ACTIVITY/MECHANISM BUDGET SUMMARY

Department of Health and Human Services

Indian Health Facilities -- 75-0391-0-1-551

**Sanitation Facilities Construction**

[Program Authorization]{.underline}: U.S.C. 13 Snyder Act, PL 83-568,
Transfer Act, 42 U.S.C. 2001, PL 86-121, Indian Sanitation Facilities
Act; and Title III of PL 94-437, Indian Health Care Improvement Act, as
amended.

+-------------+-------------+-------------+-------------+-------------+
|             | 2002        | 2003        | 2004        | Increase    |
|             |             |             |             |             |
|             | Actual      | President's | Estimate    | or Decrease |
|             |             |             |             |             |
|             |             | Budget      |             |             |
+-------------+-------------+-------------+-------------+-------------+
| BA          | \           | \           | \$          | \           |
|             | $93,827,000 | $93,983,000 | 114,175,000 | $20,192,000 |
+-------------+-------------+-------------+-------------+-------------+
| FTE         | 198         | 198         | 198         |             |
+-------------+-------------+-------------+-------------+-------------+

###### Number of Homes Benefited

+----------------------+-----------------+---------------+--------------+
|                      | [Fiscal Year    |               |              |
|                      | Progr           |               |              |
|                      | am]{.underline} |               |              |
+----------------------+-----------------+---------------+--------------+
|                      | FY 2002         | FY 2003       | FY 2004      |
|                      |                 |               |              |
|                      | [Actu           | [Pres.        | [Estimate]   |
|                      | al]{.underline} | Budget        | {.underline} |
|                      |                 | ]{.underline} |              |
+----------------------+-----------------+---------------+--------------+
| A.                   | 207             | 250           | 300          |
| [New/L               | [               | [1]           | [1]{         |
| ike-New]{.underline} | 1]{.underline}/ | {.underline}/ | .underline}/ |
|                      |                 |               |              |
| HUD\...\...\         | 212             | 250           | 300          |
| ...\...\...\...\.... |                 |               |              |
|                      | [2,9            | [3,000        | [3,500]      |
| BIA/HIP\...          | 23]{.underline} | ]{.underline} | {.underline} |
| \...\...\...\...\... |                 |               |              |
|                      | 3,342           | 3,500         | 4,100        |
| Tribal/Ot            |                 |               |              |
| her\...\...\...\.... | 1,217           | 1,435         | 2,200        |
|                      |                 |               |              |
| Subtotal\.           | [16,6           | [14,750       | [16,000]     |
| ..\...\...\...\..... | 66]{.underline} | ]{.underline} | {.underline} |
|                      |                 |               |              |
| B. [Existing Indian  | 17,883          | 16,185        | 18,200       |
| Homes]{.underline}   |                 |               |              |
|                      | 21,255          | 19,685        | 22,300       |
| First                | [               | [2]           | [2]{         |
| Ser                  | 2]{.underline}/ | {.underline}/ | .underline}/ |
| vice\...\...\...\... |                 |               |              |
|                      |                 |               |              |
| Upgrade              |                 |               |              |
| d/Emergency\...\.... |                 |               |              |
|                      |                 |               |              |
| Subtotal\.           |                 |               |              |
| ..\...\...\...\..... |                 |               |              |
|                      |                 |               |              |
| TOTAL\...\.          |                 |               |              |
| ..\...\...\...\..... |                 |               |              |
+----------------------+-----------------+---------------+--------------+
| [1]{.underline}/     |                 |               |              |
| Sanitation           |                 |               |              |
| Facilities to be     |                 |               |              |
| funded with HUD      |                 |               |              |
| grants contributed   |                 |               |              |
| by tribes to IHS     |                 |               |              |
| projects.            |                 |               |              |
|                      |                 |               |              |
| [2]{.underline}/     |                 |               |              |
| Construction         |                 |               |              |
| projects are funded  |                 |               |              |
| with IHS             |                 |               |              |
| appropriated funds   |                 |               |              |
| and contributions to |                 |               |              |
| serve these homes.   |                 |               |              |
+----------------------+-----------------+---------------+--------------+

**[PURPOSE AND METHOD OF OPERATION]{.underline}**

The Indian Sanitation Facilities Act, P.L. 86-121, authorizes IHS to
provide essential sanitation facilities to Indian homes and communities.

