APR 19 1995

NOTE TO DRS. LEE AND BOUFFORD

Subject:  Policy Decisions for Self-Governance Demonstration Project/Self-Determination Negotiations--INFORMATION

Today the IHS is distributing the attached Dear Tribal Leader letter with enclosed policy decision papers that respond to 3 Tribal/IHS Workgroup reports.  The 3 workgroups were charged with recommending policies on residual functions and resources, user population definition and estimates, and resource allocation methods.  These policies are required for upcoming negotiations with tribes wanting to compact or contract.

The Dear Tribal Leader letter summarizes my decisions on the workgroups' recommendations and references next steps.  The policy decision papers provide additional information on the recommendations and decisions, their implementation, and needed followup actions.

Key tribal leaders are being contacted to personally share these decisions, and key congressional staff have been briefed.  Area Directors will brief their respective tribal leaders.

Substantial effort has been directed to inclusive policy decision making and communication of these decisions.

I.  PURPOSE

The purpose of this plan is to ensure that information is provided to tribes and employees regarding policy recommendations and decisions for FY 1996 Self-Governance Demonstration Project negotiations.  The policy decisions will determine Residual Resources, User Population Estimates, Allocation Methods for distributing Tribal Shares and Contract Support Costs.

II.  EVENT

An information package consisting of a Dear Tribal Leader letter and supplemental information from the four workgroups covering the decision areas will be distributed to Area and Associate Directors, Lead Negotiators, Indian organizations and Congressional staffs.  Each audience will receive a specialized cover memo and a general summary of the content, process and decisions.

Tribes will receive the information package from the relevant Area Director?s office.  Employees will receive a letter on the decisions, along the lines of an Executive Summary.  The Media will receive personal calls from the Communications staff to arrange for interviews with spokespersons.

III.  SCHEDULE:  The distribution of information will occur in the following sequence:

Clearance:  Final Package ready.  Final package with Congressional cover letter to the Assistant Secretary for Legislation (ASL) review and clearance.

Day 1 (after ASL clearance):

Dr. Trujillo contacts key tribal leaders and organizations to inform them of decision.

Joe Dexter, Norton Sound Corporation (tel: 907-443-3311)
Albert Hale, President, Navajo Nation (tel: 602-871-6352)
Wilma Mankiller, Principal Chief, Cherokee Nation of Oklahoma (tel: 918-456-0671)
Dale Risling, Chairman, Hoopa Valley Business Council (tel: 916-625-4211)
Pearl Capoeman-Baller, President, Quinault Business Committee (tel: 206-276-8211)
Henry Cagey, Chairman, Lummi Business Council (tel: 206-734-8180)
William Ron Allen, Chairman, Jamestown S. Kallam Tribe (tel: 206-683-1109)
John Blackhawk, Aberdeen Tribal Chairman's Association (tel: 402-878-2272)
Martin Antone, President, ITCA (tel: 602-248-0071)
Julia Davis, Chair, NHIB (tel: 303-759-3075)
Gaiashkibos, President, NCAI (tel: 202-546-9404)

Office of the Director provides Tribal Leader package to key Congressional offices.

Office of the Director overnight mails Tribal Leader package to key leaders.

Office of the Director overnight mails Tribal Leader package to Area Directors.

Day 2

April 24, Monday

During this week, with the prior concurrence of Dr, Trujillo, the Communications staff will canvas selected media to determine the level of interest and schedule interviews.  No general press release will be issued to the media.

IV.  SPOKESPERSONS

Spokespersons at the Headquarters level are:

Dr, Michael Trujillo, Director
Ms. Luana Reyes, Acting Director of Headquarters Operations
Mr. Michel Lincoln, Deputy Director
Ms. Cynthia Smith, Senior Advisor to the Director (decision philosophy and inclusion)

Spokespersons at the Area level are Area Directors:

(Note:  Area Directors will respond to requests from their Tribes and local media.  Questions asked and answers given are to be provided to the IHS Management Team and Area Directors.)

Expert Spokespersons for background are Workgroup Chairs and Lead Negotiators.

(Note:  Interviews with expert negotiators for national publications will be scheduled by Communications Staff.)

