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entitled 'Federal Funds: Fiscal Year 2001 Expenditures by Selected 
Organizations Involved in Health-Related Activities' which was released 
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May 16, 2003:

The Honorable Christopher H. Smith:

The Honorable Joseph R. Pitts:

House of Representatives:

Subject: Federal Funds: Fiscal Year 2001 Expenditures by Selected 
Organizations Involved in Health-Related Activities:

This report responds to your request that we provide information on 
expenditures of federal funds by several organizations and their 
affiliates--the Planned Parenthood Federation of America, the 
Population Council, the International Planned Parenthood Federation, 
The Alan Guttmacher Institute, Advocates for Youth, and the Sexuality 
Information and Education Council of the United States (SIECUS)--all of 
which are involved in health-related activities. Specifically, as 
agreed with your staff, we identified (1) fiscal year 2001 expenditures 
of federal funds that supported the domestic health-related activities 
of the organizations, the federal agencies that provided the funds, and 
the congressional committees with jurisdiction over legislation 
authorizing or appropriating the federal funds, and (2) fiscal year 
2001 expenditures of federal funds that supported the international 
health-related activities of the organizations, the federal agencies 
that provided the funds, and the congressional committees with 
jurisdiction over legislation authorizing or appropriating the federal 
funds. This information updates our November 13, 2001, report that 
provided expenditure information for fiscal years 1999 and 
2000.[Footnote 1]

In response to your request, we collected information on each of the 
selected organizations and their expenditures of federal funds, the 
federal agencies that provided the funds, and the congressional 
committees with jurisdiction over legislation authorizing or 
appropriating the funds. We obtained documents and held discussions 
with representatives from several of the organizations, federal 
officials, and congressional staff members. To obtain the 
organizations' fiscal year 2001 financial information, we collected 
information on expenditures of federal funds for domestic health-
related activities from the organizations that had such expenditures--
the Planned Parenthood Federation of America, the Population Council, 
The Alan Guttmacher Institute, Advocates for Youth, and SIECUS. These 
organizations also provided their independently audited financial 
statements and reports on expenditures of federal funds.[Footnote 2] 
For the organizations that had expenditures of federal funds for 
international health-related activities, we collected expenditure data 
directly from three of the organizations--the Population Council, The 
Alan Guttmacher Institute, and Advocates for Youth. These organizations 
also provided their independently audited financial statements. The 
U.S. Agency for International Development (USAID) reported fiscal year 
2001 expenditure data for the International Planned Parenthood 
Federation's headquarters and the International Planned Parenthood 
Federation's member family planning associations. We collected 
information on the organizations' expenditures of federal funds and did 
not determine the total amount of federal funds that federal agencies 
provided the organizations. We collected information from the 
Department of Health and Human Services' Office of Public Health and 
Science to update information it provided for our November 2001 report. 
We held discussions with staff members from each of the relevant 
congressional committees to confirm committee jurisdiction over 
legislation authorizing the federal agency programs and funding and 
appropriating the program funds that supported the organizations' 
activities. In the course of our work, USAID and The Alan Guttmacher 
Institute revised fiscal year 2000 expenditures of federal funds for 
international activities that we reported in November 2001. (See 
enclosure I for this revised information.) We conducted our work from 
January 2003 through April 2003 in accordance with generally accepted 
government auditing standards.

Results in Brief:

For fiscal year 2001, the total amount of federal funds expended by the 
organizations for domestic and international health-related 
activities, such as family planning for individuals and health-related 
research, was approximately $225 million. (See table 1.) The Planned 
Parenthood Federation of America and its affiliates, the Population 
Council, The Alan Guttmacher Institute, Advocates for Youth, and SIECUS 
reported spending approximately $170 million in federal funds to 
support their domestic health-related activities.

Table 1: Organizations' Expenditures of Federal Funds for Domestic and 
International Health-Related Activities, Fiscal Year 2001:

[See PDF for image]

Sources: The Planned Parenthood Federation of America, the Population 
Council, USAID, The Alan Guttmacher Institute, Advocates for Youth, and 
SIECUS.

Note: The International Planned Parenthood Federation's headquarters 
received no federal funds for fiscal year 2001.

[A] The 12-month fiscal year periods for the organizations' 
expenditures varied.

