does not identify particular individuals.

$51c.111 Publications and copyright.

Except as may otherwise be provided under the terms and conditions of the award, the grantee may copyright without prior approval any publications, films, or similar materials developed or resulting from a project supported by a grant under this part, subject, however, to a royalty-free, nonexclusive, and irrevocable license or right in the Government to reproduce, translate, publish, use, disseminate, and dispose of such materials and to authorize others to do so.

$51c.112 Grantee accountability.

(a) Accounting for grant award payments. All payments made by the Secretary shall be recorded by the grantee in accounting records separate from the records of all other funds, including funds derived from other grant awards. With respect to each approved project, the grantee shall account for the sum total of all amounts paid as well as other funds and in-kind contributions by presenting or otherwise making available evidence satisfactory to the Secretary of expenditure for direct and indirect costs meeting the requirements of this part: Provided, however, That when the amount awarded for indirect costs was based on a predetermined fixed-percentage of estimated direct costs, the amount allowed for indirect costs shall be computed on the basis of such predetermined fixed-percentage rates applied to the total, or a selected element thereof, of the reimbursable direct costs incurred.

(b) Accounting for interest earned on grant funds. Pursuant to section 203 of the Intergovernmental Cooperation Act of 1968 (42 U.S.C. 4213), a State will not be held accountable for interest earned on grant funds, pending their disbursement for grant purposes. A State, as defined in section 102 of the Intergovernmental Cooperation Act, means any one of the several States, the District of Columbia, Puerto Rico, any territory or possession of the United States, or any agency or instrumentality of a State, but does not include the government of the political subdivisions of the State. All grantees

other than a State, as defined, must return all interest earned on grant funds to the Federal Government.

(c) Grant closeout-(1) Date of final accounting. A grantee shall render, with respect to each approved project, a full account, as provided herein, as of the date of the termination of grant support. The Secretary may require other special and periodic accounting.

(2) Final settlement. There shall be payable to the Federal Government as final settlement with respect to each approved project the total sum of:

(i) Any amount not accounted for pursuant to paragraph (a) of this section;

(ii) Any credits for earned interest pursuant to paragraph (b) of this section;

(iii) Any other amounts due pursuant to subparts F, M, and O of 45 CFR part 74.

A of this part, are applicable to grants awarded pursuant to section 330(c) of the Act for projects for planning and developing community health centers which will serve medically underserved populations.

$51c.202 Application.

To be approved by the Secretary under this subpart, an application for a grant must, in addition to meeting the requirements of §51c.104 of subpart A, contain information sufficient to enable the Secretary to determine that the project for which the grant is sought will meet the requirements of § 51c.203.

$51c.203 Project elements.

A project for the planning and developing of a community health center supported under this subpart must:

(a) Prepare an assessment of the need of the population proposed to be served by the community health center for the services set forth in §51c.102(c)(1) of subpart A, with special attention to the need of the medically underserved population for such services. Such assessment of need shall, at a minimum, consider the factors listed in §51c.102(e)(1)–(4).

(b) Design a community health center program for such population, based on such assessment, which indicates in detail how the proposed community health center will fulfill the needs identified in the assessment prepared pursuant to paragraph (a) of this section and how it will meet the requirements contained in subpart C of this part.

(c) Develop a plan for the implementation of the program designed pursuant to paragraph (b) of this section. Such implementation plan shall provide for the time-phased recruitment and training of the personnel essential for the operation of a community health center and the gradual assumption of operational status of the project so that the project will, in the judgment of the Secretary, meet the requirements contained in subpart C of this part as of the end of the project period.

(d) Implement the plan developed pursuant to paragraph (c) of this sec

tion in accordance with such paragraph.

(e) Make efforts to secure, within the proposed catchment area of such center to the extent possible, financial and professional assistance and support for the project.

(f) Initiate and encourage continuing community involvement in the development and operation of the project.

(g) Establish standards and qualifications for personnel (including the project director).

(h) Utilize, to the maximum extent feasible, other Federal, State, local, and private resources available for support of the project, prior to use of project funds under this subpart.

$51c.204 Grant evaluation and award.

