Detailed Information on the
Health Care Facilities Construction and Other Miscellaneous Congressional Earmarks Assessment

Continue to ensure effective and efficient management of these Congressionally mandated grants.

Is the program purpose clear?

Explanation: Since 1998, Congress has funded local health care projects through an earmarked funding stream in the Health Resources and Services Administration (HRSA) as part of their annual appropriation. Members of Congress set-aside funding in the appropriations bill and then designate the projects in the report language. The earmarks do not have authorizing legislation or any other statement of purpose or mission. In recent years, to ensure passage of annual appropriations bills, Congressional leaders have consolidated several separate appropriations bills into an Omnibus bill. Omnibus bills typically contain thousands of earmarks that guarantee broad support from legislators. These earmarks do not address national priorities or needs. In 2005, the average earmark was $485,000, ranging from a $18,000 earmark for a senior services agency to a $25 million earmarks for a university. The earmarks fund a wide range of activities that do not have a unifying purpose. Congress has provided earmarks for health care facilities construction and other projects administered by HRSA's Bureau of Primary Health Care, Bureau of Health Professions, Maternal Child Health Bureau, HIV/AIDS Bureau, and Office of Rural Health Policy.

Evidence: 1. P.L. 108-447 "Consolidated Appropriations Act, 2005" 2. Conference Report 108-792 3. Since the inception of the program, Congress has provided $X million for Y earmarks. In FY 2005, Congress provided 938 individual earmarks. Eighty-three percent of these earmarks were for health care facilities construction projects, with the remainder going for other health-related projects. 4. Number of earmarks in HRSA's annual appropriation since FY 2001: FY 2001: 293 FY 2002: 451 FY 2003: 544 FY 2004: 654 FY 2005: 932

Does the program address a specific and existing problem, interest, or need?

Explanation: Earmarked projects often serve local interests and do not fulfill national priorities or needs. Earmarks do not necessarily reflect a community's most pressing needs. In administering the grants, HRSA does not have discretion over evaluating the relative need of a community.

Evidence: 1. Health Care Systems Bureau, Health Care and Other Facilities Awards. FY 2005 Guidance. HRSA-05-144. Catalog of Federal Domestic Assistance (CFDA) No. 93.887 2. Office of Rural Health Policy, Research Focused Congressional Initiative. FY 2005 Guidance. HRSA-05-131. Catalog of Federal Domestic Assistance (CFDA) No. 93.888 3. HIV/AIDS Bureau, Application Package for Congressionally Mandated Telehealth Projects (CMP's). FY 2005 Guidance. HRSA-05-DIB-05-001. Catalog of Federal Domestic Assistance (CFDA) No. 93.211 4. Maternal and Child Health Bureau, Special Funding for Projects Designated by Congress. FY 2005 Guidance. Catalog of Federal Domestic Assistance (CFDA) No. 93.888 5. Maternal and Child Health Bureau, Special Funding for the National Healthy Start Association Designated by Congress. FY 2005 Guidance. Catalog of Federal Domestic Assistance (CFDA) No. 93.888 6. Bureau of Health Professions. Program Guidance for Special BHPr Congressional Initiatives. FY 2005 Guidance. HRSA-05-138. Catalog of Federal Domestic Assistance (CFDA) No. 93.888 7. Bureau of Primary Health Care, Improvement of Health Care Services in Specified Communities. HRSA-5-D1E-05-001. Catalog of Federal Domestic Assistance (CFDA) No. 93.888

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: Even if program funds were administered as a competitive grant, it would be highly duplicative of other Federal, state, and private efforts. The earmarks organizations support organizations that also receive funds for the same purpose through other HRSA programs, Medicare and Medicaid capital payments, NIH, the Federal Housing Administration, and the U.S. Department of Agriculture.

Evidence: The program includes earmarks that are duplicative of Rural Health programs, Maternal Child Health programs, Health Professions programs, and Health Centers. Based on Appropriations Report Language, funds can be used for a wide variety of activities, including health care delivery, staff, renovation, and equipment. The Medicare and Medicaid programs support health care infrastructure. For example, Medicare capital payments to inpatient hospitals will total an estimated $9.1 billion in FY 2005. In FY 2005, NIH will directly award $179 million to Extramural Biomedical and Behavioral Research Facilities Funding and will fund approximately $2.5 billion for facilities-related expenses associated with research grants. For example, six organizations that received a HRSA FY 2005 earmark also received facilities funding from NIH's National Cancer Institute. The Federal Housing Administration helps hospitals and nursing homes access affordable financing for capital projects. FHA provides insurance for 99% of the loan principle, allowing hospital to obtain lower interest rates and more favorable loan terms. Since the program began in 1968, FHA has insured over 325 hospital mortgages for a total in excess of $9.8 billion. FHA-insured loans can be used for construction financing, refinancing, modernization, remodeling, equipment, and expansion. (www.hud.gov/offices/hsg/hosp/hsghospi.cfm) The U.S. Department of Agriculture's Rural Development Community Facilities Program awards direct loans and grants to community organizations in rural areas. The program has provided over $390 million in loans to health care organizations. USDA has awarded funds or provided loans to hospitals, dental clinics, nursing homes, and doctor's offices. (www.rurdev.usda.gov/rhs/cf/cp_dir_grant.htm)

