80 FR 43966 - Recipient Fund Balances
LEGAL SERVICES CORPORATION Federal Register Volume 80, Issue 142 (July 24, 2015)
Federal Register Volume 80, Issue 142 (July 24, 2015)
| Page Range | 43966-43968 | |
| FR Document | 2015-18138 |
[Federal Register Volume 80, Number 142 (Friday, July 24, 2015)] [Rules and Regulations] [Pages 43966-43968] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-18138] ======================================================================= ----------------------------------------------------------------------- LEGAL SERVICES CORPORATION 45 CFR Part 1628 Recipient Fund Balances AGENCY: Legal Services Corporation. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: This final rule revises the Legal Services Corporation (LSC or Corporation) regulation on recipient fund balances to give the Corporation more discretion to grant a recipient's request for a waiver to retain a fund balance in excess of 25% of its annual LSC support. This final rule also provides that recipients facing a fund balance in excess of 25% of their annual LSC support may submit a waiver request prior to submitting their annual audited financial statements. DATES: This final rule is effective August 24, 2015. FOR FURTHER INFORMATION CONTACT: Stefanie K. Davis, Assistant General Counsel, Legal Services Corporation, 3333 K Street NW., Washington, DC 20007; (202) 295-1563 (phone), (202) 337-6519 (fax), or [email protected]. SUPPLEMENTARY INFORMATION: I. Regulatory Background LSC issued its first instruction on recipient fund balances in 1983 to implement what is now the Corporation's longstanding objective of ensuring the timely expenditure of LSC funds for the effective and economical provision of high quality legal assistance to eligible clients. 48 FR 560, 561, Jan. 5, 1983. Later that year, LSC published a redrafted version titled Instruction 83-4, Recipient Fund Balances (``Instruction''). 48 FR 49710, 49711, Oct. 27, 1983. The Instruction limited recipients' ability to carry over LSC funds that remained unused at the end of the fiscal year. Id. Specifically, the Instruction provided that in the absence of a waiver granted by the Corporation, a recipient must repay to LSC any funds retained at the end of the fiscal year in excess of 10% of its total annual LSC support. Id. The Instruction also prohibited a recipient from ever retaining a fund balance in excess of 25% of its annual support, thereby limiting the Corporation's waiver granting authority to fund balance amounts of 25% or less of a recipient's annual LSC support. Id. In 1984, LSC substantially adopted the Instruction in a regulation published at 45 CFR part 1628. 49 FR 21331, May 21, 1984. Part 1628 remained unchanged until 2000, when LSC promulgated revisions in response to public comments and staff advice that the rule was ``more strict'' than the fund balance requirements of most federal agencies. 65 FR 66637, 66638, Nov. 7, 2000. The revised rule provided the Corporation with more discretion to grant a recipient's request for a waiver to retain a fund balance of up to 25% of its annual LSC support. Id. at 66637. [[Page 43967]] In addition, for the first time, the rule authorized the Corporation to exercise its discretion to grant a recipient's request for a waiver to retain a fund balance in excess of 25% of its annual LSC support. Id. The Corporation reasoned that, by allowing for waivers to retain that amount, ``[t]he recipient can better plan and find the best use for the funds, rather than being forced into a hasty expenditure simply to avoid the limitation on the carryover of fund balances.'' Id. at 66640. The rule, however, limited the situations justifying a recipient's request to retain more than 25% of its annual support to ``three specific circumstances when extraordinary and compelling reasons exist for such a waiver,'' listed in Sec. 1628.3(c). Id. at 66638. These extraordinary and compelling circumstances were restricted to the following situations when a recipient received income derived from its use of LSC funds: ``(1) An insurance reimbursement; (2) the sale of real property; and (3) the receipt of monies from a lawsuit in which the recipient was a party.'' Id. at 66639. Although the Operations and Regulations Committee (Committee) ``considered using a standard of `extraordinary and compelling' for these waivers with the three specific circumstances discussed as examples,'' it ultimately decided ``that more guidance was required to avoid erosion of the standard,'' and the three circumstances became exclusive limitations, not mere examples. Id. at 66640. The LSC Board of Directors (Board) adopted the revisions to part 1628 on November 20, 1999, and the revised rule has been in effect since December 7, 2000. Id. at 66637-38. During the nearly 15-year period since part 1628 was last revised, LSC grantees have experienced various unexpected occurrences outside of those listed in Sec. 1628.3(c) that caused them to accrue fund balances in excess of 25% of their annual support. These occurrences have included an end-of-year transfer of assets from a former grantee to a current grantee, a natural disaster that resulted in a significant infusion of use-or-lose disaster relief funds from non-LSC