[Federal Register Volume 86, Number 120 (Friday, June 25, 2021)]
[Rules and Regulations]
[Pages 33518-33525]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-13272]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 61

RIN 2900-AP54


VA Homeless Providers Grant and Per Diem Program

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: The Department of Veterans Affairs (VA) is amending its 
regulations concerning the VA Homeless Providers Grant and Per Diem 
(GPD) Program. These amendments provide GPD with increased flexibility 
to: Respond to the changing needs of homeless veterans; repurpose 
existing and future funds more efficiently; and allow recipients the 
ability to add, modify, or eliminate components of funded programs. 
This rule updates these regulations to better serve our homeless 
veteran population and the recipients who serve them.

DATES: The final rule is effective July 26, 2021.

FOR FURTHER INFORMATION CONTACT: Jeffery Quarles, Director, Grant/Per 
Diem Program, (673/GPD), VA National Grant and Per Diem Program Office, 
10770 N 46th Street, Suite C-200, Tampa, FL 33617, (813) 979-3570. 
(This is not a toll-free number.)

[[Page 33519]]


SUPPLEMENTARY INFORMATION: Pursuant to 38 U.S.C. 501, 2001, 2011, 2012, 
2061, and 2064, VA established the VA Homeless Providers Grant and Per 
Diem (GPD) Program with implementing regulations at 38 CFR part 61. 
Through the GPD Program, VA awards five types of grants to entities and 
organizations that meet specific criteria to support supportive or 
transitional housing for homeless veterans until the veteran can 
transition into permanent housing. VA awards capital grants, special 
need grants, technical assistance grants, case management services 
grants and per diem only grants to offset operating costs for a program 
of supportive housing or services.
    On July 25, 2017, VA proposed to amend its regulations that govern 
the VA GPD Program. (82 FR 34457). VA provided a 60-day comment period, 
which ended on September 25, 2017. We received 15 comments on the rule. 
Most of the comments were generally positive; however, several 
commenters raised concerns about the proposed changes, which we address 
here.

Sec.  61.1 Definitions

    VA proposed amending the definition of supportive housing to state 
that this type of housing is designed to either: Facilitate the 
movement of homeless veterans to permanent housing as soon as possible 
but no later than 24 months, subject to Sec.  61.80; or provide bridge 
housing or specific medical treatment such as detoxification, respite, 
or hospice treatments that are used as step-up or step-down programs 
within that specific project's continuum.
    A commenter remarked that use of the term ``bridge housing'' is 
misleading. At 82 FR 34458 we stated that bridge housing is a short-
term, transitional housing option in a safe environment for veterans 
who have accepted a permanent housing placement, but access to the 
permanent housing is not immediately available for occupancy. 
Typically, the bridge housing model length of stay is less than 90 
days, absent additional services, and devoid of a specific clinical 
care component.
    The commenter noted that in the past, VA published a Notice of 
Funding Availability (NOFA) for the GPD Program which specified 
admission criteria. The commenter stated that the admission criteria 
published in the NOFA included the requirement that supportive housing 
must facilitate the movement of homeless veterans to permanent housing 
within a period that is not less than 90 days in length. Previously 
issued NOFAs stated, as part of the admission criteria, that the 
veteran ``must have been offered and accepted a permanent housing 
intervention prior to admission or within the first 14 days of 
admission.'' The commenter stated that the intent is for housing within 
90 days, but not that housing has been identified prior to admission.
    We do not agree that the use of the term ``bridge housing'' is 
misleading. While it is accurate to state that VA published certain 
admission criteria in past NOFAs, VA subsequently proposed changes to 
those criteria. While the commenter first focused on the proposed 
addition of ``bridge housing'' to the definition of supportive housing, 
it appears that the main concern is the proposed removal of the 
requirement that supportive housing must facilitate the movement of 
homeless veterans to permanent housing within a period that is not less 
than 90 days. The 90-day supportive housing requirement was intended to 
ensure that veterans have sufficient time to take full advantage of all 
supportive services, thereby enabling their successful transition to 
permanent housing. However, VA recognizes that each veteran has an 
individualized treatment plan and may, for a variety of reasons, choose 
to exit the program before 90 days. VA believes that one of these 
reasons may be the desire to move into permanent housing rather than 
remain in supportive housing for up to 90 days.
    In any case, we are eliminating the reference to 90 days in the 
proposed definition of supportive housing by removing the phrase 
``within a period that is not less than 90 days and does not exceed'' 
and amending paragraph (2)(i) of the definition at 38 CFR 61.1 to 
state: ``facilitate the movement of homeless veterans to permanent 
housing as soon as possible but no later than 24 months, subject to 
Sec.  61.80; or''. This should address the commenter's concerns 
summarized above.
    In addition, to address any potential confusion, we are removing 
the proposed addition of language about bridge housing. Specifically, 
we are removing the proposed definition of and reference to bridge 
housing as it is no longer necessary and not included in the 
regulation. At the time of the commenter's concern, bridge housing was 
a new concept for GPD programs. In subsequent years, however, bridge 
housing has become a standard practice in GPD programs, the meaning of 
which is common knowledge among grantees and available elsewhere, such 
as in funding opportunities and in technical assistance materials 
widely available to the community.

