Detailed Information on the
Indian Health Service Sanitation Facilities Construction Program Assessment

Continue to explore options for improved annual and efficiency performance measures.

Progress continues in the development of a plan to support and perform a new, comprehensive independent evaluation in 2010 to assess the effectiveness of the program.

Develop baselines and targets for new measures.

Marginal Cost Analysis in conjunction with OMB A-11, Section 221, Budget and Performance Integration.

Implement the first round of strategic planning activities, as recommended by the independent evaluation.

Measure: Percentage of American Indian/Alaska Native (AI/AN) homes with potable water.

Explanation:

Measure: Percent of existing homes served by the Sanitation Facilities Construction Program at Deficiency Level 4 or above as defined by 25 USC 1632. Deficiency level 4 and 5 homes have the greatest deficiencies.

Explanation:Deficiency level 4 and 5 homes have the greatest deficiencies, and when combined with the number of home served this measure quantifies the cost effectiveness and health impact of the program.

Measure: Number of new or like-new AI/AN homes and existing homes provided with sanitation facilities.

Explanation:This measure tracks the impact of the program through number of homes served. The goals are ambitious because increases in construction inflation and potential reductions in contributions from other agencies are expected to result in a decline in the number of homes served.

Measure: Track average project duration from the MOA execution to construction completion. (New Measure, added February 2007)

Explanation:Reductions in the length of time a project takes to complete will yield cost savings in both construction inflation costs and project-related staffing costs. Curbing project duration is a protracted undertaking due to the large number of projects underway, many of which have a duration in excess of four years.

Is the program purpose clear?

Explanation: The purpose of the Indian Health Service (IHS) Sanitation Facilities Construction (SFC) program is to provide sanitation facilities to American Indian/Alaska Native (AI/AN) homes and communities. The IHS SFC program provides sanitation services to new homes, services to existing homes, sanitation system expansions, new sanitation systems (first time service), combination water/sewer projects, and facility upgrades in AI/AN homes and communities in collaboration with tribes, States, and Federal agencies.

Evidence: The Indian Sanitation Facilities Act , P.L. 86-121 (42 USC 2004a), created the IHS SFC program in 1959. P.L. 86-121 authorized the SFC program to provide essential water supply, and liquid and solid waste disposal facilities to AI/AN homes and communities. This authority was reaffirmed by Congress in the 1988 Amendments to the Indian Health Care Improvement Act (IHCIA), P.L. 94-437 (25 USC 1632), as amended.

Does the program address a specific and existing problem, interest, or need?

Explanation: Many American Indians/Alaska Natives (AI/ANs) still lack access to potable water and adequate sanitation facilities. The provision of sanitation facilities is an extension of the primary health care delivery efforts of the Indian Health Service (IHS). The availability of essential sanitation facilities can be a major factor in preventing waterborne communicable disease episodes. Safe drinking water supplies and adequate waste disposal facilities are essential preconditions for most health promotion and disease prevention efforts. Without the SFC program, sanitation advances within Indian Country would be uncertain because some Indian communities have limited local resources to fund such projects. The SFC program has established utility organizations and continues to provide technical assistance and capacity building to tribal organizations that operate and maintain sanitation facilities. Without tribal utility organizations, some Indian communities would be unable to qualify for sanitation funds provided by other agencies.

Evidence: Over 38,000 AI/AN homes do not have access to potable water meeting the Safe Drinking Water Act. This constitutes approximately 12 percent of the AI/AN homes inventoried in the Sanitation Deficiency System (SDS), the IHS data system, compared to 1 percent of the US general population that lacks potable water. An additional 170,000 AI/AN homes lack adequate water supply, sewage disposal, and/or solid waste facilities. According to the 2000 US Census, over 33,000 AI/AN homes do not have indoor plumbing http://www.census.gov/census2000/pubs/phc-5.html.

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: The Sanitation Facilities Construction (SFC) program is the primary provider of sanitation facilities to the American Indian/Alaska Native (AI/AN) population (membership in a recognized tribe and need, irrespective of income level, are the basis for eligibility). The Indian Health Service (IHS) provides service to new homes, service to existing homes, sanitation system expansions, new systems (first time service), combination water/sewer projects, and sanitation facility upgrades. Unlike other Federal programs, only IHS SFC provides engineering planning, design and construction/project management services. The Environmental Protection Agency (EPA) and the Department of Agriculture's Rural Utility Service (RUS) do not provide direct services to homes; the programs in these agencies only provide funding for community water and sewer facilities. EPA provides water project grants and sewer project grants to upgrade facilities. RUS has a loan component that requires a financial contribution and/or financial requirements from tribes and operation and maintenance organizations. Unlike other agencies that provide similar sanitation construction services, the SFC program has sole responsibility, per the Indian Health Care Improvement Act (IHCIA), to maintain inventories of sanitation deficiencies for Indian homes and communities, prioritize the correction of deficiencies, and report these deficiencies to Congress annually.

