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out whether or not the direct and indirect costs necessary to support a direct research effort of a grant there are appropriate.

Mr. WILLIAMS. It is not a foregone conclusion that the researcher would win that battle once you put the money in his hands.

Senator HARKIN. I understand that. Staff is saying that perhaps the researcher would be the loser in that battle, but if future research dollars are dependent upon the quality and the research that is being done by that principal researcher and the university wants that done there, they are going to want that researcher to be happy and satisfied.

Mr. WILLIAMS. As I said before, I think it is worth looking at the incentives. But who wins that battle and what the balance is will also vary a great deal, depending on the situation of the university and the situation of that individual researcher. If you are a Nobel Prize scientist, that is one thing. If you are a new scientist just starting out, it is probably a lot different in terms of your ability to leverage this issue.

Senator HARKIN. You are right. That is true. I am still a little perplexed by it.

Mr. KUSSEROW. We all are, Mr. Chairman.

Senator HARKIN. I want to pursue it. I do not know where exactly this will lead.

Mr. KUSSEROW. I do think it is worthwhile to pursue it. I do not think that you should interpret anything that I or Mr. Williams have said as discouraging. I think that by really studying this issue and really looking at it, only good can come from it. I do not know whether we can say at the outset that we know where we will come out. But I think that it will provide food for thought, and maybe we will come up with some ideas as to how to make the system run better.

Senator HARKIN. We want to do that, and we will pursue it. We will see if we can come up with some ideas or some pilot tests that we might want to run or something like that.

INFANT MORTALITY Let me ask you a little bit about infant mortality. We had the Secretary up here the other day. I have talked to him personally on the phone, and then we had him here in the witness room the other day.

The budget proposed a new initiative to combat high infant mortality rates in 10 target cities. Again, I do not want to engage you in any policy debates. That is not your bailiwick, but I just want to ask you about the existing infant mortality initiatives that we have been planning for several years for the community health centers known as the Comprehensive Perinatal Care Program, CPCP.

Has your office done any studies of this initiative?

Mr. KUSSEROW. We were also aware that this issue came up at the hearing with the Secretary. I have brought with me, coincidentally, a copy of our report on that very subject. I would be pleased to leave it with the committee.

What you observed, in fact, is very much correct. We found some real problems in targeted populations and in reaching them, and we have made some suggestions as to how to overcome them.

Basically, the key to this program has been that you work through community health centers. People apply to them for grants to deal with the infant mortality problem. The two flaws that we found which should be remedied are, first, that these community health centers do not exist uniformly across the country in areas where there is a great need.

Senator HARKIN. They do not do what?

Mr. KUSSEROW. The community health centers that grantees must work through are not uniformly distributed in areas with high infant mortality rates. Therefore, in those communities that do not have community health centers to support the system, you will have a lot of people falling through the cracks.

Second, what we found is that in some of the areas that needed the most help, the people who were applying for grants really were not professional grant writers. They did not have all the proper terms down pat and did not know how to cross their T's and dot their I's correctly. So a lot of people who did apply for grants were turned down for technical reasons.

We feel that a couple of things need to be done. Both of them involve trying to make the program more flexible, to insure a more uniform distribution of the resources to deal with infant mortality.

When we submitted this report to the Department, they were very supportive of it. In the report itself I have attached the comments of the Assistant Secretary for Planning and Evaluation, who is the coordinating arm for the Secretary on policy, and of the Public Health Service, which is operating this particular aspect of the program. They were very supportive.

So I think that a lot of the questions you might have about this issue are contained in this report, which I did not realize would be so timely. If there are additional questions, or if you would like to have additional details on any of the work that we performed in this area, I would be pleased to have our people come talk to your folks.

Senator HARKIN. I am interested. I was not aware of this. I can guarantee you I will read it.

Mr. KUSSEROW. It was very well received by the Department because, quite frankly, the Department sensed that the process was not working quite the way they had wanted it to and they were interested in knowing why. So when we came in with the results of this study, they began to get some of the answers. We not only told them what was wrong, but we tried to give them some options and some guidance as to what steps they might take to correct it.

They are in the process of correcting it. We will be following up with them to see how aggressive they are in taking corrective action.


Senator HARKIN. Correct me if I am wrong. You are the statistician; I am not. Just from reading these paragraphs that my staff has underlined here for me, it looks to me that there is a direct correlation between cities of 100,000 or more, a direct correlation of high rates of infant mortality and noneligibility for CPCP funds.

Mr. KUSSEROW. You are correct.
Senator HARKIN. All right. I just wanted to see if I was right.

A direct correlation?
Mr. KUSSEROW. Yes, sir.

Senator HARKIN. Let me ask you this. Do you think if grants were available to other health care providers

Mr. KUSSEROW. Let me just, if I could, give you a quote that really states just exactly what you said. That is, nearly one-half of the Nation's largest cities with high infant mortality rates greater than 12 deaths per 1,000 live births have not been eligible for CPCP funds because they have no community health centers funded through sections 329 and 330 of the EPHŠ Act. That exactly makes the point you were making.

That creates kind of a big hole. But again, as you know from talking to the Secretary, he has more than just a passing interest in this area. He is really avid in trying to deal with the infant mortality rates that we have in this country, which are abominably high when you compare them to other Western and European countries. He has everybody pretty much harnessed to this effort.

As I say, this is one report where we did not have a lot of resistance. In fact, it was greeted with a great deal of appreciation. I think the trick is to see what happens now that they are armed with this information and with recommendations; whether they follow through with them or not as aggressively as they should.

Senator HARKIN. Do you think if grants were available to other health care providers also that we could target funds to high impact areas more effectively?


