[Federal Register Volume 73, Number 96 (Friday, May 16, 2008)]
[Notices]
[Pages 28472-28478]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-11015]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES


Program Reporting and Accountability Changes to the Hospital 
Preparedness Program (HPP)

AGENCY: Department of Health and Human Services, Office of the 
Assistant Secretary for Preparedness and Response, ASPR (HHS).

ACTION: Notification of intent to fund and information on: (1) 
Maintenance of Funding (MOF); (2) Evidenced-Based Benchmarks and 
Objective Standards; (3) Reporting; (4) Funding Formula; (5) 
Withholding; and (6) Maximum Carryover Amount.

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    The final FY 2008 Funding Opportunity Announcement (FOA) for the 
Hospital Preparedness Program (HPP) will be available in the coming 
weeks at http://www.grants.gov.
SUMMARY: The Department of Health and Human Services (HHS or the 
Department) is issuing in the third quarter of FY 2008 a Funding 
Opportunity Announcement (FOA) for the HPP, authorized under section 
319C-2 of the Public Health Service (PHS) Act, as amended by the 
Pandemic and All-Hazards Preparedness Act (PAHPA) (Pub. L. 109-417). 
The Consolidated Appropriations Act, 2008, provides funding for these 
awards (Pub. L. 110-161). This Federal Register notice provides 
information concerning critical aspects of this program including:

 Program Background;
 Program Requirements:
    [cir] Maintenance of Funding;
    [cir] Evidenced Based Benchmarks and Objective Standards;
    [cir] Reporting;
    [cir] Funding Formula;
    [cir] Withholding;
    [cir] Maximum Carryover Amount;
 Important Dates.

FOR FURTHER INFORMATION CONTACT: CDR Melissa Sanders at (202) 245-0763, 
or [email protected].

SUPPLEMENTARY INFORMATION:

Program Background

    Building on the lessons learned from the attacks of September 11th, 
2001, and Hurricanes Katrina and Rita, PAHPA was enacted in December 
2006 to improve the Nation's public health and medical preparedness and 
response capabilities for emergencies, whether deliberate, accidental, 
or natural. PAHPA amended and added new sections to the PHS Act. 
Examples of these changes include: identifying the Secretary of Health 
and Human Services as the lead official for all Federal public health 
and medical responses to public health emergencies and other incidents 
covered by the National Response Framework; establishing the position 
of the Assistant Secretary for Preparedness and Response (ASPR), who 
will lead and coordinate HHS preparedness and response activities, 
advise the Secretary of HHS during an emergency, and lead the 
coordination of emergency preparedness and response efforts between HHS 
and other Federal agencies; consolidating Federal public health and 
medical response programs under the Assistant Secretary for 
Preparedness and Response (ASPR); requiring the development and 
implementation of the National Health Security Strategy; and 
reauthorizing the Public Health and Emergency Preparedness (PHEP) 
cooperative agreements administered by the CDC and the HPP grants 
administered by the ASPR. In addition to reauthorizing these two 
cooperative agreement programs, PAHPA amended these grant programs to 
add certain new requirements that awardees must meet. The purpose of 
this notice is to notify HPP awardees about critical aspects and 
requirements of the HPP as amended by PAHPA.
    Purpose: The purpose of the Hospital Preparedness Program (HPP) is 
to provide funding to improve surge capacity and realize the following 
preparedness goals:
     Integration: Ensuring the integration of public and 
private medical capabilities with public health and other first 
responder systems, including--
    1. Periodically evaluating preparedness and response capabilities 
through drills and exercises; and

[[Page 28473]]

    2. Integrating public and private sector public health and medical 
donations and volunteers.
     Medical: Increasing the preparedness, response 
capabilities, and surge capacity of hospitals, other health care 
facilities (including mental health facilities), and trauma care and 
emergency medical service systems, with respect to public health 
emergencies. This shall include developing plans for the following:
    1. Strengthening public health emergency medical management and 
treatment capabilities.
    2. Improving medical evacuation and fatality management 
capabilities.
    3. Rapidly distributing and administering medical countermeasures, 
specifically to hospital based health care workers and their family 
members or partnership entities.
    4. Utilizing effectively any available public and private mobile 
medical assets and integration of other Federal assets.
    5. Protecting health care workers and health care first responders 
from workplace exposures during a public health emergency.
     At-Risk Individuals: Preparing for the medical needs of 
at-risk individuals in their community in the event of a public health 
emergency. Medical needs include behavioral health consisting of both 
mental health and substance abuse considerations. The term ``at-risk 
individuals'' means children, pregnant women, senior citizens and other 
individuals who have special needs in the event of a public health 
emergency. Before, during and after an incident, members of at-risk 
populations may have additional needs in one or more of the following 
functional areas: maintaining independence, communications, 
transportation, supervision and medical care. In addition to those 
individuals specifically identified as at-risk in the above definition, 
individuals who may need additional response assistance should include 
those who:
    1. Have disabilities;
    2. Live in institutionalized settings;
    3. Are from diverse cultures;
    4. Have limited English proficiency or are non-English speaking;
    5. Are transportation disadvantaged;
    6. Have chronic medical disorders; and
    7. Have pharmacologic dependency.
     Coordination: Minimizing duplication of, and ensuring 
coordination between, Federal, State, local, and tribal planning, 
preparedness, response and recovery activities (including the State 
Emergency Management Assistance Compact).
     Continuity of Operations: Maintaining vital public health 
and medical services to allow for optimal Federal, State, local, and 
tribal operations in the event of a public health emergency.
    Eligibility: The following are eligible entities:
     A State;
     A political subdivision determined to be eligible for an 
award under section 319C-1 of the PHS Act; or
     A consortium of States.