Sec.  61.33 Payment of Per Diem

    We proposed several changes to this section, including amending 
general provisions on per diem payments, rates for such payments, and 
removal of one paragraph that duplicates content in new proposed Sec.  
61.5. We subsequently published, at 82 FR 38646 (August 15, 2017) a 
correction to proposed paragraph (c). We received public comment on 
proposed changes to paragraphs (a)(3), (e), and (f).
    We renumber proposed Sec.  61.33 for clarity as follows. Proposed 
paragraph (a)(1)(iii) is renumbered as paragraph (a)(2). Proposed 
paragraph (a)(1)(iv) is now paragraph (a)(3). Proposed paragraph (a)(2) 
is now paragraph (b). Proposed paragraphs (b) through (h) are now 
paragraphs (c) through (h), with proposed paragraph (f) omitted. We 
have also renumbered the cross references within Sec.  61.33 to reflect 
the new numbering.
    In proposed paragraph (a)(3), now paragraph (b) as stated below, we 
stated that VA may at any time review the provision of supportive 
housing and services to individual veterans by the provider to ensure 
the care provided continues to be needed and appropriate. One commenter 
stated that the proposed reviewing of individual veteran service plans 
gives VA too much power. We do not agree. VA has always had the 
authority to inspect grantees to ensure they are complying with all 
program requirements, including review of individual service plans. See 
38 CFR 61.65. This rulemaking clarifies that authority. Further, VA 
will not pay per diem where we conclude that services furnished by the 
recipient are unacceptable. All grantees must have individual service 
plans (ISPs) for veteran participants. As a condition of accepting the 
grant award, grantees must sign assurances allowing VA to access and 
review, on demand, all records associated with the grant award. Since 
moving individual veterans to permanent housing as quickly as they are 
ready is an important goal of GPD, VA will ensure that veterans are 
continuing to move toward this goal by reviewing ISPs. Also, we will 
provide assistance to veterans and grantees in cases where veterans are 
not moving to permanent housing as quickly as they are ready.
    In proposed paragraph (e), now paragraph (f), we proposed that VA 
would pay per diem up to a maximum of seventy-two (72) consecutive 
hours for the scheduled absence of a veteran. This would amend the 
then-current rule that allowed payment for both scheduled and 
unscheduled absences,

[[Page 33520]]

which we noted had been misapplied or misunderstood by GPD grantees. 
One commenter stated that this proposed change would negate the purpose 
of the original rule, which allowed 72 hour passes for unexcused 
absences and did not take into account the fact that most hospital 
admissions are unplanned. The commenter stated that smaller providers 
would be forced to choose between absorbing the cost of an unexcused 
absence or documenting a negative exit for the veteran. The former 
would negatively impact the finances of the GPD provider while the 
latter would adversely impact the veteran. Other commenters expressed 
similar concerns. One commenter noted that a missing veteran may 
sometimes be unable to contact the facility right away, such as when 
hospitalized.
    In addition, one commenter stated that the proposed change would 
disincentivize GPD providers from working with veterans and could 
result in substantial losses to larger programs. The commenter also 
stated that, for GPD providers not in compliance with performance 
metrics, the provider would have to weigh a negative exit (which would 
result in no loss of funds) against the risk of being placed in a 
Corrective Action Plan (CAP) (proposed Sec.  61.80(c)(3)(vi)).
    While other commenters generally expressed support for the 
rationale behind the proposed change, VA acknowledges the concerns of 
those commenters urging a substantive change to paragraph (f) as 
proposed. VA has taken into consideration that the populations the 
commenters choose to serve have a higher propensity to exit their 
homeless programs when exigent circumstances arise. We encourage our 
community partners to continue serving these populations. Accordingly, 
based on the public comments, we are amending paragraph (f) to state 
that VA will pay per diem up to a maximum of seven (7) days in the case 
of an inpatient hospitalization, or, will pay per diem up to a maximum 
of seventy-two (72) consecutive hours for the scheduled or unscheduled 
(non-hospitalization) absence of a veteran. Adding per diem coverage 
for up to 7 days of inpatient hospitalization is responsive to concerns 
raised by commenters.
    Commenters also expressed concern regarding situations where a 
recipient would be forced to discharge veterans if it did not receive 
payment for services rendered. It is believed that a discharge under 
these circumstances could count against a veteran's three-time 
allowable admission to GPD programs. Many commenters believe VA will 
only allow for three admissions to GPD programs. We believe this has 
been incorrectly interpreted. To clarify, VA will remove the previously 
proposed paragraph (f) altogether. Because VA allows more than three 
admissions to GPD programs under certain circumstances and in order to 
avoid incorrect applications of a perceived limitation for supportive 
housing bed days of care, this paragraph is removed.
    Except as noted above, VA makes no edits to the rule based on these 
comments.
    Technical edits. As discussed above, we renumber proposed Sec.  
61.33 for clarity as follows. Proposed paragraph (a)(iii) is renumbered 
as paragraph (a)(2). Proposed paragraph (a)(iv) is now paragraph 
(a)(3). Proposed paragraph (a)(2) is now paragraph (b). Proposed 
paragraphs (b) through (e) are now paragraphs (c) through (f). We have 
also renumbered the cross references within Sec.  61.33 to reflect the 
new renumbering.
    Additionally, we are amending proposed 38 CFR 61.33(a)(1)(ii) to 
remove the word ``and'' at the end of the paragraph. We are also 
merging proposed paragraph 38 CFR 61.33(a)(2)(A) with proposed 
paragraph 38 CFR 61.33(a)(2) and numbering it as 38 CFR 61.33(a)(2). 
After reviewing the language, VA determined that it would reduce 
confusion by merging the two paragraphs. The paragraph at 38 CFR 
61.33(a)(2) would now read: For providers of both supportive housing 
and services. When the referral or authorization of the homeless 
veteran will not result in the project exceeding the total number of 
bed days of care or total obligated funding as indicated in the grant 
agreement and funding action document.
    Proposed paragraph (h) states that at the time of receipt, a per 
diem recipient must report to VA all other sources of income for the 
project for which per diem was awarded. We are amending proposed 
paragraph (h) to clearly state that the paragraph relates to receipt of 
a federal award by VA rather than a federal award by a different 
federal agency such as the Department of Housing and Urban Development.