sources, and receipt of a large attorneys' fees award in an LSC-funded case near the end of the fiscal year. In each of these situations, LSC determined that part 1628 prevented recipients with legitimate reasons for having fund balances exceeding 25% of their annual LSC support from seeking and obtaining needed waivers. On January 22, 2015, LSC staff presented the Committee with a proposal to consider revising part 1628 to address the difficulties faced by recipients that encounter these types of occurrences, yet are unable to justify a waiver request to retain a balance in excess of 25% of their annual support under part 1628's standards. The Committee authorized LSC management to add the matter to the Committee's rulemaking agenda. As required by the LSC Rulemaking Protocol, LSC staff prepared an explanatory rulemaking options paper, accompanied by a proposed rule amending part 1628. On April 12, 2015, the Committee voted to recommend that the Board publish the notice of proposed rulemaking (NPRM) in the Federal Register for notice and comment. On April 14, 2015, the Board accepted the Committee's recommendation and voted to approve publication of the NPRM in the Federal Register. 80 FR 21700, Apr. 20, 2015. The comment period remained open for thirty days and closed on May 20, 2015. On July 16, 2015, the Committee considered the draft final rule for publication and voted to recommend its adoption publication to the Board. On July 18, 2015, the Board adopted the final rule and approved its publication. Material regarding this rulemaking is available in the open rulemaking section of LSC's Web site at http://www.lsc.gov/about/regulations-rules/open-rulemaking. After the effective date of this rule, those materials will appear in the closed rulemaking section of LSC's Web site at http://www.lsc.gov/about/regulations-rules/closed-rulemaking. II. Section-by-Section Discussion of Comments and Regulatory Provisions LSC received two comments during the public comment period. One comment was submitted by an LSC recipient, the Northwest Justice Project (NJP). The other comment was submitted by the non-LSC-funded nonprofit National Legal Aid and Defender Association (NLADA) through its Civil Policy Group and Regulations and Policy Committee. Both commenters were generally supportive of LSC's proposed changes to part 1628. Section 1628.3 Policy LSC proposed to revise Sec. 1628.3(c) to eliminate the language limiting the extraordinary and compelling circumstances in which LSC may grant a recipient's request for a waiver to retain a fund balance that exceeds 25% of its annual support. LSC staff determined that the list of extraordinary and compelling circumstances should be illustrative, rather than exhaustive, so that recipients that encounter truly unforeseeable situations can avoid having to make the difficult choice between returning large portions of unused balances and hurriedly spending funds before the end of the fiscal year. Whereas existing Sec. 1628.3(c) is limited to three circumstances where a recipient receives a sudden infusion of income, the new section expands the types of situations that the Corporation, in its discretion, may consider to be extraordinary and compelling circumstances. The new section adds the example of a natural disaster to illustrate a situation where a recipient would be unable to expend its current LSC grant for reasons other than the receipt of new funds, such as being forced to temporarily shut down operations. The section also adds the example of ``a payment from an LSC-funded lawsuit, regardless of whether the recipient was a party to the lawsuit.'' This revision makes clear that a recipient may request a waiver to retain a fund balance in excess of 25% of its annual support when it receives an award as the result of a court decision in an LSC-funded case, even if the recipient was not named as a party to the action. LSC also proposed to make a minor revision to Sec. 1628.3(d) to reflect the proposed redesignation of certain paragraphs in Sec. 1628.4. Comments: Both commenters expressed strong support of the revisions to Sec. 1628.3. Section 1628.4 Procedures LSC proposed to add a new Sec. 1628.4(d) to expressly allow recipients that expect to have a fund balance in excess of 25% of their annual support at the end of the fiscal year to submit a waiver request prior to the submission of their annual audited financial statements. This addition will require existing Sec. 1628.4(d), (e), (f), and (g) to be redesignated as Sec. 1628.4(e), (f), (g), and (h). The new Sec. 1628.4(d) will list the written requirements for a waiver request to retain a fund balance in excess of 25% of annual support. It will also require recipients that receive early approval to later submit updated information consistent with the requirements of Sec. 1628.4(a) to confirm the actual fund balance amount to be retained by the recipient, as determined by reference to its annual audited financial statements. Accordingly, an advance approval would be, in effect, an approval of the reasons for a waiver and of the proposed amount to be retained. The recipient must later provide confirmation of the actual amount of excess funds it has retained. Finally, LSC proposed to revise the