[End of table]

The Department of Health and Human Services' (HHS) grants and programs 
were the major sources of the federal funds that the organizations 
spent for domestic health-related activities. Two committees in the 
Senate--Finance; and Health, Education, Labor, and Pensions--and two 
committees in the House of Representatives--Energy and Commerce, 
through its Subcommittee on Health; and Ways and Means--have 
jurisdiction over legislation authorizing the programs through which 
most of the federal funds were provided. In addition, the Senate and 
House committees on appropriations each have subcommittees that have 
jurisdiction over legislation appropriating funds for the federal 
programs.

The Population Council, the International Planned Parenthood 
Federation's member family planning associations, The Alan Guttmacher 
Institute, and Advocates for Youth reported spending more than $55 
million for international health-related activities. (See table 1.) 
USAID and the Centers for Disease Control and Prevention (CDC) within 
HHS were the sources of the federal funds that the organizations spent. 
Two committees in the Senate--Foreign Relations; and Health, Education, 
Labor, and Pensions--and two committees in the House of 
Representatives--Energy and Commerce, through its Subcommittee on 
Health; and International Relations--have jurisdiction over 
legislation authorizing the programs through which the federal funds 
were provided. In addition, the Senate and House committees on 
appropriations, through their subcommittees on foreign operations; and 
labor, health and human services, and education, have jurisdiction over 
legislation appropriating funds for the federal programs.

In response to HHS's comments on a draft of this report, we revised the 
report to better reflect the scope of our work and indicated that this 
report updates the information in our November 13, 2001, report.

Background:

The Planned Parenthood Federation of America--a nonprofit organization 
headquartered in New York City--and its 126 affiliates, with 865 local 
health centers, provide reproductive medical care and birth control 
education. The affiliates are independent, separately incorporated 
organizations with their own boards of directors and financial 
autonomy. In 2001, the affiliates provided health care to
2.7 million women and men and educational services to 1.5 million 
individuals. The affiliates and their clinics provide family planning 
counseling and birth control services, pregnancy testing, abortions, 
cancer screening, human immunodeficiency virus (HIV) testing, screening 
and treatment for sexually transmitted diseases, prenatal and well-baby 
care, and other health care services.

The Population Council is an international, nonprofit research 
organization. It is headquartered in New York City, has an office in 
Washington, D.C., 4 regional offices, and 14 other offices in 
developing countries. In 2002, about half of the Population Council's 
staff of about 600 employees was based in developing countries. The 
Population Council conducts biomedical research and develops 
contraceptives and other health products including those that protect 
against the transmission of HIV/AIDS and other sexually transmitted 
diseases. The Population Council also conducts research on trends in 
health and research aimed at improving the quality and outreach of 
family planning and reproductive health services. In addition, the 
Population Council strengthens professional resources in developing 
countries through collaborative research awards, fellowships, and 
training.

The International Planned Parenthood Federation is a nonprofit, family 
health care organization headquartered in London and registered as a 
charity in the United Kingdom. It has six regional offices, including 
one in the United States. The International Planned Parenthood 
Federation is a volunteer membership organization of autonomous legal 
entities called family planning associations. These associations are 
linked to the International Planned Parenthood Federation through 
common standards and objectives. The International Planned Parenthood 
Federation operates in conjunction with member family planning 
associations in 180 countries to provide family planning and 
reproductive health services, including maternal care and screening and 
treatment for sexually transmitted diseases.

The Alan Guttmacher Institute was originally a division of the Planned 
Parenthood Federation of America and became an independent nonprofit 
corporation in 1977 with offices in New York City and Washington, D.C. 
It remains an affiliate of the Planned Parenthood Federation of 
America. The Alan Guttmacher Institute conducts reproductive health and 
family planning research and policy analysis, provides public education 
nationally and internationally, and publishes journals about family 
planning and reproductive health.

Advocates for Youth, established in 1980 as the Center for Population 
Options, is a nonprofit organization that works in the United States 
and developing countries, supporting efforts to help young people make 
informed and responsible decisions about their reproductive and sexual 
health. Advocates for Youth provides information, training, and 
assistance to educators, health care providers, youth-serving 
organizations, and others about best reproductive health practices for 
teens for the prevention of pregnancy and HIV and other sexually 
transmitted disease. In 2002, Advocates for Youth worked with more than 
37,000 professionals who provided information and assistance to more 
than 10 million teens around the world to help them make decisions 
about their reproductive health.

