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ASPR, CDC: What’s Up With The Funding Restrictions?

ASPR, CDC: What’s Up With The Funding Restrictions?

The 2017-2018 Funding Opportunity Announcement (FOA) that contains the Hospital Preparedness Program (HPP) and Public Health Emergency Preparedness Program (PHEP) cooperative agreements dedicates six pages to funding restrictions that limit how awardees can spend their funds. That's five more pages of restrictions than were in the 2016-2017 FOA. But, are all funding restrictions required to be passed through by awardees to healthcare coalitions and local health departments in their sub-grants? Well, it depends whom you ask. And that's a problem!

The Shirt Restriction

The impetus for today's post comes from a question posed by a healthcare coalition chair who was frustrated with some of the deliverables his state had placed in his coalition's sub-grant. During the discussion, he went on to vent that he was being denied the ability to buy the coalition's all-volunteer executive board lunch during a noon meeting because of funding restrictions (They have lunch meetings, because everyone is too busy with their full-time jobs). I defended ASPR, explaining that the restriction on meals was not in the State's cooperative agreement, so it was a creature of the State's creation.

Yes, awardees can add funding restrictions above and beyond those imposed by the Feds.

Healthcare Coalition Polo ShirtSo he says, "what about ASPR's new funding restriction that takes away the ability to give our all-volunteer executive board and committee chairs a coalition branded polo shirt as a gesture of appreciation for their work?" And I said, "really?" "The Feds are worried about a polo shirt – really?" Yep, they surely are. 

He went on to explain that he was told by the State that the funding restriction originated with ASPR, and that they had no choice but to include it in the coalition's sub-grant.  

The State has no choice but to pass through such a silly funding restriction – really?" Well, maybe.

HPP and PHEP funds may not be used to purchase clothing such as jeans, cargo pants, polo shirts, jumpsuits, sweatshirts, or T-shirts

The Interpretation Challenge

To get a handle on what federal funding restrictions 'must' be passed through in state sub-grants, I asked numerous state preparedness directors, grant managers, and HPP coordinators their perceptions. And it became clear that interpretations vary. Sure, all said, "yes." But, when I asked whether the requirement applied to all funding restrictions or some, the answers ranged from "yes" to "it depends" to "I'm not sure." And that's a problem!

With six pages of funding restrictions, a simple cut-and-paste – which is the gold standard – may castrate the effectiveness of sub-grants and cause unecessary heartache. Maybe it'd be good if ASPR and the CDC made it clear what restrictions awardees 'must' pass through, and those that 'may' be.

Funding restrictions identify what costs are unallowable – and those that may be allowable only under specific conditions – under HPP and PHEP cooperative agreements. Now, let me be clear, funding restrictions are not necessarily a bad thing, as they reduce the potential for inconsistent interpretations by the 62 awardees and the hundreds of sub-grantees. Inconsistent interpretation? Now that could be a problem.

62 HPP and PHEP Awardees

You see, if the cooperative agreement does not specifically state something 'must' be done, 'must' not be done, or 'may' be done only under specified conditions, it falls into a grey area subject to interpretation. And as I wrote in, Health Care Coalitions 2002-2006: HHS Strategy, the best strategic intentions can be disrupted by interpretation.

And history proves that interpretation is the mother of implementation. And implementation is the mother of success or failure.

Maybe that’s why HHS’ strategy for multi-disciplinary healthcare coalitions was lost in translation for over a decade. Yes, no matter how good the intended strategy, loosely crafted cooperative agreements with few funding restrictions may have left awardees too much latitude to interpret the cooperative agreement to meet their State's interest or the philosophy of the person drafting the sub-grants.

So, we now have six pages of restrictions that “must be considered” by awardees. But, what about their sub-awardees – regional healthcare coalitions and local health departments?

Required "Flow-Down Provisions"

In HHS’ Grants Policy Statement, they call such requirements “flow-down or flow-through provisions” and define them as “[t]he rules governing whether, and how, grant terms apply to sub-awards or contracts under grants.” So, in the context of the HPP and PHEP cooperative agreements, what they are saying is that flow-through provisions determine what funding restriction must flow down to healthcare coalitions and local health departments through their sub-grants.