introductory text of paragraph (a), as well as paragraphs (a)(2) and (a)(3), for clarity and readability. [[Page 43968]] Comments: Both commenters were supportive of LSC's proposal to allow recipients with fund balances in excess of 25% of annual support to submit waiver requests prior to the submission of their annual audit reports. NLADA recommended that LSC further revise Sec. 1628.4 to also allow recipients expecting to have fund balances in excess of 10% and up to 25% of their annual LSC support to submit early waiver requests. NLADA reasoned that this would allow recipients seeking such waivers to plan for the next fiscal year with greater certainty. NJP, on the other hand, expressed support for continuing the standard waiver request process for recipients with fund balances that do not exceed 25% of annual support. NJP stated that, in its experience, such requests are more than likely to be approved and that using annual audit report information to draft them assures that the amount approved for retention is equal to the final audited carryover. Response: As stated in the preamble of the NPRM, LSC staff found that limiting early approvals to waiver requests for fund balances in excess of 25% of annual support was proper in light of the unique and significant financial planning burdens faced by recipients that experience extraordinary and compelling circumstances causing them to accrue substantial amounts of unused funds. Furthermore, while the Corporation will continue to apply the heightened standard of ``extraordinary and compelling circumstances'' to requests to retain fund balances in excess of 25% of annual support, it will maintain the less burdensome standard of ``special circumstances'' for requests to retain fund balances that do not exceed 25% of annual support. Therefore, LSC believes that recipients seeking to retain fund balance amounts in excess of 10% and up to 25% of annual support would not benefit significantly from the minimal level of additional assurance that allowing the early submission of waiver requests may potentially provide. In addition, recipients that receive early approvals of such requests would later have to provide confirmation of the actual amount of excess funds they accrued when they submit their annual audited financial statements. LSC believes that the additional time and effort required by this process would not be justified by the small amount of additional assurance that it may provide. List of Subjects in 45 CFR Part 1628 Administrative practice and procedure, Grant programs--law, Legal services. For the reasons set forth in the preamble, the Legal Services Corporation amends 45 CFR part 1628 as follows: PART 1628--RECIPIENT FUND BALANCES 0 1. The authority citation for Part 1628 is revised to read as follows: Authority: 42 U.S.C. 2996g(e). 0 2. Revise paragraphs (c) and (d) of Sec. 1628.3 to read as follows: Sec. 1628.3 Policy. * * * * * (c) Recipients may request a waiver to retain a fund balance in excess of 25% of a recipient's LSC support only for extraordinary and compelling circumstances, such as when a natural disaster or other catastrophic event prevents the timely expenditure of LSC funds, or when the recipient receives an insurance reimbursement, the proceeds from the sale of real property, a payment from a lawsuit in which the recipient was a party, or a payment from an LSC-funded lawsuit, regardless of whether the recipient was a party to the lawsuit. (d) A waiver pursuant to paragraph (b) or (c) of this section may be granted at the discretion of the Corporation pursuant to the criteria set out in Sec. 1628.4(e). * * * * * 0 3. Amend Sec. 1628.4 by revising paragraphs (a) introductory text, (a)(2) and (3), and (d) to read as follows: Sec. 1628.4 Procedures. (a) A recipient may request a waiver of the 10% ceiling on LSC fund balances within 30 days after the submission to LSC of its annual audited financial statements. The request shall specify: * * * * * (2) The reason(s) for the excess fund balance; (3) The recipient's plan for disposing of the excess fund balance during the current fiscal year; * * * * * (d) A recipient may submit a waiver request to retain a fund balance in excess of 25% of its LSC support prior to the submission of its audited financial statements. The Corporation may, at its discretion, provide approval in writing. The request shall specify the extraordinary and compelling circumstances justifying the fund balance in excess of 25%; the estimated fund balance that the recipient anticipates it will accrue by the time of the submission of its audited financial statements; and the recipient's plan for disposing of the excess fund balance. Upon the submission of its annual audited financial statements, the recipient must submit updated information consistent with the requirements of paragraph (a) of this section to confirm the actual fund balance to be retained. * * * * * Dated: July 20, 2015. Stefanie K. Davis, Assistant General Counsel. [FR Doc. 2015-18138 Filed 7-23-15; 8:45 am] BILLING CODE 7050-01-P
![43966 Federal Register / Vol. 80, No. 142 / Friday, July 24, 2015 / Rules and Regulations
tribal implications and will not impose Under section 307(b)(1) of the CAA, Dated: July 10, 2015.