SIECUS, established in 1964, is a nonprofit organization with offices 
in New York City and Washington, D.C. SIECUS develops, collects, and 
disseminates information; promotes comprehensive education; and 
advocates the right of individuals to make responsible sexual choices.

Federal Funds Expended for Domestic Health-Related Activities:

For fiscal year 2001, the Planned Parenthood Federation of America and 
its affiliates, the Population Council, The Alan Guttmacher Institute, 
Advocates for Youth, and SIECUS reported spending approximately $170 
million in federal funds for domestic health-related activities. Some 
of the domestic health-related activities these organizations support 
include family planning and reproductive health services for 
individuals and health research. HHS provided most of this federal 
funding through grants and the Medicaid program. (See table 2.):

Table 2: Organizations' Expenditures of Federal Funds for Domestic 
Health-Related Activities, 
Fiscal Year 2001:

[See PDF for image]

Sources: The Planned Parenthood Federation of America, the Population 
Council, The Alan Guttmacher Institute, Advocates for Youth, and 
SIECUS.

Note: GAO analysis of the organizations' data.

[A] The 12-month fiscal year periods that the organizations' year-end 
financial statements covered varied.

[B] Data are for the Planned Parenthood Federation of America's 
affiliates that did not identify specific sources of funds and related 
funding amounts.

[End of table]

The majority of federal funding that supported the organizations' 
domestic health-related activities was provided through the following 
grants, programs, and cooperative agreements:

*  Family planning grants--Title X of the Public Health Service Act (42 
U.S.C.  300 et seq.) authorizes grants for voluntary family planning 
services, primarily for low-income women. Title X grants also provide 
funding for general and clinical specialty training programs for family 
planning clinic personnel, research to improve the delivery of family 
planning services, and information dissemination activities. Title X 
grantees include state and territorial health departments, local health 
departments, hospitals, and other organizations. Grantees can disburse 
title X funds to other agencies or organizations to provide services or 
to support clinics. Although there are no matching requirements for 
service grants, regulations specify that no title X grant may fund 100 
percent of a project's estimated costs. For fiscal year 2001, the 
Planned Parenthood Federation of America and its affiliates reported 
spending about $59 million and The Alan Guttmacher Institute reported 
spending more than $315,000 of federal funds provided through family 
planning grants.

* Medicaid--Title XIX of the Social Security Act (42 U.S.C.  1396 et 
seq.) authorizes federal funding to states and requires state Medicaid 
programs to cover family planning services for individuals of 
childbearing age who are eligible under the state's Medicaid plan and 
seek those services. Medicaid is a joint federal/state entitlement 
program that annually finances health care coverage for more than 40 
million low-income individuals. The federal government pays 90 percent 
and states pay 10 percent of Medicaid expenditures for family planning 
services and supplies furnished to beneficiaries. Family planning 
services under Medicaid include only those services and supplies 
intended to control family size, such as counseling and patient 
education and methods of contraception. Many other reproductive health 
services covered under Medicaid are paid for under standard federal-
state payment formulas.[Footnote 3] The Planned Parenthood Federation 
of America and its affiliates reported fiscal year 2001 expenditures 
for services covered by the Medicaid program of about $61 million.

* Social Services Block Grant (SSBG) and Maternal and Child Health 
Services Block Grant (MCHBG)--Title XX of the Social Security Act (42 
U.S.C.  1397 et seq.) authorizes SSBG, and title V of the act (42 
U.S.C.  701 et seq.) authorizes MCHBG. SSBG and MCHBG funds are 
distributed by formula to state and territorial health and social 
service agencies. Federal MCHBG funds
are matched by state funds; states provide $3 of nonfederal funds for 
every $4 of MCHBG funds. Each state determines how its funds from each 
block grant are to be used. Under each block grant, state agencies may 
fund family planning activities directly or purchase them from entities 
such as an organization's affiliates that provide family planning 
activities. For fiscal year 2001, the Planned Parenthood Federation of 
America and its affiliates reported spending more than $19 million in 
federal SSBG funds and about $6 million in federal MCHBG funds that 
were provided through state agencies.