V.  POINT OF CONTACT

Assistance regarding the distribution of information and media relations can be provided by:

Tony Kendrick, Acting Director of Communications (tel: 301-443-3593)
Kenneth Bricker, Public Affairs Specialist (tel: 301-443-3593)

Introduction

Residual, the funding amount that the Indian Health Service would require to fulfill its moral and legal responsibilities, has been an issue of discussion since the Self Governance Demonstration Project (SGDP) began.  A diversity of opinion arose among tribes and the IHS over the residual functions and funds that would be necessary under 100 per cent compacting.  It was apparent that we needed to reach some consensus on this important issue, because identification of residual was necessary to determine what resources from Headquarters could be made available as tribal shares.  Accordingly, the Residual Workgroup was established by the Acting Director, Headquarters Operations in September 1994.  The Workgroup was charged to:

1. Develop the principles which will govern the identification of resources the Agency will retain to meet its inherently Federal functions should 100% of tribes exercise their right to compact under Self Governance.
2. Develop the principals which will govern the identification of resources the Agency will retain, on a transitional basis, up to the point when 100% of the tribes have entered into compacts under Title III.
3. Develop the specific methods for use in identifying the resources that will be retained upon application of the above principles.
4. Calculate the total amount of resources that will be retained by the Agency applying the principles and methods in 1-3 above.

Workgroup Options/Recommendations

In order to carry-out its task, the Workgroup developed three definitions which would guide its work.

1. Residual:  Those activities, functions, and services necessary for the United States government to fulfill and maintain its moral and legal responsibilities based upon treaties, statutes, and Executive Orders that must be carried out by Federal officials.
2. Tribal Shares:  Tribal shares of Headquarters and Area resources not determined to be residual and allocated to individual tribes utilizing an agreed upon methodology.  This does not include Service Unit or program base.
3. Retained tribal shares:  Those resources which support the activities, functions, and services which are not residual, but which tribes elect to leave with the Federal Government to administer.

In response to its primary task, the Workgroup provided three options on residual for the Director, IHS, to consider.  However, no options or recommendations were provided related to resources the Agency will retain, on a transitional basis, until 100% of tribes have compacted. Even though the Workgroup did not address transitional funding, the concept of transitional funding is discussed in the "Explanation of Decision" below. The three options the Workgroup provided are:

1. The IHS residual estimate of 720 FTE and $45 million for an Agency-wide residual including Headquarters and Area tasks be used as FY 96 negotiations.
2. A Workgroup derived estimate of 240 FTE and $15.56 million for Headquarters plus an amount for Area FTE and funding based on the assumptions developed by the Workgroup with local tribal participation in the estimate development, by March 31 be used for FY 96 negotiations.
3. A Workgroup derived estimate of 240 FTE and $15.56 million for the Agency-wide residual to be used for the FY 96 negotiations.

Director's Decision

1. I concur with the definitions developed for residual, tribal shares, and retained tribal shares.
2. I accept, in principle, the $15.56 million identified in option number 2 as a goal for Headquarters residual.  In the context of an environment where 100% of tribes have compacted for their share of programs, this is goal theoretically possible.  I do not concur with the estimate of 240 FTEs (see explanation below).

Explanation of Decision

The acceptance of the definitions requires no additional explanation.  However, as implementation progresses, tribes and the IHS may want, periodically, to revisit and review these definitions.

The residual of $15.56 million is a goal that is based on the assumption that 100% of tribes will exercise their right to compact.  In establishing a residual resource goal, a dollar target is more relevant than FTE.  The Agency would utilize the funds to carry out its residual functions.  Its staffing needs would be determined based on these residual functions.  For this reason, I do not concur with the number of FTEs proposed by the workgroup in option number 2.

I accepted this goal because many of the assumptions in the report are consistent with other efforts that will result in a reduced Federal presence.  I also believe that it provides a starting point for the Agency to evaluate the entire process using the Workgroup's assumptions and our 18 months experience with the SGDP.  It is essential that work continue to better define what the Agency must continue to do on behalf of tribes, and what the tribes can assume themselves, either individually or collectively.  I expect this number to change, and by that I mean it could move in either direction.  The residual amount also will change as a result of mandatory increases included in the appropriation.

