liiiiii It i AI)ritl- 1969 AILO(;ATION AN]) DISTRII')UJ'101.\' 01? RLNIP GIVUN,T FUii])S )\,-,,IONG TI-IE RL,,GIONS Issue and Bec'@,@,,round The nianiier of allocating cyraiit funds to the Regions, equity in the distribution of funds aRic;i-ig the Regions @iii(I the need for greater flexi- bi.lity in the use of funds have bc@co@-.qe issues o major 3iiil)oi-tarice o many Prograiii Coordinators. k,xcept for requiring the Nition@t3- Aclviso):y Council to ]make recoi-iiiiieii- dations on the approval of grants and i-outii-tc- provisions for accounting and special uses of the funds, P.L. 89--239 rfia.kes no specific re erence as to how available funds sball be allocated to or distributed among the regions. The Act speaks of accomplishing the purposes of the title through ligrants", but neither specifies project grants nor speaks of entitlement or all.otipent. Simil.arly,tlie governing R(--gulatioias refer to the broad co,.isid- oration which the Surgeon General shal-I make in awarding grants to the P,egions,incl-udiri-, such factors as: the ca pacity of institutions within the prograui for research training and demonstration activities; coordination with other Federally supported health activities; the population to be served by the Proaram; involvement of the health resources in the region; projected use of no-.i-Fc-deral resources in cai:ryiig oijt-. the proi,,ra.,a; and distribution of grants throughout the Nation. The grant policies and t@li(, review system adopted by the Division of Regional- @leclica-I Prcgra@-is followed closely the NIII iiiod(-,l. In accordance with the Act, a National Advi-sory Council w,-@s fo@nned to advise the Divisiop on policy issues and to naive reco!.-riic-,nd,-,ti.oris in the -r,,,,ard of grants. A I'@eview Con,@7,,j-tLc-,-c @,7,-Ls c@3tabl.islic@d the responsibility for i.oo]@in@@ at qualitative aspects of programs Barrel projects pri-ci- to to Council-. In tlieo3-,T this review mechanism would have placed a baliii.ced emphasis on program coherence, regiod.alization of health activities and quality of the projects iii. attackin- the categorical- diseases. In practice, because of a heavy work load -Liid the technical complc->,ity of the proposed activities, the review process became more and more project oriented. There was considerable variation between the Regions in the amount of planning and core staff funds requested and awarded, rangin- from $.05 to over $.50 per capi.ta. Those Programs which took a conservative and careful approach to planning and organizing their program felt themselves to be- under som!c, pressure to move quickly into the operational phase. The message which they seemed to hear from the Division was that unless more of the available money was obligated, there would be difficulty in going to Congress for increased appropriations. As more Regions became operational the variation in the per capita amount awarded to the Regions continued. In F.Y. 69, a number of new Regions came in with operational proposals. No%q the projected demand for funds is estimated to exceed the amount avail- ,able. This coupled with a tight money policy at the beginning of the new i@driii.rtiF,-rat4on, the Div4Sion to adopt for the. first time a speci.fic set L -L of pri-bi-iti@ for fundiiic,. These priorities emphasized the need for continued full support of core activity i.r@ order to keep the more slowly developing I)rogra.p.-i-, movint-. However, some Program Coordinators still. feel- that those Pecions which first went operati.oi-iLI- have an advantage because of the base level. ,@7hicli they have established for future funding comparison. -3- Many Regions have adopted a complex grant review process which to some extent parallels that of the Division. This has soinetii-acs resulted in a time span of fifteen months or more from p7:oject conception, through review, to funding and operation. The move to an annual review cycle by the Division further limits the extent to which the RE!g--'Lons can be responsive to short term, high priority needs. This kind of flexibility is particularly important when working, with health programs such as OEO neighborhood health centers which need to short quick impact on local problems. The Division has attempted to develop pol.icies which will a]-low appropriate reallocation of funds to meet the changing needs of the Regiolls, but there are still real- difficulties air. th is area. ,options and Alternatives Reexaiaine the DP,",TP review and award process, looking for alternative means of allocating funds within the existing system. If necessary, @-irqend Section 904 of the Act to provide for distribution or reservation of part or all of th-?, grant funds according to a formul-a or other form or entitle- n)ei-it. Several. systems could be adopted, includinc,: placing a maximum or ceili-n- on the amount of funds available for any one re-ion; reservation of a speci'Li c portion of the available funds for distribution among the regions according to a formula leaving the bal.ance for award on a coiipct-- ltiv(@ basis; distribution ..oj' al.1 grant funls -Lccordilig to a formula with the provision that a program for the use of these funds be submitted for Council. Co3isideratioias (1) Partial or total reservation of funds may be necessary to protect the limited inc)unts of available money from the monopolization by the better organized and older established Regions. It is felt by some Regions that if they take their time and go slowly, funds will be, gone before they get a chance to apply for their,. Reservation would end what some Regions feel to be a i-lecd to submit a premature operational program in order to establish a base of experience for future funding. (2) The current trend in Federal grant programs is toward bloc grants and tax sharing, which allow basic decisions to be made closer to the community level and which shorten the time gap between application and fiind-I.i-L-,.' (3) A major advantage of partial bloc grant funding- would be to provide the Regions some funds which they could expend quickly on high priority projects without going throuah the full ex- tended review process, thus giving tll('-Tt) more fl.e-i-bility to meet the local- needs. (4) Many of the high population Regions have serious concern -il)out the per capita differences in grants to the various Programs. If these problems are no,- anmqered, (or at ]-east dealt with by the Di.viE;ion) tl)csc-- Regions may turn to alternate poli.tica-l- resources for solutions. (5) A real political factor in establishing any formula distri- butioii systeiR is the p):obal)lc impossibility of reducing the funding -level of the-niore prosperous Regions. It would probably be necessary to allot to each Re-ion a minimum per capita amount c@c,,ua.1 to that which is hold by the best funded Region. There may not be enough money available to do this. (6) Any formula approach would have to face squarely the necessity of establisliiiia Fede).-al priorities. Many controversies could arise including; uroan vs. rural concerns, economic differences among regions, sectional or geographic concerns, fragmentation 0-ir the total health care system vs. the special needs of the poor. (7) The whole issue of quality comes up in several forms. Those Regions which are well fun.ded feel that they should not be penalized for developing good programs and moving quickly ahead.. More slowly developiiia Procrams feel that their lack of progress is indicative of the problem wi)ich they face and of the need for funds to overco-.-,,ic these problems. !(S) Perhaps in awatdii).g funds, Coii,.iiiittce and Council have been lookiiic, too closely at the individual projects as opposed to the quality of the ovc@i.-all.. approach to problem solving (g37and desire) C, which the presents. A new on program as opposed LI to project review ionic! niil-le- a shift to partiEt], bloc funding less (9) Iiiy allocation or reservation of funds based upon some kind of formula, inevitably raises the problem of clearer -,nd more precise delineation of regional boundaries. This in turn might we].]. lead to some disputes among Regioiis where overlap now occurs, requiring adjudication by the Division qlid Council, which could prove to be counter-productive. (10) It might be possible to achieve many of the suggested improve-- inents without legislative change. However, the question has been raised whether the progr,-mi v@ould be willing or politically able to make major shifts in grant policy without strategic legislative endorsement or push.