substantial direct costs on tribal petitions for judicial review of this Ron Curry,
governments or preempt tribal law as action must be filed in the United States Regional Administrator, Region 6.
specified by Executive Order 13175 (65 Court of Appeals for the appropriate 40 CFR part 52 is amended as follows:
FR 67249, November 9, 2000). circuit by September 22, 2015. Filing a
The Congressional Review Act, 5 petition for reconsideration by the PART 52—APPROVAL AND
U.S.C. 801 et seq., as added by the Small Administrator of this final rule does not PROMULGATION OF
Business Regulatory Enforcement affect the finality of this rule for the IMPLEMENTATION PLANS
Fairness Act of 1996, generally provides purposes of judicial review nor does it
that before a rule may take effect, the extend the time within which a petition ■ 1. The authority citation for part 52
agency promulgating the rule must for judicial review may be filed, and continues to read as follows:
submit a rule report, which includes a shall not postpone the effectiveness of Authority: 42 U.S.C. 7401 et seq.
copy of the rule, to each House of the such rule or action. This action may not
Congress and to the Comptroller General be challenged later in proceedings to Subpart GG—New Mexico
of the United States. EPA will submit a enforce its requirements. (See section ■ 2. In § 52.1620(c), the table titled
report containing this rule and other 307(b)(2).) ‘‘EPA Approved New Mexico
required information to the U.S. Senate, Regulations’’ is amended by revising the
List of Subjects in 40 CFR Part 52
the U.S. House of Representatives, and entry for ‘‘Part 1’’ under ‘‘New Mexico
the Comptroller General of the United Environmental protection, Air Administrative Code (NMAC) Title 20—
States prior to publication of the rule in pollution control, Incorporation by Environment Protection, Chapter 2—Air
the Federal Register. A major rule reference, Reporting and recordkeeping Quality’’ to read as follows:
cannot take effect until 60 days after it requirements.
is published in the Federal Register. § 52.1620 Identification of plan.
This action is not a ‘‘major rule’’ as * * * * *
defined by 5 U.S.C. 804(2). (c) * * *
EPA APPROVED NEW MEXICO REGULATIONS
State
State citation Title/subject approval/ EPA approval date Comments
effective date
New Mexico Administrative Code (NMAC) Title 20—Environment Protection Chapter 2—Air Quality
Part 1 ................................ General Provisions ..................................................... 1/23/2015 7/24/2015 [Insert Federal
Register citation].
* * * * * * *
* * * * * DATES: This final rule is effective August the Instruction provided that in the
[FR Doc. 2015–18098 Filed 7–23–15; 8:45 am] 24, 2015. absence of a waiver granted by the
BILLING CODE 6560–50–P
FOR FURTHER INFORMATION CONTACT:
Corporation, a recipient must repay to
Stefanie K. Davis, Assistant General LSC any funds retained at the end of the
Counsel, Legal Services Corporation, fiscal year in excess of 10% of its total
3333 K Street NW., Washington, DC annual LSC support. Id. The Instruction
LEGAL SERVICES CORPORATION also prohibited a recipient from ever
20007; (202) 295–1563 (phone), (202)
337–6519 (fax), or sdavis@lsc.gov. retaining a fund balance in excess of
45 CFR Part 1628 25% of its annual support, thereby
SUPPLEMENTARY INFORMATION: limiting the Corporation’s waiver
Recipient Fund Balances granting authority to fund balance
I. Regulatory Background
amounts of 25% or less of a recipient’s
AGENCY: Legal Services Corporation. LSC issued its first instruction on annual LSC support. Id.