By accepting this option as a goal, I recognize that the issues of transition and retained tribal shares, has not been addressed.  I also am aware that the Agency has spent considerable time analyzing its functions, considering ways to do things better, and looking at different structures to respond not only to the SGDP, but also to Self Determination contracting (Title I amendments) and to the Reinventing Government initiative.  In this process, the Agency is identifying resources to meet the increased demands on staff related to the self governance process; resources to carry-out functions which benefit all tribes; staff in support of Federal construction; and support for information management systems.

Implementation and Impact

Even though the residual amount of $15.56 million is a goal, this is the amount that will be used in calculating the tribal shares of Headquarters for negotiations with tribes for Title I and III agreements.  At this time, I do not believe that this should present significant funding problems for the Agency during the FY 1996 compact negotiations, based on the President's FY 1996 budget request, because we are dealing with 30 tribes (counting Alaska as 1) and 42 annual funding agreements.  As more tribes elect to exercise their right to compact, and as tribes enter into contracts under the new Title I amendments, it may be necessary to look at the transitional amounts required by the Agency to provide services to compacting, contracting, and direct services tribes.

Follow Up Actions

Although a goal has been established for residual, additional work on residual and transition is necessary.  The existing Workgroup will be asked to continue its efforts.  In addition, a suggestion will be taken to the Indian Health Design Team that they include this in its deliberations.  Some of the issues that will require attention include:

1. Residual
   • Annual analysis of functions and resources required for those functions.
   • Annual evaluation of impact using the goal established for residual.
   • Guidance to Areas in establishing an Area residual that provides for some consistency among Areas.
2. Transition
   • Develop a definition for transition and estimate a time-frame for the transition; this should include the establishment of targets to achieve as the Agency moves towards the theoretical residual.

References

1. IHS/Tribal Residual Workgroup Final Report, February 1995.

Introduction

Since the start of the Self-Governance Demonstration Project (SGDP), the Indian Health Service (IHS) has utilized the IHS official user population estimates to determine the Tribal Shares (TS) of IHS Headquarters and Area Office administrative resources.  Tribes have questioned the accuracy and completeness of the IHS data upon which the estimates are based, and whether the current user population is the appropriate indicator to use.

As a result, the Director, IHS, established the User Population Workgroup consisting of compacting and non-compacting tribal representatives and IHS staff to address:  1) the validity of the IHS user population estimates, 2) the definition of user population for resource allocation, and 3) alternative indicators for resource allocation.  Although the Workgroup did not have time to complete their tasks prior to the FY 1996 negotiations, they submitted to the Director an interim report with a recommendation for the FY 1996 SGDP negotiations.

Workgroup Recommendation

The current definition of user population should not be used to determine counts for allocation of TS for the FY 1996 negotiations.  The following definition should be used:

Director's Decision

I do not concur with the recommendation at this time.  The IHS will continue to use the original user population definition for the FY 1996 negotiations, which is:

Explanation of Decision

The Workgroup's recommendation is an excellent idea and has merit, when considering resource requirements for the facilities providing services.  A thorough analysis of the proposed population indicator for the allocation of TS needs to be performed and the technical details for proper implementation need to be worked out.  The proposed definition would change the residence-based user population to facility-based.  This would result in duplicated counts in those locations where individuals are registered and receive services at more than one facility.  Due to the complexity of the issue and the long-term effect of the decision, it is best that the current user population definition be used until the IHS and tribes are confident that the replacement indicator(s) have the desired effect and can be correctly calculated.

Implementation and Impact

The IHS has issued official user population estimates for FY 1994 by Area.  The Area-level user population estimates are fixed, are not subject to change, and, therefore, are used to determine the dollar limit for TS by Area.  Each Area is to take their Area user population total and divide it among the Tribes in their Areas.  However, an Area has the option, with tribal involvement and concurrence, of using a variant of the current user population definition for allocating TS within their Area.  These Area-adjusted figures will not be used to alter the IHS official user population estimates, and therefore will only affect the distribution of TS within the Area.  The Areas should notify the Director, IHS, of any deviations from the standard allocation technique and provide documentation of their methodology.