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: Earmarks are not subject to a competitive or merit-based process to ensure higher priorities are funded first. Earmarks are awarded through a Congressional political process, favoring those who have direct access to elected officials or indirect access through lobbyists. Since 2001, 598 organizations have been funded in multiple years. Congress has provided 2,874 separate earmarks to 2,140 individual organizations. The use of earmarks also undermines local and state planning. Many of the HRSA grant programs are awarded to states or localities by formula or objective criteria. Earmarks can bypass the local priorities and fund projects that sometimes are of limited value to the community or state. There is some evidence that earmarks in academic settings are less productive than peer-reviewed funding. One analysis showed that earmarked funding may increase the quantity of publications but decrease the quality of the publications and the performance of earmarked funding is lower than that from using peer-reviewed funding. Another analysis found that many institutions that obtained significant levels of earmarks declined in their overall funding rank. Some academic institutions have policies that prohibit or limit the acceptance of grants and contracts funded via Congressional earmarks.

Evidence: 1. "Hastert Directs Millions to Birthplace; Earmarked Money Skirts Procedures" Washington Post, Sunday, May 29, 2005; A01 2. Utt, Ronald D. "How Congressional Earmarks and Pork-Barrel Spending Undermine State and Local Decision Making". The Heritage Foundation Backgrounder. April 2, 1999. (www.heritage.org/Research/Budget/BG1266.cfm) 3. Payne, Abigail A. "Do Congressional Earmarks Increase Research Output at Universities?". 4. Savage, James. ""Funding for Science in America: Congress, Universities, and the Politics of the Academic Pork Barrel"". 1999. 5. MIT Congressional Earmarks Policy (web.mit.edu/osp/www/earmarks.htm); University of Michigan Earmarking Policy (www.research.umich.edu/policies/earmarkpolicyQA.html)

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: Congressional earmarks divert funding from other higher priority programs. Many of the organizations are funded multiple times and some have been funded continuously for many years. Earmarks also divert people and associated financial resources from HRSA's core mission activities. Functions within the Health Care Facilities earmarks include the development of program guidance, providing technical assistance, processing applications, monitoring the award recipient's activities during the construction period, and responding to requests to change the scope of the project. The Health Facilities earmarks alone require 12 FTE. Projects generally take several years to complete, requiring HRSA resources for an extended period of time. The process of determining which HRSA office should administer the grant is time-consuming. Awardees are often not prepared to absorb the award, requiring additional technical assistance. HRSA utilizes 1% of the total earmark funding to pay for administration of the awards.

Evidence: 1. P.L. 108-477 "Consolidated Appropriations Act, 2005" 2. Conference Report 108-792 3. From 2001 to 2005, 498 organizations received an earmark in multiple years. 336 organizations received an earmark twice during 2001 to 2005, 104 organizations were funded three separate times, 42 organizations were funded four separate times, and 16 were funded five separate times. 4. Report: HCOF Projects by Status (FY1998 - 2004). Percentage of health facilities construction projects complete as of March 4, 2005, by year of funding: FY 1998: 75% FY 1999: 92% FY 2000: 74% FY 2001: 86% FY 2002: 34% FY 2003: 30% FY 2004: 10%

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: No long-term health outcomes measures exist for the program or were developed for the PART.

Evidence:  

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: The program has not established long-term health outcomes measures. Therefore, associated ambitious targets with clear time frames have not been developed.

Evidence:  

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: The program lacks a long-term health outcome goal. Therefore, the program does not have annual performance measures that directly support a long-term outcome goal.

Evidence:  

Does the program have baselines and ambitious targets for its annual measures?

Explanation: The program has not established annual performance measures. Therefore, associated ambitious targets with clear time frames have not been developed.

Evidence:  

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: The program does not have annual or long-term goals, and as such, cannot demonstrate that program partners work towards such goals.

Evidence: See Questions 2.1 and 2.3

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: No independent evaluations of sufficient scope and quality have been conducted to date.

