December 6, 1974




              Paul D. Ward
              Executive Director
              California  Regional  Program
              7700 Edgewater Drive
              Oakland, California  94621

              Dear Mr. Ward:

              Your letter of Novmber 25, requests approval to reliudget pilot arthritis
              f  de from the Scripps Clinic and Research Foundation project (154L), to
              overall CAV coordination of  the  ramining  pilot  arthritis  activities.
              We eta av4re of the circumstances which proscribed  the  Inauguration  of
                is promising activity, a" we share your regret with its loss.

              7    proposal to employ the $26,322 thus freed to provide Regiona
              ar ritis program coordination and  staff  assistance  is  appropriate,
              and the request is approved.  We will appreciate receipt of Forms 15,
              #ad 16 documentation of this change at your earlist convenience.

              With regard to the limitations placed on RH? funding of arthritis
              activities (i.e., "no other RM? funds can be  expended  for  arthritis
              act@tital'), the  t)rob:tbiti  was not intended to proscribe  the  normal
              R@MP program coordinativelevaluative activities which do not result in
              program enlargement, per se. The ongoing, R?iP responsibility  for  these
              functions is recognized, &ad the earmark ceiling  on  pilot  arthritis
              activities is .iot considered by us to be violated when  arthritis  is
              subjected  to  the  ea"  usun   t controls as are addressed  to  other
                  programs. We recognize  @  confusion  surrounding  this  matter,  and
              we will Issue a clarifying statw"t  soon,  probably  in  the  imminent
              announcement of a conference of the pilot arthritis  programs,  to  be
              held in Kamas City, Missouri, on January 19-20, 1975.

                                                    Yours truly,



                                                    Matthew Spear
                                                    Public Health Adviser
                                                    Division of Regional liedical Programs

              cc:  Mr. Gardell
                   Hr, Teats
                   t(ri Russell