Sec.  61.80 General Operation Requirements for Supportive Housing and 
Service Centers

    This section is in subpart F which addresses awards, monitoring and 
enforcement of agreements. Paragraph (c) of this section focuses on 
establishment of performance goals, periodic assessment of grant 
recipient performance, remedies available to VA if a grantee fails to 
meet established performance goals, and actions the grant recipient 
must take if VA determines that established GPD performance goals have 
not been met over a certain period of time. VA proposed several non-
substantive changes to this paragraph for purposes of clarity. In 
addition, we proposed that VA will establish performance goals for the 
initial award and update those goals annually. Performance goals would 
be established based on data VA collects on veterans in all homeless 
programs, and VA priorities in addressing the issue of homeless 
veterans. This would shift the burden of developing performance goals 
from the grant recipient without VA losing any oversight capabilities. 
We noted at 82 FR 34460 (July 25, 2017) VA's intent to also reduce the 
number of performance items recipients are responsible for from the 
range of 10 to 20 per recipient project to a number that accurately 
captures acceptable performance. We proposed changing the trigger point 
at which VA would consider remedies for failure to meet performance 
goals from 15 percent to five percent below any performance goals. In 
addition, we proposed requiring a grant recipient to submit a 
Corrective Action Plan (CAP) to the VA GPD Liaison within sixty (60) 
calendar days if VA determines that established GPD performance goals 
have not been met for any two (2) consecutive quarters. The rationale 
for these proposed changes is to more closely monitor attainment of VA-
established performance goals and to identify and address problem areas 
in a timely manner. As explained in detail below, VA is amending 
references to a Corrective Action Plan (CAP) to refer instead to a 
Performance Improvement Plan (PIP). Accordingly, all references to CAPs 
in the paragraphs below will use PIP instead of CAP. In addition, all 
of the CAP references below are in fact referring to what is now PIP 
under section 61.80(c)(3)(v) through (vii).
    We received several comments related to VA's collection of data 
related to services provided to homeless veterans. Commenters expressed 
reservations as to the integrity and accuracy of VA data and VA's 
reliance on that data when establishing performance goals. One 
commenter stated that there should be a mechanism to allow a grant 
awardee the ability to challenge VA data it believes is inaccurate, 
where the alleged inaccuracy could impact a performance review. The 
commenter stated that such mechanism would allow for a comparison of 
grantee-provided data with that of VA, and ensure continuity of payment 
while that mechanism was in use. Another commenter stated that it is 
crucially important that the

[[Page 33521]]