Program Requirements

1. Maintenance of Funding (MOF)

    Award recipients must maintain their health care preparedness 
expenditures at a level that is not less than the average of 
expenditures made during the preceding two year period (i.e., federal 
FY 2006 and FY 2007). The MOF requirement refers to the awardee's 
expenditures (i.e., state (or political subdivision) contributions for 
health care preparedness, not Federal dollars) and may include 
expenditures for surge capacity investments such as:
    a. Beds;
    b. Isolation;
    c. Decontamination;
    d. Personal Protective Equipment;
    e. Pharmaceuticals;
    f. Mobile Medical Assets;
    g. Interoperable communications equipment;
    h. Laboratory equipment and trainings.

2. Evidence-Based Benchmarks and Objective Standards

    In accordance with section 319C-1(g) of the PHS Act, ASPR has 
established evidence-based benchmarks and targets to be achieved at the 
mid-year and end-of-year reporting times. Please see the FY08 HPP FOA 
for the specific benchmarks that awardees must achieve. As noted in 
more detail below, HPP awardees will have funds withheld from their FY 
2009 awards if, when expending their FY 2008 HPP awards, they fail 
substantially to meet the benchmarks described in the FY 2008 HPP FOA.

3. Reporting

    In order to ensure all awardees are able to demonstrate compliance 
with newly established benchmarks and other reporting requirements, HHS 
will require semi-annual reporting information. Please see the FY08 HPP 
FOA for actual reporting targets to be met.

4. Funding Formula

    Per section 319C-2(j) of the PHS Act, funding for this mandatory 
cooperative agreement is determined in the same manner as amounts are 
determined for PHEP awardees under section 319C-1(i) of the PHS Act, 
via a statutory formula that employs a base allocation with an 
adjustment for population.

5. Withholding

    The Secretary of HHS is required under section 319C-1(g) of the PHS 
Act to develop and require application of measurable benchmarks and 
objective standards that measure levels of preparedness with respect to 
HPP activities. The Secretary shall withhold funds beginning in FY 2009 
from HPP awardees who fail substantially to meet the applicable 
benchmarks for the immediate preceding fiscal year and/or who fail to 
submit a Pandemic Influenza Plan. Thus, HPP awardees will have funds 
withheld from their FY 2009 awards if, when expending their FY 2008 HPP 
awards, they fail substantially to meet the benchmarks described in the 
FY 2008 FOA or to submit a Pandemic Influenza Plan. The amounts to be 
withheld are as follows:
    (i) For the fiscal year immediately following a fiscal year in 
which an entity experienced a failure, an amount equal to 10 percent of 
the amount the entity was eligible to receive;
    (ii) For the fiscal year immediately following two consecutive 
fiscal years in which an entity experienced a failure, an amount equal 
to 15 percent of the amount the entity was eligible to receive, taking 
into account the withholding of funds for the immediately preceding 
fiscal year;
    (iii) For the fiscal year immediately following three consecutive 
fiscal years in which an entity experienced such a failure, an amount 
equal to 20 percent of the amount the entity was eligible to receive, 
taking into account the withholding of funds for the immediately 
preceding two fiscal years;
    (iv) For the fiscal year immediately following four consecutive 
fiscal years in which an entity experienced such a failure, an amount 
equal to 25 percent of the amount the entity was eligible to receive, 
taking into account the withholding of funds for the three preceding 
fiscal years.
    Each failure to meet the benchmarks for the immediately preceding 
fiscal year or to submit a Pandemic Influenza Plan will be treated as a 
separate failure for purposes of calculating amounts withheld. The 
Secretary is required to develop and implement a process to notify 
entities who have failed substantially to meet the evidence-based 
benchmarks or who have failed to submit a Pandemic Influenza Plan. HHS 
will notify awardees during the mid-

[[Page 28474]]

year reporting period that are determined to have failed to meet the 
benchmark targets that are described in the FOA. Awardees will have the 
opportunity to seek intensive technical assistance from project 
officers and be involved in the development of such technical 
assistance. Should awardees fail to correct their failures, they shall 
be subject to the withholding amounts described previously.