HPP Grant Funding Flow

Per the Policy Statement, “[t]he terms and conditions in the HHS GPS (Grants Policy Statement) apply directly to the recipient of HHS funds. The recipient is accountable for the performance of the project, program, or activity; the appropriate expenditure of funds under the award by all parties [emphasis added]; and all other obligations of the recipient, as cited in the NoA (Notice of Award).” The Statement continues, “In general [emphasis added], the requirements that apply to the recipient, including public policy requirements, also apply to sub-recipients and contractors under grants, unless an exception is specified [emphasis added]."

Well, that’s like no help –  whatsoever!

How about stating, "There are ten flow-through requirements that all awardees must flow-down to their sub-grantees under federal law and HHS policy (insert list here). Additional flow-through requirements may be determined by the awarding agency (ASPR or CDC), and will be clearly identified in the FOA. If not specifically stated in HHS policy or the FOA, funding restrictions included only apply to the awardee."

Where's Shall and Must?

Now, let me preface this by saying that I am not an attorney and do not play one on TV. But, years of negotiating various types of contracts leads me to believe there's something amiss with the FOA's funding restrictions section. It's the inconsistent verbiage. Sure, it could be intentionally inconsistent to differentiate between what restrictions have mandatory flow-down requirements and those that don't. Or it could be that such inconsistency is designed to provide everyone plausible deniability. "Dude! I did not know that meant and had to do that," says the state preparedness director or HCC Chair. "Understood; I can see how you could have arrived at such an interpretation" says the Field Project Officer. "Do not do it again." (insert wink here)

It could also be that too many people had their hands in creating this monster of a document and just did not realize they were causing confusion by mixing verbiage. One problem is that there are no definitions for many critical terms used in the FOA – not in the glossaries of either the FOA or the HHS Grants Policy Statement – which opens the door to  interpretation.

For example, the funding restrictions rely on vague terms, sch as may, may not, and cannot, which from a contractual perspective tend to have different meanings to different people. And there is no sign of shall or must, words with some juice behind them. And that's all well and good, as long as everyone is given broad latitude to interpret the restrictions, and they are not indiscriminatory enforced.

Restriction Verbiage What does it Means?
  • Awardees may not use funds for...
  • Awardees may use funds only for...
  • Awardees may purchase...
  • HPP awardees cannot use funds to...
  • It sure seems that these restrictions only apply to the awardee.
  • Why would the awardee be required to "flow-through" these restrictions to its sub-grantees? Unlike those below, which clearly state that the funds cannot be used for...
  • Does "may not" and "cannot" have the same meaning in federal legal jargon? Or do they mean "must not" or "shall not"?
  • HPP and PHEP funds may not be used for...
  • HPP and PHEP funds may not be used to...
  • HPP grant funds cannot be used to...
  • Seems clear. Grant funds cannot be used for the given purpose by anyone – period. Unlike those restrictions above which apply to only the awardee, right?
  • And this restriction would be required to be passed through on all sub-grants, right? Maybe?
  • See below where it's crystal clear that HPP awardees and their sub-recipients may...
  • HPP awardees and their sub recipients may
  • There's no doubt that this restriction applies to both the awardee and sub-recipient, or is it sub-grantee, or sub-awardee?
  • Recipients may not use funds to...
  • Is a recipient the same as an awardee? It's definitely not a sub-recipient, right?

 

So you say," dude, you're reading too much into this." Maybe, but, then why throughout the remainder of the FOA, do they rely on very specific verbiage with legal muster leaving no room for interpretation. For example:

  • "...the funding shall be deemed part of the award and as having been paid to you, the awardee."
  • "The NOA shall be the only binding, authorizing document between the awardee and CDC"
  • "This report shall be submitted no later than two weeks following the end of each quarter..."
  • "If 10% of the award is greater than $200,000, then the firs t$200,000 is waived, and the rest must be paid as match.
  • "Each awardee must develop a health care system recovery plan..."
  • "Applications must be electronically submitted no later than 5 p.m.EST on the application due date."
  • "All awardees must develop and/or mature their HCCs by the end of Budget Period 1"

And why did the Feds change the funding restrictions lead-in from saying, "[f]unding restrictions, which apply to both awardees and their sub-awardees, must be taken into account while writing the budget" to "[r]estrictions that must be considered while planning the programs and writing the budget are"?

Was the change intentional, because all funding restrictions in the 2016-2017 cooperative agreement had mandatory flow-through requirements, whereas only some of the funding restrictions in the 2017-2018 cooperative agreement do? If not, why the change? If so, which one's are not mandatory?

comparing funding restrictions

# Agreement 2016-2017 2017-2018
    "Funding restrictions, which apply to both awardees and their subawardees, must be taken into account while writing the budget. Restrictions are as follows:" "Restrictions that must be considered while planning the programs and writing the budget are:"
1 HPP & PHEP None of the funds awarded to these programs may be used to pay the salary of an individual at a rate in excess of Executive Level II or $185,100 per year None of the funds awarded to these programs may be used to pay the salary of an individual at a rate in excess of Executive Level II or $187,000 per year
2 HPP & PHEP Recipients cannot use funds for fund raising activities or lobbying. Other than for normal and recognized executive-legislative relationships, no funds may be used for:
  • Publicity or propaganda purposes, for the preparation, distribution, or use of any material designed to support or defeat the enactment of legislation before any legislative body.
  • The salary or expenses of any grant or contract recipient, or agent acting for such recipient, related to any activity designed to influence the enactment of legislation, appropriations, regulation, administrative action, or Executive order proposed or pending before any legislative body
3 HPP & PHEP Recipients cannot use funds for research. Awardees may not use funds for research.
4 HPP & PHEP Recipients cannot use funds for construction or major renovations. Awardees may not use funds for construction or major renovations.
5 HPP & PHEP Recipients cannot use funds for clinical care. Awardees may not use funds for clinical care except as allowed by law. For the purposes of this FOA, clinical care is defined as "directly managing the medical care and treatment of patients.”
6 HPP & PHEP Recipients cannot use funds to acquire real property such as land, land improvements, structures, and appurtenances thereto. In addition, activities under individual grants that constitute major renovation of real property or purchase of a trailer or modular unit that will be used as real property may be charged to HHS grants only with specific statutory authority and GMO approval. Awardees may purchase basic (non-motorized) trailers with prior approval from the CDC OGS.
7 HPP & PHEP Recipients cannot use funds for reimbursement of pre-award costs. Reimbursement of pre-award costs generally is not allowed, unless the CDC provides written approval to the awardee.
8 HPP & PHEP Recipients may supplement but not supplant existing state or federal funds for activities described in the budget. Awardees may supplement but not supplant existing state or federal funds for activities described in the budget.
9 HPP & PHEP The direct and primary recipient in a cooperative agreement program must perform a substantial role in carrying out project objectives and not merely serve as a conduit for an award to another party or provider who is ineligible. The direct and primary recipient in a cooperative agreement program must perform a substantial role in carrying out project outcomes and not merely serve as a conduit for an award to another party or provider who is ineligible.
10 HPP & PHEP Payment or reimbursement of backfilling cost for staff, including healthcare personnel for exercises, is not allowed. Payment or reimbursement of backfilling costs for staff is not allowed.
11 HPP & PHEP Not Addressed Awardees may use funds only for reasonable program purposes, including personnel, travel, supplies, and services.
12 HPP & PHEP Not Addressed HPP and PHEP funds may not be used to purchase clothing such as jeans, cargo pants, polo shirts, jumpsuits, sweatshirts, or T-shirts
13 HPP & PHEP Not Addressed Generally, awardees may not use funds to purchase furniture or equipment. Any such proposed spending must be clearly identified in the budget.
14 HPP & PHEP Not Addressed HPP and PHEP funds may not be used to purchase or support (feed) animals for labs, including mice. Any requests for such must receive prior approval of protocols from the Animal Control Office within CDC and subsequent approval from the CDC OGS.
15 HPP & PHEP Not Addressed Recipients may not use funds to purchase a house or other living quarters for those under quarantine.
16 HPP & PHEP Not Addressed HPP and PHEP awardees may (with prior approval) use funds for overtime for individuals directly associated (listed in personnel costs) with the award.
17 PHEP PHEP awardees cannot use funds to purchase vehicles to be used as means of transportation for carrying people or goods, such as passenger cars or trucks and electrical or gas-driven motorized carts. PHEP awardees cannot use funds to purchase vehicles to be used as means of transportation for carrying people or goods, such as passenger cars or trucks and electrical or gas-driven motorized carts.
18 PHEP PHEP awardees can (with prior approval) use funds to lease vehicles to be used as means of transportation for carrying people or goods, e.g., passenger cars or trucks and electrical or gas-driven motorized carts. PHEP awardees can (with prior approval) use funds to lease vehicles to be used as means of transportation for carrying people or goods, e.g., passenger cars or trucks and electrical or gas-driven motorized carts.
19 PHEP PHEP awardees can (with prior approval) use funds to purchase material-handling equipment (MHE), such as industrial or warehouse-use trucks to be used to move materials, such as forklifts, lift trucks, turret trucks, etc. Vehicles must be of a type not licensed to travel on public roads. PHEP awardees can (with prior approval) use funds to purchase material-handling equipment(MHE) such as industrial or warehouse-use trucks to be used to move materials, such as fork lifts, lift trucks, turret trucks, etc. Vehicles must be of a type not licensed to travel on public roads.
20 PHEP PHEP awardees can use funds to purchase caches of antibiotics for use by first responders and their families to assure the health and safety of the public health workforce. PHEP awardees can use funds to purchase caches of antibiotics for use by first responders and their families to ensure the health and safety of the public health workforce.
21 PHEP PHEP awardees can use funds to support appropriate accreditation activities that meet the Public Health Accreditation Board’s preparedness-related standards. PHEP awardees can use funds to support appropriate accreditation activities that meet the PublicHealth Accreditation Board’s preparedness-related standards.
22 HPP Not Addressed

HPP Vehicle Purchase

  • Non-public road vehicles: HPP grant funds can (with prior approval) be used to purchase healthcare coalition material-handling equipment (MHE) such as industrial or warehouse-use trucks to be used to move health care coalition materials, supplies and equipment (such as forklifts, lift trucks, turret trucks, etc.). Vehicles must be of a type not licensed to travel on public roads.
23 HPP HPP awardees cannot use funds to support stand-alone, single-facility exercises. HPP awardees cannot use funds to support stand-alone, single-facility exercises.
24 HPP Not Addressed

HPP Vehicle Leasing and Hauling Agreements

Passenger road vehicles:

  • HPP grant funds cannot be used to purchase over-the road passenger vehicles.
  • HPP grant funds can (with prior approval) be used to procure leased or rental vehicles as means of transportation for carrying people (e.g., passenger cars or trucks) during times of need. Examples include transporting health care coalition leadership to planning meetings, to an exercise, or during a response.

Transportation of medical materials:

  • HPP grant funds can (with prior approval) be used to procure leased or rental vehicles for movement of materials, supplies and equipment by HCC members.
  • Additionally, HPP grant funds can (with prior approval) be used for health care coalitions to make transportation agreements with commercial carriers for movement of health care coalition materials, supplies and equipment. There should be a written process for initiating transportation agreements (e.g., contracts, memoranda of understanding, formal written agreements, and/or other letters of agreement). Transportation agreements should include, at a minimum, the following elements:
    • Type of vendor
    • Number and type of vehicles, including vehicle load capacity and configuration
    • Number and type of drivers, including certification of drivers
    • Number and type of support personnel
    • Vendor’s response time
    • Vendor’s ability to maintain cold chain, if necessary to the incident
  • This relationship may be demonstrated by a signed transportation agreement or documentation of transportation planning meeting with the designated vendor. All documentation should be available to the FPO for review if requested.
25 HPP Not Addressed

Deployment of HPP and PHEP Funded Personnel, Equipment, and Supplies during Emergencies via the Emergency Management Assistance Compact (EMAC)

  • Deployment of HPP- and PHEP-funded equipment, supplies and personnel via the Emergency Management Assistance Compact (EMAC) for the purpose of mutual aid and assistance between states during a governor declared State of emergency or disaster is permitted, but is subject to 101.
  • the Federal provisions of 45 CFR 75. However, affected States must notify their CDC Grants Management Specialist within a 24-hour period of the personnel, services and/or equipment being loaned out for the emergency. Awardees should follow their state legislation which governs how they will operate during an emergency or when another state requests assistance via EMAC. Awardees may reference the EMAC website for detailed information via www.emacweb.org . Additional guidance can be found in the 2017-2022 HPP-PHEP Supplemental Guidelines.
26 HPP Not Addressed

Use of HPP Funds during a Declared Emergency

Consistent with section 319C-2 of the PHS Act, HPP funds may only be used to support activities that prepare States for public health emergencies and to improve surge capacity . There are two situations when States (see definition) may use HPP funds during a State or locally declared emergency, disaster, or public health emergency (hereafter referred to as an “emergency”). These situations and related criteria are described below.

Situation 1: HPP Staff Conducting Activities Consistent with Approved Project Goals 

Awardees may use HPP funds to support positions performing preparedness-related activities consistent with the awardee’s project goals and may utilize those positions within any phase of the disaster cycle, provided that the staff members in those positions continue to do work within statutory limitations, the notice of award, and the approved spending plan. For example, an employee’s salary may be permissible for response activities if that employee is carrying out the same responsibilities he or she would carry out as part of his or her preparedness responsibilities. 

Situation 2: Using a Declared Emergency as a Training Exercise 

Under certain conditions, HPP funds may, on a limited, case-by-case basis, be reallocated to support response activities to the extent they are used for purposes provided for in Section 319C-2 of the PHS Act (the program’s authorizing statute), applicable cost principles, the funding opportunity announcement, and the awardee’s application (including the jurisdiction’s all-hazards plan). Awardees should contact their assigned HPP project officer and grants management specialists for guidance on the process to make such a change. ASPR encourages awardees to develop criteria such as costs versus benefits for determining when to request a “scope-of-work” change to use a real incident as a required exercise. 

The request to use an actual response as a required exercise and to pay salaries with HPP funds for up to seven days will be considered for approval under these conditions:

  • A state or local declaration of an emergency, disaster, or public health emergency is in effect.
  • No other funds are available for the cost.
  • The awardee agrees to submit within 60 days (of the conclusion of the disaster or public health emergency) an after-action report, a corrective action plan, and other documentation that supports the actual dollar amount spent.

Note: A change in the scope of work is required to use an actual event as an exercise whether or not funds are needed to support salaries. Also, regardless of the amount of money used in response to an event, the State is still required to meet all the requirements of the original award.

27 HPP

HPP Funding Considerations

In the original HPP-PHEP funding opportunity announcement, CDC-RFA-TP12-1201, ASPR strongly encouraged HPP awardees to allocate 75% of HPP funds in support of local healthcare preparedness activities.”

In Budget Period 5, ASPR strongly recommends HPP awardees continue these efforts, with a concentrated effort to maximize efficiency. To achieve this, ASPR recommends the following:

  • Awardees and subrecipients should consider limiting the use of contracts to only those projects where expertise does not exist among agency personnel or partner agencies or agency personnel are not appropriate for completing the specified project. When contracts are utilized, awardees must ensure the contract achieves set deliverables and that the contractor’s work is durable and sustainable.
  • Awardees should consider the feasibility of hiring term employees or examine other jurisdictions’ best practices regarding hiring efficiency.

HPP General Funding Guidance 

HPP funding must primarily support strengthening health care system preparedness through the collaborative development of HCCs that prepare and respond as an entire regional health system, rather than individual health care organizations. HPP recognizes that, at the conclusion of the previous project period (2012-2017), some awardees only funded HCCs, some funded individual health care entities (with a requirement that they participate in regional preparedness efforts), and others funded a mixture of HCCs and individual health care entities.

During this project period (2017-2022), beginning in Budget Period 1, all awardees must allocate funding to HCCs. For Budget Period 1, ASPR still permits providing direct funding from the awardee to individual health care entities for regional preparedness efforts; however, ASPR expects that as the project period progresses, the awardee’s funding strategy will include allocating funding to HCCs in a graduated manner – such HCC funding should increase incrementally over the five-year project period.

As awardees allocate more funding to HCCs each year, individual health care entities can continue to receive HPP funding, through the HCC, to ensure regional coordination and collaboration. HCCs will determine the amount of funding for health care entities upon review of coalition projects, as well as health care entity projects, based on the funding priorities for each budget period. This process will ensure that HCC activities contribute to the overarching readiness, preparedness, and resilience of health care systems.

