[Federal Register: August 12, 2003 (Volume 68, Number 155)]
[Notices]
[Page 47923-47925]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12au03-54]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Resources and Services Administration
Report on the Relationship Between the Costs of Administrative,
Program Support, and Direct Service-Related Activities and Access of
Eligible Individuals to Services and Research Opportunities
AGENCY: Health Resources and Services Administration, HHS.
ACTION: Notice of request for comments.
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SUMMARY: The Health Resources and Services Administration (HRSA)
invites comments on the proposed establishment of a limitation on
administrative expenses for Ryan White Comprehensive AIDS Resources
Emergency (CARE) Act Title IV Grants for Coordinated Services and
Access to Research for Women, Infants, Children, and Youth. In
addition, HRSA invites comments on determining a definition of what
costs are to be included in administrative expenses, and on the
specific percentage limitation to be applied.
DATES: Comments must be postmarked by September 11, 2003.
ADDRESSES: Written comments should be submitted to the Division of
Community Based Programs, HIV/AIDS Bureau (HAB), HRSA, Room 7A-30,
Parklawn Building, 5600 Fishers Lane, Rockville, Maryland 20857.
Respondents should provide a clear rationale for their suggested
changes or additions. All comments will be available for public
inspection and copying at the Division of Community Based Programs,
HAB, Room 7A-30, Parklawn Building weekdays between 8:30 a.m. and 5
p.m. and responses to the comments will be addressed in the final
notice.
FOR FURTHER INFORMATION: Wayne E. Sauseda, Director, Division of
Community Based Programs, HAB, at (301) 443-0493.
SUPPLEMENTARY INFORMATION: Title IV of the Ryan White CARE Act of 1990,
as amended by the Ryan White CARE Act Amendments of 2000, authorizes
Grants for Coordinated Services and Access to Research for Women,
Infants, Children and Youth. Title IV of the CARE Act appears in
section 2671 of the Public Health Service Act, 42 U.S.C. 300ff-71.
Section 2671(i)(1) requires ``the Secretary, in consultation with
grantees under this part, to conduct a review of the administrative,
program support, and direct service-related activities that are carried
out under this part to ensure that eligible individuals have access to
quality, HIV-related health and support services and research
opportunities under this part, and to support the provision of such
services.'' Section 2671(i)(2) further requires that ``the Secretary,
in consultation with grantees under this part, shall determine the
relationship between the costs of the activities referred to in
paragraph (1) and the access of eligible individuals to the services
and research opportunities described in such paragraph.'' The proposed
limitation on administrative expenses is based on a collaborative
review process conducted by HRSA. The proposed limitation on
administrative expenses is based on the following:
1. An analysis of the current expenditures of Title IV grantees and
their relationship to access to services and research opportunities.
[sbull] It was determined from an external and internal review that
the current administrative expenditures by Title IV grantees of record
are an average of 14 percent of the total budget. Currently, of
[[Page 47924]]
the 63 grantee budgets analyzed, 24 (38 percent) expend 10 percent or
less of their total grant award for administrative expenses; 11 (17.5
percent) expend over 10 percent but less than 15 percent; 10 (16
percent) expend over 15 percent but less than 20 percent; and, 18 (28.6
percent) expend over 20 percent up to 36.6 percent. It was determined
that the lower the amount of administrative expenses allocated, the
higher the amount of direct services provided to program clients.
[sbull] The average Title IV project served 512 HIV-infected
clients, 273 uninfected clients, and 198 clients whose serostatus is
unknown. The number of HIV infected clients served was not associated
with the number of contractors in a Title IV network, receipt of Title
I funds, or the organizational type of the lead agency. The number of
HIV infected clients served is positively correlated with the number of
years of Title IV funding, and of funds received from other Ryan White
CARE Act Title sources.
2. In exercising its responsible stewardship of public funds, HRSA
seeks to assure that limited Federal dollars will be maximized to the
greatest extent possible to fund direct client services. The Title IV
program's current absence of a limitation on administrative expenses
should not be used to absorb administrative expenses of other related
programs that have limitations.
3. HRSA has an established goal of enhancing access to care for
HIV-infected women, infants, children, and youth and their affected
family members under the Title IV program. We have determined that a
limitation on administrative expenses will not diminish the ability of
grantees to provide access to appropriate HIV/AIDS services and
research opportunities. Furthermore, we believe that the establishment
of a limitation on administrative expenses will maximize the dollars
available for direct care services and access to research
opportunities. With a total of $64,759,964 of funds currently being
provided to the 90 fiscal year (FY) 2002 Title IV grantees, we have
determined that reducing the administrative expenditure from the
current average of 14 percent to 10 percent would result in a shift of
$2,590,399 in administrative disbursements to direct services to
clients. This increase in available services to Title IV clients is
equivalent to the addition of approximately 10 new projects.
