[Federal Register Volume 73, Number 102 (Tuesday, May 27, 2008)]
[Notices]
[Pages 30401-30405]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-11718]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Disease Control and Prevention


Department of Health and Human Services Implementation of New 
Authorities for the Public Health Emergency Preparedness Cooperative 
Agreement

AGENCY: Department of Health and Human Services, Centers for Disease 
Control and Prevention, Coordinating Office for Terrorism Preparedness 
and Emergency Response, Division of State and Local Readiness.

ACTION: Notification of intent to implement: (1) Maintenance of funding 
(MOF); (2) nonfederal matching requirements; (3) evidence-based 
benchmarks and objective standards; (4) maximum amount of carryover; 
(5) pandemic influenza operations plans criteria; (6) audit 
requirements; and (7) withholding and repayment guidelines. Links to 
the Interim Progress Report (IPR) for Budget Period 9 (BP9) of the 
Public Health Emergency Preparedness (PHEP) program are provided for 
informational purposes only.

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SUMMARY: The Department of Health and Human Services (HHS or the 
Department), Centers for Disease Control and Prevention (CDC), will 
issue an Interim Progress Report (IPR) for the PHEP cooperative 
agreement program in the third quarter of Fiscal Year (FY) 2008, as 
authorized under section 319C-1 of the Public Health Service (PHS) Act, 
as amended by the Pandemic and All-Hazards Preparedness Act (PAHPA) 
(Pub. L. 109-417) (42 U.S.C. 247d-3a). The Consolidated Appropriations 
Act, 2008, (H.R. 2764) provided funding for these awards. This notice 
provides information to facilitate the critical aspects of the program, 
including:
     Background of the program;
     Current requirements for awardees:
    [cir] MOF;
     Future requirements of awardees:
    [cir] Nonfederal matching requirements--reduced or no award 
provided;
    [cir] Evidence-based benchmarks and objective standards--
substantial failure results in withholding of funds;

[[Page 30402]]

    [cir] Maximum amount of carryover--exceeding the limit results in 
repayment of funds;
    [cir] Pandemic influenza planning documents--failure to submit a 
sufficient operations plan results in withholding of funds;
    [cir] Audit requirements--failure results in repayment of funds;
     Electronic submission;
     Important dates;
     Reporting;
     PHEP IPR for BP9 (http://www.emergency.cdc.gov/);
     Withholding and Repayment Guidance (Attachment).

FOR FURTHER INFORMATION CONTACT: Donna Knutson at (404) 639-7530, or e-
mail at [[email protected]].

SUPPLEMENTARY INFORMATION:

Background of the Program

    Building on the lessons learned from the attacks of September 11, 
2001, and Hurricanes Katrina and Rita in 2005, the 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. The 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 Health 
and Human Services 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 renamed ASPR; requiring the development and 
implementation of the National Health Security Strategy; and 
reauthorizing the PHEP cooperative agreements administered by CDC and 
the Hospital Preparedness Program (HPP) cooperative agreements 
administered by ASPR. In addition to reauthorizing these two 
cooperative agreement programs, the PAHPA added new requirements that 
awardees must meet. The purpose of this notice is to notify PHEP 
awardees about critical aspects and requirements of the PHEP 
cooperative agreements, as amended by PAHPA. The Secretary of Health 
and Human Services 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 
PHEP activities. The Secretary of Health and Human Services must 
withhold funds beginning in FY 2009 from PHEP awardees who fail 
substantially to meet the applicable benchmarks or objective standards 
for the immediately preceding fiscal year and/or who fail to submit a 
sufficient pandemic influenza operations plan. Thus, PHEP awardees will 
have funds withheld from their FY 2009 awards (as described in the 
attached withholding guidance) if, when expending their FY 2008 PHEP 
awards, they fail substantially to meet the benchmarks and objective 
standards described in the FY 2008 (BP9) IPR or to submit a sufficient 
pandemic influenza operations plan. The Secretary of Health and Human 
Services is required to develop and implement a process to notify 
entities who have failed substantially to meet the evidence-based 
benchmarks and objective standards or who have failed to submit a 
sufficient pandemic influenza operations plan. The process must provide 
awardees with the opportunity to correct their noncompliance.
    Purpose: The purpose of the PHEP cooperative agreement program is 
to provide funding to improve and upgrade state and local public health 
jurisdictions' preparedness and response to bioterrorism, outbreaks of 
infectious diseases, and other public health threats and emergencies, 
utilizing the following goals:
    1. Integration--integrating public health and public and private 
medical capabilities with other first responder systems including 
through--
    i. The periodic evaluation of Federal, State, local, and tribal 
preparedness and response capabilities through drills and exercises; 
and
    ii. The integration of public and private sector public health and 
medical donations and volunteers.
    2. Public health--developing and sustaining Federal, State, local, 
and tribal essential public health security capabilities, including the 
following--
    i. Disease situational awareness domestically and abroad, including 
detection, identification, and investigation.
    ii. Disease containment including capabilities for isolation, 
quarantine, social distancing, and decontamination.
    iii. Risk communication and public preparedness.
    iv. Rapid distribution and administration of medical 
countermeasures.
    3. Medical--increasing the preparedness, response capabilities, and 
surge capacity of hospitals, other healthcare facilities (including 
mental health facilities), and trauma care and emergency medical 
service systems, with respect to public health emergencies, which shall 
include developing plans for the following--
    i. Strengthening public health emergency medical management and 
treatment capabilities.
    ii. Medical evacuation and fatality management.
    iii. Rapid distribution and administration of medical 
countermeasures.
    iv. Effective utilization of any available public and private 
mobile medical assets and integration of other Federal assets.
    v. Protecting healthcare workers and healthcare first responders 
from workplace exposures during a public health emergency.
    4. At-risk individuals--
    i. Taking into account the public health and medical needs of at-
risk individuals in the event of a public health emergency.
    ii. For purposes of these awards, 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, as 
determined by the Secretary of Health and Human Services (see the IPR 
for BP9 for updated definition).
    5. Coordination--minimizing duplication of, and ensuring 
coordination between, Federal, State, local, and tribal planning, 
preparedness, and response activities (including Emergency Management 
Assistance Compact). Such planning shall be consistent with the 
National Response Framework, or any successor plan, and National 
Incident Management Systems and the National Preparedness Goal.
    6. 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: Since the funding opportunity represents the fourth 
year of a five-year cooperative agreement, eligibility is limited to 
those currently funded through PHEP Program Announcement AA154 and 
authorized under 42 U.S.C. 247d-3a. Eligible applicants are the health 
departments of States or their bona fide agents, the District of 
Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, the 
Commonwealth of the Northern Mariana Islands, American

[[Page 30403]]

Samoa, Guam, the Federated States of Micronesia, the Republic of the 
Marshall Islands, the Republic of Palau, and the official public health 
agencies of New York City, New York; Los Angeles County, California; 
and Chicago, Illinois.

Current Requirements of Awardees

Maintenance of Funding (MOF)

    MOF is defined as ensuring that the amount contributed by the 
entity that receives the award to support public health security does 
not fall below the average of the amount provided annually during the 
previous two years. This definition includes:
    1. Appropriations specifically designed to support public health 
emergency preparedness as expended by the entity receiving the award; 
and
    2. Funds not specifically allocated for public health emergency 
preparedness activities but which support public health emergency 
preparedness activities, such as personnel assigned to public health 
emergency preparedness responsibilities or supplies or equipment 
purchased for public health emergency preparedness from general funds 
or other lines within the operating budget of the entity receiving the 
award.
    The definition of expenditures does not include one-time expenses 
to support public health preparedness and response, such as purchases 
of antiviral drugs. Awardees will be required to document the required 
MOF as part of the IPR for BP9. According to Public Law 109-417, any 
funds withheld from the PHEP cooperative agreement program or the 
Hospital Preparedness Program will be reallocated to the Healthcare 
Facilities Partnership program in the same state.

