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DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE
PUBLIC HEALTH SERVICE
7 HEALTH SERVICES AND MENTAL HEALTH ADMINISTRATION
: ROCKVILLE, MARYLAND 20352 .

 

OFFICE OF THE ADMINISTRATOR
April 7, 1971 |

fhe change in anticipated funds available for- Fiscal Year '7l after the
wid point of the year had been passed resulted in an Jnterim release to
your program based upon certain fiscal assuiptions on cur part. While the
release by Dr. Margulies dated February 22, 1971, came reasonably close

to our final status, new information now available makes it necessary to.
japlenent a final adjustment. We are simultaneously giving to you oux
initial estimate for the subsequent year based on our present knowledge

of your program and the budget request for 1972. We are fully cognizant
of the difficulties created by late adjustiacnt and stand ready to discuss
with you any extraordinary probless this has created for you. Basically
this second adjustuent was necessary to assure funding in Fiscal Year '72
which would be equal to-that requested for 1972.

The rate of expenditure released for your prograw in Fiscal Year '71 is
+> ©. and appropriate indirect costs. This is a decrease from our
preliminary estimate of .. -  . Your estimated base for 1972 is the
sane amount, It should be clear, however, that later changes for 1972
may result from on-site review of your progras of from changes in
‘available funds. Any such change will be trans itted only after formal
notification and an opportunity has been extended to you for discussion.

You will receive a separate letter asking for program detail in response
to this notification. In that response we expect you to utilize maxinun
local discretion in adjusting your own progran. While you may not
undertake new initiatives waich are outside of the projects approved by
the National Council you are free to readjust within approved projects
with the attendant obligation to keen us informed of substantial changes.

HSMIA's response to the overall reduction in RePS funds has been to

request the Regional. Prograis to share proportionately in that reduction.
We recognize that this does not respond to the different leveis of develop-
ment in those prograws. Tiire sinply dia not allow such a procedure. Any
additional funds waich become available to REPS wihl be appiied to that
effort. . .

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| Page. 2 ~ Mr. Thomas C. King

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A few programs which are quite active and have had two seaucn tia! years of
substantial cuts will have a slightly s2aller proportionate cut because of
attendant personnel probleas, No change in your prograa for this situation

is indicated, —_

It should’ be pointed out that the RWPS expenditure rate -for Fiscal Year '71

will be 78.9 million dollars. Our authorized budget for Fiscal Year '72

will be 70 million. We will be therefore, dependent upon carryover funds
at the level of 8.9 million dollars at the National level. Our experience
this year indicates it is reasonable to anticipate that amount. Please

try to manage your funds with this in mind. Past experience indicates

that it should be achievable without undue hardshin on any prograna. It

is obviously an endeavor which calls for close cooperation,

Your cooperative attitude and constructive criticisns have been of sreat
assistance to us in this difficult period. We hope you will continue to
eaphasize quality performance and will be particularly sensitive in the
selection of PEO gYaa objectives to the never health care initiatives which
are uniquely of concern to providers of care. Harold Mar irgulies and I will
be dependent upon your further thought and suggestions for eduinistrative
refinements in our effor .

A wore detailed

  
  

procedural letter should arrive from Dr. Margulis ies? Office
in the next few days,
Sjaiceyely yours,
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LAE, BE. Wilson, M.D.
Administrator
ec:
Robert M. Satovick, M.D. So

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