(a) Within the limits of funds determined by the Secretary to be available for such purpose, the Secretary may award grants under this subpart to applicants therefor which will, in his judgment, best promote the purposes of section 330(c) of the Act and the applicable regulations of this part, taking into account:

(1) The degree to which the proposed project satisfactorily provides for the elements set forth in §51c.203;

(2) The relative need of the population to be served for the services to be provided;

(3) The administrative and management capability of the applicant;

(4) The potential of the project for development of new and effective methods for health services delivery and management;

(5) The soundness of the fiscal plan for assuring effective utilization of grant funds and maximizing non-grant revenue;

(6) The extent to which community resources will be utilized in the project;

(7) The extent to which grants approved under this part will provide for an appropriate distribution of resources throughout the country, taking into consideration the following factors;

(i) The urban-rural area to be served; (ii) The nature of the organization applying; and

(iii) The organizational structure for delivery of services;

(8) Whether the project's catchment area is exclusive of the area served by a community health center;

(9) The degree to which the applicant intends to integrate services supported by a grant under this subpart with health services provided under other Federally assisted health services or reimbursement programs or projects.

(b) The Secretary may:

same

(1) Make no more than two grants under this subpart for the project.

(2) Make a grant under this subpart to an entity which has been awarded one or more grants under section 330(d)(1)(A) and/or section 330(d)(1)(B) of the Act only if the grant under this subpart is for a new project.

Subpart C-Grants for Operating Community Health Centers

$51c.301 Applicability.

The regulations of this subpart, in addition to the regulations of subpart A, are applicable to grants awarded pursuant to section 330(d)(1)(A) of the Act for the costs of operation of community health centers which serve medically underserved populations.

$51c.302 Application.

To be approved by the Secretary under this subpart, an application for a grant must, in addition to meeting the requirements of § 51c.104 of subpart A,

(a) Be submitted by an entity which may be a co-applicant which the Secretary determines is a community health center, and

(b) Contain information sufficient to enable the Secretary to determine that the center will meet the requirements of § 51c.103.

[41 FR 53205, Dec. 3, 1976, as amended at 42 FR 60418, Nov. 25, 1977]

§ 51c.303 Project elements.

A community health center supported under this subpart must:

(a) Provide the health services of the center so that such services are available and accessible promptly, as appropriate, and in a manner which will assure continuity of service to the residents of the center's catchment area.

(b) Implement a system for maintaining the confidentiality of patient records in accordance with the requirements of § 51c.110 of subpart A.

(c) Have an ongoing quality assurance program which provides for the following:

(1) Organizational arrangements, including a focus of responsibility, to support the quality assurance program and the provision of high quality patient care;

(2) Periodic assessment of the appropriateness of the utilization of services and the quality of services provided or proposed to be provided to individuals served by the center. Such assessments shall:

(i) Be conducted by physicians or by other licensed health professionals under the supervision of physicians;

(ii) Be based on the systematic collection and evaluation of patient records; and

(iii) Identify and document the necessity for change in the provision of services by the center and result in the institution of such change, where indicated.

(d) Develop management and control systems which are in accordance with sound financial management procedures, including the provision for an audit on an annual basis (unless waived for cause by the Secretary) by an independent certified public accountant or a public accountant licensed prior to December 31, 1970, to determine, at a minimum, the fiscal integrity of grant financial transactions and reports, and compliance with the regulations of this part and the terms and conditions of the grant.

(e) Where the cost of care and services furnished by or through the project is to be reimbursed under title XIX or title XX of the Social Security Act, obtain or make every reasonable effort to obtain a written agreement with the title XIX or title XX State agency for such reimbursement.

(f) Have prepared a schedule of fees or payments for the provision of its services designed to cover its reasonable costs of operation and a corresponding schedule of discounts adjusted on the basis of the patient's ability to pay. Provided, That such schedule of discounts shall provide for a full discount

to individuals and families with annual incomes at or below those set forth in the most recent CSA Proverty Income Guidelines (45 CFR 1060.2) and for no discount to individuals and families with annual incomes greater than twice those set forth in such Guidelines, except that nominal fees for services may be collected from individuals with annual incomes at or below such levels where imposition of such fees is consistent with project goals.

(g) Make every reasonable effort, including the establishment of systems for eligibility determination, billing, and collection, to:

(1) Collect reimbursement for its costs in providing health services to persons who are entitled to insurance benefits under title XVIII of the Social Security Act, to medical assistance under a State plan approved under title XIX of such Act, to social services and family planning under title XX of such Act, or to assistance for medical expenses under any other public assistance program, grant program, or private health insurance or benefit program on the basis of the schedule of fees prepared pursuant to paragraph (f) of this section without application of any discounts, and

(2) Secure from patients payments for services in accordance with the schedule of fees and discounts required by paragraph (f) of this section.

(h) Have a governing board which meets the requirements of § 51c.304.