Other Implementation Issues

New tribes have been federally recognized since FY 1994 and are not reflected in the FY 1994 user population estimates.  Decisions are required for the FY 1996 negotiations concerning:  1) whether these new tribes should be considered in determining TS and 2) if so, what methodology should be used in accounting for the new tribes.

Follow Up Actions

I will ask the Workgroup to provide advice on a new tribes policy in order to make an informed decision for the FY 1996 negotiations.  I plan to continue the User Population Workgroup so that its findings will be available prior to the FY 1997 negotiations.  The Workgroup will be asked to complete its original charge and to consider workload, eligibility, and related issues.  The Workgroup is responsible for ensuring that the indicator(s) that are finally proposed are thoroughly evaluated to determine their adequacy and validity for the defined purposes and that they can be properly calculated.

References

1. IHS/Tribal User Population Work Group Draft Report, March 7, 1995.
2. IHS memorandum, "Final User Population Estimates - FY 1994," March 23, 1995.

The Joint Allocation Methodology Workgroup (JAMW), whose membership includes representatives of Compacting and Non-compacting tribes and of the Indian Health Service (IHS), was charged with developing recommendations for distribution of IHS Headquarters funding for fiscal year (FY) 1996 self governance negotiations.  The January 26, 1995, final JAMW report with recommendations was submitted simultaneously to the Indian Health Service (IHS) and to tribal leaders for consideration.  During several national meetings the JAMW recommendations were discussed, and, subsequently, many comments and letters were received.  All have been reviewed and considered, and have contributed to the decisions.

This document is arranged according to the outline of the JAMW Report's recommendations.  The Director's Decisions follow each recommendation.

1.  GENERAL HEADQUARTERS POOL

Workgroup Recommendation

The General Headquarters Pool is to be distributed using the Tribal Size Adjustment (TSA) methodology.

Director's Decision

I concur with the recommendation.  The General Headquarters Pool will be distributed based upon the TSA methodology.  Please note that the size of this pool is adjusted annually following an examination of program requirements and available resources.  For example, Headquarters reserves are set aside each year to distribute to the Area Offices and/or Service Units based upon special needs.  At the end of each year, a portion of those funds are made recurring to the Area base and, therefore, will be distributed in future years from Area tribal shares.

Explanation of Decision

Based on information available, the TSA best approximated the historical Headquarters administrative workload distribution.  It recognizes both the threshold of administrative overhead needed for the administration of small health programs or systems, and the economies of scale achieved in the administration of larger health systems.  There is an expressed diversity of opinion among tribes about the TSA method.

The subject of allocating health resources is not new to the IHS.  For more than a decade the IHS has been working with tribes to develop resource allocation methods that would move toward equity of health services and health resources.  In doing so, the IHS and tribes have recognized that allocating resources only on a per capita basis would result in inequitable access to care among tribes nationwide.  Past IHS and tribal efforts to attain equitable distribution of resources have emphasized the development of funding strategies most closely associated with the IHS' public health mission and its goal to raise the health status of American Indians and Alaska Natives to the highest level possible.  The IHS funding policies have, therefore, been "directed to those means that best promote the elevation of health status for all Indian people collectively; i.e., at those communities with excessive deaths and morbidity and those with no access to any system of health care, rather than simply calculating the per capita dollar expenditures".  (See Rhoades letter to Governor Bellmon, May 12, 1990.)

A concern expressed by the larger tribes is that the TSA methodology inappropriately provides funding to support administrative infrastructure for small tribes and, therefore, reduces health services to the user population.  The funds in the General Headquarters Pool are primarily centrally managed program support funds, rather than direct services funds.  Of an estimated FY 1994 amount of $64.67 million, $56.35 million, or 87.1%, is estimated for distribution based on user population.  The balance of only $8.32 million, 12.9%, is estimated for distribution based on the number of tribes.  The dollar estimates used by the JAMW for their report were drawn from spreadsheets developed for fiscal year (FY) 1995 self-governance compact negotiations.  The basis for these spreadsheets was actual appropriations for FY 1994 and was adjusted to $59.7 million, when the actual FY 1995 appropriations level became available.