Evidence: The SFC FY 2006 appropriation of $92 million is provided for service specifically to the AI/AN population. Other Federal, state or local programs are funded to serve the general population. The SFC program receives outside contributions annually of approximately $50 to $100 million from Federal agencies, States, and tribes. The majority of these contributions were from RUS and EPA. The Department of Interior's Bureau of Reclamation (BOR) funding is limited to rural water and typically funds systems for the provision of agricultural water, which is not an authorized use of IHS SFC resources. The BOR does not provide wastewater services and does not normally fund services to homes.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: The Sanitation Facility Construction (SFC) program has a long history of strong relationships with partnering agencies based on successful project outcomes and the program's solid reputation for construction design and management. An independent evaluation of the SFC program concluded that it has many organizational strengths, including a decentralized organizational structure that emphasizes local service operations which, among other advantages, allows services to be tailored to the local or regional needs. Additionally, the evaluation noted the SFC program's performance monitoring system and outcome-oriented project delivery system. There is no strong evidence that another mechanism would be more effective at providing sanitation facilities to American Indian/Alaska Native (AI/AN) homes and communities.

Evidence: Independent Evaluation Report: IHS SFC Program, July 2005, prepared by Federal Occupational Health Service. The SFC program is considered to be optimally designed by other Federal programs. The EPA Clean Water Act Tribal Set-Aside (CWA) and Safe Drinking Water Act Tribal Set-Aside (SDWA) programs use the SFC priority system to select projects eligible for funding and prefer that IHS administer projects because of the efficiencies in the program. See EPA CWA regulations http://www.epa.gov/owm/mab/indian/cwisa.htm and http://www.epa.gov/owm/sbroch.pdf and SDWA Guidelines http://www.epa.gov/safewater/dwsrf/allotments/tribes/index.html.

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: Funding for the Sanitation Facilities Construction (SFC) program is dedicated exclusively to serving American Indian/Alaska Native (AI/AN) homes and communities with sanitation facilities. All project scopes are approved by tribes and all beneficiaries are approved and verified as tribal members by their respective tribes. SFC projects fall into two major categories: regular projects to serve existing AI/AN homes and housing funds to serve new and like new AI/AN homes. Allocation of funding to serve existing homes is prioritized based on several rating criteria including health impact, deficiency level, economic feasibility, tribal priority, outside contributions, first service, and operation and maintenance capability. This priority system allows the Indian Health Service (IHS) to maximize health benefits by balancing needs with economic feasibility, thus assuring that the highest health needs are the highest priority. The Sanitation Deficiency System (SDS) prioritization system assigns points based on cost per home, amongst other scoring factors, if all other factors are equal (e.g. health impact) the more cost effective projects score higher and get funded first. The Project Data System (PDS) system tracks the scope, schedule, and cost throughout the life of the project to ensure funds are utilized as intended. Housing funds are distributed to serve new and like new or renovated AI/AN homes. New AI/AN homes have the highest priority.

Evidence: The SFC Criteria Document outlines the prioritization system for new projects and contains guidelines that ensure the most cost efficient and highest need projects are funded first across the SFC program. The regular and housing projects account for approximately 98 percent of appropriated funds with the remainder reserved for special and emergency requests. Additionally, the program is able to leverage and utilize funding from States, Federal agencies and tribes to construct sanitation facilities.

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The program has two long-term performance measures that reflect the program's statutory goal to ensure "that all Indian Communities and Indian homes, new and existing, be provided with safe and adequate water supply systems and sanitary sewage waste disposal systems as soon as possible." The first long-term outcome measure tracks the percentage of American Indian/Alaska Native (AI/AN) homes with potable water. The second annual/long-term efficiency measure focuses on average project duration by measuring project construction duration.