Future Awardee Requirements

Matching Requirements

    PHEP cooperative agreement funding must be matched by nonfederal 
contributions beginning with the distribution of federal FY 2009 funds 
(Budget Period 10). Nonfederal contributions (match) may be provided 
directly or through donations from public or private entities and may 
be in cash or in-kind, fairly evaluated, including plant, equipment, or 
services. Amounts provided by the federal government, or services 
assisted or subsidized to any significant extent by the federal 
government, may not be included in determining the amount of such 
nonfederal contributions. Awardees will be required to provide matching 
funds as described:
    i. For FY 2009, not less than 5% of such costs ($1 for each $20 of 
federal funds provided in the cooperative agreement); and
    ii. For any subsequent fiscal year of such cooperative agreement, 
not less than 10% of such costs ($1 for each $10 of federal funds 
provided in the cooperative agreement).
    Please refer to 45 CFR 92.24 for match requirements, including 
descriptions of acceptable match resources. Documentation of match must 
follow procedures for generally accepted accounting practices and meet 
audit requirements. Beginning with federal FY 2009, the Secretary of 
Health and Human Services may not make an award to an entity eligible 
for PHEP funds unless the eligible entity agrees to make available 
nonfederal contributions as described above. CDC will require each 
eligible entity to include in its FY 2008 (BP9) mid-year progress 
report a plan describing the methods and sources of match that the 
eligible entity agrees to pursue in FY 2009.

Evidence-Based Benchmarks and Objective Standards

    In accordance with section 319C-1(g)(1), CDC has established the 
following evidence-based benchmarks and objective standards. 
Substantial failure to meet these benchmarks and standards will result 
in withholding of funds for the FY 2009 budget year (BP10). The 
following benchmarks and standards also appear in the PHEP IPR for BP9:
    1. Demonstrated capability to notify primary, secondary, and 
tertiary staff to cover all incident management functional roles during 
a complex incident.
    To provide an effective and coordinated response to a complex 
incident, a public health department must maintain a current roster of 
pre-identified staff available to fill core Incident Command System 
(ICS) functional roles. During an incident that lasts more than 12 
hours, secondary and tertiary staff may be called upon to fill ICS 
roles, and thus the health department must maintain a roster of all 
staff qualified for those roles. Testing the staff notification system 
is critical for an efficient response, especially when the notification 
is unannounced and occurs outside of regular business hours.
    a. Confirm the accuracy of the primary, secondary, and tertiary 
contact information for all eight ICS functional roles at least once 
every six months.
    b. Test the notification system twice a year, with at least one 
test being unannounced and occurring outside of regular hours. The test 
can be a drill or an exercise, or it may be demonstrated by a response 
to a real incident.
    Guidance on the numerator, denominator, and scoring methodology to 
determine how results will factor in to a withholding penalty for this 
measure will be available by May 15, 2008.
    2. Demonstrated capability to receive, stage, store, distribute, 
and dispense material during a public health emergency.
    Health departments must be able to provide countermeasures to 100% 
of their identified population within 48 hours after the decision to do 
so. To be able to achieve this standard, health departments must 
maintain the capability to plan and execute the receipt, staging, 
storage, distribution, and dispensing of material during a public 
health emergency.
    a. Obtain a score of 69 or higher on the Division of Strategic 
National Stockpile (DSNS) State Technical Assistance Review by December 
31, 2008.
    b. Each planning/local jurisdiction within each Cities Readiness 
Initiative (CRI) metropolitan statistical area conducts a minimum of 
three DSNS drills by August 10, 2009.
    c. To comply with the PAHPA legislation and for purposes of guiding 
funding decisions for 2009, the planning/local jurisdiction(s) that 
comprises the 25% most populous within a CRI MSA conducts at least one 
of the three DSNS drills prior to December 31, 2008 (with the remaining 
two drills conducted by August 10, 2009).
    These drills may include any three of the following: staff call 
down, site activation, facility set-up, pick-list generation, 
dispensing, and/or modeling of throughput. Guidance on the numerator, 
denominator, and scoring methodology to determine how results will 
factor in to a withholding penalty for this measure will be available 
by May 15, 2008.

Maximum Amount of Carryover

    CDC shall determine the maximum percentage amount of an award that 
an awardee may carry over to the succeeding fiscal year. Unjustifiable 
unobligated balances will be determined by using the awardee's spend 
plan and financial status and progress/performance reports. (See the 
Withholding and Repayment Guidance for additional information).
    To provide effective program management, an awardee must be able to 
develop and execute spend plans, make procurements and let contracts on 
schedule, and otherwise assure the

[[Page 30404]]

infrastructure capacity to support the attainment of programmatic 
objectives. One outcome of an effective management infrastructure is 
the full expenditure of funds awarded in the budget period.
    CDC recognizes that there may be justifiable causes (e.g., state 
hiring freezes, inefficiencies on the part of the awarding agency) or 
unjustifiable causes (e.g., ineffective management infrastructure at 
the state level, irregularities in contracting or payment of debt) for 
dollars to remain unobligated at the end of the budget period even 
after a robust execution of plans. Therefore, the awardee must 
immediately communicate with CDC any events occurring between the 
scheduled spend plan and progress/performance report date which have 
significant impact upon the cooperative agreement.
    CDC will make available by May 15, 2008, additional guidance 
regarding spend plan and progress/performance reports to determine how 
results will factor into a repayment penalty for this measure.

Pandemic Influenza Plans

    State pandemic influenza operations plans must meet national 
standards. On June 16, 2008, awardees will submit a second version of 
their pandemic influenza operations plans based on guidance provided by 
HHS on March 13, 2008. Two scores (Comprehensiveness and Operational 
Readiness) for each of the seven elements in the ``Health and Medical'' 
category will be used by CDC to determine the extent to which criteria 
have been met, as follows:

Comprehensiveness Score:
    No Major Gaps
    A Few Major Gaps
    Many Major Gaps
    Inadequate Preparedness
Operational Readiness Score:
    Substantial Evidence of Operational Readiness
    Significant Evidence of Operational Readiness
    Little Evidence of Operational Readiness

    Failure to meet accepted criteria for pandemic influenza operations 
planning will result in the withholding of funds for the FY 2009 budget 
period. Guidance on the numerator, denominator, and scoring methodology 
for this measure will be available by May 15, 2008.

Audit Requirements

    Each entity receiving funds shall, not less than once every two 
years, audit its expenditures from amounts received from the PHEP 
cooperative agreement. Such audits shall be conducted by an entity 
independent of the agency administering the PHEP cooperative agreement 
in accordance with Office of Management and Budget (OMB) Circular A-
133, Audits of States, Local Governments, and Non-Profit Organizations.
    Audit reports must be submitted to CDC. Failure to conduct an audit 
or expenditures made not in accordance with PHEP cooperative agreement 
guidance and grants management policy may result in a requirement to 
repay funds to the Federal treasury or the withholding of future funds.

Electronic Submission

    Given the technical capabilities necessary to carry out and 
document the activities required under this program, HHS is announcing 
the funding opportunity on the grants.gov Web site at http://www.grants.gov. Detailed instructions for submitting the combined IPR 
and application for funding will be available through a download in the 
Preparedness Emergency Response System for Oversight, Reporting, and 
Management Services (PERFORMS) at https://sdn/cdc/gov.

Important PHEP Dates

     Anticipated application due date: June 27, 2008.
     Anticipated award date: August 11, 2008.

Reporting

    Please refer to the PHEP IPR for actual reporting dates and 
requirements.

Withholding and Repayment Guidance

    The Withholding and Repayment Guidance is provided in its entirety 
for review as an attachment. (See attachment below.)

    Dated: May 20, 2008.
James D. Seligman,
Chief Information Officer, Centers for Disease Control and Prevention, 
Department of Health and Human Services.