proposed rule rely on performance measures based on data from the 
Department of Housing and Urban Development's Homeless Management 
Information System (HMIS) and not solely from the VA Homeless 
Operations Management and Evaluation System (HOMES) program.
    We do not believe it is necessary for there to be additional 
mechanisms for recipients to challenge the accuracy of VA's data in 
HOMES. Grantees provide outcome data to VA Liaisons detailing the 
effects of moving veterans to permanent housing or discharging them for 
rule violations. We continue this practice under VA HOMES. VA uses 
HOMES to record information on every veteran entering and exiting GPD's 
nationally funded projects. From this system, VA is able to provide 
monthly performance data based on the technical specifications of each 
metric. The GPD program educates grantees on reading and using the data 
in practical ways and has used this information to understand 
performance and promote improvement. VA maintains rigorous 
methodologies which are reviewed and updated as needed. When grantees 
have questions about such data or its role in their performance, 
answers continue to be provided through the normal communication 
channels available among grantees, VA medical centers and the GPD 
national office.
    As VA is standardizing performance outcomes for all of its 
transitional housing, we are able to produce these reports for each 
funded project and distinguish between GPD transitional housing models. 
Additionally, we have the opportunity to take into consideration the 
various operational definitions that make up each metric. The reports 
produced from HOMES provide results on national, regional (i.e., 
Veteran Integrated Service Network), medical center, and GPD funded 
projects. While we commend the commenter's participation in the HMIS 
locally, the aforementioned capability is unavailable to VA at this 
time due to concerns about undue financial burden for grantees and the 
protection of confidential and clinical information about Veterans. 
HMIS participation involves grantees paying for several costs (e.g. 
access, training, staffing, usage). The cost is locally determined and 
is not necessarily able to be supported by grant funds. That said, the 
GPD program has encouraged, but does not require, participation among 
grantees in HMIS, and continues to collaborate with HMIS about options 
for the future.
    Moreover, we have eliminated the reporting requirements for several 
types of grant project goals and objectives that were previously 
necessary. VA eliminated these reporting requirements in our efforts to 
grant flexibility for recipients in developing project goals based on 
the recipient's experience with specific populations, services, and the 
recipient's geographic location. The changes in 38 CFR 61.80(c) utilize 
metrics that lead to empirical comparisons, such as outcome measures 
for homeless program success, which are consistent with VA's national 
goal of ending homelessness. Historically, the selected data points 
within in the metrics have been used to report homeless program data 
within VA and to Congress. The use of common metrics is an effective 
method to determine success across different GPD program methodologies. 
Both VA and the recipients are linked as VA must also meet the very 
same metrics. We believe this will lead to better outcomes and 
strengthen community partnerships in the battle against homelessness. 
The amendments in this rulemaking are consistent with current VA policy 
and practice.
    VA amends references to a Corrective Action Plan (CAP) to refer 
instead to a Performance Improvement Plan (PIP). One commenter remarked 
on the use of CAPs (now PIPs) listed in proposed 38 CFR 61.80. We 
proposed in 38 CFR 61.80(c)(3)(v) through (vii) that if after reviewing 
a recipient's assessment, VA determines that it falls more than five 
percent below any performance goal, then VA may revise the award by 
withholding placements or payment, suspending payment, and terminating 
the grant agreement. While the five percent rather than fifteen percent 
would be a new standard, the four listed potential remedies remain 
unchanged from then-current paragraph (c)(6). The commenter stated that 
the proposed changes suggest that at any time VA could enact any 
options, regardless of the PIP. That is not VA's intent, and we amend 
the proposed language to clarify the issue. We are amending proposed 38 
CFR 61.80(c)(3)(v) to explain that VA could avail itself to more than 
one, or a combination of, enforcement actions in 38 CFR 
61.80(c)(3)(v)(A)-(D). VA seeks to reserve its discretion to apply any 
combination or permutation of enforcement actions it deems fit. We 
amend 38 CFR 61.80(c)(3)(v) to read as follows: If, after reviewing a 
recipient's assessment, VA determines that it falls more than five 
percent below any performance goal, then VA may require the recipient 
to create and follow a performance improvement plan (PIP) as outlined 
in 38 CFR 61.80(c)(vi). We are moving the second part of proposed 38 
CFR 61.80(c)(3)(v) and numbering it as new 38 CFR 61.80(c)(3)(vii). We 
believe that this move will provide a more sequential process for the 
PIP. Therefore, new paragraph (c)(3)(vii) will state that if the 
recipient is not compliant with the PIP, VA may impose any combination 
of the following enforcement actions by award revision: (A) Withhold 
placements; (B) Withhold payment; (C) Suspend payment; and (D) 
Terminate the grant agreement, as outlined in this part or other 
applicable federal statutes and regulations.
    Other commenters expressed concern with the threshold VA selected 
to trigger a PIP in proposed 38 CFR 61.80(c)(3)(v). One commenter 
stated that the proposed change in threshold for action to a deviation 
of more than five percent from a performance goal will have a greater 
negative impact on smaller programs than larger programs, with service 
issues related to only one or two veterans resulting in imposition of a 
PIP. As an example, the commenter stated that if a recipient serves ten 
veterans, this means that it cannot possess serious deficiencies or 
service issues for more than one veteran (i.e., five percent of the 
recipient's veteran population) or it will trigger a PIP. Similarly, 
other commenters stated that the changes may have unintended effects on 
recipients that would disproportionately affect small and rural 
programs. In particular, the commenters express concerns in situations 
where failure to meet their goals with small populations would give 
rise to the appearance that the program is substandard or failing.
    We agree with the commenters that slight deviations in meeting 
goals successfully could give the appearance of program mismanagement 
or failure. Also, we agree that smaller programs with fewer veterans 
could appear unsuccessful if only one or two veterans do not exit 
successfully from the program. However, VA believes that the changes to 
38 CFR 61.80(c)(3)(v) and (vi) provide an adequate solution to tighten 
the performance metrics as well as provide relief from the 
disproportionate impact the changes would have on small and rural 
programs.
    With respect to when VA may initiate a PIP, we believe the more 
than five percent deviation is the threshold where recipients should 
adjust their efforts to improve their outcomes in order to comply with 
the established GPD performance goals. This does not mean that VA will 
initiate imminent enforcement actions once a deviation greater than 
five percent is reached. VA will only take enforcement actions in

[[Page 33522]]

the event the recipient is not compliant with the established GPD 
performance goals after attempting a PIP. This is why VA adopted a 
quarterly assessment period as opposed to a monthly review. VA wants to 
afford recipients the opportunity to correct issues that could 
disqualify them from future funding. In the first quarterly review 
where a grantee is more than five percent away from a performance goal, 
the grantee and VA Liaison can review the data along with other program 
aspects to ascertain what causal relationships are present. Part of 
that assessment is determining whether the total number of veterans 
served by the program contributed to the award recipient's failure to 
attain performance goals. The recipient will have the ability to 
determine if the reason for the more than five percent deviation is an 
anomaly or requires the need for adjustments. If the greater than five 
percent deviation occurs for a second consecutive quarter, then this 
would indicate that an issue requires action, and the recipient would 
need to submit a PIP sixty days after VA's determination.
    Accordingly, we are also amending the language in proposed 38 CFR 
61.80(c)(3)(vi). In the proposed rule, VA stated that recipients would 
need to submit a PIP to VA's GPD Liaison within sixty (60) calendar 
days. VA believes that this is unclear, and we are amending it to state 
if VA determines that the recipient has a more than five percent 
deviation from established GPD performance goals for any two (2) 
consecutive quarters as defined in 38 CFR 61.80(c)(3)(i) through (iv), 
the recipient will submit a PIP to the VA GPD Liaison sixty (60) 
calendar days after VA makes its determination.
    The recipient and VA Liaison can use the third quarter as a period 
to examine if the recipient's actions improved performance. While 
changing the name of the corrective action measure, VA declines to 
change the requirement that it is triggered after two consecutive 
quarters of reduced performance. Since two quarters are one-half of a 
typical one-year performance period for a grant, VA is reticent to 
accept the commenter's proposal to increase the threshold to three 
quarters. We would find this unacceptable because it would cover 
approximately three-fourths (75%) of the one-year performance period.
    Based on a review of public comments VA also believes that there is 
confusion regarding the purpose of the changes to 38 CFR 61.80(c)(3)(v) 
and (vi). Several commenters appear to view the changes as punitive in 
nature. We note that the remedial action for a grantee's non-compliance 
with 2 CFR 200.338 is a corrective action plan, and VA believes it is 
appropriate to distinguish action plans related to failure to meet 
performance goals from those related to failure to comply with federal 
statutes or regulations under Title 2 CFR part 200. While some of the 
remedies reflected in 2 CFR 200.338 are the same as those in 38 CFR 
61.80(c)(3)(v), the impetus for imposing those remedies is not. VA 
views the remedies reflected in 38 CFR 61.80(c)(3)(v) and (vi) as a 
mechanism to initiate proactive reviews with recipients along with 
giving them the ability to make program adjustments in order to meet 
the goals set out in the GPD program application and improve the 
services to the veterans they serve. Accordingly, as discussed above, 
VA has amended references to a Corrective Action Plan (CAP) to refer 
instead to a Performance Improvement Plan (PIP) to avoid confusing 
recipients with the enforcement actions of 2 CFR 200.338 for non-
compliance.
    Finally, one commenter referenced the absence of an appeal process 
for termination of grants. While it is true that Part 61 does not 
contain express appeal provisions, VA follows 2 CFR 200.340 through 
200.342. VA provides advance notice of any enforcement actions and an 
opportunity to be heard and object or provide documentation challenging 
the enforcement decision. These procedures afford due process 
protections and, specific to the commenter's concerns, provide grant 
recipients an opportunity to raise issues regarding the accuracy of VA 
data. VA follows 2 CFR 200.343 regarding payments after a termination. 
VA makes no changes based on this comment.
    Based on the rationale set forth in the proposed rule and in this 
document, VA is adopting the provisions of the proposed rule as a final 
rule with changes as noted above.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (at 44 U.S.C. 3507) requires 
that VA consider the impact of paperwork and other information 
collection burdens imposed on the public. According to the implementing 
regulations for the Paperwork Reduction Act (5 CFR 1320.8(b)(2)(vi)), 
an agency may not collect or sponsor the collection of information, nor 
may it impose an information collection requirement unless it displays 
a currently valid Office of Management and Budget (OMB) control number. 
This rule includes provisions constituting collections of information 
under the Paperwork Reduction Act of 1995 that require approval by OMB. 
Accordingly, pursuant to 44 U.S.C. 3507(d), VA is submitting a copy of 
this rulemaking action to OMB for review.
    In the proposed rule we had stated that we would require a renewal 
of the collection of information under Sec. Sec.  61.33 and 61.80. We 
had stated that Sec.  61.33 requires recipients to report to VA all 
sources of income it has received for the project for which VA has 
awarded a grant. The proposed rule indicated that there would be no 
changes to this collection. We had also stated that under Sec.  61.80 
recipients are required to submit quarterly reports to VA Liaisons, who 
are VA staff members, about how the recipients are meeting the 
performance measures that are outlined in their grant applications. 
However, VA provides to the grantee (quarterly) the grantee's 
performance status regarding the VA performance metrics. The grantee 
does not provide a compliance report because it would be duplicative of 
information already available to the VA Liaison in existing VA systems 
through the grantee's monthly billing invoice information and admission 
and discharge notifications as reflected in the billing. Accordingly, 
we are no longer collecting information under these two sections. 
Compliance information from recipients is captured through other 
processes and therefore is not repeated in order to avoid duplication 
in collection.
    The proposed rule also included the aggregate collection of 
information for capital grants, per diem grants and special need grants 
located at 38 CFR part 61. These collections were previously approved 
by OMB under OMB control number 2900-0554, which expired on September 
30, 2020. As noted above, VA is submitting a new PRA request to OMB and 
awaits approval for the collections of information described herein. If 
OMB does not approve the collections of information as requested, VA 
will immediately remove the provisions containing a collection of 
information or take such other action as is directed by OMB.
    Title: VA Homeless Providers Grant and Per Diem Program.
    Summary of collection of information: This collection of 
information is for capital grants, per diem grants, special need grants 
and case management grants located at Sec. Sec.  61.11, 61.15, 61.17, 
61.31, 61.41, and, 61.92. Information must be collected to determine 
which applicants are eligible for the grant and per diem program, and 
to prioritize applications for determining who will be awarded funds.