References

1. E. R. Rhoades, M.D., former Director, IHS, letter to Governor Henry Bellmon, State of Oklahoma, May 12, 1990.
2. Indian Health Care Improvement Act Amendments of 1984.
3. Health Services Priority System - 1986

2.  EMERGENCY FUNDS

Workgroup Recommendation

The Emergency Funds are to be narrowly defined and restricted to public health emergencies.  Prior to the end of the fiscal year, a summary report on the use of these funds is to be issued to the tribes.  Tribal shares should then be identified for any remaining balance and distributed accordingly.

Director's decision

I concur with the recommendation with the following modification to the definition.  Expand the definition to not only handle public health emergencies, but also to resolve possible financial difficulties, i.e., Anti-Deficiency Act, and other unforeseen problems that are appropriately resolved using executive discretion.  Throughout the year, any tribe may be the recipient of these non-recurring emergency funds.  Any funds remaining at the end of the year will be available for distribution in accordance with the TSA methodology.

3.  CATASTROPHIC HEALTH EXPENDITURE FUNDS (CHEF)

Workgroup Recommendation

The CHEF funds continue to be distributed retroactively (reimbursed) for catastrophic costs based on the current IHS method.

Director's Decision

I concur with the recommendation.  This is a consistent with my position last year, as stated in my June 2, 1994, letter.

4.  EQUIPMENT REPLACEMENT: (MEDICAL)

Workgroup Recommendation

The amount of medical equipment replacement funds made available to each tribe is to be calculated on the basis of a formula that allocates 50% of the amount available based on the number of active users; 25% to those with hospitals; 15% to those with health centers; and 10% to those with health stations.

Director's Decision

I do not concur with the recommendation.  Although equipment funds were distributed as recommended by the JAMW in 1994 and 1995, the Congress expanded the use of these funds, prompting review of the methodology.  The IHS will use the recently developed formulae for distributing these funds.

The formula for distributing funds to existing tribal and IHS facilities ($10 million) is based on clinical workload (50%) and relative facility size (50%).  The formula for distributing funds to equip new, tribally-constructed replacement facilities ($3 million) ranks all such facilities on the basis of relative space, need, location, and extent that existing space will be used.  Available funds will be allocated to the highest ranked (neediest) facilities, in priority order.

These formulae are a result of the congressional direction to develop a needs-based methodology for distributing funds made available to equip tribal replacement facilities constructed with non-IHS funds.  That methodology and a companion methodology for distributing equipment replacement funds to existing tribal and IHS health care facilities were completed by a tribal/Federal workgroup.

5.  EQUIPMENT REPLACEMENT (DENTAL)

Workgroup Recommendations

The dental equipment replacement funds available to each tribe are to be calculated on the basis of a formula that allocates 50% of the amount available based on the number of active users; 25% to those with hospitals; 15% to those with health centers; and 10% to those with health stations.

Director's Decision

I do not concur with the recommendation.  The IHS will discontinue the practice of establishing a discretionary dental equipment replacement pool.  Beginning in FY 1996, any discretionary funds that would have been retained in Headquarters for this purpose will be distributed to the Areas in the annual Dental allocation.

6.  ASSESSMENTS

Workgroup Recommendation

The IHS is to allocate the following resources and costs to the appropriate (organization) level; Payroll, FTS, Rental of Office Space, Mailing Costs, and Employee Accident Compensation.

Director's Decision

I do not concur with the recommendation.  The Agency would be placed at financial risk if the funds needed to pay the assessments were allocated below the Agency level.  These costs are billed by various other Government agencies to the IHS Headquarters and the Agency is required to pay the centrally.  If funds were not set aside in the resource allocation process, based on estimated requirements, the Agency would risk being anti-deficient, if it could not pay its bills.  The IHS will continue to identify these costs on an Area and/or service unit basis so that management systems can be developed to better control and manage them.  As these costs are reduced, the savings will be distributed to the Areas in the annual H&C allocation.