* Research project grants--Title IV and section 301 of the Public 
Health Service Act (42 U.S.C.  281 et seq. and 42 U.S.C.  241, 
respectively) authorize research project grants. The National 
Institutes of Health (NIH) institutes and centers funding these grants 
include the National Institute on Aging, the National Institute of 
Allergy and Infectious Diseases, the National Institute of Child Health 
and Human Development, and the National Institute of Environmental 
Health Sciences. Funds from NIH are provided directly to recipient 
organizations. The NIH research grant recipients conduct various kinds 
of reproductive health and other population research. For example, 
among its research projects, the Population Council explores ways to 
prevent the spread or transmission of HIV and trends in health among 
elderly Asians. The Alan Guttmacher Institute conducts research that 
focuses on the effectiveness of contraceptives in preventing 
pregnancies. For fiscal year 2001, the Population Council reported 
spending about $6.5 million in NIH research project grant funds and The 
Alan Guttmacher Institute reported expenditures of about $57,000.

* Research grants--The National Science Foundation (NSF), through the 
National Science Foundation Act of 1950, as amended (42 U.S.C. 1861 et 
seq.), is authorized to award research grants. NSF's Directorate for 
Biological Sciences, Division of Integrative Biology and Neuroscience, 
funds research that focuses on understanding multifaceted relationships 
among the central nervous system, hormones, and behavior, especially in 
relation to environmental factors. For fiscal year 2001, the Population 
Council reported spending more than $52,000 in NSF research grant 
funds. The grants funded research on the behavioral and biological 
effects of chronic social stress.

* Cooperative agreements--Title III and sections 311 and 317 of the 
Public Health Service Act (42 U.S.C.  241 et seq., 42 U.S.C  243, and 
42 U.S.C.  247b respectively) authorize the use of cooperative 
agreements and grants.[Footnote 4] CDC's National Center for Chronic 
Disease Prevention and Health Promotion and
National Center for HIV, STD, and TB Prevention enter into cooperative 
agreements with entities to provide funding support for the development 
and implementation of effective health education to prevent HIV and 
other health problems for school-age populations. For fiscal year 2001, 
Advocates for Youth reported spending about $500,000 and SIECUS 
reported spending more than $218,000 in federal funds provided through 
cooperative agreements with CDC.

The Senate Committee on Finance; the Senate Committee on Health, 
Education, Labor, and Pensions; the Senate Committee on Commerce, 
Science, and Transportation; the House Committee on Energy and Commerce 
through its Subcommittee on Health; the House Committee on Science; and 
the House Committee on Ways and Means have jurisdiction over 
legislation authorizing the program funds that the organizations 
reported spending for domestic health-related activities. Also, the 
Senate Committee on Appropriations, through its Subcommittee on Labor, 
Health and Human Services, and Education; and Subcommittee on VA, HUD 
and Independent Agencies, and the House Committee on Appropriations, 
through its Subcommittee on Labor, Health and Human Services, and 
Education; and Subcommittee on VA, HUD and Independent Agencies, have 
jurisdiction over legislation appropriating funds for the programs. 
(See table 3.):

Table 3: Congressional Committees and Subcommittees with Jurisdiction 
over Legislation for the Authorization of Federal Programs and the 
Appropriation of Funds That Supported the Organizations' Domestic 
Health-Related Activities:

[See PDF for image]

Source: Congressional committees and subcommittees.

Note: GAO analysis of congressional information.

[End of table]

Federal Funds Expended for International Health-Related Activities:

For fiscal year 2001, the Population Council, the International Planned 
Parenthood Federation's member family planning associations, The Alan 
Guttmacher Institute, and Advocates for Youth--reported spending more 
than $55 million in federal funds for international health-related 
activities such as family planning and health research. (See table 4.) 
The Population Council, the International Planned Parenthood 
Federation's member family planning associations, and The Alan 
Guttmacher Institute received financial support for international 
activities from USAID. Advocates for Youth received financial support 
for its international activities through a cooperative agreement with 
CDC.

Table 4: Organizations' Expenditures of Federal Funds For International 
Health-Related Activities, Fiscal Year 2001:

[See PDF for image]

Sources: USAID, the Population Council, The Alan Guttmacher Institute, 
and Advocates for Youth.

