Source: https://www.lsc.gov/program-letter-15-3-enforcement-mechanisms
Timestamp: 2019-04-22 22:29:08+00:00

Document:
B. Proposed determination of suspension.
D. Final determination of suspension.
V. Limited Reductions of Funding.
A. Grounds for a limited reduction of funding.
B. Preliminary determination for a limited reduction of funding.
D. Informal conference or written materials in opposition to the preliminary determination.
B. Preliminary determination for a termination.
E. Informal conference or written materials in opposition to the termination.
This program letter provides an overview of LSC policies for enforcement actions that LSC may take in the event of grantee noncompliance with the terms and conditions of a grant. The program letter explains general practices of LSC, but it does not limit LSC’s discretion to make decisions that are otherwise permissible under the LSC statutes and regulations.
This program letter describes the LSC regulations covering enforcement mechanisms to provide guidance to LSC grantees regarding the operation of these regulations. This program letter summarizes the major provisions of the following regulations to organize and explain them (but does not include every detail set forth in each of the regulations summarized).
This program letter does not address the disallowed costs procedures of 45 C.F.R. Part 1630, which involve recovering grant funds.
This program letter applies to LSC grants or contracts provided under section 1006(a)(1)(A) of the LSC Act to LSC recipients for the purpose of providing legal assistance to eligible clients. Those grants include Basic Field—General, Basic Field—Migrant, and Basic Field—Native American. 42 U.S.C. § 2996e(a)(1)(A). The LSC Act and regulations define “LSC recipients” as grantees or contractors receiving “annualized funding from LSC granted under section 1006(a)(1)(A) [of the LSC Act] for the direct delivery of legal assistance to eligible clients.” 42 U.S.C. § 2996a(6); 45 C.F.R. § 1600.1. This program letter will also refer to all covered entities as “grantees” for convenience. Please note that some LSC grants are subject to different enforcement procedures. For example, termination procedures for LSC Technology Initiative Grants appear at http://tig.lsc.gov/grants/compliance.
The following LSC offices are referred to in this program letter.
Attached to this program letter is a table comparing these enforcement mechanisms. 78 Fed. Reg. 10087 (Feb. 13, 2013). To summarize, suspension procedures are the shortest and least formal. Terminations and debarments use identical procedures that include a right to a hearing before an impartial decision maker. Limited reductions of funding use the same basic procedures as terminations, but do not include the right to a hearing and are subject to some different deadlines.
LSC oversees grantee compliance with all LSC rules and restrictions, many of which are statutorily mandated. Although LSC is not a federal agency, it provides grants with funds appropriated by Congress. LSC and its grantees are accountable for ensuring that those funds are spent responsibly and only for allowable activities. These enforcement mechanisms are designed to enable LSC to take timely and effective action to deal with issues of noncompliance while protecting the provision of legal services to eligible clients and providing appropriate levels of due process for grantees. LSC can choose the enforcement mechanism best suited to the situation.
Enforcement is an integral part of LSC’s overall grants management oversight process and includes review of the grantee’s programmatic operations, compliance with rules and requirements, and financial management. LSC works with grantees to identify problems and provide opportunities for correction. Often, grantees are able to implement corrective actions and/or comply with special grant conditions without LSC’s initiating an enforcement action. Furthermore, the enforcement procedures include an early opportunity for resolving compliance concerns through an informal conference at which the grantee and LSC may seek to narrow the issues and explore possibilities of settlement or compromise. They also include opportunities for the grantee to implement corrective actions, when appropriate, in lieu of LSC’s imposing a sanction. Nonetheless, LSC may impose sanctions when necessary to respond to noncompliance or to compel corrective actions to end noncompliance. Additionally, LSC may impose special grant conditions requiring implementation of corrective actions and related monitoring and reporting.
Compliance is a significant factor in the grant competition process. Based on compliance or programmatic concerns, LSC may decide not to award a grant to a particular entity or to award a grant with a shorter than normal funding term (e.g., 12 months, 6 months, 3 months, or monthly),while addressing compliance or programmatic concerns.
LSC requirements means the provisions of the LSC Act, the Corporation’s appropriations act or other law applicable to LSC funds, a Corporation rule, regulation, guideline or instruction, or the terms or conditions of the recipient’s grant or contract with the Corporation.
substantial failures to provide high quality, economical, and effective legal assistance, for which terminations are available—LSC cannot suspend funds or impose limited reductions of funding for substantial failures.
45 C.F.R. §§ 1606.2 (definitions), 1606.3 (grounds for termination or limited reduction of funding), 1606.4 (grounds for debarment), 1623.3 (grounds for suspension).