Workgroup Recommendation

A workgroup at the HHS/PHS level is to be formalized to:  (a) examine the specific Assessment categories; (b) determine what resources should be allocated; (c) review the method and process to accomplish this allocation; and (d) develop an approach to protect the cost savings relative to downsizing.  This workgroup should be composed of PHS, IHS, and tribal representatives.  Proposed recommendations for transferring identified tribal shares should be completed prior to the start of 1996 Self-Governance negotiations.

Director's Decision

I concur with the recommendation.  I will request that the Assistant Secretary for Health establish a workgroup to review the other costs identified within the Assessment pool to determine if the charges are fair to the IHS and whether costs can be reduced.  If costs can be reduced, these savings will be distributed to the Areas in the annual H&C allocation.  This workgroup has yet to be established, therefore, the results will be unavailable for the 1996 negotiations.

7.  SPECIAL PAY

Workgroup Recommendation

The current IHS reimbursement method and ISDM 85- 4 are to be modified to include all categories of special pay, specifically incentive special pays. Additionally, these funds are to be allocated on a recurring basis directly to the service delivery site where the costs for compensation are incurred.  This can be accomplished based on historical allocations after a 3-year period which would provide for an adjusted base to correct historical shortfalls caused by deficiencies in ISDM 85-4.

Director's Decision

I concur with the recommendation that ISDM 85-4 be revised to reflect the current special pay structure.  The revision will also address identification of the funding source.  The revised ISDM 85-4 will govern this process through FY 1996 to the extent that equivalent funds were not included in the base funding.  Funds will be paid to contractors/compactors, on a reimbursable basis, for providers legally eligible for special pay to the extent that funds are determined available for this purpose.

8.  PERMANENT CHANGE OF STATION (PCS)

Workgroup Recommendation

The PSC funds are to be made available as tribal shares based on 50% Active Users/25% Hospitals/15% Health Center/10% Health Station (with a differential to the Alaska Area).

Director's Decision

I do not concur with the recommendation.  The IHS will discontinue the practice of reimbursing Areas and tribes for PCS from Headquarters maintained funds at the end of FY 1995.  Beginning in FY 1996, funds for this purpose will be distributed to the Areas in the various program accounts.  Costs for PCS will then be paid from locally available resources.

9.  CONTINUING MEDICAL EDUCATION (CME)

Workgroup Recommendation

The distribution of the Continuing Medical Education fund is to be based on the number of eligible medical staff and that it be equal to reimbursement rates used by IHS for individual allocation as follows:  $1,000/physician in the lower 48 states, $1,300/physician in Alaska; %500/dentist in the lower 48 states, $700/dentist in Alaska; and $200/nurse.  Also that mid-level practitioners are to be eligible for continuing education reimbursements.

Director's Decision

I do not concur with the recommendation.  Although the IHS will continue to advocate for an identification of CME funds for staff at the local level, the Headquarters fund will be discontinued at the end of FY 1995. Beginning in FY 1996, the funds will be distributed to the Areas as part of the overall allocation of H&C program funds.  The responsibility for assuming and for paying the cost of obtaining CME credits needed for staff accreditation will be paid by the Area/tribe with locally available resources.

10.  RPMS/DATA PROCESSING

Workgroup Recommendation

The RPMS/Data Processing funds are to be distributed in accordance with the TSA methodology.

Director's decision

I concur with the recommendation to distribute the RPMS/Data Processing funds using the TSA methodology.  In concurring, however, it is critically important to both the IHS and all tribal programs to maintain an organization-wide system that supports the collective public health database from all AI/AN health programs.

Explanation of Decision

An information infrastructure is needed to support delivery of health care services, to provide collective data to advocate for resources, to improve management and efficiency, to support tribal management of programs, and to decrease the size of the Agency, while maintaining the capability to fulfill all residual activities.  We can work together to reduce administrative costs, while improving capabilities by implementing electronic commerce at all levels.  We can open new channels of communications by customer services, and by taking advantage of advances in telemedicine.  Perhaps most importantly, together we must reach out to our counterparts in education, economic development, land management, etc., to ensure that an Indian Information Infrastructure is implemented that supports the communities we serve.