Note: The International Planned Parenthood Federation's headquarters 
received no federal funds for fiscal 
year 2001.

[A] The 12-month fiscal year periods for the organizations' 
expenditures varied.

[B] Dollar value of the contraceptive shipments.

[End of table]

Expenditures of federal funds supported the following organizations' 
international health-related activities:

* The Population Council spent its USAID grant funds to, among other 
things, conduct research to improve the quality, accessibility, and 
cost-effectiveness of reproductive health programs; conduct research on 
adolescent livelihoods and the transition to marriage and adulthood; 
conduct field-based research in developing countries to identify best 
practices for the prevention, treatment, and mitigation of HIV/AIDS and 
other sexually transmitted diseases; and undertake research on new and 
improved contraceptive methods and products that protect against HIV 
and other diseases.

* The International Planned Parenthood Federation's family planning 
association members usedUSAID funds to support various international 
health-related activities, such as providing contraceptives and 
contraceptive counseling. The support included direct funding through 
agreements between USAID and the family planning associations and 
indirect funding through agreements between USAID and U.S.-based 
agencies that have subagreements with other entities. In fiscal year 
2001, USAID resumed a policy of providing family planning assistance 
only to foreign nongovernmental organizations that chose to sign 
agreements to neither perform nor actively promote abortion as a method 
of family planning in other nations with the organization's own funds 
or funds received from any other donor source. According to USAID, 
since 1973, organizations have been legally prohibited from using USAID 
funds to support or encourage abortion as a method of family planning.

* The Alan Guttmacher Institute used USAID funds for publishing an 
international journal about family planning and reproductive health 
issues in English, French, and Spanish.

* Advocates for Youth used federal funds provided through a cooperative 
agreement with CDC to help foster relationships between HIV/AIDS 
service organizations in the United States and those working in 
developing countries. Specifically, Advocates for Youth created a 
network of service providers from the Washington, D.C. area, El 
Salvador, Honduras, and Guatemala to share strategies on HIV prevention 
services for at-risk Latino youth. Advocates for Youth also provided 
technical assistance and training to its Central American partners on 
organizational development, peer education, and outreach.

The Senate Committee on Foreign Relations and the House Committee on 
International Relations have jurisdiction over legislation authorizing 
USAID programs. The Senate Committee on Appropriations, through its 
Subcommittee on Foreign Operations, and the House Committee on 
Appropriations, through its Subcommittee on Foreign Operations, Export 
Financing, and Related Programs, have jurisdiction over legislation 
appropriating funds for USAID programs and operations. The Senate 
Committee on Health, Education, Labor, and Pensions and the House 
Committee on Energy and Commerce, through its Subcommittee on Health, 
have jurisdiction over legislation authorizing CDC programs. The Senate 
Committee on Appropriations, through its Subcommittee on Labor, Health 
and Human Services, and Education, and the House Committee on 
Appropriations, through its Subcommittee on Labor, Health and Human 
Services, and Education have jurisdiction over legislation 
appropriating funds for CDC programs.

Agency and Other Comments and our Response:

We provided a draft of this report to HHS, USAID, the Planned 
Parenthood Federation of America, the Population Council, The Alan 
Guttmacher Institute, Advocates for Youth, and SIECUS for review.

In its written comments, HHS raised concern about our data collection 
methodology (see enclosure II). HHS commented that the major question 
posed in the congressional request was not addressed because we 
presented expenditure data rather than total federal funding and that 
its records indicate that two organizations received from about two to 
three times the amount of federal funds presented in the draft report. 
We acknowledge that there could be a difference in the amount of 
federal funds the organizations received and the amount they reported 
spending. However, determining the amount of federal funds the 
organizations received was beyond the scope of our work. We agreed with 
the requesters' staff to update the information presented in our 
November 2001 report. In that report, we presented information that the 
organizations provided on their expenditures of federal funds for 
fiscal years 1999 and 2000. This report updates those data by 
presenting information on the organizations' expenditures of federal 
funds for fiscal year 2001. We added information to clarify that the 
scope of our work focused on expenditures rather than the total amount 
of federal funding the organizations received from the federal 
agencies.