[[Page 33523]]

    Description of the need for information and proposed use of 
information: This information is needed to determine eligibility for 
capital grants, per diem grants, special need grants and case 
management grants.
    Description of likely respondents: Non-Profit Agencies and State 
and Local Governments.
    Estimated number of respondents per year:
    Capital grants and per diem: 100 per year.
    Per diem for non-capital grant recipients: 500 per year.
    Special need grants: 50 per year.
    Case management grants: 300 per year.

    Estimated frequency of responses per year:
    Capital grants and per diem: 1 time per year.
    Per diem for non-capital grant recipients: 1 time per year.
    Special need grants: 1 time per year.
    Case management grants: 1 time per year.

    Estimated average burden per response:
    Capital grants and per diem: 35 hours.
    Per diem for non-capital grant recipients: 20 hours.
    Special need grants: 20 hours.
    Case management grants: 20 hours.

    Estimated total annual reporting and recordkeeping burden: 20,500 
hours.
    Capital grants and per diem: 3,500 hours.
    Per diem for non-capital grant recipients: 10,000 hours.
    Special need grants: 1,000 hours.
    Case management grants: 6,000 hours.
    Estimated cost to respondents per year: We estimate the annual cost 
to respondents will be $305,655, based on a rate of $14.91 per hour. 
Out of that annual cost, it is estimated that one fourth of the grant 
proposals will be written on a pro bono basis and the remaining three 
fourths of the grant proposals will be written by professional grant 
writers.

Regulatory Flexibility Act

    The Secretary hereby certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities 
as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-
612. The provisions associated with this rulemaking do not involve 
costs to small entities because the VA Homeless Providers Grant and Per 
Diem (GPD) Program provides federal awards (e.g., grants) to small 
entities. VA awards five types of grants to small entities meeting 
specific criteria for supportive or transitional housing for homeless 
veterans until the veteran can transition into permanent housing. 
Specifically, VA awards capital grants, special need grants, technical 
assistance grants, and case management services grants, and per diem 
only grants to offset operating costs for a program of supportive 
housing or services. Small entities will choose whether to apply for 
federal awards, and there are no out-of-pocket expenses (e.g., no 
filing fees) to apply for funding. Therefore, under 5 U.S.C. 605(b), 
this rulemaking is exempt from the initial and final regulatory 
flexibility analysis requirements of sections 603 and 604.

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
The Office of Information and Regulatory Affairs has determined that 
this rule is a significant regulatory action under Executive Order 
12866. VA's impact analysis can be found as a supporting document at 
http://www.regulations.gov, usually within 48 hours after the 
rulemaking document is published. Additionally, a copy of the 
rulemaking and its impact analysis are available on VA's website at 
http://www.va.gov/orpm by following the link for VA Regulations 
Published from FY 2004 through FYTD.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
state, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year. This final rule will have no such effect on 
state, local, and tribal governments, or on the private sector.

Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a major rule, as defined by 5 U.S.C. 804(2).