6. Maximum Carryover Amount

    Per section 319C-1(j)(3) of the PHS Act the Secretary shall 
determine, for each fiscal year, the maximum percentage of unobligated 
funds that may be carried over to the succeeding fiscal year. If the 
percentage of unobligated funds exceeds the maximum percentage 
permitted, the awardee shall return that portion of the unobligated 
funds that exceeds the maximum amount permitted. Awardees may apply to 
the Secretary for a waiver of the maximum percentage amount by 
including an explanation why the requirement should not apply to the 
awardee and the steps the awardee will take to ensure that all funds 
will be expended appropriately. Further, the Secretary may waive or 
reduce the amount of carryover determined for a single entity or for 
all entities in a fiscal year, if the Secretary determines that 
mitigating conditions exist that justify the waiver or reduction.
    An awardee may not have more than 15% of the award available as 
unobligated funds at the time a carryover request is made, 
approximately 10 months into the budget cycle. Amounts in excess of 15% 
may result in repayment.

7. Important Dates

    Anticipated Application Due Date: June 11, 2008.
    Anticipated Award Date: August 1, 2008

    Dated: May 9, 2008.
RADM W. Craig Vanderwagon,
Assistant Secretary for Preparedness and Response, Office of the 
Secretary, Department of Health and Human Services.

ASPR Hospital Preparedness Program (HPP) Cooperative Agreement

Enforcement Actions and Disputes

I. Purpose

    Sections 319C-1 and C-2 of the Public Health Service (PHS), as 
amended by the Pandemic and All-Hazards Preparedness Act (PAHPA), 
include certain accountability and compliance requirements that 
grantees must meet, including achievement of evidence-based benchmarks, 
audit requirements, and maximum carryover amounts. This document 
provides information about enforcement actions associated with these 
requirements, and appeal processes in the event there is a dispute. 
This document addresses requirements and enforcement actions 
specifically outlined in section 319C-1 and C-2 of the PHS. It is not 
intended to cover all requirements that grantees must meet pursuant to 
grant laws, regulations, Departmental grants policy, and terms and 
conditions of the award. Grant laws, regulations, and Departmental 
grants policies apply to these grants to the extent they are consistent 
with section 319C-1 and C-2 of the PHS Act.

II. Abbreviations, Acronyms and Definitions

    A. For the purpose of this document, the following abbreviations 
and acronyms apply:
    1. ARC--Agency Review Committee.
    2. ASPR--Assistant Secretary for Preparedness and Response.
    3. CGMO--Chief Grants Management Officer.
    4. DAB--Departmental Appeals Board.
    5. GMO--Grants Management Officer.
    6. GMS--Grants Management Specialist.
    7. HHS--Department of Health and Human Services.
    8. HPP--Hospital Preparedness Program.
    9. IDDA--Intra-Departmental Delegation of Authority (IDDA).
    10. NoA--Notice of Award.
    11. OPHS--Office of Public Health and Science.
    12. PHEP--Public Health Emergency Preparedness.
    13. PO--Project Officer.
    B. For the purpose of this document, the following definitions 
apply:
    1. HHS Department Appeals Board (DAB)--The administrative board 
responsible for resolving certain disputes arising under HHS assistance 
programs. The DAB provides an impartial adjudicatory hearing process 
for appealing certain final written decisions by GMOs. The DAB's 
jurisdiction is specified in 45 CFR Part 16, ``Procedures for HHS Grant 
Appeals Board.''
    2. Agency Review Committee (ARC)--Committee comprised of awarding 
agency members who review awardee appeals to adverse determinations 
made by grant officials. A minimum of three appointed core members, one 
of whom will be designated a chairperson by the ASPR. Others may be 
designated as determined by the chairperson. Members of the ARC may not 
be from the branch or program whose adverse determination is being 
appealed.
    3. Recipient--The organization that receives a grant or cooperative 
agreement award from an awarding agency, and is responsible and 
accountable for using the funds provided, and for the performance of 
the grant-supported project or activity. The recipient is the entire 
legal entity, even if a particular component is designated in the NoA. 
The term includes ``awardee/grantee.''
    4. Corrective action--Action taken by the awardee that corrects 
identified deficiencies or produces recommended improvements.
    5. Enforcement--Actions taken to compel the observance of policies, 
regulations, and laws governing the administration of an assistance 
program. Such actions are generally the result of a recipient's failure 
to comply with the terms and conditions of an award. These failures may 
cause an awarding agency to take one or more actions, depending on the 
severity and duration of the non-compliance. The awarding agency 
generally will afford the recipient an opportunity to correct the 
deficiencies before taking enforcement action, unless public health or 
welfare concerns require immediate action. However, even if an awardee 
is taking corrective action, the awarding agency may take proactive 
steps to protect the Federal government's interests, including placing 
special conditions on awards, or may take action designed to prevent 
future non-compliance, such as closer monitoring.
    6. Termination--The permanent withdrawal by the awarding agency of 
an awardee's authority to obligate previously awarded grant funds 
before that authority would otherwise expire, including the voluntary 
relinquishment of that authority by the recipient.
    7. Disallowance--A determination denying payment of an amount 
claimed under an award, or requiring return of funds or off-set of 
funds already received.
    8. Void--A determination that an award is invalid because the award 
was not authorized by statute or regulation, or because it was 
fraudulently obtained.
    9. Withholding of funds--An action taken by an awarding agency to 
withhold or reduce support within a previously approved or subsequent 
budget period. Withholding may occur for the following justifiable 
reasons: (1) An awardee is delinquent in submitting required reports; 
(2) adequate Federal funds are not available to support the project; 
(3) an awardee fails to show satisfactory progress in achieving the 
objectives of the project, e.g.,

[[Page 28475]]

performance measures/benchmarks and/or excessive carryover; (4) an 
awardee fails to meet the terms of a previous award; (5) an awardee's 
management practices fail to provide adequate stewardship of Federal 
funds; (6) any reason which would indicate that continued funding would 
not be in the best interests of the Government.
    10. Offset--The withholding of funds from an award recipient in 
order to compensate for costs owed the awarding agency.
    11. Repayment of funds--Funds for payment of a debt determined to 
be owed to the Federal Government. Repayment of funds cannot come from 
other Federally-sponsored programs.
    12. Terms and conditions of award--All requirements imposed on a 
recipient by the Federal awarding agency, whether by statute, 
regulation, or within the grant award document itself. The terms of 
award may include both standard and special provisions, appearing on 
each NoA that are considered necessary to attain the objectives of the 
grant; facilitate post award administration of the grant, conserve 
grant funds, or otherwise protect the Federal government's interests.
    13. Performance measures/benchmarks--The use of statistical 
evidence to determine progress toward specific defined objectives. 
These are leading indicators that will allow a national ``snapshot'' to 
show how preparedness and response activities, and the associated 
resources, aid in improving the public health system.
    14. Excessive Carryover--Unobligated funds of a recipient that 
exceed the established maximum percentage of 15% of the award, as 
reported on a Financial Status Report (SF-269) at the time a carryover 
request is made, approximately 10 months into the 12 month budget 
cycle. The threshold amount includes direct and indirect costs.
    15. Outlays or Expenditures--The charges made to the Federally-
sponsored project or program. They may be reported on a cash or accrual 
basis. For reports prepared on a cash basis, outlays are the sum of 
cash disbursements for direct charges for goods and services, the 
amount of indirect expense charged, the value of third party in-kind 
contributions applied and the amount of cash advances and payments made 
to sub-awardees. For reports prepared on an accrual basis, outlays are 
the sum of cash reimbursements for direct charges for goods and 
services, the amount of indirect expense incurred, the value of in-kind 
contributions applied, and the net increase (or decrease) in the 
amounts owed by the recipient for goods and other property received, 
for services performed by employees, contractors, sub-awardees and 
other payees and other amounts becoming owed under programs for which 
no current services or performance are required.
    16. Audits--A systematic review or appraisal made to determine 
whether internal accounting and other control systems provide 
reasonable assurance of financial operations are properly conducted; 
financial reports are timely, fair, and accurate; the entity has 
complied with applicable laws, regulations, and terms and conditions of 
award; resources are managed and used economically and efficiently; 
desired results and objectives are being achieved effectively.
    17. Failure--Noncompliance with any or all of the provisions of the 
NoA which include but not limited to various laws, regulations, 
assurances, terms, or conditions applicable to the grant or cooperative 
agreement.
    18. Matching or Cost Sharing--The value of third-party in-kind 
contributions and the portion of the costs of a federally assisted 
project or program not borne by the Federal Government. Costs used to 
satisfy matching or cost-sharing requirements are subject to the same 
policies governing allowability as other costs under the approved 
budget.

III. Background

    PAHPA amended section 319C-2 of the PHS Act, and authorizes the 
Assistant Secretary for Preparedness and Response (ASPR) to award 
cooperative agreements to eligible entities to enable such entities to 
improve surge capacity and enhance community and hospital preparedness 
for public health emergencies. Funding for these awards is provided by 
the Consolidated Appropriations Act of 2008 (Public Law 110-161).
    Grantees must meet certain statutory accountability and compliance 
requirements. Sections 319C-1 and C-2 of the PHS Act require the 
Department to take certain enforcement actions if grantees fail to meet 
these requirements. More specifically, this document addresses the 
following enforcement actions required by the statute: (1) Beginning in 
fiscal year 2009, withholding a statutorily-mandated percentage of the 
award if an awardee fails substantially to meet established benchmarks 
and performance measures for the immediately preceeding fiscal year or 
fails to submit a satisfactory pandemic flu plan to the Department; (2) 
repayment of any funds that exceed the maximum percentage of an award 
that an entity may carryover to the succeeding fiscal year; and (3) 
repayment or future withholding or offset as a result of a disallowance 
decision if an audit shows that funds have not been spent in accordance 
with section 319C-2 of the PHS Act .

IV. Enforcement Actions and Disputes

A. Withholding for Failure To Meet Established Benchmarks and 
Performance Measures or To Submit a Satisfactory Pandemic Influenza 
Plan

    1. Beginning with the distribution of FY 2009 funding, awardees 
that fail substantially to meet performance measures/benchmarks for the 
immediately preceding fiscal year and/or who fail to submit a pandemic 
influenza plan to CDC as part of their application for PHEP funds, may 
have funds withheld from their FY 2009 and subsequent award amounts. An 
awardee that fails to correct such noncompliance shall be subject to 
withholding in the following amounts:
     For the fiscal year immediately following a fiscal year in 
which the awardee has failed substantially to meet performance 
measures/benchmarks or who has failed to submit a satisfactory pandemic 
influenza plan; an amount equal to 10 percent of funding the awardee 
was eligible to receive.
     For the fiscal year immediately following two consecutive 
fiscal years in which an awardee experienced such a failure, an amount 
equal to 15 percent of funding the awardee was eligible to receive, 
taking into account the withholding of funds for the immediately 
preceding fiscal year.
     For the fiscal year immediately following three 
consecutive fiscal years in which an awardee experienced such a 
failure, an amount equal to 20 percent of funding the awardee was 
eligible to receive, taking into account the withholding of funds for 
the immediately preceding fiscal years.
     For the fiscal year immediately following four consecutive 
fiscal years in which an entity experienced such a failure, an amount 
equal to 25 percent of funding the awardee was eligible to receive for 
such a fiscal year, taking into account the withholding of funds for 
the immediately preceding fiscal year.
    Please note that HHS is required to treat each failure to 
substantially meet all the benchmarks and each failure to submit a 
satisfactory pandemic influenza plan as a separate withholding action. 
For example, an awardee failing substantially to meet benchmarks/
performance measures and who fails to

[[Page 28476]]

submit a satisfactory pandemic influenza plan could have 10% withheld 
for each failure for a total of 20% for the first year this happens. If 
this situation remained unchanged, HHS would then be required to assess 
15% for each failure for a total of 30% for the second year this 
happens. Alternatively, if one of the two failures are corrected in the 
second year but one remained, HHS is required to withhold 15% of the 
second year funding.
2. Technical Assistance and Notification of Failures
    ASPR may, in coordination with the CGMO and in accordance with 
established Departmental grants policy, provide to an awardee, upon 
request, technical assistance in meeting benchmarks/performance 
measures and submitting a satisfactory pandemic influenza plan. In 
addition, as described below, ASPR will notify awardees that are 
determined to have failed substantially to meet benchmarks/performance 
measures and/or who have failed to submit a satisfactory pandemic 
influenza plan and give them an opportunity to correct such 
noncompliance. Entities who fail to correct such noncompliance will be 
subject to withholding as described in the paragraph above.
    The awardee shall submit the required progress report on or before 
the specified due date according to the terms and conditions of the 
NoA. The Project Officer shall, within 15 days of receipt of the 
required progress report, assess performance, provide technical 
assistance to the awardee as required, and issue a written letter 
acknowledging completion of assessment and that the assessment has been 
forwarded to the GMO. Upon determination that the awardee has failed to 
comply with the terms and conditions of a grant or cooperative 
agreement, the Project Officer (PO) shall issue a written 
recommendation and provide a complete documentation package to the 
Grants Management Officer (GMO) based on the review and monitoring of 
the awardee.
    Within 15 days of receipt of the recommendation from the PO, the 
GMO shall issue an initial failure notification to the awardee in 
writing. This document will provide compliance requirements as 
submitted by the PO and will include the total amount of Federal funds 
which will be withheld or reduced in the subsequent fiscal year due to 
noncompliance, absent corrective action by the awardee that is 
satisfactory to the GMO. The document will specify that the GMO will 
take such other remedies as may be legally available and appropriate in 
the circumstances, such as withholding of Federal funds.
    The awardee must provide a proposed Corrective Action Plan (CAP) in 
writing to the GMO, within 15 days of receipt of the initial failure 
notification.. The GMO will forward a copy to the PO. The awardee may 
request technical assistance at this time.
    Within 15 days of receipt of the proposed CAP, the PO will assess 
the remedies and provide a recommendation to the GMO. If the GMO finds 
the corrective action measures satisfactory, the GMO shall, within 15 
days of receipt of the PO's assessment, provide notification to the 
awardee of the awarding agency's intent to rescind the initial failure 
notification. If in the GMO's judgment the awardee has still failed to 
comply with the terms and conditions of a grant or cooperative 
agreement, the GMO shall issue a final failure notification and provide 
information about the appeal process to include applicable timelines in 
writing. The GMO will concurrently issue his/her decision to the 
awardee and the Agency Review Committee (ARC).
3. Dispute Process
    The ASPR has established an ARC for the purpose of providing 
awardees a fair and flexible process to appeal certain enforcement 
actions such as a final decision to withhold funds due to a failure to 
meet benchmarks/performance measures and/or to submit a satisfactory 
pandemic influenza plan. The ARC consists of three regular members: 
ASPR Principal Deputy (Director); OPEO (Director); and Resource 
Planning and Evaluation (Director). The ASPR Principal Deputy, 
Director, or designee, shall be the chairperson for the ARC. The ARC 
may consult with subject matter experts within the Department as 
necessary (i.e., attorneys, Branch Chiefs, Team Leaders, Project 
Officer/Public Health Advisors, etc.) Members of the ARC may not be 
from the branch or program whose adverse determination is being 
appealed.
    If the awardee chooses to appeal the GMO decision, the awardee must 
do so directly to the ARC within ten days of receipt of the GMO's final 
failure notification. The Notice of Appeal shall include: (1) a 
detailed description of the reason for appeal including supporting 
documentation and (2) a description of how the enforcement action 
impacts the affected organization. The awardee should be aware that 
they bear the burden of proof to the extent of the type of modification 
or reversal of the GMO's decision they seek and the necessity for 
modification or reversal.
    Within ten days of receipt of the awardee's notice of appeal, the 
GMO will (1) Brief the ARC on the issues of the case, (2) submit any 
relevant documentation supporting the decision, and (3) provide a 
written statement responding to the notice of appeal.
    Within ten days of receipt of the brief and documentation submitted 
by the GMO, the ARC will acknowledge, in writing, the notice of appeal 
to the awardee and the GMO. The ARC will review the relevant 
information, within seven days of providing written notification to 
awardee and GMO, and use one or a combination of the following methods 
for dispute resolution:
    (a) Documentation Review--an independent evaluation of documents to 
verify compliance with laws, regulations, or policies;
    (b) Conference--allow parties an opportunity to make an oral 
presentation to clarify issues, question both parties to obtain a clear 
understanding of the facts, and provide recommendations for resolution. 
Telephone conferences are acceptable.
    Based on the outcome of the review or conference, the ARC will 
decide on the resolution of an issue within seven days. The ARC may 
decide that the Department should waive or reduce the withholding as 
described above for a single entity or for all entities in a fiscal 
year, if the ARC reviews and determines that mitigating conditions 
exist that justify the waiver or reduction. The ARC will notify the 
GMO, PO, and the awardee, in writing, of their final decision that the 
Department should waive or withhold federal funds.
    If the ARC's final decision is to for the Department to waive the 
federal funds to be withheld or withhold Federal funds for the 
subsequent fiscal year, the GMO shall issue, in writing, a final 
decision to the awardee within ten days from the receipt of the ARC's 
final decision.
    Funds that are withheld for failure to substantially meet 
benchmarks/performance measures and/or to submit a satisfactory 
pandemic influenza plan will be reallocated so that the Secretary may 
make awards under section 319C-2 to entities described in subsection 
(b)(1) of that section (i.e., Healthcare Facility Partnership grants).
4. Responsibilities
    A. PO/Public Health Advisor shall:
    1. During the corrective action phase, provide technical assistance 
to the awardee to meet the requirement.
    2. If determined the awardee will not meet the requirement, the PO 
shall issue a written recommendation to the GMO

[[Page 28477]]

based on the review and monitoring of awardee progress.
    3. Provide a timely documentation package to the GMO regarding a 
decision to withhold or reduce cooperative agreement funds.
    B. GMO shall:
    1. Rescind initial failure notification or issue a final failure 
notification and provide the awarding agency's process for appeal to 
include applicable timelines, in writing, to the awardee and provide a 
copy to ARC.
    2. Brief ARC on issues pertaining to disputes.
    3. Prepare and submit a complete documentation package to the ARC 
regarding a decision to withhold or reduce cooperative agreement funds.
    C. ARC shall:
    1. Establish regular committee members and consult with subject 
matter experts in the Department as necessary.
    2. Receive initial Notice of Appeal.
    3. Send acknowledgements to the awardee and GMO.
    4. Review disputes by documentation or conference.
    5. Provide recommendations and facilitate disputes to preclude 
further action.
    6. Provide the ARC decisions on appeals.
    D. Awardee or Complainant shall:
    1. Remedy non-compliance issues during the corrective action phase. 
If the GMO determines that corrective actions have not been adequate, 
the awardee may submit a written request for review.
    2. If awardee disputes the GMO's final decision, submit dispute to 
ARC after Failure Notification is received from the agency awarding 
office. The dispute must contain the following:
    A. A detailed description of the reason for dispute including 
supporting documentation and
    B. A description of how the enforcement action impacts the affected 
organization.

B. Repayment of Any Funds That Exceed the Maximum Percentage of an 
Award That an Entity May Carry Over to the Succeeding Fiscal Year

    1. For each fiscal year, ASPR, in consultation with the States and 
political subdivisions, will determine the maximum percentage amount of 
an award that an awardee may carry over to the succeeding fiscal year. 
This percentage amount will be listed in the funding opportunity 
announcement (FOA). For fiscal year 2008 awards, this maximum 
percentage amount that an awardee may carry over is 15%. For each 
fiscal year, if the percentage amount of an award unobligated by an 
awardee exceeds the maximum percentage permitted (i.e., 15% for FY 2008 
awards), the awardee shall repay the portion of the unobligated amount 
that exceeds the maximum amount permitted to be carried over to the 
succeeding fiscal year.
2. Notification of Failure
    Upon determination that the awardee has exceeded the maximum 
percentage permitted, the GMO shall issue an initial failure 
notification to the awardee in writing. Such documentation will specify 
that the GMO will take such remedies as may be legally available and 
appropriate in the circumstances, such as requiring repayment of the 
portion of the unobligated amount that exceeds the maximum amount 
permitted to be carried over to the succeeding fiscal year.
    The awardee must provide a proposed Corrective Action Plan (CAP) in 
writing to the GMO, within 15 days of receipt of the initial failure 
notification.. The GMO will provide a copy to the PO. The awardee may 
request technical assistance at this time.
    Within 15 days of receipt of the proposed CAP, the PO will assess 
the remedies and provide a recommendation to the GMO. The GMO shall, 
within 15 days of receipt of the PO's assessment, provide notification 
to the awardee of the awarding agency's intent to rescind the initial 
failure notification. If the awardee has still failed to comply with 
the terms and conditions of a grant or cooperative agreement, the GMO 
shall issue a final failure notification in writing and provide 
information about the appeal process and application for waiver of 
repayment to include applicable timelines. The GMO will concurrently 
issue his/her decision to the awardee and the Agency Review Committee 
(ARC).
3. Dispute Process
    If the awardee chooses to appeal the GMO decision, the awardee must 
do so directly to the ARC within ten days of receipt of the GMO's final 
failure notification. The Notice of Appeal shall include: (1) A 
detailed description of the reason for appeal including supporting 
documentation; (2) a description of how the enforcement action impacts 
the affected organization; and (3) request for a waiver of repayment 
that includes an explanation why such requirement (for maximum 
percentage of carryover amount) should not apply to the awardee and the 
steps taken by the awardee to ensure that all HPP funds will be 
expended appropriately. The awardee should be aware that they bear the 
burden of proof to the extent of the type of modification or reversal 
of the GMO's decision they seek and the modification or reversal.
    Within ten days of receipt of the awardee's notice of appeal, the 
GMO will (1) Brief the ARC on the issues of the case, (2) submit any 
relevant documentation supporting the decision, and (3) provide a 
written statement responding to the notice of appeal.
    Within ten days of receipt of the brief and documentation submitted 
by the GMO, the ARC will acknowledge, in writing, the notice of appeal 
to the awardee and the GMO.
    The ARC will review the relevant information, within seven days, 
and use one or a combination of the following methods for dispute 
resolution:
    (a) Documentation Review--an independent evaluation of documents to 
verify compliance with laws, regulations, or policies;
    (b) Conference--allow parties an opportunity to make an oral 
presentation to clarify issues, question both parties to obtain a clear 
understanding of the facts, and provide recommendations for resolution. 
Telephone conferences are acceptable.
    The ARC may decide that the Department should waive or reduce the 
amount to be repaid for a single entity or for all entities in a fiscal 
year, if the ARC reviews and determines that mitigating conditions 
exist that justify the waiver or reduction. The ARC will notify the 
GMO, PO, and the awardee, in writing, of their final decision that the 
Department should waive or require repayment of the portion of the 
unobligated amount of HPP funds that exceeds the maximum amount 
permitted to be carried over to the succeeding fiscal year.
    If the ARC's final decision is to waive or to require repayment of 
the portion of the unobligated amount of HPP funds that exceeds the 
maximum amount permitted to be carried over to the succeeding fiscal 
year, the GMO shall issue a final decision in writing to the awardee 
within ten days from the receipt of the ARC's final decision.
    Funds that are repaid to ASPR will be reallocated so that the 
Secretary may make awards under section 319C-2 to entities described in 
subsection (b)(1) of that section (i.e., Healthcare Facility 
Partnership grants).
4. Responsibilities
    A. PO/Public Health Advisor shall:
    1. If determined the awardee has exceeded the maximum carryover 
percentage, the PO shall issue a written recommendation to the GMO 
based on