HHS also commented that we had not requested information from the 
department's agencies as we have done in the past, such as with our 
November 2001 report. However, we contacted the HHS agency that 
provided information for our November 2001 report, for updated 
information. For consistency, the methodology that we used to collect 
data for this report was similar to the methodology we used for our 
November 2001 report.

Throughout the draft report we used the term "reproductive health" in 
discussing the organizations' expenditures and the type of activities 
they support. HHS commented that our use of the term reproductive 
health made it unclear whether we requested information only on funding 
for reproductive health activities or whether we characterized all 
expenditures of federal funds by the organizations as funds to support 
reproductive health activities. We agree with HHS' comment that the 
focus on reproductive health should be changed and have revised the 
report to reflect the broader health-related activities that the data 
represent.

HHS, USAID, and the organizations we reviewed provided technical 
comments that we incorporated in the report where appropriate.

- - - - -:

We are sending copies of this report to the relevant congressional 
committees, the Secretary of Health and Human Services, and the 
Administrator of the U.S. Agency for International Development. We will 
also make copies available to others on request. In addition, the 
report is available at no charge on GAO's home page at http://
www.gao.gov. If you have any questions about this report, please 
contact me at (202) 512-7101 or James O. McClyde at (202) 512-7152. 
Claude B. Hayeck made major contributions to this report.

Marjorie E. Kanof:

Director, Health Care--Clinical and Military Health Care Issues:

Signed by Marjorie E. Kanof:

Enclosures - 2:

Revised Fiscal Year 2000 Expenditures for
International Health-Related Activities:

In providing the nonprofit organizations' fiscal year 2001 expenditures 
of federal funds for health-related activities, the U.S. Agency for 
International Development (USAID) also revised fiscal year 2000 
international health-related expenditure data it provided for the 
International Planned Parenthood Federation and its affiliated 
associations.[Footnote 5] As shown in table 5, fiscal year 2000 
expenditures for contraceptive shipments increased more than $2.6 
million, expenditures related to direct agreements increased about $3.9 
million, and expenditures related to subagreements decreased about $1.3 
million. The Alan Guttmacher Institute also revised its fiscal year 
2000 expenditures of federal funds for international activities that 
USAID provided for our November 2001 report. These expenditures 
increased by $5,000.

Table 5: Federal Funds Expended by Three Nonprofit Organizations for 
International Health-Related Activities, Fiscal Year 2000:

[See PDF for image]

Source: USAID, the Population Council, and The Alan Guttmacher 
Institute.

Note: GAO analysis of the organizations' data. Revised expenditure data 
provided by USAID and The Alan Guttmacher Institute.

[A] These figures represent obligations.

[End of table]

This information changes the total amount of fiscal year 2000 
expenditures of federal funds that supported the domestic and 
international health-related activities of the four nonprofit 
organizations discussed in our November 2001 report--the Planned 
Parenthood Federation of America and its affiliates, the Population 
Council, the International Planned Parenthood Federation and its 
affiliated associations, and The Alan Guttmacher Institute--from about 
$196 million to approximately $201 million. (See table 6.):

Table 6: Federal Funds That Supported the Domestic and International 
Health-Related Activities of Four Nonprofit Organizations, Fiscal Year 
2000:

[See PDF for image]

Source: GAO analysis of the organizations' data.

Note: Revised expenditure data provided by USAID and The Alan 
Guttmacher Institute.

[End of table]

Comments from the Department of Health and Human Services:


DEPARTMENT OF HEALTH & HUMAN SERVICES	
Office of Inspector General:

APR 10 2003:

Washington, D.C. 20201:

Ms. Marjorie E. Kanof Director, Health Care - Clinical and Military 
Health Issues United States General Accounting Office Washington, D.C. 
20548:

Dear Ms. Kanof:

Enclosed are the department's comments on your draft report entitled, 
"Reproductive Health: Federal Funds That Supported Six Nonprofit 
Organizations." The comments represent the tentative position of the 
department and are subject to reevaluation when the final version of 
this report is received.

The department provided several technical comments directly to your 
staff.

The department appreciates the opportunity to comment on this draft 
report before its publication.