Awardees may retain direct costs for the management and monitoring of the HPP cooperative agreement during the 2017-2022 project period. Awardee-level direct costs are defined as personnel, fringe benefits, and travel. Because the goal is to support HCCs and their health care system partners, awardees must limit these direct costs to no more than 18 percent of the HPP cooperative agreement award. By the end of Budget Period 5, awardees must limit these direct costs to no more than 15 percent of the HPP cooperative agreement award.

ASPR will consider requests for exemptions on a case-by-case basis. Requests for exemption must be submitted with the Budget Period 1 application. Requests for exemption will be strengthened by letters of support from the HCCs and the jurisdiction’s hospital association indicating these entities understand and agree with the amount the awardee is retaining for awardee-level direct costs. Please note that concurrence is not required, only recommended if an awardee is requesting an exemption.

Within the first 60 days of each budget period, all awardees must provide a detailed spend plan, including all budget line items, to all HCCs within their jurisdiction and any interested health care entity. This spend plan must also be sent to FPOs.

Awardees are not required to submit position descriptions for HPP funded-staff with the application. However, awardees may be required to submit this information to HPP if the roles and responsibilities of the employee(s), and how they support health care preparedness are not clear in the budget narrative section of the application.

28 HPP Not Addressed (Necessitated by CMS Rule)

HPP Funding Limitations for Individual Healthcare Facilities

HPP awardees and their sub recipients may provide funding to individual hospitals or other health care entities, as long as the funding is used for activities to advance regional, HCC, or health care system wide priorities, and are in line with ASPR’s four health care preparedness and response capabilities. Funding to individual health care entities is not permitted to be used to meet Centers for Medicare and Medicaid Services (CMS) conditions of participation, including CMS-3178-F Medicare and Medicaid Programs: Emergency Preparedness Requirements for Medicare and Medicaid Participating Providers and Suppliers. CMS-3178-F requires providers and suppliers to the following conditions of participation.

  • Development of an emergency plan: Based on a risk assessment, develop an emergency plan using an all-hazards approach focusing on capacities and capabilities that are critical to preparedness fora full spectrum of emergencies or disasters specific to the location of a provider or supplier. HPP funding may not be provided to individual health care entities to meet this requirement; however,ASPR encourages HCCs to provide technical assistance to their individual members to assist them with the development of their emergency plans. HCCs are permitted to use HPP funding to develop the staffing capacity and technical expertise to assist their members with this requirement.
  • Develop policies and procedures: Develop and implement policies and procedures based on the plan and risk assessment. HPP funding may not be provided to individual health care entities to meet this requirement; however, ASPR encourages HCCs to provide technical assistance to their individual members to assist them with the development of policies and procedures. HCCs are permitted to use HPP funding to develop the staffing capacity and technical expertise to assist their members with this requirement.
  • Develop and maintain a communication plan: Develop and maintain a communication plan that complies with both Federal and State law. Patient care must be well-coordinated within the facility, across health care providers, and with State and local public health departments and emergency systems. HPP funding may not be provided to individual health care entities to meet this requirement; however, ASPR encourages HCCs to provide technical assistance to their individual members to assist them with the development a communication plan that integrates with theHCC’s communications policies and procedures. HCCs are permitted to use HPP funding for costs associated with adding new providers and suppliers to their HCC who are seeking to join coalitions to coordinate patient care across providers, public health departments, and emergency systems(e.g., hiring additional staff to coordinate with the new members, providing communications equipment and platforms to new members, conducting communications exercises, securing meeting spaces, etc.)
  • Develop and maintain a training and testing program: Develop and maintain training and testing programs, including initial and annual trainings, and conduct drills and exercises or participate in an actual incident that tests the plan. HPP funding may not be provided to individual health care entities for individual health care organizations’ trainings and exercises. HPP funding may be used to plan and conduct trainings and exercises at the regional or HCC level.
29 HPP Not Addressed HPP awardees cannot spend HPP funds on training courses, exercises, and planning resources when similar offerings are available at no cost.

 

To think this all started with questions about buying a few polo shirts and some Jimmy Johns sandwiches for lunch. Crazy! And after hours of research and writing trying to help you make sense of how these funding restrictions affect your healthcare coalition or local health department, I think I might have failed.

So, the balls in your court, CDC, ASPR.

Karl Schmitt, MPA

Karl Schmitt, MPA


Karl is the Passionate Founder & CEO of bParati. He is on a mission to build a national network of effective, sustainable healthcare coalitions. More...

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