The IHS Sanitation Facilities Construction Program, an integral
component of the IHS disease prevention activity, has carried out those
authorities since 1960 using funds appropriated for Sanitation
Facilities Construction to provide potable water and waste disposal
facilities for AI/AN people. As a result, the rates for infant
mortality, the mortality rate for gastroenteritis and other
environmentally related diseases have been dramatically reduced, by
about 80 percent since 1973. The IHS physicians and health professionals
credit many of these health status improvements to IHS\' provision of
water supplies, sewage disposal facilities, development of solid waste
sites, and provision of technical assistance to Indian water and sewer
utility organizations.

A Report to Congress by the Comptroller General (dated March 11, 1974)
noted that AI/AN families living in homes with satisfactory
environmental conditions placed fewer demands on IHS\' primary health
care delivery system than families living in homes with unsatisfactory
conditions. For example, those with satisfactory environmental
conditions in their homes (e.g., safe piped water and adequate sewage
disposal) required approximately 25 percent of the health care services
required by those with unsatisfactory environmental conditions.

The provision of Indian sanitation facilities is a very important
component of the overall effort required to achieve a reduction in
infant mortality, a goal highlighted in Healthy People 2010 \"The Year
2010 Objectives for the Nation." Safe drinking water supplies and
adequate waste disposal facilities are essential preconditions for most
health promotion and disease prevention efforts, as well as being a
major factor in the quality of life of Indian people.

Support for the IHS\' justification of Sanitation Facilities
Construction Program funding can be found in a PHS study entitled
"Relationship of Environmental Factors to the Occurrence of Enteric
Disease in Areas of Eastern Kentucky." The data support the premise that
the incidence of acute infections and diarrhea disease could be reduced
significantly by selectively modifying environmental factors. The IHS
physicians have stated that the Indian Sanitation Facilities Act has had
a greater positive effect upon the health of AI/ANs than any other
single piece of legislation.

As with other IHS activities, sanitation facilities projects are carried
out cooperatively with the Indian people who are to be served by the
facilities. Tribal involvement has been the keystone of the Sanitation
Facilities Program since its inception in FY 1960. Projects are
initiated only following receipt of a tribal request expressing
willingness on their part to participate in carrying out the project and
willingness to execute an agreement to assume ownership
responsibilities, including operation and maintenance, for completed
facilities.

With completion of all projects approved through FY 2002, approximately
254,000 AI/AN homes will have been provided sanitation facilities since
1960. Experience shows that 60 to 70 percent of the actual construction
is performed by Indian tribes/firms.

**[Sanitation Facilities Needs]{.underline}**

The Indian Health Care Improvement Act (Title III, Section 302(g) 1 and
2 of P.L. 94-437) directed the IHS to identify the universe of Indian
sanitation facilities needs for existing Indian homes. As of the end of
FY 2002, the list of all documented projects totaled \$1.578 billion
with those projects considered economically feasible totaling \$900
million. In FY 2002, of the \$93,827,000 appropriated for sanitation
facilities, \$46,209,060 was used to address the backlog of existing
homes. This included \$4.7 million to serve solid waste needs (included
in the solid waste funding was \$500,000 to clean up open dumps
identified by an interagency task force, the members of which included
the Bureau of Indian Affairs, the Environmental Protection Agency, the
Department of Agriculture and others). The remainder of the FY 2002
appropriation was used to provide \$249,700 for special projects,
\$395,240 for emergency projects, and \$46,473,000 for sanitation
facilities for new/like-new Indian homes.