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance number and title for the 
program affected by this document is 64.024, VA Homeless Providers 
Grant and Per Diem Program.

List of Subjects in 38 CFR Part 61

    Administrative practice and procedure, Alcohol abuse, Alcoholism, 
Day care, Dental health, Drug abuse, Government contracts, Grant 
programs--health, Grant programs--veterans, Health care, Health 
facilities, Health professions, Health records, Homeless, Mental health 
programs, Reporting and recordkeeping requirements, Travel and 
transportation expenses, Veterans.

Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, approved this 
document on April 9, 2021, and authorized the undersigned to sign and 
submit the document to the Office of the Federal Register for 
publication electronically as an official document of the Department of 
Veterans Affairs.

Consuela Benjamin,
Regulations Development Coordinator, Office of Regulation Policy & 
Management, Office of the Secretary, Department of Veterans Affairs.

    For the reasons set forth in the preamble, the Department of 
Veterans Affairs amends 38 CFR part 61 as follows:

PART 61--VA HOMELESS PROVIDERS GRANT AND PER DIEM PROGRAM

0
1. The authority citation for part 61 continues to read as follows:

    Authority: 38 U.S.C. 501, 2001, 2002, 2011, 2012, 2061, and 
2064.


Sec.  61.1  [Amended]

0
2. In Sec.  61.1 amend paragraph (2)(i) of the definition of 
``Supportive housing'' by removing the phrase ``within a period that is 
not less than 90 days and does not exceed'' and adding in its place 
``as soon as possible but no later than''.

0
3. Add Sec.  61.5 to subpart A to read as follows:


Sec.  61.5   Implementation of VA Limits on Payments due to Funding 
Restrictions.

    (a) Continuing payments. Once a grant agreement is awarded by VA, 
payments will continue for the time frame specified in the federal 
award, subject to the availability of funds, as long as the recipient 
continues to provide the supportive services and housing

[[Page 33524]]

described in its grant application, meets VA's Homeless Providers Grant 
and Per Diem (GPD) Program performance goals, and meets the applicable 
requirements of this part.
    (b) Factors. (1) In cases of limited availability of funding during 
the time frame specified in the federal award, VA may terminate the 
payment of per diem payments to recipients after weighing the following 
factors:
    (i) Non-duplication of ongoing services and equitable distribution 
of grant agreements across geographic regions, including rural 
communities and tribal lands;
    (ii) Receipt by recipient of any capital investment from VA or any 
other source; and
    (iii) Recipient's demonstrated compliance with GPD performance 
goals.
    (2) Notwithstanding paragraph (b)(1) of this section, when an 
awarded grant agreement is terminated during the time frame specified 
in the federal award due to no fault by the recipient, VA shall refrain 
from applying the recapture provisions of 38 CFR 61.67.

0
4. Revise Sec.  61.33 to read as follows:


Sec.  61.33   Payment of per diem.

    (a) General. VA will pay per diem to recipients that provide a bed 
day of care:
    (1) For a homeless veteran:
    (i) Who VA referred to the recipient; or
    (ii) For whom VA authorized the provision of supportive housing or 
supportive service;
    (2) For providers of both supportive housing and services. When the 
referral or authorization of the homeless veteran will not result in 
the project exceeding the total number of bed days of care or total 
obligated funding as indicated in the grant agreement and funding 
action document; or
    (3) For service centers. When the total hours of service or total 
obligated funding as indicated in the grant agreement and funding 
action document.
    (b) VA Review. VA may at any time review the provision of 
supportive housing and services to individual veterans by the provider 
to ensure the care provided continues to be needed and appropriate.
    (c) Rate of payments for individual veterans. The rate of per diem 
for each veteran in supportive housing will be the lesser of:
    (1) The daily cost of care estimated by the per diem recipient 
minus other sources of payments to the per diem recipient for 
furnishing services to homeless veterans that the per diem recipient 
certifies to be correct (other sources include payments and grants from 
other departments and agencies of the United States, from departments 
of local and State governments, from private entities or organizations, 
and from program participants); or
    (2) The current VA state home program per diem rate for domiciliary 
care, as set by the Secretary under 38 U.S.C. 1741(a)(1).
    (d) Rate of payments for service centers. The per diem amount for 
service centers shall be 1-8 of the lesser of the amount in paragraph 
(c)(1) or (c)(2) of this section, per hour, not to exceed eight (8) 
hours in any day.
    (e) Reimbursements. Per diem may be paid retroactively for services 
provided not more than three (3) days before VA approval is given or 
where, through no fault of the recipient, per diem payments should have 
been made but were not made.
    (f) Payments for absent veterans. VA will pay per diem up to a 
maximum of seventy-two (72) consecutive hours for the scheduled or 
unscheduled absence of a veteran, or, in the case of an in-patient 
hospitalization, will pay per diem up to a maximum of seven (7) days.
    (g) Veterans receiving supportive housing and services. For 
circumstances where a veteran is receiving supportive housing and 
supportive services from the same per diem recipient, VA will not pay a 
per diem for the supportive services.
    (h) Reporting other sources of income. At the time of receipt of a 
federal award from VA, a per diem recipient must report to VA all other 
sources of income for the project for which per diem was awarded. The 
report provides a basis for adjustments to the per diem payment under 
paragraph (c)(1) of this section.