Evidence:  

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: The program did not have a funding request in the FY 2006 President's Budget. The Administration has never requested funding for the program.

Evidence: HRSA FY 2006 Justification of Estimates for Appropriations Committees

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: Funding award determinations are made entirely by Congress. Therefore, HRSA does not have the necessary tools to address their strategic planning deficiencies. The program attempted to develop meaningful long-term and annual measures during the PART process. However, given the program's lack of purpose and design, it was be impossible to develop a performance targets and unlikely that the program will be able to develop them in the future. Given the wide range of activities that the earmarks fund across HRSA, it also will be impossible to develop a comprehensive evaluation of the program.

Evidence:  

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: The program does not have outcome goals and, as such, awardees do not report performance information associated with program goals. However, HRSA requires funding recipients to submit annual progress reports and a final report at the end of the project period. HRSA uses these reports to ensure that progress toward meeting grant conditions is monitored and on target.

Evidence: 1. Report: Report 10 -HCOF Detail Report and Progress Report for City of Homestead 2. Email Thread: Example of reminder notice for grant monitoring reports 3. Monitoring Report 16A

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: The program does not have long-term or annual goals, and as such, they are not considered as part of federal managers' performance assessment. All federal managers are evaluated on the processing of the earmarked awards. Federal managers within Division of Engineering Services are accountable for ensuring that health facilities construction projects are cost-efficient and consistent with federal and construction guidelines. HRSA has a limited number of tools to hold awardees accountable for completing the conditions of their grant award. If a grantee is not in compliance with Federal grant law or the facility has closed down, HRSA can send a recovery recommendation to Office of Federal Assistance Management. Changes in the scope of the project must be submitted for approval and reviewed by the program and, if it is a construction project, the Division of Engineering Services.

Evidence: 1. Sample Performance Evaluations 2. Report: Report 10 -HCOF Detail Report and Progress Report for City of Homestead. 3. Email Thread: Example of reminder notice for grant monitoring reports 4. Report: Monitoring Report 16A (Page 20 of 37). 5. Memorandum: Example of a recovery action initiated by HCOF for Mary McClellan Hospital, Inc. The awardees paid back a portion of the funds that they had already spent. 6. Memorandum: Example of a change in scope for Rockford Health System.

Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: Since its inception, HRSA has committed 100% program funds by the end of the fiscal year. The use of funds is monitored through periodic progress reports and calls with awardees to ensure compliance with the appropriation, regulations and policies. Fund disbursements are made as facilities incur costs and request disbursements and the federal share is reimbursed. Requests for disbursements are reviewed for compliance with project timelines. The program tracks payments to awardees through the Payment Management System. Every grantee must submit a close-out report. Any project that funds equipment will include an itemized equipment list as part of the closeout report.

Evidence: 1. Federal funds were appropriated in December 2004, and 20% of the applications will be reviewed and forwarded for obligation by July 31, 2005. The remainder of the funds is scheduled for obligation by September 30th. 2. Report: Report 10 -HCOF Detail Report and Progress Report for City of Homestead. 3. Close-Out Packet: example of tools used to compare actual expenditures against intended use - Final 424c, Report 10, and Final Equipment for Wendell Foster's Campus for Developmental Disabilities; 4. Financial Status Report for Wendell Foster's Campus for Developmental Disabilities. 5. Email Thread: example of a Disbursement Transactions Report which provides award payment details

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: The program does not have an efficiency measure that measure the per-unit cost of outcomes or another indicator of efficient processes germane to the program. Health facilities awardees are required by law to engage in competitive bidding within their vendor selection processes.

Evidence: 1. 44 CRF Part 74. 43 - Requires awardees to engage in competitive bidding 2. Letter: ""Information for Grantee"" outlines construction requirements and recipient construction self-certification letters.

Does the program collaborate and coordinate effectively with related programs?

Explanation: During the pre-award phase, there is continuous ""project shifting"" between the Health Care Systems Bureau and the other Bureaus and Offices in HRSA. (The Health Care Systems Bureau administers the health care facilities earmarks, which comprise over 80% of the earmarks.) This is done to ensure that the funds are managed by the program best suited to administer the award. Awards are transferred to other programs in the instances where the funds will be used for expenses unrelated to construction. Also, if an earmark is to be used for multiple activities, such as construction and health care delivery, HRSA will ""project share"" across Bureaus or Offices. In these cases, funds are stratified between the two programs and each will employ its own requirements and oversight methods.

Evidence: 1. Email Thread: example of an awardee's request for "broader use of funds" which was rejected by HCOF and transitioned to another HRSA program, which could fund such an expense.