ACTION: Final rule. recipient fund balances in 1983 to In 1984, LSC substantially adopted
implement what is now the the Instruction in a regulation published
SUMMARY: This final rule revises the Corporation’s longstanding objective of at 45 CFR part 1628. 49 FR 21331, May
Legal Services Corporation (LSC or ensuring the timely expenditure of LSC 21, 1984. Part 1628 remained
Corporation) regulation on recipient funds for the effective and economical unchanged until 2000, when LSC
fund balances to give the Corporation provision of high quality legal promulgated revisions in response to
more discretion to grant a recipient’s assistance to eligible clients. 48 FR 560, public comments and staff advice that
request for a waiver to retain a fund 561, Jan. 5, 1983. Later that year, LSC the rule was ‘‘more strict’’ than the fund
balance in excess of 25% of its annual published a redrafted version titled balance requirements of most federal
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LSC support. This final rule also Instruction 83–4, Recipient Fund agencies. 65 FR 66637, 66638, Nov. 7,
provides that recipients facing a fund Balances (‘‘Instruction’’). 48 FR 49710, 2000. The revised rule provided the
balance in excess of 25% of their annual 49711, Oct. 27, 1983. The Instruction Corporation with more discretion to
LSC support may submit a waiver limited recipients’ ability to carry over grant a recipient’s request for a waiver
request prior to submitting their annual LSC funds that remained unused at the to retain a fund balance of up to 25%
audited financial statements. end of the fiscal year. Id. Specifically, of its annual LSC support. Id. at 66637.
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In addition, for the first time, the rule recipients that encounter these types of between returning large portions of
authorized the Corporation to exercise occurrences, yet are unable to justify a unused balances and hurriedly
its discretion to grant a recipient’s waiver request to retain a balance in spending funds before the end of the
request for a waiver to retain a fund excess of 25% of their annual support fiscal year. Whereas existing § 1628.3(c)
balance in excess of 25% of its annual under part 1628’s standards. The is limited to three circumstances where
LSC support. Id. The Corporation Committee authorized LSC management a recipient receives a sudden infusion of
reasoned that, by allowing for waivers to to add the matter to the Committee’s income, the new section expands the
retain that amount, ‘‘[t]he recipient can rulemaking agenda. types of situations that the Corporation,
better plan and find the best use for the As required by the LSC Rulemaking in its discretion, may consider to be
funds, rather than being forced into a Protocol, LSC staff prepared an extraordinary and compelling
hasty expenditure simply to avoid the explanatory rulemaking options paper, circumstances. The new section adds
limitation on the carryover of fund accompanied by a proposed rule the example of a natural disaster to
balances.’’ Id. at 66640. The rule, amending part 1628. On April 12, 2015, illustrate a situation where a recipient
however, limited the situations the Committee voted to recommend that would be unable to expend its current
justifying a recipient’s request to retain the Board publish the notice of LSC grant for reasons other than the
more than 25% of its annual support to proposed rulemaking (NPRM) in the receipt of new funds, such as being
‘‘three specific circumstances when Federal Register for notice and forced to temporarily shut down
extraordinary and compelling reasons comment. On April 14, 2015, the Board operations. The section also adds the
exist for such a waiver,’’ listed in accepted the Committee’s example of ‘‘a payment from an LSC-
§ 1628.3(c). Id. at 66638. These recommendation and voted to approve funded lawsuit, regardless of whether
extraordinary and compelling publication of the NPRM in the Federal the recipient was a party to the
circumstances were restricted to the Register. 80 FR 21700, Apr. 20, 2015. lawsuit.’’ This revision makes clear that
following situations when a recipient The comment period remained open for a recipient may request a waiver to
received income derived from its use of thirty days and closed on May 20, 2015. retain a fund balance in excess of 25%
LSC funds: ‘‘(1) An insurance On July 16, 2015, the Committee of its annual support when it receives
reimbursement; (2) the sale of real considered the draft final rule for an award as the result of a court
property; and (3) the receipt of monies publication and voted to recommend its decision in an LSC-funded case, even if
from a lawsuit in which the recipient adoption publication to the Board. On the recipient was not named as a party
was a party.’’ Id. at 66639. Although the July 18, 2015, the Board adopted the to the action. LSC also proposed to
Operations and Regulations Committee final rule and approved its publication. make a minor revision to § 1628.3(d) to
(Committee) ‘‘considered using a Material regarding this rulemaking is reflect the proposed redesignation of
standard of ‘extraordinary and available in the open rulemaking section certain paragraphs in § 1628.4.
compelling’ for these waivers with the of LSC’s Web site at http://www.lsc.gov/ Comments: Both commenters
three specific circumstances discussed about/regulations-rules/open- expressed strong support of the
as examples,’’ it ultimately decided rulemaking. After the effective date of revisions to § 1628.3.