Evidence: In addition to the statutory goal of 100 percent of AI/AN communities and homes with safe and adequate water supply and sanitary sewage disposal included in the Indian Health Care Improvement Act, the Sanitation Facilities Construction (SFC) program has the following long-term goals: (1) Increase the number of AI/AN homes with potable water (sanitation facilities) from 88 percent to 94 percent by 2015; and (2) complete SFC projects in 4 years or less from the time of Memorandum of Agreement (MOA) execution to construction completion by 2011 and maintain this rate through 2014. The Indian Health Service Strategic Plan 2006-2011 outlines IHS's strategy for achieving the SFC program's long-term goals http://www.ihs.gov/NonMedicalPrograms/PlanningEvaluation/documents/IHS_StrategicPlan_2006-2011.pdf.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: The Sanitation Facilities Construction (SFC) program has the ambitious statutory long-term goal of ensuring "that all Indian Communities and Indian homes, new and existing, be provided with safe and adequate water supply systems and sanitary sewage waste disposal systems as soon as possible." The SFC program's long-term outcome and efficiency measures have ambitious, quantifiable targets with clear baselines based on the SFC program's longstanding data systems. SFC program staff and tribes document an increasing demand for sanitation facilities in Indian communities as they periodically update data systems to reflect new and resurfacing sanitation needs. The Indian Health Service (IHS) Strategic Plan, SFC PART, and FY 2008 IHS Performance Budget include the long-term SFC goals to increase the percentage of American Indian /Alaska Native (AI/AN) homes with potable water from 88 percent to 94 percent by 2015 and to maintain average project construction duration at 4.0 years in the long term after an expected increase in project construction duration from 3.8 years to 4.1 years.

Evidence: The baselines and targets for the SFC program's long-term outcome measures to (1) increase the number of AI/AN homes with potable water (sanitation facilities) from 88 percent to 94 percent by 2015 and (2) complete SFC projects in 4 years from the time of Memorandum of Agreement (MOA) execution to construction completion by 2010 and maintain this rate through 2013 after an expected increase in project construction duration from 3.8 years to 4.1 years are based on data from the Sanitation Deficiency System (SDS) and the Project Data System (PDS). The SDS was created in response to the Indian Health Care Improvement Act (IHCIA), which requires IHS to maintain inventories of sanitation deficiencies for Indian homes and communities; prioritize the correction of deficiencies in the form of projects; and report these deficiencies to Congress annually. The IHS has reported these deficiencies to Congress since 1989. The targets for both long-term measures are ambitious because new home construction in Indian Country is outpacing IHS housing projects. Facility life cycle costs pose challenges for the SFC program because most IHS installed facilities have a 20-40 year life cycle. When the life of a facility is exhausted, sanitation facility needs re-emerge in IHS data systems. New environmental regulations also increase the SFC program inventory of projects. The Indian Health Care Improvement Act (IHCIA), P.L. 94-437 (25 USC 1632), as amended. The IHS Strategic Plan 2006-2011 http://www.ihs.gov/NonMedicalPrograms/PlanningEvaluation/documents/IHS_StrategicPlan_2006-2011.pdf. EPA Tribal Water Plan http://www.epa.gov/ow/waterplan/tribal/index.html.

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: The Sanitation Facilities Construction (SFC) program has two annual outcome performance measures and one annual/long-term efficiency measure that demonstrate progress toward achieving the program's long-term goals. One of the program's annual performance measures assesses the provision of water, sewage disposal, and/or solid waste facilities to American Indian/Alaska Native (AI/AN) homes. The second annual performance measure tracks the percentage of existing homes served by the SFC program at Deficiency level 4 and 5. Deficiency Level 4 and 5 homes have the greatest health deficiencies. The annual performance measures take into account cost effectiveness and health impact by focusing on serving the greatest number of homes in highest need while simultaneously contributing to the long-term goal of increasing the number of AI/AN homes with potable water. Knowing the number of AI/AN homes without potable water and number of homes provided with potable water permits the calculation of progress toward achieving the program's long-term goals. The SFC program has met its performance goals since the inception of the Government Performance Results Act (GPRA). Recently, the SFC program established an annual/long-term efficiency measure that tracks average project duration from Memorandum of Agreement (MOA) execution

Evidence: The SFC program has two annual performance measures. The first performance measure tracks the number of new, like-new, and existing AI/AN homes provided with sanitation facilities. The second performance measure ensures that a percentage of the homes served by the program each year will be at Deficiency Level 4 or above. The FY 2008 IHS Performance Budget describes annual outcome and efficiency measures. Data contained in the SFC program Sanitation Deficiencies System (SDS) and the Project Data System (PDS) are utilized to determine progress in achieving performance targets.

Does the program have baselines and ambitious targets for its annual measures?

