[Fax and Report to Tim Westmoreland from Martin Delaney]

2/5/93 05:21:26'

Martin Delaney

Page 5 of 6

S 1 Discussion Points / Analysis / Clarification

TABLE 2
A: S1 supporting arguments (and responses) Put the money first in the OARD's account:
For: Response
This is the muscle of the OAR reforms. It gives the OARD already has this control as he/she already
OARD the power to demand compliance with, and would control the budget, as described in the bill,
performance under, the budget agreements,
Gives the OARD a "big stick" to utilize when people or There is no added leverage, only symbolism. Performprograms fail to live up to agreements, ance evaluation can happen only on an annual basis.
Poor performance cannot be addressed any sooner
than each year's budget planning process.
Gives the OARD real power over a significant portion of This approach give no added control because the
the AIDS research budget in any institute. Control OARD is required, by law (by the bill itself) to clistribwould be implemented gradually, giving people time to ute the funds as planned.
plan for and cope with the change.
Some government budget experts recommend retaining This works for short-term programs built up in each
disbursement control as the only way to effectively budget cycle. It is unnecessary in a long-term plan.
manage programs, where other control mechanisms are in place. such as
upfront control of the budget process. Control need be
only in one place or the other, not both.
Any movement away from giving the QARD disburse- All objectives of OAR reforms - strategic planning,
ment control over funds feels like a con,-ssion from the management controls, discretionary funds, evaluatoriginal S1 proposal. ions, etc. - are achieved without the added complication of making OARD responsible for disbursement.
B. Dr. Fauci/others arguments (and response): Distribute the money directly to the Institutes as planned
in the budget.
For Against

Putting the money in the OARD's hands adds another
bureaucratic step. as well as substantial administrative
overhead to manage. control, and account for the transfer of hundreds of millions of dollars. This is the kind of
every growing bureaucracy which ultimately strangles
everything in Washington.
Since the OARD is required by the law to distribute the
funds according to the budget, the outcome is exactly
the same whether the funds are distributed through the
OARD or directly to the Institutes. The only difference is
the added overhead of having an intermediary funds
disbursement mechanism.
Institutes must be secure that programs budgeted and
approved by the OARD will be funded. If OARD breaks
the budget agreement in any way, it will create incentives for last-minute lobbying of the OARD for funding,
regardless of what was agreed to in the annual budget
and planning process.
(So then what's the point, other than symbolism, of
putting the money in the OARD's hands? What is
gained in return for the added bureaucratic overhead
and expense? Shouldn't we be trying to reduce, rather
than increase, bureaucratic steps?)

Because the program is new and some uncertainties
exist, we can't be absolutely sure that front end control
of the budget will be sufficient. Retaining funds
disbursement control provides a secure backup.
Special circumstances may arise which demand the
reprogramming of funds. Even though there is no
mechanism to permit this in the current bill, it would
be easier to achieve if the money doesn't go directly to
the institutes.
The bill requires that OARD distribute the funds according to the budget. This provides sufficient security,
OARD is not permitted to deviate from the budget
agreement and priorities,

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