As proposed, the current backlog of projects would provide sanitation
facilities to between 95 and 98 percent of all existing Indian homes.
Also included in the backlog are projects intended to upgrade existing
water supply and waste disposal facilities and projects to improve
sanitation facilities operation and maintenance capabilities in Indian
country. Maximum health benefits will be realized by addressing existing
sanitation needs identified in the backlog and by providing sanitation
facilities for new homes when they are constructed.

In cooperation with the Office of Management and Budget (OMB) a Common
Measure was developed with the Rural Utility Service (RUS), the Bureau
of Reclamation (BOR), the Environmental Protection Agency (EPA), and the
IHS to allow direct comparisons between rural water programs within the
federal government.  The Common Measures agreed upon were the number of
connections and the population served per million dollars of total
project cost.  It was recognized that BOR and IHS are direct service
programs to a specific population, and EPA and RUS are grant/loan
programs that can leverage funding with both of these programs mostly
providing strictly upgraded services.   The data is reported as east and
west, excluding Alaska.  The IHS compared favorably in FY 2001 with the
BOR having provided 174 and 212 (east and west) services per million
dollars.

>  

The Program Assessment Rating Tool (PART) is an OMB initiative performed
on the SFC program in 2002 (see page IHF-18).  The PART rates a
program's purpose, design, strategic planning, program management and
program results.  The SFC program scored 80%, which is a very acceptable
score (second highest within the Department of Health and Human
Services) and supports the funding increase in 2004.  A major weakness
of the SFC program is that it has not had an independent program review
since 1974, and there has not been a recent benefit cost analysis on the
value of sanitation facilities for AI/AN homes.  The SFC program is
working with other parts of the Department of Health and Human Services
on an independent evaluation of the program.  Additionally, a new GPRA
measure along with a long term performance goal will be developed
related to the percentage of Deficiency Level 4 and Deficiency Level 5
homes served. 

Funding levels for the last 5 fiscal years follows:

+----------+-------------------+-------+------------------------------+
| [Y       | [Fun              | ##    |                              |
| ear]{.un | ding]{.underline} | # FTE |                              |
| derline} |                   |       |                              |
+----------+-------------------+-------+------------------------------+
| 1999     | \$89,328,000      | 244   | President's Budget           |
|          |                   |       |                              |
| 2000     | \$92,117,000      | 197   |                              |
|          |                   |       |                              |
| 2001     | \$93,617,000      | 195   |                              |
|          |                   |       |                              |
| 2002     | \$93,827,000      | 195   |                              |
|          |                   |       |                              |
| 2003     | \$93,983,000      | 195   |                              |
+----------+-------------------+-------+------------------------------+

**[DISTRIBUTION OF SANITATION FACILITIES CONSTRUCTION
FUNDS]{.underline}**

All Projects are budgeted to include full costs for pre-planning,
design, construction costs, and associated overhead. The FY 2004
Sanitation Facilities Construction portion of the appropriation will be
allocated as follows:

1)  \$1,000,000 each will be reserved at IHS Headquarters for special
    projects and for distribution to the Areas as needed to address
    water supply and waste disposal emergencies caused by natural
    disasters or other unanticipated situations that require immediate
    attention to minimize potential threats to public health. Emergency
    and special funds remaining at the end of the fiscal year will be
    distributed to the Areas to address the Sanitation Deficiency System
    (SDS) priority list of needs.

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1)  Up to \$53,000,000 of the total FY 2004 sanitation facilities
    construction appropriation will be reserved to serve new and
    like-new homes. Some of these funds may also be used for sanitation
    facilities for the individual homes of the disabled or sick with a
    physician referral indicating an immediate medical need for adequate
    sanitation facilities in their home. As needed, amounts to serve new
    and like-new homes will be established by Headquarters after
    reviewing Area requests. Priority will be given to projects intended
    to provide sanitation facilities for the first time to homes in
    categories B, C, and D (new homes and homes receiving major
    renovation bringing the homes up to like new condition) under the
    BIA Housing Improvement Program (HIP). (NOTE: Homes in BIA/HIP
    Category A are considered existing homes. Category A homes needing
    service will be included in the SDS.)