45 C.F.R. § 1606.2 (emphasis added). Although LSC must consider all of the criteria, LSC may take enforcement action even when only some of the criteria are met. For example, knowing and willful violations of substantive restrictions by senior staff at a grantee may merit a limited reduction of funding.
45 C.F.R. § 1606.3(a)(2) (emphasis and lettering added).
45 C.F.R. § 1618.5 sets forth the following steps regarding enforcement actions (emphasis and outline formatting added).
attempt to resolve it through informal consultation with the recipient."
LSC may proceed to take an enforcement action when there is “substantial reason to believe that a recipient has persistently or intentionally violated the LSC requirements, or after notice, a recipient has failed to take appropriate remedial or disciplinary action to ensure compliance by its employees with the LSC requirements, and attempts at informal resolution have been unsuccessful.” 45 C.F.R. § 1618.5(a)–(b) (emphasis added).
Suspensions are the most immediate sanction. LSC can suspend funding in whole or in part. 45 C.F.R. § 1623.2. The procedures for initiating a suspension can be completed in less than 20 business days. 45 C.F.R. § 1623.4(b)–(g). The suspension can take effect as early as the next scheduled grant payment after the grantee receives the final determination of suspension. 45 C.F.R. § 1623.4(g). Suspended funds are provided to the grantee at the end of the suspension. 45 C.F.R. § 1623.6(b).
LSC may temporarily suspend a grant, in whole or in part, for up to 90 calendar days. 45 C.F.R. § 1623.4(j). Only suspensions based on the failure to submit an acceptable audit may last for more than 90 calendar days. 45 C.F.R. §§ 1623.3(b), 1623.4(k). Audit-based suspensions may last until completion of an acceptable audit. 45 C.F.R. § 1623.4(k).
For non-audit-based suspensions, grantees may appeal the suspension to the LSC President after the first 30 calendar days. 45 C.F.R. § 1623.4(h).
A suspension will end if LSC initiates termination proceedings against the grantee. 45 C.F.R. § 1623.2.
Ordinarily, LSC will issue a final determination of suspension within 30 days of initiating the suspension procedures. LSC can extend deadlines and take longer to complete the process. 45 C.F.R. § 1623.5(a), (c).
ensure that the grantee takes immediate corrective action necessary for compliance with the LSC requirements.
the OIG has recommended suspension.
that, within 10 business days, it may submit written materials in opposition to the proposed suspension.
If requested by the grantee, LSC will hold an informal meeting with the grantee within 5 business days of the request. At the informal meeting, both LSC and the grantee will have an opportunity to state their cases, seek to narrow the issues, explore the possibilities of settlement or compromise including implementation of corrective actions, and submit written materials. 45 C.F.R. § 1623.4(c)–(e).
Based on the informal meeting and/or written materials, LSC will determine whether the compliance concern can be resolved without a suspension. If LSC decides to suspend funding, then it will provide the grantee with a written final determination containing a summary of the issues raised in the informal conference and presented in any written materials. 45 C.F.R. § 1623.4(f).
Grantees cannot immediately appeal final determinations of suspension.
For non-audit-based suspensions, a grantee can appeal the suspension after the suspension has been in effect for 30 calendar days or more.
For audit-based suspensions, there is no appeal.
Appeals of suspensions are directed to the LSC President. 45 C.F.R. § 1623.4(h). The President or another senior LSC employee will review the appeal; the person doing so must have had no prior involvement in the suspension proceedings. 45 C.F.R. § 1623.4(a), (h).
The appeal must be in writing and must state, in detail, the reasons for seeking review.
The LSC decision on appeal will be based on the record of the suspension proceedings, including any additional materials that LSC requests. The grantee will have an opportunity to respond to those additional materials.
LSC will affirm, modify, or terminate the suspension within 15 calendar days of receipt of the appeal.
LSC may impose a limited reduction of funding, whereby it reduces the grant for the current grant year by less than 5%. Limited reductions of funding affect only the current year’s funding. 45 C.F.R. § 1606.2. LSC may determine whether to impose the reduction in one payment, prorated over many months, or by any other means. 45 C.F.R. § 1606.13(d). The amount of the reduction is measured by the total grant for the year, regardless of when the reduction occurs. Thus, a reduction of 4% of the total grant for the year could cause a reduction in a single month’s payment of 60%. Alternately, a reduction of 4% imposed at the beginning of a grant year could be applied as a 4% reduction of each month’s payment throughout the entire grant year.
Limited reductions of funding can be imposed within approximately three months of the initial notice, presuming all appeals are requested.
that occurred less than five years prior to the notice initiating the limited reduction of funding proceedings.
the Chair of the grantee’s governing body.