Explanation: The annual outcome and efficiency measures of the Sanitation Facilities Construction (SFC) program have baselines and quantifiable targets based on over ten years of data from the Sanitation Deficiency System (SDS) and the Project Data System (PDS). Targets for the annual outcome and efficiency measures have been set for a minimum of two years beyond the year of evaluation. The targets are ambitious given the increasing demand for sanitation facilities in Indian communities.

Evidence: The SFC program has the following annual performance measure targets: (1) to fund sanitation facilities projects that serve a minimum of 23,000 American Indian/Alaska Native (AI/AN) homes with water, sewage disposal, and/or solid waste facilities in 2007 and (2) to ensure that 35 percent of the homes served by the program will be at Deficiency Level 4 or above. Data contained in the SFC program Sanitation Deficiencies System (SDS) and the Project Data System (PDS) are utilized to determine baselines and progress towards achieving performance measure targets.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: The primary Sanitation Facilities Construction (SFC) program partners are tribes, including those that receive services directly from the Indian Health Service (IHS) and those that assume SFC program activities through self-determination agreements. Tribes and SFC staff report on performance semi-annually through the SFC Project Data System (PDS), which tracks progress and status of funded projects from project document execution through final report. Additionally, all SFC program staff and tribal program staff collect and report on needs through the Sanitation Deficiency System (SDS).

Evidence: An independent evaluation of the SFC program noted that a strength of the program is the relationships the program forges with tribal partners, State, local, and Federal agencies. In 2006, a survey conducted as part of the Nashville Area Strategic planning process indicated that partner agencies and tribes are satisfied with their partnership with the SFC program. When asked to rate the level of satisfaction among partners in a scale from 1 to 5, with 1 being "very poor" and 5 being "superior," tribal partners rated their overall satisfaction level at 4. The overall satisfaction rating in the same survey among Federal partners was 3.67. Data on tribal communities is tracked in the PDS and SDS data systems. These data systems are the basis for collecting information for budget justification and funding allocation. All project and staffing fund allocations are tied directly to the data systems, which ensures that all IHS and tribally-operated programs report performance data. EPA Tribal Water Plan http://www.epa.gov/ow/waterplan/tribal/index.html. Nashville Area SFC 5 Year strategic Plan 2006. Independent Evaluation Report: IHS SFC Program, July 2005, prepared by Federal Occupational Health.

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: An independent, comprehensive evaluation of the Sanitation Facilities Construction (SFC) Program was completed in 2005 by the Federal Occupational Health (FOH). The goals of the evaluation were the following: analyze the program's business practices; measure strengths, accomplishments, and areas for improvement; present best practices from outside the program; identify internal best practices; develop baseline for strategic planning efforts; and provide a template for evaluations. Several components of the program were evaluated including: program management, stakeholder relationships, service delivery, resource management, and organizational competencies. An on-line "filtering survey" was distributed to all SFC personnel designed to identify issues within each evaluation component. An evaluation report was produced based on survey results, document reviews, Area SFC visits, and interviews. The SFC program will undergo an independent evaluation in 2010, and every five years thereafter. Additionally, the SFC program has developed a series of stakeholder surveys and is developing a policy for conducting these surveys on a regular basis.

Evidence: FOH was chosen to conduct the evaluation of the SFC program because it has unique contracting authorities; it has experience with public health program evaluation; the industry expert approach; and it is a separate organizational entity within the Department of Health and Human Services with no line to the operational mission or authorities of the Indian Health Service (IHS). In addition to the independent evaluation conducted by the FOH the SFC program is evaluated on a continuous basis by 561 sovereign tribes and by Area Tribal Advisory Committees. Federal State, County, and utility organizations monitor, review, permit, approve, and evaluate program activities within their jurisdictions. Independent Evaluation Report for the IHS SFC Program, July 2005, prepared by Federal Occupational Health.

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: The Sanitation Facilities Construction (SFC) program budget requests are linked to accomplishment of annual and long-term performance goals and the program is able to show the impact of funding policy and legislative changes on performance, but the program is not able to report all direct and indirect costs needed to meet performance targets.

Evidence: The SFC program section in the Indian Health Service (IHS) Congressional Justification presents both the program's resource needs and how the budget request supports achievement of performance goals. The Sanitation Facilities Construction Program Marginal Cost Analysis, June 2006 determined the funding amount the SFC program needs to accomplish its long-term outcome goal to provide 94 percent of American Indian/Alaska Native (AI/AN) homes with potable water.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: The Sanitation Facilities Construction (SFC) program executed a strategic planning process, as recommended by an independent evaluation completed in 2005. In May 2005, the program convened a series of meetings of program directors and mid-level managers. Thse meetings resulted in 3 strategic directions and 10 vision elements. Within each vision element a wide variety of initiatives were identified for implementation. Vision element teams are currently working on specific initiatives.

Evidence: A core team consisting of 5 program directors meets by teleconference monthly to guide the implementation phase of the strategic plan. Additionally, 16 vision element teams consisting of 80 staff members from the twelve Indian Health Service (IHS) Areas and employees of outside agencies have been chartered to work on the implementation of initiatives related to the vision elements. The first major initiative that emerged from the strategic planning process was strengthening partner relationships. To address this, the SFC program has identified protocols in the SFC data systems to share information, and create a library of MOUs, agreements, and best practices. A customer service philosophy and satisfaction surveys have also been created. The second major initiative is strengthening the SFC Project Management culture. The SFC program has created a project duration data briefing package for each Area, standardized project milestones, created a time tracking system, implemented the UFMS financial system, conducted an internal survey of procurement methods, initiated formal career development for all SFC staff and researched project management tools and practices. The third initiative is insuring tribal operations and maintenance (O&M) is self-sustaining. The SFC program has distributed O&M manuals and reviewed existing O&M program guidance. The fourth major initiative is promoting technical and administrative data systems that are accurate, updated, and readily available.

Has the agency/program conducted a recent, meaningful, credible analysis of alternatives that includes trade-offs between cost, schedule, risk, and performance goals, and used the results to guide the resulting activity?

Explanation: A 2006 Benefit-Cost Analysis of major Sanitation Facility Construction (SFC) program functions determined a benefit-cost ratio for health benefits to Indian Health Service (IHS) costs and total benefits to total costs. Preliminary conclusions indicate that the benefits produced by SFC program activities exceed the cost of the program. Additionally, the environmental review process of SFC projects required by the National Environmental Policy Act (NEPA) mandates an analysis of alternatives. Several methods of procurement are open to the program, thus allowing the program to determine the most cost and time effective means for completing projects.

Evidence: In addition to the Benefit-Cost Analysis, alternatives for all SFC projects are reviewed in the feasibility stage. For example, the program's project development process considers whether a home should be provided with an individual well, connected to a surface water source, or connected to a nearby community water source. All proposed project alternatives are evaluated on costs, regulatory compliance, and operations and maintenance factors. IHS SFC Draft Benefit-Cost Analysis, April 2007. IHS SFC Criteria Document. IHS Environmental Review Manual, January 2007.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: In cooperation with partner agencies and tribes, the Sanitation Facilities Construction (SFC) program regularly collects timely and credible performance information through its Project Data System (PDS) and Sanitation Deficiency System (SDS). Data entered by field staff in the PDS and SDS,are checked by mid-level management and verified again by Area and Indian Health Service (IHS) Headquarters managers. Projects are ranked in the PDS and SDS systems based on assigned scores for the following criteria: health, deficiency level, previous services, contribution, capital cost, operations and maintenance, capability, tribe priority, and local conditions. Projects are funded in priority order from the SDS at the Area level.

Evidence: Funding for staff is distributed based on a workload model using data from the SDS and PDS. PDS project data contain estimated and actual costs, milestones, proposed and actual schedule, scopes, tasks, actual and budgeted resources for activities, and project durations. Quarterly progress reports for the SFC program and partners are generated from PDS data. At IHS Headquarters, information in the SDS and PDS systems is analyzed through long and short-term trend analysis. IHS SFC Criteria Document, June 1999.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: Federal managers and program partners are held accountable for cost, schedule and performance results. Area Directors are evaluated based on SFC program performance. Sanitation Facilities Construction (SFC) performance measures are included in the the Area Directors' performance plans. Tribes are held accountable for cost, schedule, and performance result based on the type of agreement chosen to accomplish the work.

Evidence: Area Directors make the final allocation decision based on the recommendations of the SFC program and Office of Environmental Health and Engineering Support (OEHE). There is a rigorous and structured system for change to the project scope or budget that ensures projects are completed within costs and on schedule. Accountability for tribes is based on the agreement between the tribe and the SFC program. For example, if the project is performed as a direct service through a Federal Acquisition Regulation (FAR) contract the contractor is accountable to the full extent required by the FAR. If the Tribe is performing work through a Memorandum of Agreement (MOA), performance and accountability provisions are passed on through the MOA. If the work is accomplished through a self-governance contract or compact, the Tribe assumes complete responsibility for the project, though payment is based on project schedules and progress. Each project has a schedule within the Project Data System (PDS). Final reports describe the original project schedules and rationalization for deviations in scope, schedule, and budget. The Indian Health Service (IHS) SFC Criteria Document (June 1999) outlines the standards to which managers and partners are held accountable.

Are funds (Federal and partners') obligated in a timely manner, spent for the intended purpose and accurately reported?

Explanation: Sanitation Facilities Construction (SFC) program funds are obligated in a timely manner. There is no strong evidence that the Indian Health Service (IHS) has adequate procedures in place for reporting expenditures or that it takes timely and appropriate action to correct single audit findings.

Evidence: SFC funds are obligated by Memoranda of Agreement (MOA) in the year received, and funds are not disbursed until an MOA is executed. A Department of Health and Human Services Office of Inspector General review of IHS action on audit stewardship reports of single agency audit recommendations discovered that of the 9,493 audit recommendations from CYs 2003-2005, IHS had not resolved 6,653 audit recommendations. http://oig.hhs.gov/oas/reports/region7/70603077.pdf

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: The Sanitation Facilities Construction (SFC) program has procedures to measure and achieve efficiencies in program execution. Under a Memorandum of Agreement (MOA) and self-governance contracts and compacts, tribes may procure services through competitive bids. All SFC projects compete on cost efficiency factors within the Sanitation Deficiency System (SDS). Additionally, the program developed an efficiency measure to maintain average project construction duration at 4.0 years or less in the long term after an expected increase in project construction duration from 3.8 years to 4.1 years. This performance measure incorporates cost effectiveness by focusing on project duration targets that aim to minimize average project costs and ensure management efficiencies.

Evidence: The SFC program achieves efficiencies in procurement and construction through Federal Acquisition Regulations (FAR) and Memorandum of Agreement (MOA) force account. Cost is one of the considerations in the choice of procurement instruments and historical construction costs, means estimated cost (industry standard), engineers estimates, and bid abstracts are used for cost comparisons. The IHS SFC Criteria Document, June 1999, outlines the policies and procedures for SFC project procurement and construction procedures.

Does the program collaborate and coordinate effectively with related programs?

Explanation: The Sanitation Facilities Construction (SFC) program works cooperatively with tribes, tribal organizations, tribal housing authorities, and government agencies to achieve its sanitation facilities construction objectives. For example, the Department of Housing and Urban Development (HUD) regularly transfers funds to the SFC program for sanitation projects in new and renovated HUD homes. An independent evaluation noted as a strength the long-standing, positive relationships the program has established with partners.

Evidence: Agreements among tribes, the Indian Health Service (IHS), and the Environmental Protection Agency's (EPA) Indian Set-Aside Grants (ISA) Program enable the EPA to contribute ISA Clean Water Act (CWA) and Safe Drinking Water Act (SDWA) funds to SFC projects. Additionally, the State of Alaska, through its Village Safe Water program, participates in many jointly funded construction projects in Alaska Native communities. The IHS has signed Memoranda of Understanding (MOU) with other Federal agencies to facilitate collaboration and coordination. Inter-agency meetings are held to collaborate on sanitation related issues. Over 30 percent of SFC projects funded in 2006 received contributions from other Federal programs.

Does the program use strong financial management practices?

Explanation: The financial management practices of the Indian Health Service (IHS) relies on legacy accounting systems that are not compliant with the Federal Financial Management Improvement Act (FFMIA). A 2007 report by the HHS Office of Inspector General found that IHS does not resolve audit recommendations in a timely manner because it does not follow departmental policies and procedures.

Evidence: An OIG review of IHS action on audit stewardship reports on single agency audit recommendations discovered that of the 9,493 audit recommendations from CYs 2003-2005, IHS had not resolved 6,653 audit recommendations. http://oig.hhs.gov/oas/reports/region7/70603077.pdf

Has the program taken meaningful steps to address its management deficiencies?

Explanation: The Sanitation Facilities Construction (SFC) program has taken meaningful steps to address its management deficiencies through (1) a yearly management review process and (2) constant evaluation of program data systems that expose necessary changes in management practices. First, a Management Control Review is conducted each year which allows managers to certify the appropriateness of their program operations, identify deficiencies, and implement corrective action plans. Second, information collected in project reviews or captured in the SFC data systems is used to refine management practices.