‘‘that more guidance was required to this rule, those materials will appear in
Section 1628.4 Procedures
avoid erosion of the standard,’’ and the the closed rulemaking section of LSC’s
three circumstances became exclusive Web site at http://www.lsc.gov/about/ LSC proposed to add a new
limitations, not mere examples. Id. at regulations-rules/closed-rulemaking. § 1628.4(d) to expressly allow recipients
66640. The LSC Board of Directors that expect to have a fund balance in
II. Section-by-Section Discussion of excess of 25% of their annual support
(Board) adopted the revisions to part
Comments and Regulatory Provisions at the end of the fiscal year to submit
1628 on November 20, 1999, and the
revised rule has been in effect since LSC received two comments during a waiver request prior to the submission
December 7, 2000. Id. at 66637–38. the public comment period. One of their annual audited financial
During the nearly 15-year period since comment was submitted by an LSC statements. This addition will require
part 1628 was last revised, LSC grantees recipient, the Northwest Justice Project existing § 1628.4(d), (e), (f), and (g) to be
have experienced various unexpected (NJP). The other comment was redesignated as § 1628.4(e), (f), (g), and
occurrences outside of those listed in submitted by the non-LSC-funded (h). The new § 1628.4(d) will list the
§ 1628.3(c) that caused them to accrue nonprofit National Legal Aid and written requirements for a waiver
fund balances in excess of 25% of their Defender Association (NLADA) through request to retain a fund balance in
annual support. These occurrences have its Civil Policy Group and Regulations excess of 25% of annual support. It will
included an end-of-year transfer of and Policy Committee. Both also require recipients that receive early
assets from a former grantee to a current commenters were generally supportive approval to later submit updated
grantee, a natural disaster that resulted of LSC’s proposed changes to part 1628. information consistent with the
in a significant infusion of use-or-lose requirements of § 1628.4(a) to confirm
Section 1628.3 Policy the actual fund balance amount to be
disaster relief funds from non-LSC
sources, and receipt of a large attorneys’ LSC proposed to revise § 1628.3(c) to retained by the recipient, as determined
fees award in an LSC-funded case near eliminate the language limiting the by reference to its annual audited
the end of the fiscal year. In each of extraordinary and compelling financial statements. Accordingly, an
these situations, LSC determined that circumstances in which LSC may grant advance approval would be, in effect, an
part 1628 prevented recipients with a recipient’s request for a waiver to approval of the reasons for a waiver and
legitimate reasons for having fund retain a fund balance that exceeds 25% of the proposed amount to be retained.
of its annual support. LSC staff The recipient must later provide
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balances exceeding 25% of their annual
LSC support from seeking and obtaining determined that the list of extraordinary confirmation of the actual amount of
needed waivers. and compelling circumstances should excess funds it has retained. Finally,
On January 22, 2015, LSC staff be illustrative, rather than exhaustive, LSC proposed to revise the introductory
presented the Committee with a so that recipients that encounter truly text of paragraph (a), as well as
proposal to consider revising part 1628 unforeseeable situations can avoid paragraphs (a)(2) and (a)(3), for clarity
to address the difficulties faced by having to make the difficult choice and readability.
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Comments: Both commenters were additional assurance that allowing the pursuant to the criteria set out in
supportive of LSC’s proposal to allow early submission of waiver requests may § 1628.4(e).
recipients with fund balances in excess potentially provide. In addition, * * * * *
of 25% of annual support to submit recipients that receive early approvals of
waiver requests prior to the submission such requests would later have to ■ 3. Amend § 1628.4 by revising
of their annual audit reports. NLADA provide confirmation of the actual paragraphs (a) introductory text, (a)(2)
recommended that LSC further revise amount of excess funds they accrued and (3), and (d) to read as follows:
§ 1628.4 to also allow recipients when they submit their annual audited § 1628.4 Procedures.
expecting to have fund balances in financial statements. LSC believes that
excess of 10% and up to 25% of their the additional time and effort required (a) A recipient may request a waiver
annual LSC support to submit early by this process would not be justified by of the 10% ceiling on LSC fund balances
waiver requests. NLADA reasoned that the small amount of additional within 30 days after the submission to
this would allow recipients seeking assurance that it may provide. LSC of its annual audited financial
such waivers to plan for the next fiscal statements. The request shall specify:
List of Subjects in 45 CFR Part 1628
year with greater certainty. NJP, on the * * * * *
other hand, expressed support for Administrative practice and (2) The reason(s) for the excess fund
continuing the standard waiver request procedure, Grant programs—law, Legal balance;
process for recipients with fund services.
(3) The recipient’s plan for disposing
balances that do not exceed 25% of For the reasons set forth in the
of the excess fund balance during the
annual support. NJP stated that, in its preamble, the Legal Services
current fiscal year;
experience, such requests are more than Corporation amends 45 CFR part 1628
likely to be approved and that using as follows: * * * * *
annual audit report information to draft (d) A recipient may submit a waiver
them assures that the amount approved PART 1628—RECIPIENT FUND request to retain a fund balance in
for retention is equal to the final audited BALANCES excess of 25% of its LSC support prior
carryover. to the submission of its audited
Response: As stated in the preamble ■ 1. The authority citation for Part 1628 financial statements. The Corporation
of the NPRM, LSC staff found that is revised to read as follows: may, at its discretion, provide approval
limiting early approvals to waiver Authority: 42 U.S.C. 2996g(e). in writing. The request shall specify the
requests for fund balances in excess of ■ 2. Revise paragraphs (c) and (d) of extraordinary and compelling
25% of annual support was proper in § 1628.3 to read as follows: circumstances justifying the fund
light of the unique and significant balance in excess of 25%; the estimated
financial planning burdens faced by § 1628.3 Policy. fund balance that the recipient
recipients that experience extraordinary * * * * * anticipates it will accrue by the time of
and compelling circumstances causing (c) Recipients may request a waiver to the submission of its audited financial
them to accrue substantial amounts of retain a fund balance in excess of 25% statements; and the recipient’s plan for
unused funds. Furthermore, while the of a recipient’s LSC support only for disposing of the excess fund balance.
Corporation will continue to apply the extraordinary and compelling Upon the submission of its annual
heightened standard of ‘‘extraordinary circumstances, such as when a natural audited financial statements, the
and compelling circumstances’’ to disaster or other catastrophic event recipient must submit updated
requests to retain fund balances in prevents the timely expenditure of LSC information consistent with the
excess of 25% of annual support, it will funds, or when the recipient receives an requirements of paragraph (a) of this
maintain the less burdensome standard insurance reimbursement, the proceeds section to confirm the actual fund
of ‘‘special circumstances’’ for requests from the sale of real property, a payment balance to be retained.
to retain fund balances that do not from a lawsuit in which the recipient * * * * *
exceed 25% of annual support. was a party, or a payment from an LSC-
Therefore, LSC believes that recipients Dated: July 20, 2015.
funded lawsuit, regardless of whether
seeking to retain fund balance amounts the recipient was a party to the lawsuit. Stefanie K. Davis,
in excess of 10% and up to 25% of (d) A waiver pursuant to paragraph (b) Assistant General Counsel.
annual support would not benefit or (c) of this section may be granted at [FR Doc. 2015–18138 Filed 7–23–15; 8:45 am]
significantly from the minimal level of the discretion of the Corporation BILLING CODE 7050–01–P
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Document Created: 2018-02-23 09:24:33
Document Modified: 2018-02-23 09:24:33
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| Dates | This final rule is effective August 24, 2015. | |
| Contact | Stefanie K. Davis, Assistant General Counsel, Legal Services Corporation, 3333 K Street NW., Washington, DC 20007; (202) 295-1563 (phone), (202) 337-6519 (fax), or [email protected] | |
| FR Citation | 80 FR 43966 | |
| CFR Associated | Administrative Practice and Procedure; Grant Programs-Law and Legal Services |
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