[[Page 28478]]

the review and monitoring of awardee progress.
    2. Provide a timely documentation package to the GMO regarding a 
decision to repay unobligated HPP funds that exceed the maximum 
carryover percentage.
    B. GMO shall:
    1. Rescind initial failure notification or issue a final failure 
notification and provide the awarding agency's process for appeal to 
include applicable timelines, in writing, to the awardee and provide a 
copy to ARC.
    2. Brief ARC on issues pertaining to disputes.
    3. Prepare and submit a complete documentation package to the ARC 
regarding a decision to repay.
    C. ARC shall:
    1. Establish regular committee members and consult with subject 
matter experts in the Department, as necessary.
    2. Receive initial Notice of Appeals.
    3. Send acknowledgements to the awardee and GMO.
    4. Review disputes by documentation or conference.
    5. Provide recommendations and facilitate disputes to preclude 
further action.
    6. Provide the ARC decisions on appeals.
    D. Awardee or Complainant shall:
    1. Remedy non-compliance issues during the corrective action phase. 
If the GMO determines that corrective actions have not been adequate, 
the awardee may submit a written request for review.
    2. If awardee disputes the GMO's final decisions, submit dispute to 
ARC after Failure Notification is received from the agency awarding 
office as described in the NoA. The dispute must contain the following:
    A. A detailed description of the reason for dispute including 
supporting documentation;
    B. A description of how the enforcement action impacts the affected 
organization; and
    C. Request for a waiver of repayment that includes an explanation 
why such requirement (for maximum percentage of carryover amount) 
should not apply to the awardee and the steps taken by the awardee to 
ensure that all HPP funds will be expended appropriately.

C. Repayment or Future Withholding or Offset as a Result of a 
Disallowance Decision if an Audit Shows That Funds Have Not Been Spent 
in Accordance With Section 319C-2 of the PHS Act

    1. Awardees shall, not less often than once every 2 years, audit 
their expenditures from HPP funds received. Such audits shall be 
conducted by an entity independent of the agency administering the HPP 
program in accordance with the Comptroller General's standards for 
auditing governmental organizations, programs, activities, and 
functions and generally accepted auditing standards. Within 30 days 
following completion of each audit report, awardees should submit a 
copy of that audit report to ASPR.
    Awardees shall repay to the United States amounts found not to have 
been expended in accordance with section 319C-2 of the PHS Act. If such 
repayment is not made, ASPR may offset such amounts against the amount 
of any allotment to which the awardee is or may become entitled under 
section 319C-2 or may otherwise recover such amount. ASPR may withhold 
payment of funds to any awardee which is not using its allotment under 
section 319C-2 in accordance with such section. ASPR may withhold such 
funds until it finds that the reason for the withholding has been 
removed and there is reasonable assurance that it will not recur.
2. Disallowance notification
    Upon determination as a result of audit findings that the awardee 
has not expended funds in accordance with section 319C-2, the GMO shall 
issue a disallowance notification to the awardee for the portion of 
funds not expended in accordance with section 319C-2 and require 
repayment of those funds to the United States.
3. Dispute process
    HHS has established a DAB for the purpose of providing awardees a 
fair and flexible process to appeal certain written final decisions 
involving grant and cooperative agreement programs administered by 
agencies of HHS. This document notifies HPP awardees that an 
opportunity exists to appeal a disallowance enforcement action to the 
DAB. If the awardee chooses to appeal a final disallowance decision by 
the GMO, the awardee must do so directly to the DAB within thirty days 
of receipt of the GMO's final disallowance notification. The Notice of 
Appeal shall include: (1) A copy of the final decision, (2) a statement 
of the amount in dispute in the appeal, and (3) a brief statement of 
why the decision is wrong. More details about the DAB's procedures may 
be found at 45 CFR part 16.

V. References

A. Code of Federal Regulations (CFR)

     45 CFR Part 16 and Appendix A, Procedures of the 
Departmental Grants Appeal Board.
     45 CFR Part 74 and Appendix E, Uniform Administrative 
Requirements for Awards and Sub-awards to Institutions of Higher 
Education, Hospitals, Other Nonprofit organizations, and commercial 
organizations.
     45 CFR Part 92, Uniform Administrative Requirements for 
Grants and Cooperative Agreements to State, Local, and Tribal 
Governments.

B. OMB Circulars

     A-87, Cost Principles for State, Local and Indian Tribal 
Governments.
     A-102, Grants and Cooperative Agreements with State and 
Local Governments.
     A-110, Uniform Administrative Requirements for Grants and 
Other Agreements with Institutions of Higher Education, Hospitals, and 
Other Non-Profit Organizations.
     A-133, Audits of States, Local Governments, and Non-Profit 
Organizations Requirements.

C. HHS Grants Policy Statement, January 1, 2007

[FR Doc. E8-11015 Filed 5-15-08; 8:45 am]
BILLING CODE 4150-37-P