Senator HARKIN. I have something new to look at now. I wish I had known about that before the Secretary came up. I know the Secretary, and I have talked with him personally about this. This is a high-priority item for him. This is something he really wants to pursue.

Mr. KUSSEROW. Very high. It is something that we hear about every week from him. He cannot understand how it is that this Nation, which leads the world in biomedical research and in the quality of health care, could have such an abysmal infant mortality record when compared to other industrialized nations. He definitely wants it changed. He wants to harness all the efforts of the Department to that.

Now, we have had some complicating factors. In fact, if you would like to go into greater detail on this issue, we have issued some other reports that relate to it. We have done some work in the area of crack babies and border babies which talks about the effect crack is going to have on our society, is already having now that we have addicted mothers giving birth to addicted children.

What it underscores inore than anything else is the very great importance, the paramount importance, of getting to that mother in the first trimester of her pregnancy and engaging her in some preventive programs. This is essential if we want to avoid a health care cost in the future that is going to be so gargantuan that it is almost unimaginable.

If you like, I would be pleased to make all these reports available to the committee. Crack is a complicating factor that is having a very big effect on infant mortality today.


Senator HARKIN. The last question. I said I was going to return to the Chief Financial Officers Act, and I made a note on that.

No; I had one other thing I wanted to ask you. I had written this down earlier. When Assistant Secretary Gall was here, she said that the Inspector General's Office is doing a study of Head Start. I just jotted that down.

Is it done, or when will it be available? Will we be able to get a copy?

Mr. KUSSEROW. If you have a follow-up hearing on that subject, as you said, it will be ready then.

We basically have four national studies going on right now. We were asked by the Assistant Secretary for Management and Budget, as well as by Mary Gall of Human Development Services, to try to see if we could examine the readiness of the Head Start Program to handle its proposed expansion. What good is it to give money to a program if it is all going to fall off the table because they are not ready to handle it? So we want to know how ready they are.

Senator HARKIN. That is what I want to know, too.

Mr. KUSSEROW. We also are doing work to try to understand the whole Head Start management information system and how reliable it is in terms of being able to look at performance and to monitor programs. We are very much interested in trying to have a lot of information relating to performance evaluation, and also to see if we can identify high risk grantees who are not doing the job or who could do it better.

One of the other areas we have reported on in the past is the results of looking at grantees to see how many vacant slots they have in their programs. There is not really a straight, linear relationship between the amount of dollars and the number of children you can have in the program. If you have a program that is operating at only 50 percent of capacity, the question is how can you bring it up to full capacity? You can do that with only marginal increases to the cost of the program. So we want to look at the attendance and how well the program is working, and how much capacity that existing program is going to have for expansion.

Senator HARKIN. You made a good point, and you are correct. So my linear assumptions earlier are not quite correct. Obviously you are right. The incremental cost for each additional one is lower than the first.

Mr. KUSSEROW. Yes; what we really need to know is the exact relationship, to have some idea as to what the excess capacity is right now. Once you know the excess capacity, you can determine under an ideal, frictionless environment how many more children you can pump into that excess capacity, and what the add-on costs would be versus what it would be to establish new facilities and new capacity

We have that ready. If you have a follow-up hearing on this, to get to your question, we will be ready for that hearing.

Senator HARKIN. We will. I just do not know when exactly—

Mr. KUSSEROW. I will be pleased to come back to you and give you the full results of all the work that we are doing in this area.

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As I say, Human Development Services has been very anxious to have this kind of information. The ASMB has also been very anxious, and we have been very anxious. I think that from the dialog I heard earlier with Mary Gall, you are quite interested. So I think this is good information.

RESOURCES FOR AUDITED FINANCIAL STATEMENTS Senator HARKIN. The Chief Financial Officers Act, which you were lauding and saying is an important piece of legislation that was passed, requires you to audit financial statements for all the trust funds, revolving funds, accounts, et cetera.

Again, you said that you needed 95 additional FTE's and how much more money?

Mr. KUSSEROW. About $9.5 million.

Senator HARKIN. What does it basically mean for your office? It means more people and more money, but what do you have to do?

Mr. KUSSEROW. The money would be dedicated to people. We would have to have a meter running to make sure that we could account for it, because the way it is set up in the President's budget, they want that money dedicated for this purpose and this purpose only.

Senator HARKIN. Those FTE's will be just for this purpose only?

Mr. KUSSEROW. And no other purpose at all. If we do not use that money for that purpose, or if we do not use those people for that purpose, then we cannot have them.

Now what would they do? Let us go back to NIH, for example, since we talked about it earlier. What we would do is provide a financial audit report on NIH's operations. The OMB, as well as the congressional staff and committee members that caused the passage of this legislation, said that they wanted information that goes beyond just a statement as to whether a financial statement can be relied upon. They consider that critical, but a very technical thing. They said that they want two things that I have heard over and over again. I have been to more meetings on this than you can shake a stick at. They said that they want usable information, and information that deals with performance indicators. They want to know how well the programs are doing.

So what you would be getting, quite frankly, in your capacity as chairman of this subcommittee, is information about operating components of our Department. The financial information would include the financial statement—which if you are lucky somebody on the staff might be able to make heads or tails of and is really technical—but would also go beyond that; that is, a statement of the kind of problems there might be in internal controls, whether they are complying with rules and regulations and program guidance, and how well they are performing against their stated objectives.

Many of those objectives, quite frankly, are worked out between the program people and the Congress. I just heard a discussion like that when you were talking to Mary Gall about wanting to know the number of children enrolled in Head Start today, the potential number, and how far along the line we are incrementally with increased funding.

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