(i) Have developed an overall plan and budget for the center that:

(1) Provides for an annual operating budget and a three-year financial management plan which include all anticipated income and expenses related to items which would, under generally accepted accounting principles, be considered income and expense items;

(2) Provides for a capital expenditures plan for at least a three-year period (including the year to which the operating budget described in paragraph (i)(1) of this section is applicable) which includes and identifies in detail the anticipated sources of financing for, and the objective of, each anticipated expenditure in excess of $100,000 related to the acquisition of land, the improvement of land, buildings, and equipment and the replace

ment, modernization and expansion of buildings and equipment which would, under generally accepted accounting principles, be considered capital items; (3) Provides for plan review and updating at least annually; and

(4) Is prepared under the direction of the governing board, by a committee consisting of representatives of the governing board, and administrative staff, and the medical staff, if any, of the center.

(j) Establish basic statistical data, cost accounting, management information, and reporting or monitoring systems which shall enable the center to provide such statistics and other information as the Secretary may reasonably require relating to the center's costs of operation, patterns of utilization of services, and the availability, accessibility, and acceptability of its services and to make such reports to the Secretary in a timely manner with such frequency as the Secretary may reasonably require.

(k) Review its catchment area annually to insure that the criteria set out in §51c.104(b)(2) of subpart A are met and, where such criteria are not met, revise its catchment area, with the approval of the Secretary, to conform to such criteria to the extent feasible.

(1) In the case of a center which serves a population including a substantial proportion of individuals of limited English-speaking ability, have developed a plan and made arrangements responsive to the needs of such populations for providing services to the extent practicable in the language and cultural context most appropriate to such individuals, and have identified an individual on its staff who is fluent in both that language and in English and whose responsibilities include providing guidance to such individuals and to appropriate staff members with respect to cultural sensitivities and bridging linguistic and cultural differences. If more than one non-English language is spoken by such group or groups, an individual or individuals fluent in those languages and English shall be so identified.

(m) Be operated in a manner calculated to preserve human dignity and to maximize acceptability and effective utilization of services.

(n) To the extent possible, coordinate and integrate project activities with the activities of other Federally funded, as well as State and local, health services delivery projects and programs serving the same population.

(0) Establish means for evaluating progress toward the achievement of the specific objectives of the project.

(p) Provide sufficient staff, qualified by training and experience, to carry out the activities of the center.

(q) Assure that facilities utilized in the performance of the project meet applicable fire and life safety codes.

(r) Utilize, to the maximum extent feasible, other Federal, State, and local, and private resources available for support of the project, prior to use of project funds under this part.

(8) Provide for community participation through, for example, contributions of cash or services, loans of fullor part-time staff, equipment, space, materials, or facilities.

(t) Where the center will provide services through contract or other cooperative arrangements with other providers of services, establish rates and methods of payment for health care. Such payments must be made pursuant to agreements, with a schedule of rates and payment procedures maintained by the project. The project must be prepared to substantiate that such rates are reasonable and necessary.

(u) Operate in a manner such that no person shall be denied service by reason of his inability to pay therefor: Provided, however, That a charge for the provision of services will be made to the extent that a third party (including a Government agency) is authorized or is under legal obligation to pay such charges.

(v) In addition to the above, projects which are supported with grant funds for the operation of a prepaid health care plan also must provide:

(1) A marketing and enrollment plan, including market analysis, marketing strategy, and enrollment growth projections.

(2) A plan that provides for funding on a capitation basis of such portion of the residents of the catchment area of the center, as the Secretary shall determine.

(3) An assurance that services shall be available to all residents of the catchment area without regard to method of payment or health status.

§ 51c.304 Governing board.

A governing board for the center shall be established by an applicant as follows:

(a) Size. The board shall consist of at least 9 but not more than 25 members, except that this requirement may be waived by the Secretary for good cause shown.

(b) Composition. (1) A majority of the board members shall be individuals who are or will be served by the center and who, as a group, represent the individuals being or to be served in terms of demographic factors, such as race, ethnicity, sex.

(2) No more than one-half of the remaining members of the board may be individuals who derive more than 10 percent of their annual income from the health care industry.

(3) The remaining members of the board shall be representative of the community in which the center's catchment area is located and shall be selected for their expertise in community affairs, local government, finance and banking, legal affairs, trade unions, and other commercial and industrial concerns, or social service agencies within the community.

(4) No member of the board shall be an employee of the center, or spouse or child, parent, brother or sister by blood or marriage of such an employee. The project director may be a non-voting, ex-officio member of the board.

(c) Selection of members. The method of selection of all governing board members shall be prescribed in the bylaws or other internal governing rules of the center. Such by-laws or other rules must specify a process of selection of individuals on the governing board who represent the population served or to be served by the center so that such individuals, as a group, are representative of such population. Such process of selection in the bylaws or other rules is subject to approval by the Secretary.

(d) Functions and responsibilities. (1) The governing board for the center

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