[Federal Register Volume 87, Number 107 (Friday, June 3, 2022)]
[Notices]
[Pages 33835-33836]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-11988]


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LEGAL SERVICES CORPORATION


Issuance of Updated Financial Guide for Grantees

AGENCY: Legal Services Corporation.

ACTION: Notice of issuance of final Financial Guide.

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SUMMARY: The Legal Services Corporation (LSC) updated its Financial 
Guide (``Guide'') for grantees.

DATES: The guide will become effective January 1, 2023.

FOR FURTHER INFORMATION CONTACT: Stuart Axenfeld, Deputy Director for 
Fiscal Compliance, Legal Services Corporation, 3333 K St. NW, 
Washington, DC 20007; (202) 295-1539; <a href="/cdn-cgi/l/email-protection#503128353e36353c3423103c23337e373f26"><span class="__cf_email__" data-cfemail="04657c616a6261686077446877672a636b72">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: In 2018, LSC conducted a comprehensive 
review of the Accounting Guide for LSC Recipients, 2010 Edition. Based 
on input from LSC grantees and LSC's fiscal compliance analysts, LSC 
determined the format of the Accounting Guide no longer best serves 
grantees or LSC. The new Financial Guide removes outdated or 
inapplicable materials, improves guidance directly related to LSC-
specific issues, and adds clarity about both required and recommended 
financial practices. The new Financial Guide also addresses areas that 
were previously identified as problematic or complex, such as cost 
allocation, and assists grantees in the financial management of LSC 
grants. LSC removed sections that provided general accounting and 
financial guidance because neither LSC nor grantees found these 
sections useful.
    Overall, the new Financial Guide reflects existing LSC and grantee 
practices and requirements. Additionally, in some places, the new 
Financial Guide sets out requirements that previously had not been 
published for comment. These are requirements that LSC has been 
applying through required corrective actions and most, perhaps all, 
grantees have already implemented.
    LSC originally sought comment on the comprehensive revisions to the 
Financial Guide via a notice published in the Federal Register on July 
7, 2020. 85 FR 40688. LSC received 38 unique comments on the draft 
Financial Guide from five grantees and the National Legal Aid and 
Defender Association (NLADA) on behalf of itself and its LSC grantee 
members. Generally, the commenters suggested clarifications and 
requested that LSC make many of the proposed requirements into 
recommendations to accommodate the diversity of grantee sizes, fiscal 
sophistication, and resources.
    On December 15, 2021, LSC sought additional comments on discrete 
changes to the Financial Guide. 86 FR 71288, Dec. 15, 2021. LSC later 
extended the comment period to February 15, 2022. 87 FR 2638, Jan. 18, 
2022. LSC received six unique comments from one grantee, NLADA, and 
Management Information Exchange.
    LSC will publish the Financial Guide on LSC's website at https://www.lsc.gov/lsc-financial-guide. The Financial Guide will become 
effective on January 1, 2023. LSC will announce training opportunities 
at a later date.

LSC's Response to Comments

    LSC considered all comments and made the changes described below in 
response. The Financial Guide adds clear definitions that ``must'' and 
``shall'' state requirements, but ``should'' states a strong 
recommendation. For all required items, grantees may opt to use 
different methods of reaching the goal, subject to LSC's determination 
that the alternatives are sufficient.
    Revised sections include:

Section 1.3--Recipient Responsibility

    This new section contains general statements moved from other 
sections that grantees must keep their financial policies and 
procedures up to date with accounting standards and changes to LSC 
requirements (such as regulations, the Audit Guide, etc.).
    This section also reinforces the requirement for grantee Board 
approval of grantee written policies, which many recipient 
organizations already practice. Additionally, LSC revised the Financial 
Guide to clarify that both grantee policies and procedures should be 
written.

Section 2.2.2--Time and Attendance (Payroll)

    LSC revised the language related to the timing of payroll or the 
execution of payroll to focus on the review of time and attendance 
records to ensure they are authorized, complete, and accurate. Also, 
LSC clarified that grantees may develop an alternative report to 
maintain the components of a labor cost distribution report.

Section 2.5.3--Electronic Data Processing and Cybersecurity

    LSC considered the increasing level of electronic threats and the 
significant risk those threats pose to the financial security of 
grantees. LSC is requiring grantees to gauge the risk to their 
organizations. Risk assessment procedures will vary by grantee. 
However, at a minimum, the process should:
    <bullet> Identify the physical and digital assets susceptible to 
cyberattacks;
    <bullet> identify risks to those assets (risks should be evaluated 
annually for changes);
    <bullet> evaluate the risks (e.g., high, medium, or low) based on 
likelihood and impact; and
    <bullet> document the results of the risk assessment, including the 
development and implementation of appropriate controls.

Section 3.5--Procurement and Contracting

    LSC added suggestions on how recipients should customize their 
policy requirements based on levels of risks.
    Authority: 42 U.S.C. 2996(g)(e).


[[Page 33836]]


    Dated: May 31, 2022.
Stefanie Davis,
Senior Associate General Counsel.
[FR Doc. 2022-11988 Filed 6-2-22; 8:45 am]
BILLING CODE 7050-01-P


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