0
5. Amend Sec.  61.61 by revising paragraph (a) to read as follows:


Sec.  61.61   Agreement and funding actions.

    (a) Agreement. When VA selects an applicant for grant or per diem 
award under this part, VA will incorporate the requirements of this 
part into an agreement to be executed by VA and the applicant. VA makes 
the final decision on applicant selection. VA may negotiate with an 
applicant regarding the details of the agreement and funding, as 
necessary. VA will enforce the agreement through such action as may be 
appropriate, including temporarily withholding cash payments pending 
correction of a deficiency. Appropriate actions include actions in 
accordance with the Uniform Administrative Requirements, Cost 
Principles, and Audit Requirements for Federal Awards under 2 CFR part 
200.
* * * * *

0
6. Amend Sec.  61.80 by revising paragraph (c) to read as follows:


Sec.  61.80   General operation requirements for supportive housing and 
service centers.

* * * * *
    (c) VA will provide performance goals to recipients in its initial 
federal award and update annually thereafter:
    (1) Each recipient must conduct an ongoing assessment of the 
supportive housing and services needed by their residents and the 
availability of housing and services to meet this need. Recipients are 
expected to make adjustments to meet resident needs.
    (2) The recipient will provide to the VA GPD Liaison evidence of 
its ongoing assessment of the plan described in the grant application. 
The assessment must show how it is using the plan to meet the GPD 
performance goals.
    (3) The VA GPD Liaison will provide the GPD performance information 
to recipients. VA will incorporate this assessment information into the 
annual inspection report.
    (i) The VA GPD Liaison will review the quarterly assessment with 
the recipient no later than (30) days after the end of each of the 
following quarters:
    (A) Quarter 1 (October-December) assessment completed not later 
than January 30;
    (B) Quarter 2 (January-March) assessment completed not later than 
April 30;
    (C) Quarter 3 (April-June) assessment completed not later than July 
30; and,
    (D) Quarter 4 (July-September) assessment completed not later than 
October 30.
    (ii) A valid assessment must include the following:
    (A) A comparison of actual accomplishments to established GPD 
performance goals for the reporting period addressing quantifiable as 
well as non-quantifiable goals. Examples include, but are not limited 
to, a description of grant agreement-related activities, such as: 
Hiring and training personnel, community orientation/awareness 
activities, programmatic activities, or job development; and
    (B) Identification of administrative and programmatic problems, 
which may affect performance and proposed solutions.
    (iii) Recipients and VA GPD Liaisons must include a summary of the 
quarterly assessment in their administrative records. These quarterly 
assessments will be used to provide a

[[Page 33525]]

cumulative assessment for the entire calendar year.
    (iv) The recipient must immediately inform the VA GPD Liaison of 
any significant developments affecting its ability to accomplish the 
work. VA GPD Liaisons will provide necessary technical assistance.
    (v) If, after reviewing a recipient's assessment, VA determines 
that it falls more than five percent below any performance goal, then 
VA may require the recipient to create and follow a performance 
improvement plan (PIP) as outlined in 38 CFR 61.80(c)(vi).
    (vi) Performance Improvement Plan (PIP): If VA determines that a 
recipient deviates more than five percent from established GPD 
performance goals for any two (2) consecutive quarters as defined in 38 
CFR 61.80(c)(3)(A)(i) through (iv), the recipient will submit a PIP to 
the VA GPD Liaison sixty (60) calendar days after VA makes its 
determination.
    (A) The PIP must identify the activity which falls below the 
measure. The PIP must describe the reason(s) why the recipient did not 
meet the performance measure(s) and provide specific proposed 
corrective action(s) and a timetable for accomplishment of the 
corrective action. The plan may include the recipient's intent to 
propose modifying the grant agreement. The recipient will submit the 
PIP to the VA GPD Liaison.
    (B) The VA GPD Liaison will forward the PIP to the VA National GPD 
Program Office. The VA National GPD Program Office will review the PIP 
and notify the recipient in writing whether the PIP is approved or 
disapproved. If disapproved, the VA GPD Liaison will make suggestions 
for improving the proposed PIP, and the recipient may resubmit the PIP 
to the VA National GPD Program Office.
    (vii) If the recipient is not compliant after the PIP, then VA may 
impose any combination of the following enforcement actions by award 
revision:
    (A) Withhold placements;
    (B) Withhold payment;
    (C) Suspend payment; and
    (D) Terminate the grant agreement, as outlined in this part or 
other applicable federal statutes and regulations.
* * * * *
[FR Doc. 2021-13272 Filed 6-24-21; 8:45 am]
BILLING CODE 8320-01-P