Evidence: In the Management Control Review Area Directors and SFC Program Directors certify that the program is efficiently and effectively carried out in accordance with applicable laws and management policy; that assets and resources are safeguarded against waste, loss, unauthorized use, and misappropriation; that obligations and costs comply with applicable laws; and that revenues and expenditures are properly recorded. Additionally, the Management Control Review includes a detailed assessment of management procedures and program requirements. Reported management weaknesses require a Corrective Action Plan to which Directors are held accountable in their performance plan. Corrective Action Plans are reviewed for completion during the following Management Control Review cycle.

Is the program managed by maintaining clearly defined deliverables, capability/performance characteristics, and appropriate, credible cost and schedule goals?

Explanation: The Sanitation Facilities Construction (SFC) project designs are based on value engineering, the requirement to meet Clean Water Act (CWA), Safe Drinking Water Act (SDWA), and local regulations. Long term costs and ability to provide ongoing operations and maintenance (O&M) support are analyzed as well as the life cycle of the proposed facilities. The program provides technical assistance and training on O&M. SFC design parameters have been developed to provide the most cost-effective and maintenance-free facilities possible. Project summaries and Memorandums of Agreement (MOA) state that minimum Indian Health Service (IHS) standards must be utilized for projects. All SFC projects are under the direct supervision of a Licensed Engineer.

Evidence: All projects have plans and specifications approved and stamped by a Licensed Engineer. Additionally, all SFC projects have construction inspection and documentation throughout the construction phase to insure compliance with specifications and plans. Detailed drawings of the completed facility are also produced and kept as records. SFC has developed cost estimates criteria and uses bid abstract information, cost accounting data, and/or industry standard methods for determining cost estimates and schedules. Project Data System (PDS) data compare actual schedule and cost data with estimates for project management purposes and future estimates. Relevant program documents include the IHS SFC Criteria Document June 1999, PDS/SDS data systems, and MOA Guidelines.

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: The Sanitation Facilities Construction (SFC) program has made progress in achieving its long-term outcome performance goal. It has also exhibited progress toward achieving the new long-term/annual efficiency measure target. Future evaluations of the long-term/annual efficiency measure will determine the adequacy of progress in achieving the program's overall long-term performance goals. The SFC program has maintained the percentage of American Indian/Alaska Native (AI/AN) homes with access to potable water and incorporated efficiencies in program management and execution that will help it achieve the goal of decreasing project duration. Over 270,000 AI/AN homes have received services from the SFC program since 1959.

Evidence: Only 20 percent of AI/AN homes had sanitation facilities in 1959. Currently, 88 percent of AI/AN homes have a safe water supply in the home. Additionally, rates for infant mortality, gastroenteritis and other environmentally related diseases have been reduced by approximately 80 percent since 1973 in AI/AN communities. From 2000-2002 the SFC program was able to maintain the percentage of AI/AN homes with potable water at 92.5 percent. In 2003, the percentage of AI/AN homes with potable water dropped to 88 percent due in large part to the implementation of new environmental regulations. It is expected that progress in achieving the program's annual/long-term efficiency goal of maintaining project duration at 4 years or less will be influenced by the fact that project duration is expected to increase to 4.1 years. In the past, SFC has funded more projects than it completes, consequently the number of projects that the staff has to manage increased by about 100 projects per year. However, growth in average project duration has slowed due to improvements such as standard specifications and establishment of drafting standards.

Does the program (including program partners) achieve its annual performance goals?

Explanation: The Sanitation Facilities Construction (SFC) program exceeds the targets for its annual outcome performance measures and met the first target for the annual/long-term efficiency performance measure. The program should be more aggressive in setting its annual targets. The actual number of American Indian/Alaska Native (AI/AN) served tend to exceed those in project proposals, due in part to relocation to the area served and lower actual costs. The SFC program has achieved the percentage target for serving deficiency level 4 and 5 AI/AN homes. Similarly, target goals for serving AI/AN homes with sanitation facilities have been met. The annual/long-term efficiency measure has baseline data and the program is within its estimated project duration goals to meet the goal of project duration of four years or less by 2010. In 2005-2006, tribal partners committed to working with the SFC program to achieve its annual performance goals by contributing tribal resources to 11 percent of all SFC projects.

Evidence: In 2006, the target for serving deficiency 4 and 5 homes was 20 percent and 35 percent was achieved. In the same year, the program provided 24,090 AI/AN homes with sanitation facilities, surpassing the goal of 20,000. IHS met the annual/long-term efficiency measure target for average project duration of 3.6 years in 2006.

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: The Sanitation Facilities Construction (SFC) program has demonstrated improved efficiencies and cost effectiveness in achieving its program goals. The average construction cost per home has decreased since FY 1995. In addition, the contracting methods of the Indian Health Service (IHS), such as open-market fixed price contracts (competition with contractor assumption of risk) and force account (non-profit with cost controls dictated through a Memorandum of Agreement), assist in achieving cost control. The SFC program has established a feasible cost threshold based on a combined application of Department of Housing and Urban Development and IHS construction indexes for each State since 1988. Additionally, the program developed an efficiency measure to maintain average project construction duration at 4.0 years in the long term after an expected increase in project construction duration from 3.8 years to 4.1 years. This measure incorporates cost effectiveness by focusing on project duration targets that aim to minimize average project costs and ensure management efficiencies.

Evidence: The average cost of service per home has decreased from $5,470 in FY 1996 to less than $4,000 in FY 2006. This decrease has occurred amidst increasing construction inflation rates. Improved cost effectiveness can be attributed to shifts in provision of first services to large scale community upgrade projects designed to meet new Safe Drinking Water Act requirements. SFC program emphasis on improvements in efficiency can be credited with a portion of the savings. Examples of efficiency improvements include national standardization of drafting guidelines, improved data systems, and standardized computer generated reporting.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: The Sanitation Facilities Construction (SFC) program compared favorably to other Federal programs in the Rural Water Common Measure developed in collaboration with the Rural Utility Service (RUS), the Bureau of Reclamation (BOR), and the Environmental Protection Agency (EPA). An independent evaluation conducted by Federal Occupational Health cited as a strength the positive reputation of SFC staff and its project management practices. The positive reputation of the SFC program is evidenced by the investments Federal programs make in SFC projects ($50 to $100 million annually).

Evidence: The Common Measures evaluated the number of connections and the population served per million dollars of total project cost. The Indian Health Service (IHS) compared favorably to other Federal sanitation programs in FY 2001 having provided 174 services in the East and 212 services in the West per million dollars compared with the BOR which provided 24 services in the West per million dollars. An independent evaluation of the SFC program determined that its services are of good quality, but that the program could develop systems to better track cost and schedule adherence and the IHS should improve administrative efficiencies to aid in achieving improved efficiencies. Department of Interior information on the Common Measure http://www.gpoaccess.gov/usbudget/fy04/pdf/budget/interior.pdf. The Program Assessment Rating Tool found that the SFC program was the second highest rated Federal sanitation program with a rating of Moderately Effective in 2002.

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: A 2005 independent evaluation of the Sanitation Facilities Construction (SFC) program by Federal Occupational Health (FOH) concluded that the SFC Program was largely effective and noted numerous strengths, positive attributes, and some areas for improvement. The following organizational components of the national SFC program were evaluated as part of the independent evaluation: program management; stakeholder relationships; service delivery; resource management; and organizational competencies. The SFC program will start an independent evaluation in 2010, and every five years thereafter.

Evidence: The independent evaluation found that the SFC program has flexible and diverse service delivery mechanisms, strong partner and stakeholder relationships, a credible and quantitative performance monitoring system, a highly professional and experienced staff, and a decentralized structure that supports local service operations. However, the evaluation also concluded that the program should strengthen its core competencies, implement results-oriented performance management, strengthen IHS administrative support functions, implement a partner/stakeholder feedback system, and incorporate a system-wide project cost tracking. Independent Evaluation Report: IHS SFC Program, July 2005, prepared by FOH.

Were program goals achieved within budgeted costs and established schedules?

Explanation: The Sanitation Facilities Construction (SFC) program performance goals are surpassed every year and there is evidence that most projects are completed within budget and within the timeframes established by program guidelines.

Evidence: The Indian Health Service (IHS) Area Offices manage projects in aggregate to allow completion within the Area's overall construction budget. Due to the risks involved in construction, perfect project timeframe estimates are difficult to establish in some of the remote and rural areas where the SFC program works. Typically, a few projects exceed budget with the majority of projects completed under-budget. Funds from projects completed under-budget are reprogrammed to cover projects with cost over-runs. This reprogramming is done through a formal process of project amendments. All projects are completed within the funds available in the project accounts. An independent evaluation determined the program lacked a formalized system for tracking projects which could obscure true costs and delays and inaccuracies in budget reconciliation in Area Finance Offices often delayed project closeout. According to SFC Project Data System (PDS) data, of projects completed in FYs 2000-2006, 76 percent were completed on budget, 13 percent were under budget with an average savings of 16 percent, and 10 percent were over budget by an average of 26 percent. There has never been an antideficiency issue in the SFC program