Summarize prior attempts, if any, for resolution of the substantial noncompliance.
A grantee may challenge the proposed limited reduction of funding as described below. If the grantee does not do so, then LSC may issue a final decision with no further avenues for appeal or review under the regulation. 45 C.F.R. § 1606.6(b).
LSC may provide the grantee with the option of accepting an LSC-specified corrective action to prevent the limited reduction of funding. 45 C.F.R. § 1606.6(a)(6).
A grantee that attempts to implement a corrective action cannot also request an informal conference or submit written materials in opposition to the preliminary determination.
includes both an implementation plan and an implementation timeline.
If the grantee implements the corrective action to the satisfaction of LSC, then LSC will withdraw the preliminary determination as provided in 45 C.F.R. § 1606.7(a)(2)–(3).
summarize in the draft final decision the attempts at resolution.
The grantee has 10 business days to appeal the draft final decision for a limited reduction of funding to the LSC President or designee. 45 C.F.R. § 1606.10(b) (described below).
Within 5 business days, LSC will notify the grantee of the time and place of the conference. 45 C.F.R. § 1606.7(c).
The informal conference will be held pursuant to 45 C.F.R. § 1606.7(c)–(f). At the informal conference, both LSC and the grantee will have an opportunity to state their cases, seek to narrow the issues, explore the possibilities of settlement or compromise including implementation of corrective actions, and submit written materials.
LSC will issue a draft final decision to modify, withdraw, or affirm the preliminary determination. 45 C.F.R. § 1606.7(f).
LSC will do so within 15 calendar days of either: (i) the informal conference, or (ii) the receipt of written materials if there is no informal conference. 45 C.F.R. § 1606.7(f).
That decision will become final if the grantee does not request review by the LSC President. 45 C.F.R. § 1606.10(a).
Within 10 business days, the grantee may appeal the draft final decision to the LSC President. 45 C.F.R. § 1606.10(b).
The President or another senior LSC employee will review the appeal; the person doing so must have had no prior involvement in the suspension proceedings. 45 C.F.R. §§ 1606.5(b), 1606.10(d).
The LSC decision on appeal will be based on the record of the proceedings, including any additional materials that LSC requests. The grantee will have an opportunity to respond to those additional materials. Upon request, LSC will provide a copy of the administrative record to the grantee. 45 C.F.R. § 1606.10(c).
Within 30 days after receiving the request for review, the LSC President or other senior LSC employee will adopt, modify, or reverse the draft decision as the final decision, which cannot be appealed. LSC may also direct further consideration of the matter. 45 C.F.R. § 1606.10(e).
artial termination” that reduces the grant funds by 5% or more but continues the grant with the remaining funding.“partial termination” that reduces the grant funds by 5% or more but continues the grant with the remaining funding.
A full termination will end the grant. 45 C.F.R. § 1606.2. LSC will determine the best way to close out the grant and recompete the service area while taking all practical steps to ensure the continued provision of legal assistance in the service area. 45 C.F.R. §§ 1606.14, 1634.11.
A partial termination can apply to the current year of the grant or to multiple years, up to the full grant term. 45 C.F.R. § 1606.2. LSC may determine whether to apply the termination to one payment, prorated over many months, or by any other means. 45 C.F.R. § 1606.13(d). For example, a partial termination of 10% of a grant for the current grant year could be applied over two months, which would reduce the payment for each month by 60%. Alternatively, a 10% reduction could be applied uniformly to each month’s payment over the entire grant year.
Terminations include the right to a hearing before an impartial decision maker. 45 C.F.R. § 1606.8. Terminations have multiple stages and can take six months or more to complete.
there has been a substantial failure by the grantee to provide high quality, economical, and effective legal assistance (as defined at 45 C.F.R. § 1606.3(a)(2) and discussed above).
A grantee may challenge the proposed termination as described below. If the grantee does not do so, then LSC may issue a final decision with no further avenues for appeal or review under this part. 45 C.F.R. § 1606.6(b).
For terminations, grantees have two different paths for appeal. The grantee always has a right to request a hearing before an impartial hearing examiner. The grantee can directly request that hearing as discussed in paragraph VI.F, below. Alternatively, the grantee may first accept LSC’s proposed corrective action plan (if provided), participate in an informal conference, or submit written materials for LSC’s consideration. Those options are discussed in paragraphs VI.D and E below. Thereafter, the grantee can request a hearing before an impartial hearing examiner. 45 C.F.R. § 1606.7.
If LSC proposes a corrective action to prevent the termination, then the grantee may attempt to implement that proposed corrective action. 45 C.F.R. § 1606.7(a).
A grantee that attempts to implement a corrective action cannot also request an informal conference or submit written materials in opposition to the preliminary determination. 45 C.F.R. § 1606.7(a).
The grantee has 10 business days to submit a draft compliance agreement under the procedures at 45 C.F.R. § 1606.7(a)(1).
If the grantee implements the corrective action to the satisfaction of LSC, then LSC will withdraw the preliminary determination. 45 C.F.R. § 1606.7(a)(2)–(3).
The grantee has 10 business days to appeal the draft final decision to the LSC President. 45 C.F.R. § 1606.10(b) (described below).
The informal conference will be held pursuant to 45 C.F.R. § 1606.7 (c)–(f). At the informal conference, both LSC and the grantee will have an opportunity to state their cases, seek to narrow the issues, explore the possibilities of settlement or compromise including implementation of corrective actions, and submit written materials.
LSC will issue a draft final decision to modify, withdraw, or affirm the preliminary determination.
LSC will do so within 15 calendar days of either (i) the informal conference, or (ii) the receipt of written materials if there is no informal conference. 45 C.F.R. § 1606.7(f).
15 calendar days to request a hearing to review a draft final decision issued after consideration of corrective actions, an informal conference, or submitted written materials, as described in paragraphs VI.D and E, above, and at 45 C.F.R. § 1606.7.
Within 10 business days after LSC receives a request for a hearing, LSC will notify the grantee in writing of the date, time, and place of the hearing and the names of the hearing officer and of the attorney who will represent LSC. 45 C.F.R. § 1606.8(b).
The hearing will be scheduled for the earliest appropriate date, which ordinarily will be within 30 calendar days of the request. 45 C.F.R. § 1606.8(d).
The hearing procedures are described at 45 C.F.R. § 1606.8(e)–(l).
The impartial hearing officer must not have been involved in the current termination action and must be a person who has not formed a prejudgment on the case and does not have a pecuniary interest or personal bias in the outcome of the proceeding. The hearing officer may be an LSC employee. 45 C.F.R. § 1606.8(c).
Within 20 calendar days of the conclusion of the hearing, the hearing officer will issue a written recommended decision to adopt, modify, or reverse LSC’s proposed termination, which will contain findings and the reasons for the decision. Findings will be based solely on the record, evidence adduced at the hearing, and matters subject to official notice. 45 C.F.R. § 1606.9.
If neither the grantee nor LSC appeals the recommended decision within 10 business days, then it will be issued as a final decision with no further appeals. 45 C.F.R. § 1606.10(a).
Within 10 business days after the grantee’s receipt of the hearing officer’s recommended decision, the grantee or LSC may appeal the hearing officer’s recommended decision to the LSC President. 45 C.F.R. § 1606.10(b).
The President will review the appeal. Unlike appeals of suspensions and limited reductions of funding, appeals of terminations permit the President to have been involved in the prior termination proceedings because the hearing officer provides the opportunity for impartial review. 45 C.F.R. § 1606.10(d).
The decision on appeal will be based on the record of the proceedings, including any additional materials that LSC requests. The grantee will have an opportunity to respond to those additional materials. Upon request, LSC will provide a copy of the administrative record to the grantee. 45 C.F.R. § 1606.10(c).
Within 30 days the President will adopt, modify, or reverse the draft decision as the final decision, which cannot be appealed. The President may also direct further consideration of the matter. 45 C.F.R. § 1606.10(d)–(f).
LSC may debar a grantee for up to six years from receiving an LSC grant or LSC funds from another LSC grantee. 45 C.F.R. §§ 1606.2, 1606.11(d).
LSC may initiate debarment proceedings on a showing of good cause. 45 C.F.R. § 1606.4(a).
Was initiated after December 23, 1998.
The debarment procedures are the same as the termination procedures in 45 C.F.R. Part 1606 and described in section VI, above.
The final debarment decision will state the effective date of the debarment and the period of debarment, which will be commensurate with the seriousness of the cause for debarment. 45 C.F.R. § 1606.11(d).
The debarment will be for no more than 6 years. 45 C.F.R. § 1606.11(d).
(9) Proceedings involving violations of Military Selective Service Act or military desertion—Section 1007(b)(10).
(13) In-person solicitation—Section 504(a)(18) and 45 C.F.R. Part 1638.

References: V. 
 § 2996
 § 2996
 § 1600
 § 1606
 § 1606
 § 1618
 § 1618
 § 1623
 § 1623
 § 1623
 § 1623
 § 1623
 § 1623
 § 1623
 § 1623
 § 1623
 § 1623
 § 1623
 § 1623
 § 1623
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606
 § 1606