Sincerely,

Dennis J. Duquette:

Acting Principal Deputy Inspector General:

Signed by Dennis J. Duquette:

Enclosure:

The Office of Inspector General (OIG) is transmitting the department's 
response to this draft report in our capacity as the department's 
designated focal point and coordinator for General Accounting Office 
reports. The OIG has not conducted an independent assessment of these 
comments and therefore expresses no opinion on them.

Comments of the Department of Health and Human Services on the General 
Accounting Office's Draft Report, "Reproductive Health: Federal Funds 
That Supported Six Nonprofit Organizations" (GAO-03-527R):

The Department of Health and Human Services (department) has several 
significant concerns regarding this draft report. First, we are 
concerned that the major question posed in the congressional request 
(i.e. what is "The amount of federal funding that supports these 
organizations?") has not been addressed. The General Accounting Office 
(GAO) has presented, for the six organizations, information on 
"expenditures" which differs significantly from total "federal 
funding." For example, our records for fiscal year 2001 indicate that 
Advocates for Youth received approximately three times the amount 
included in the draft report and that the Alan Guttmacher Institute 
received approximately twice the amount included in the draft report.

Second, on a related note, in the past, in response to similar 
congressional requests, GAO has sought funding information from both 
the organizations receiving federal funds and from the funding 
agencies. This year, with the exception of the National Institutes of 
Health, GAO has not requested information from department agencies and 
has chosen to rely exclusively on information provided by the six 
organizations under review. We believe the approach used in past 
reports (e.g. the inclusion of information on federal funding by fiscal 
year as presented in Table 1 of GAO's 2001 report (GAO-02-81 R)) 
resulted in a more accurate representation of federal funding and is 
more closely aligned with the current congressional request.

Our third concern relates to GAO's focus on "reproductive health." It 
is not clear whether GAO requested only information on "reproductive 
health" funding from the six organizations, or whether GAO simply 
characterized all funding provided by the department as "reproductive 
health." We believe GAO's use of the term is problematic in either 
case. If, in fact, GAO only sought information relating to 
"reproductive health" funding, we believe this is inconsistent with the 
congressional request which was clearly intended to disclose all 
federal funding provided to the six organizations. On the other hand, 
if GAO did request information on all department funding and 
characterized all department funding as "reproductive health," that 
would be inaccurate. For example, funds used to prevent HIV/AIDS are 
not "reproductive health" funds. In either case, the focus on 
"reproductive health" (including use of the term in the title of the 
draft report) should be revised.

A final issue is GAO's description of the six organizations and their 
overall organizational structures and activities in the "Background" 
section of the draft report. The GAO appears to have utilized the 
organizations' own descriptions of themselves without clearly stating 
so. The GAO may wish to make the sources of the organizations' 
descriptions clear by putting the descriptions in quotation marks and 
providing appropriate attribution.

We would, of course, be prepared to work with GAO to address our 
concerns and provide additional information as needed. We realize that 
this could further delay completion of the draft report beyond the 
deadline the Members of Congress requested.

[End of section]

(290255):

FOOTNOTES

[1] U.S. General Accounting Office, Reproductive Health: Federal Funds 
That Supported Four Nonprofit Organizations, GAO-02-81R (Washington, 
D.C.: Nov. 13, 2001). 

[2] With the exception of SIECUS's financial statements, all the 
statements were prepared in compliance with Office of Management and 
Budget Circular A-133. The independently audited financial statements 
that SIECUS provided were not subject to the Circular A-133 requirement 
because the organization's expenditures of federal funds were less than 
the $300,000 annual minimum required under Circular A-133. The 12-month 
fiscal year periods that the organizations' year-end financial 
statements covered varied. 

[3] The federal portion of payments for these Medicaid services is set 
annually for each state by a formula based on state per capita income 
and may range from 50 to 83 percent.

[4] Cooperative agreements are to be used when substantial federal 
involvement with the recipient during performance is anticipated. The 
difference between grants and cooperative agreements is the degree of 
federal programmatic involvement rather than the type of administrative 
requirements imposed. See 31 U.S.C.  6304 and 6305.

[5] See U.S. General Accounting Office, Reproductive Health: Federal 
Funds That Supported Four Nonprofit Organizations, GAO-02-81R 
(Washington, D.C.: Nov. 13, 2001).