Does the program use strong financial management practices?

Explanation: In FY 2004, HHS OIG conducted an HHS financial statement audit. The audit reported that the Department had serious internal control weaknesses in its financial systems and processes for producing financial statements. OIG considered this weakness to be material. The audit recommended that HHS improve their reconciliations, financial analysis, and other key controls. The September 30, 2002 HRSA independent auditor's report found that the preparation and analysis of financial statements was manually intensive and consumed resources that could be spent on analysis and research of unusual accounting. The audit also found that HRSA's interagency grant funding agreement transactions were recorded manually and were inconsistent with other agencies' procedures. Finally, the audit found that HRSA had not developed a disaster recovery and security plan for its data centers.

Evidence: 1. HHS FY 2004 Performance and Accountability Report 2. HRSA's 2002 audit report

Has the program taken meaningful steps to address its management deficiencies?

Explanation: The program has taken some steps to increase program efficiencies. In FY 2005, the program implemented electronic distribution and receipt of applications and began offering technical assistance and training for applicants via WebEx.

Evidence:  

Are grants awarded based on a clear competitive process that includes a qualified assessment of merit?

Explanation: HRSA does not award the grant competitively. 100% of the program funds are provided via Congressional earmark. These awards are often much higher than those awarded through a competitive process.

Evidence: 1. P.L. 108-447 "Consolidated Appropriations Act, 2005" 2. Conference Report 108-792

Does the program have oversight practices that provide sufficient knowledge of grantee activities?

Explanation: Award recipients submit audits and reports that are appropriate for their type of organization and level of funding. Award recipients submit the following documents: 1) monthly progress reports are reviewed for information on how funds were spent (not applicable to equipment-only projects); 2) quarterly cash transaction reports indicating the current amount of cash spent; 3) annual Financial Status reports indicating the amount of federal funds spent for the budget period and how much remains unobligated. The largest health care facilities awardees also have a site visit each year. The Division of Facilities Compliance and Recovery monitors the overall progress of the equipment and construction projects through reviewing annual monitoring reports. The Division of Engineering Services (DES) monitors the specific progress of the construction projects through reviewing quarterly reports. The grantee also submits self-certification letters related to construction requirements. DES also visits about 20 of the largest dollar-value projects each year to check on the grantee's progress.

Evidence: 1. Report: Report 10 -HCOF Detail Report and Progress Report for City of Homestead. 2. Letter: General Information Letter to Northcentral Technical College - which outlines construction requirements and ""intensive review"" procedures. 3. Construction Progress Report: example of an awardee's monthly status report from Northcentral Technical College which provides an update on construction costs, schedule and performance. 4. Financial Status Report for Wendell Foster's Campus for Developmental Disabilities. 5. Letter: ""Information for Grantee""/Routine Monitoring letter - which outlines construction requirements and recipient construction self-certification letters. 6. Email Thread: Disbursement Transactions Report

Does the program collect grantee performance data on an annual basis and make it available to the public in a transparent and meaningful manner?

Explanation: The list of awardees is public information, but the HRSA does not publish a report of the projects or activities undertaken by the awardees or provide any other meaningful information about awardee performance.

Evidence:  

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: The program has not adopted long-term health outcome goals.

Evidence: See Questions 2.1 and 2.2.

Does the program (including program partners) achieve its annual performance goals?

Explanation: The program has not adopted annual goals.

Evidence: See Questions 2.3 and 2.4.

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: The program has not adopted an efficiency measure with associated baseline and targets.

Evidence: See Question 3.4

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: Projects administered by the program can be compared to other programs administered by the Office of Rural Health, the Maternal Child Health Bureau, Bureau of Health Professions programs, and Bureau of Primary Health Care. This program does not compare favorably to other HRSA programs because it is not administered competitively. The program can also be compared to Medicare and Medicaid payments to support health care infrastructure. Medicare capital payments to inpatient hospitals will total an estimated $9.1 billion in FY 2005. Medicare and Medicaid have a clear purpose and are used to purchase services for enrollees in a health plan and help pay for the infrastructure required to serve their beneficiaries. The HRSA earmarks do not have a clear purpose. The program does not compare favorably to NIH's Extramural Biomedical and Behavioral Research Facilities Funding or their facilities-related expenses associated with research grants. These grants are designed to support research and are awarded on the basis of scientific merit. The HRSA earmarks awarded to universities or other research institutions are not based on scientific merit or any competitive process.

Evidence:  

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: No independent evaluations of sufficient scope and quality have been conducted to date.

Evidence: