issued. To
describe the various measures of population used to allocate federal
grant funds, we examined the logistics and data from postcensal
population estimates, the American Community Survey (ACS) and the
Current Population Survey. To obtain insight on how the accuracy of the
population count and the measurement of accuracy have evolved, we
reviewed information from the Census Bureau's Decennial Statistical
Studies Division, as well as previous GAO reports.[Footnote 1] To
describe the potential impact that differences in population estimates
can have on the allocation of grant funds, we relied on work we
reported to this subcommittee last year, as well as prior
work.[Footnote 2] We conducted our work in accordance with generally
accepted government auditing standards.
Population Measures Are Used in Grant Formulas:
Decennial census data play a key role in the allocation of many grant
programs. In fiscal year 2004, the federal government administered
1,172 grant programs, with $460.2 billion in combined
obligations.[Footnote 3] Most of these obligations were concentrated in
a small number of grants. For example, Medicaid was the largest formula
grant program, with federal obligations of $183.2 billion, or nearly 40
percent of all grant obligations, in fiscal year 2004. Many of the
formulas used to allocate grant funds rely upon measures of population,
often in combination with other factors. In addition to the census
count, the Bureau has programs that estimate more current data on
population and population characteristics that are derived from the
decennial census of population. Grant formula allocations also use the
estimated data from the Bureau's postcensal population estimates, the
Current Population Survey, and the American Community Survey.
Because the decennial census provides population counts once every ten
years, the Bureau also estimates the population for the years between
censuses. These estimates are referred to as postcensal population
estimates. They start with the most recently available decennial census
data and for each year adjust population counts for births, deaths, and
migration. Because these population estimates are more current than the
decennial population counts, the distribution formulas for federal
grants often use these data. For example, the allocation formula for
the Social Services Block Grants uses the most recent postcensal
population estimates to distribute funds.
While the decennial census and postcensal estimates provide annual
data, the Current Population Survey provides monthly data. This
survey's sampling design relies on information developed for the
decennial census and its data are revised annually to be consistent
with the postcensal estimates. The survey is primarily designed to
generate detailed information about the American labor force, such as
the number of people unemployed. Data from this survey are also used to
allocate funds for programs, for instance programs under the Workforce
Investment Act.
Another survey, the American Community Survey (ACS), provides detailed
socioeconomic characteristics for the nation's communities. The ACS
relies on information developed for the decennial census and its annual
data are controlled to be identical to postcensal population estimates.
Currently, the ACS provides information on communities with populations
over 65,000. Data from the ACS are also used to allocate federal funds,
such as determining fair market rent levels used in the Section 8
housing voucher program. Because the ACS is to replace 2010 census long
form socioeconomic data, it is expected that ACS data will be used more
extensively in other federal assistance programs in the future.
Beginning in 2010, 5-year estimates will be available for areas to the
smallest block groups, census tracts, small towns, and rural areas.
Beyond their use by the federal government, the population counts and
estimates are also used extensively by state and local governments,
businesses, nonprofits, and research institutions.
Population-based data drawn from the decennial census, postcensal
population estimates, and the ACS play critical roles in the conduct of
community development programs undertaken by the federal, state, and
local governments. Such data are central to the conduct of the federal
government's Community Development Block Grant program (CDBG), the
federal government's 13th largest formula grant program with $3 billion
in obligations in fiscal year 2004. Since 1974, this program has
provided $120 billion to help communities address a host of urban
problems ranging from poverty and deteriorating housing to population
loss and social isolation. Given the breadth of the program's
objectives and the diversity of the nation's communities, CDBG employs
four formulas to allocate funds among 50 states, the District of
Columbia, and 1,080 local governments. These formulas depend on census
data, including total population, individuals in poverty, lagging
population growth, households in overcrowded homes, as well as the
number of pre-1940 homes.
Accuracy of Population Count Is Important:
An accurate census relies on finding and counting people--only once--in
the right place and getting complete, correct information on them.
Seeking to obtain an accurate count has been a concern since the first
census in 1790. Concern about undercounting the population continued
through the decades. In the 1940s, demographers began to obtain a more
thorough understanding of the scope and nature of the undercount. For
example, the selective service registration of October 1940 showed 2.8
percent more men than the census count. According to the Bureau,
operations and programs designed to improve coverage have resulted in
the total undercount declining in all but one decade since the 1940s.
These measures of coverage are based on demographic analysis, which
compares the census count to birth and death certificates and other
administrative data (see fig. 1).
Figure 1: Decennial Census Population Net Undercount Rates from
Demographic Analysis in Percentages: 1940 to 2000:
This figure is a bar chart showing the decennial census population net
undercount rates from demographic analysis in percentages between 1940
and 2000.
[See PDF for image]
Source: U.S. Census Bureau-2006 Census Test-Evaluation #2: Coverage
Improvement, Decennial Statistical Studies Division, Sept. 24, 2007.