Attachment

CDC Public Health Emergency Preparedness Cooperative Agreement 
Withholding and Repayment Guidance

Procedural Consideration

    This standard operating procedure (SOP) describes procedures CDC 
will use to implement withholding or repayment actions in connection 
with the Public Health Emergency Preparedness (PHEP) cooperative 
agreement program.
    A. Pandemic and All-Hazards Preparedness Act (PAHPA) requirements 
for the PHEP Cooperative Agreement. The PAHPA requires the withholding 
of amounts from entities that fail to achieve benchmarks and objective 
standards or to submit an acceptable pandemic influenza operations 
plan, beginning with Fiscal Year 2009 and in each succeeding fiscal 
year:
Benchmarks and Statewide Pandemic Influenza Operations Plan
    (1) Enforcement Condition: Awardees substantially fail to meet 
evidence-based benchmarks and objective standards and/or fail to 
prepare and submit an acceptable pandemic influenza operations plan.
    Please note 319C-1(g)(6)(B) Separate Accounting: Each failure 
described under A(1) shall be treated as a separate failure for 
purposes of calculating amounts withheld under A(2). For example, a 
failure to achieve applicable benchmarks as a whole will count as one 
failure and a failure to submit a pandemic influenza operations plan 
will count as a second failure.
    (2) Enforcement Action:
     Withhold funds--Fiscal Year 2008 is for the purpose of 
evaluation to determine the amount to be withheld from the year 
immediately following year of failure. Additionally, each failure is to 
be treated as a separate failure for the purposes of the penalties 
described below:
     Initial failure--withholding in an amount equal to 10% of 
funding per failure.
     Two consecutive years of failure--withholding in an amount 
equal to 15% of funding per failure.
     Three consecutive years of failure--withholding in an 
amount equal to 20% of funding per failure.
     Four consecutive years of failure--withholding in an 
amount equal to 25% of funding per failure.
     Reallocation of amount withheld--According to Pub. L. 109-
417, any funds withheld from the PHEP or the Hospital Preparedness 
Program will be reallocated to the Healthcare Facilities Partnership 
program in the same state.
     Preference in reallocation--According to Pub. L. 109-417, 
any funds withheld from the PHEP or the Hospital Preparedness Program 
will be reallocated to the Healthcare Facilities Partnership program in 
the same state.
    Waive or Reduce: The Secretary of Health and Human Services may 
waive or reduce the withholding as described above for a single entity 
or for all entities in a fiscal year, if the Secretary determines that 
mitigating conditions

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exist that justify the waiver or reduction.

Audit Implementation

    (1) Enforcement Condition: Awardees who fail to submit the required 
audit or spend amounts in noncompliance.
    (2) Enforcement Action: Grants Management Officer disallows costs 
and requests payment via standard audit disallowance process or 
temporarily withholds funds pending corrective action.
    Adjudication: Enforcement will be in accordance with 45 Code of 
Federal Regulation (CFR), part 16.

Carryover

    (1) Enforcement Condition: For each fiscal year, the percentage 
amount of an award unexpended by an awardee exceeds the maximum 
percentage permitted by the Secretary.
    (2) Enforcement Action: Awardees shall return to the Secretary the 
portion of the unexpended amount that exceeds the maximum permitted to 
be carried over. According to Public Law 109-417, any funds withheld 
from the PHEP or the Hospital Preparedness Program will be reallocated 
to the Healthcare Facilities Partnership program in the same state.
    Waive or Reduce: The awardee may request a waiver of the maximum 
percentage amount or the Secretary may waive or reduce the withholding 
as described above 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. The Secretary will make a decision 
after reviewing the awardee's request for waiver.
    The Department of Health and Human Services (HHS) permits grantees 
to appeal to the Departmental Appeal Board (DAB) certain post-award 
adverse administrative decisions made by HHS officials (see 45 CFR part 
16). CDC has established a first-level grant appeal procedure that must 
be exhausted before an appeal may be filed with the DAB (see 42 CFR 
part 50.404). CDC will assume jurisdiction for any of the above adverse 
determinations.

[FR Doc. E8-11718 Filed 5-23-08; 8:45 am]
BILLING CODE 4163-18-P