Follow Up Actions

Opportunities for tribal participation in design, development, implementation, and support of Indian health information systems must be identified.  The RPMS/Data Processing funds presently are used to maintain the centralized health statistical and patient care database; to support the development of RPMS software used at all tribal and IHS sites; and to support the design, testing, and maintenance of computer system platforms and the telecommunications network.  Funds to purchase hardware for tribal and IHS facility operations are progressively more limited and new combined IHS/tribal initiatives must be developed to replace and upgrade existing systems.

11.  MAINTENANCE AND IMPROVEMENT

Workgroup Recommendation

The use of the Oklahoma Formula is to be continued.  Additionally, JAMW recommends revisions to M&I project guidelines by one or a combination of the following:  (a) develop a priority funding formula for M&I projects which provides for a priority score adjustment based on continuous years of participation in the M&I competitive project pool; (b) limit selection to participate in the competitive pool versus selection of a tribe's share to either the initiation of the Self Governance compact or an open "enrollment" period once every 5-7 years; and (c) provide for "buy in" capabilities for Self Governance Tribes which have selected tribal shares and determine that they wish to re-enter the competitive pool.

Director's Decision

I concur with the recommendation to continue use of the Oklahoma Formula.  I also concur with the need to establish controls over leaving and re-entering the pool of competitive M&I projects; therefore I will establish a tribal/Federal workgroup to review the options presented along with the current methodology for the operation of the M&I pool.

12.  HEALTH FACILITIES CONSTRUCTION

Workgroup Recommendation

The IHS is to work with tribes to seek a special line item appropriation for Self-Governance capital acquisition and construction which would permit participating tribes to draw down a negotiated tribal share.  This approach could be on a pilot basis and could be phased-in.

Director's Decision

I do not concur with the recommendation.  The IHS will continue with the June 2, 1994, position for Health Facilities Construction funds.  The IHS distribution for health facilities construction is determined by congressional appropriations language and is project-specific based on the IHS facilities priority systems.  The Congress directed development of and approved the IHS health facilities priority systems.  Any revisions to these processes will need congressional approval.  Regarding the proposed alternative for funding health facilities, IHS is continuing to discuss this matter with OMB and the Congress.

13.  SANITATION FACILITIES CONSTRUCTION

Workgroup Recommendation

The IHS work with tribes to seek a special line item appropriation for Self-Governance capital acquisition and construction which would permit participating tribes to draw down a negotiated tribal share.  This approach could be on a pilot basis and could be phased-in.

Director's Decision

I do not concur with the recommendation.  The IHS will continue with the June 2, 1994, position for Sanitation Facilities construction funds.  The IHS distributes Sanitation Facilities construction funds as required by the Indian Health Care Improvement Act.  That distribution is project-specific, based on the extent of sanitation facilities deficiencies as defined in the Act.  The IHS has explored alternative funding approaches and is responding, through OMB, to congressional questions about a variety of options.

14.  OEHE SUPPORT

Workgroup Recommendation

The OEHE Support funds distribution is to be based on the TSA Method.

Director's Decision

I do not concur with the recommendation.  The IHS position remains, as described in the June 2, 1994, response, that these funds should reflect workload distribution because they support activities funded by construction appropriations.  A workload methodology ensures needs-based distribution of available funds.

15.  ENVIRONMENTAL HEALTH SUPPORT

Workgroup Recommendation

The Environmental Health Support funds distribution is to be based on TSA Method.

Director's Decision

I do not concur with the recommendation.  The IHS position remains, as described in the June 2, 1994, response, that these funds should reflect workload distribution because they support activities funded by the construction appropriations.  A workload methodology ensures needs-based distribution of available funds.

16.  FACILITIES SUPPORT

Workgroup Recommendation

The Facilities Support funds continue to be distributed based on current IHS workload methodology.

Director's Decision

I concur with the recommendation.

17.  SCHOLARSHIPS/LOAN REPAYMENT

Workgroup Recommendation

The Scholarship/Loan Repayment funds continue to be administered by IHS and distributed based on the existing IHS methodology which is consistent with congressional intent.

Director's Decision

I concur with the recommendation.

18.  TRIBAL MANAGEMENT GRANTS

Workgroup Recommendation

The Tribal Management Grant funds be distributed on a competitive basis.

Director's Decision

I concur with the recommendation.