[End of figure]
Modern coverage measurement began with the 1980 Census, when the Bureau
compared decennial figures to the results of an independent sample
survey of the population. In using statistical methods such as these,
the Bureau began to generate detailed measures of the differences among
undercounts of particular ethnic, racial and other groups. In 1990, the
Bureau relied on a Post-Enumeration Survey to verify the data it
collected through the 1990 Census. For this effort, the Bureau
interviewed a sample of households several months after the 1990
Census, and compared the results to census questionnaires to determine
if each sampled person was correctly counted, missed, or double counted
in the Census. The Bureau estimated that the net undercount, which it
defined as those missed minus those double counted, came to about 4
million people.[Footnote 4] To estimate the accuracy of the 2000
Census, the Bureau conducted the Accuracy and Coverage Evaluation
(A.C.E.), which was an independent sample survey designed to estimate
the number of people that were over-and undercounted in the census, a
problem the Bureau refers to as coverage error. This evaluation found
that in the 2000 Census there was a net overcount. For 2010 the Bureau
plans a census coverage measurement program that will, among other
things, produce estimates of components of census net and gross
coverage error (the latter includes misses and erroneous enumerations)
in order to assess accuracy.
Population Estimates May Affect Allocation of Federal Funds:
The accuracy of state and local population estimates may have an
effect, though modest, on the allocation of grant funds among the
states. In our June 2006 report, we analyzed how sensitive two federal
formula grants are to alternative population estimates, such as those
derived by statistical methods.[Footnote 5] In the June 2006 report, we
recalculated certain federal assistance to the states using the A.C.E.
population estimates from the 2000 Census, as well as the population
estimates derived from the Post-Enumeration Survey, which was
administered to evaluate the accuracy of the 1990 Census. This
simulation was done for illustrative purposes only--to demonstrate the
sensitivity of government programs to alternative population estimates.
While only the actual census numbers should be used for official
purposes, our simulation shows the extent to which alternative
population counts would affect the distribution of selected federal
grant funds and can help inform congressional decision making on the
design of future censuses.
We selected the Social Services Block Grant (SSBG) as part of this
simulation because the formula for this block grant program, which is
based solely on population, and the resulting funding allocations are
particularly sensitive to alternative population estimates. At a given
level of appropriation, any changes in the state's population relative
to other states' changes would have a proportional impact on the
allocation of funds to the state. In fiscal year 2004, the federal
government allocated $1.7 billion to states in block grant funds under
the program. Recalculating these allocations using statistical
population estimates from the 2000 A.C.E., only $4.2 million--or 0.25
percent--of $1.7 billion in block grant funds would have shifted. The
total $1.7 billion SSBG allocation would not have changed because SSBG
receives a fixed annual appropriation. In other words, those states
receiving additional funds would have reduced the funds of other
states.
In short, 27 states and the District of Columbia would have gained $4.2
million and 23 states would have lost a total of $4.2 million. Based on
our simulation of the funding formula for this block grant program, the
largest percentage changes were for Washington, D.C., which would have
gained 2.05 percent (or $67,000) in grant funding and Minnesota which
would have lost 1.17 percent (or $344,000). For the programs we
examined, less than half of a percent of total funding would be
redistributed by using the revised population counts. Figure 2 shows
how much (as a percentage) and where SSBG funding in 2004 would have
shifted as a result of using statistical population estimates for
recalculating formula grant funding by state. We previously reported
that using 1990 adjusted data as the basis for allocations had little
relative effect on the distribution of annual funding to
states.[Footnote 6] More recently, we reported that statistical
population estimates from the 2000 Census would have shifted a smaller
percentage of funding compared to those from the 1990 Census because
the difference between the actual and estimated population counts was
smaller in 2000. For example, using statistical estimates of the
population following the 1990 Census, a total of 0.37 percent of SSBG
funds would have shifted among the states in fiscal year 1998.
Figure 2: Estimated Social Services Block Grant Percentage Change in
Grant Funding Using Statistical Population Estimates for States:
This figure is a bar chart showing the estimated social services block
grant percentage chance in grant funding using statistical population
estimates for states.
[See PDF for image]
Source: GAO analysis of data from the Department of Commerce and the
Department of Health and Human Services.
[End of figure]
In addition to any impact that inaccuracies in the census count may
have on allocation of federal funds, between decennials differences
between the actual population and population estimates could affect
fund allocation. To calculate grant amounts, formula grants generally
rely on annual population estimates for each state developed by the
Bureau. State populations are estimated by adding to the prior year's
population estimate the number of births and immigrants and subtracting
the number of deaths and emigrants. These estimates are subject to
error, mainly because migration between states and between the United
States and other countries is difficult to measure. By the end of the
decade, when the census count is taken, a significant gap may have
arisen between the population estimate and the census count. We found
that by the time of the 2000 census count, the annual estimates of
population differed from the 2000 count by about 2.5 percent. This
"error of closure" was substantially larger than that for the 1990
census--0.6 percent. We found that correcting population estimates to
reflect the 2000 census count redistributes among states about $380
million in federal grant funding for Medicaid, Foster Care, Adoption
Assistance, and SSBG. Most of the shift in funding occurred in fiscal
year 2003 when federal matching rates for three of the programs were
based on population estimates derived from the 2000 census. For the
SSBG program, the shift occurred in 2002 when it began using the 2000
census count.
