Current Projects

Workshop on Formulas for Allocating Program Funds

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Description

Each year, billions of dollars of federal funds are allocated to state and local governments for programs designed to meet a wide spectrum of economic and social objectives. The allocation of these funds is commonly determined by formulas that include statistical estimates of population characteristics. The formulas are designed to meet policy objectives; however, these objectives may not be fully met for various reasons, some of which are statistical in nature. In particular, the interaction between estimation errors and formula features such as thresholds and hold harmless provisions may have unintended consequences. Some formulas call for data inputs that are not readily available or are costly to obtain. Some may fail to take advantage of the best available sources of data.

The Committee on National Statistics, following on the work of its Panel on Estimates of Poverty for Small Geographic Areas, held a workshop on formula fund allocation on April 26-27, 2000. The workshop focused on the consequences of using statistical estimates as inputs to formulas. The agenda included an overview of formula allocation programs and related data sources, three case studies, and methodological presentations. Two of the case studies covered were Title I education grants and substance abuse block grants. The case studies served to illustrate the statistical questions that arise in the development and application of allocation formulas. Thomas Louis, member of the Committee on National Statistics and member of the Panel on Estimates of Poverty for Small Geographic Areas, chaired the workshop.

The goals of the workshop are to issue a report that makes a significant independent contribution and to lay the groundwork for structuring and funding a panel study.

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Staff