The amount allocated to each Area for projects to serve other
new/like-new homes will be the Area\'s pro-rata share of remaining funds
for serving such housing.

2)  Up to \$60,000,000 of the amount appropriated in FY 2004 will be
    distributed to the Areas for prioritized projects to serve existing
    homes, based on a formula that considers, among other factors, the
    cost of facilities to serve existing homes that: (a) have not
    received sanitation facilities for the first time; or (b) are served
    by substandard sanitation facilities (water and/or sewer). Another
    distribution formula element is a weight factor that favors Areas
    with larger numbers of AI/AN homes without water supply or sewer
    facilities, or without both. Up to \$5,000,000 will be used for
    projects to clean up and replace open dumps on Indian lands pursuant
    to the Indian Lands Open Dump Cleanup Act of 1994.

The IHS appropriated funds will not be used to provide sanitation
facilities for new homes funded with grants by the housing programs of
the Department of Housing and Urban Development (DHUD). These DHUD
housing grant programs for new homes are able to fund the sanitation
facilities necessary for the homes.

**[ACCOMPLISHMENTS]{.underline}**

The FY 2002 accomplishments are as follows: (1) received approximately
\$40.0 million in SFC contributions from other Federal agencies, States,
and Tribes. Combined with SFC appropriation, the total SFC program
funded 511 projects in FY 2002; (2) the staff also assisted Tribes by
providing engineering services to many other Tribes that independently
funded their own projects; and (3) provided essential sanitation
facilities to 3,135 new/like new Indian Homes and 1,217 first service
existing homes. With additional funds from Housing and Urban Development
(HUD), IHS also provided sanitation facilities to 207 new HUD-sponsored
housing units.

**[PERFORMANCE MEASURES]{.underline}**

The Sanitation Facilities Construction budget contributes to the
performance indicators that are included in the IHS FY 2004 Annual
Performance Plan. These indicators address some of the administrative
aspects of providing health care to American Indian and Alaska Native
population.

[Indicator 35]{.underline}: During FY 2004, provide sanitation
facilities projects to 18,150 Indian homes with water, sewage disposal,
and/or solid waste facilities.

The Sanitation Facilities Construction program will also be providing
data on a rural water measure that is also common to the Rural Utility
Service of the Department of Agriculture, the Bureau of Reclamation of
the Department of Interior and the Environmental Protection Agency. This
new measure will allow each program to measure the effectiveness and
annual performance of their rural water program, and will allow some
ability to make comparisons between programs.

**[RATIONALE FOR BUDGET REQUEST]{.underline}**

**[TOTAL REQUEST]{.underline}** -- The request of \$114,175,000 and 198
FTE is an increase of \$20,192,000 over the FY 2003 President's Budget
of \$93,983,000 and 195 FTE.

#### [Pay Costs: +\$192,000]{.underline}

The request of \$192,000 will fund federal pay costs which will assist
the IHS in maintaining access to services for the IHS patient
population. Provision of these funds is necessary to maintain the
current I/T/U health system which works to eliminate disparities in
health status between the American Indian and Alaska Native population
and the rest of the U.S.

#### [Sanitation Facilities Backlog/Environmental Problems: +\$20,000,000]{.underline}

The \$20,000,000 will provide needed water, sewer, and solid waste
facilities to approximately 765 additional first service homes and
upgraded service to 1,260 previously serviced homes in all Areas of the
IHS. This increase will assist the IHS in providing service to more
homes than previous years, which will help to relieve environmental
problems that are a threat to health. Projects will be funded based on
an established priority system. Communities and homes with the greatest
health needs, which can be feasibly addressed, will be served first.