Complete and accurate data from the decennial census are central to our
democratic system of government. These same data serve as a foundation
for the allocation of billions of dollars in federal funds to states
and local governments. Because of the importance of the once-a-decade
count, it is essential to ensure that it is accurate. Though the
overall undercount has generally declined since it has been measured,
evaluating the accuracy of the census continues to be essential given
the importance of the data, the need to know the nature of any errors,
and the cost of the census overall. We continue to monitor the Bureau's
progress in this important effort.
Mr. Chairman, this concludes my remarks. I will be glad to answer any
questions that you, Mr. Turner, or other subcommittee members may have.
Contacts and Acknowledgments:
For further information regarding this statement, please contact Mathew
Scire, Director, Strategic Issues, on (202) 512-6806 or at
sciremj@gao.gov. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this
testimony. Individuals making key contributions to this statement
included Steven Lozano, Assistant Director; Betty Clark; Robert
Dinkelmeyer; Greg Dybalski; Ron Fecso; Sonya Phillips; Michael
Springer; and Cheri Truett.
[End of section]
Related GAO Products:
Federal Assistance: Illustrative Simulations of Using Statistical
Population Estimates for Reallocating Certain Federal Funding. GAO-06-
567. Washington, D.C.: June 22, 2006.
Data Quality: Improvements to Count Correction Efforts Could Produce
More Accurate Census Data. G AO-05-463. Washington, D.C.: June 20,
2005.
Census 2000: Design Choices Contributed to Inaccuracy of Coverage
Evaluation Estimates. GAO-05-71. Washington, D.C.: November 12, 2004.
2010 Census: Cost and Design Issues Need to Be Addressed Soon. GAO-04-
37. Washington, D.C.: January 15, 2004.
Formula Grants: 2000 Census Redistributes Federal Funding Among States.
GAO-03-178. Washington, D.C.: February 24, 2003.
2000 Census: Coverage Measurement Programs' Results, Costs, and Lessons
Learned. GAO-03-287. Washington, D.C.: January 29, 2003.
2000 Census: Complete Costs of Coverage Evaluation Programs Are Not
Available. GAO-03-41. Washington, D.C.: October 31, 2002.
The American Community Survey: Accuracy and Timeliness Issues. GAO-02-
956R. Washington, D.C.: September 30, 2002.
2000 Census: Refinements to Full Count Review Program Could Improve
Future Data Quality. GAO-02-562. Washington, D.C.: July 3, 2002.
2000 Census: Coverage Evaluation Matching Implemented as Planned, but
Census Bureau Should Evaluate Lessons Learned. GAO-02-297. Washington,
D.C.: March 14, 2002.
Formula Grants: Effects of Adjusted Population Counts on Federal
Funding to States. GAO/HEHS-99-69. Washington, D.C.: February 26, 1999.
Formula Programs: Adjusted Census Data Would Redistribute Small
Percentage of Funds to States. GAO/GGD-92-12. Washington, D.C.:
November 7, 1991.
[End of section]
Footnotes:
[1] GAO, Federal Assistance: Illustrative Simulations of Using
Statistical Population Estimates for Reallocating Certain Federal
Funding, GAO-06-567 (Washington, D.C.: June 22, 2006); GAO, 2000
Census: Coverage Measurement Programs' Results, Costs, and Lessons
Learned, GAO-03-287 (Washington, D.C.: January 29, 2003) and GAO,
Formula Grants: Effects of Adjusted Population Counts on Federal
Funding to States, GAO/HEHS-99-69 (Washington, D.C.: Feb. 26, 1999).
[2] GAO-06-567; GAO, Formula Grants: 2000 Redistributes Federal Funding
Among States, GAO-03-178 (Washington, D.C.: February 24, 2003) and GAO,
Formula Programs: Adjusted Census Data Would Redistribute Small
Percentage of Funds to States, GAO/GGD-92-12 (Washington, D.C.:
November 7, 1991).
[3] In fiscal year 2000, we found that 85 percent of federal government
obligations in grants to state and local governments was distributed on
the basis of formulas that are based on data such as state population
and personal income.
[4] GAO/HEHS-99-69.
[5] GAO-06-567.
[6] GAO, Formula Programs: Adjusted Census Data Would Redistribute
Small Percentage of Funds to States, GAO/GGD-92-12 (Washington, D.C.:
Nov. 7, 1991).
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