4. HRSA has had years of experience in managing other Ryan White
CARE Act grantees with legislatively imposed administrative expenses.
Titles I, II, and III of the CARE Act limit grantees to 10 percent for
administrative costs. Many of the current Title IV programs are also
recipients of Title III grant funds and are effectively implementing
their Title III programs with a 10 percent limitation on administrative
expenses. Although Title IV provides some services that Title III does
not, both are expected to assure the provision of health care services
to HIV-infected clients and must meet the same standards for quality
primary HIV care. HRSA is confident that Title IV grantees can maintain
the highest quality of services and provide access to research for
clients while expending no more than ten percent on administrative
expenses.
5. Although there are a variety of Title IV program models, each of
the Title IV programs provides an extensive array of services either
directly or through contractual relationships. The proportion of total
Title IV grant funds allocated by lead agencies for administrative
services is strongly associated with the organizational type of the
lead agency. Of the agencies whose administrative expenses exceed 20
percent of the total grant award, the majority were university-based
health systems. Of the agencies whose administrative expenses were 10
percent or less, the majority were community-based programs. When
comparing similar grantee models on amount allocated for administrative
expenses, we found that an administrative budget allocation over 10
percent was not a requisite for serving a greater number of Title IV
clients.
Implementation
The limitation on administrative expenses is proposed for
implementation as follows:
5.1 The limitation on administrative expenses will be proposed as a
specific percent. This limitation also would apply to any contractors
of the Grantee who provide client services.
5.2 Recognizing that some grantees may exceed the specified percent
limitation at present, we propose that beginning with FY 2004 funding,
administrative expenses shall not exceed the specified percentage
limitation plus 10 percent of the total grant award to the Grantee.
These administrative costs include all administrative costs of the
grantee and all payments to contractors or consultants who provide
administrative services to the Grantee. The administrative costs of
individual client service contractors of the grantee would not be
considered part of this limitation to the grantee. Notwithstanding this
provision, no Grantee shall claim administrative expenses in excess of
the percentage received in FY 2002, if such administrative expenses
exceeded 10 percent of the total grant award.
5.3 For FY 2005, no Grantee shall claim administrative expenses in
excess of the specified percentage limitation plus 5 percent.
Notwithstanding this provision, no Grantee shall claim administrative
expenses in excess of the percentage received in FY 2004.
5.4 For FY 2006 and in each succeeding year, no Grantee shall claim
administrative expenses in excess of the specified percent limit.
5.5 It is the Grantee's responsibility to enforce the percent
limitation on administrative expenses of contractors of the Grantee who
provide direct services. This administrative limitation will apply to
all contractor payments made in FY 2004 and each succeeding year.
5.6 Administrative expenditures under this section for grant awards
shall be clearly specified and documented in grantee applications and
budgets in the following categories: direct services; program support;
and administrative costs. Direct services are those services that are
provided to the patients/clients to meet the goals and objectives of
the program. This includes the provision of professional, diagnostic,
and therapeutic services rendered by a primary care provider. Also
included are referrals to and provision of specialty care. Program
support services are services that sustain program activities and
contribute to or help to improve direct service delivery. Such services
include capacity building initiatives, prevention and education
materials and translation services among others. Administrative costs
are funds to be used by the grantee for grant management and monitoring
activities. This includes costs related to any staff or activity
unrelated to direct or support services. Also, indirect costs are
included as administrative costs. Indirect costs will be allowed only
if the applicant has a Federal negotiated indirect cost rate. All
indirect costs are considered administrative and subject to the
specified percent limitation. The categorization of all services as
direct, program support, and administrative is further addressed in the
Title IV Ryan White CARE Act program guidance which can be obtained
from HAB at the address noted above.
As required in the Act, ``the Secretary may not make a grant under
this part unless the grantee complies with such requirements as may be
included in such determination.'' Accordingly, all Ryan White CARE Act
Title IV recipients of Grants for Coordinated
[[Page 47925]]
Services and Access to Research for Women, Infants, Children, and Youth
will be required to comply with the limitation on administrative
expenses to be established in the final notice that will follow this
comment period.
Dated: August 5, 2003.
Elizabeth M. Duke,
Administrator.
[FR Doc. 03-20439 Filed 8-11-03; 8:45 am]
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