Proposed Information Collection; Comment Request; Revolving Loan Fund Reporting and Compliance Requirements, 14214-14215 [E8-5216]

Agencies

• DEPARTMENT OF COMMERCE
• Economic Development Administration

[Federal Register Volume 73, Number 52 (Monday, March 17, 2008)]
[Notices]
[Pages 14214-14215]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-5216]


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DEPARTMENT OF COMMERCE

Economic Development Administration


Proposed Information Collection; Comment Request; Revolving Loan 
Fund Reporting and Compliance Requirements

AGENCY: Economic Development Administration.

ACTION: Notice.

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SUMMARY: The Department of Commerce, as part of its continuing effort 
to reduce paperwork and respondent burden, invites the general public 
and other federal agencies to take this opportunity to comment on 
proposed and/or continuing information collections, as required by the 
Paperwork Reduction Act of 1995.

DATES: Written comments must be submitted on or before May 16, 2008.

ADDRESSES: Direct all written comments to Diana Hynek, Departmental 
Paperwork Clearance Officer, Department of Commerce, Room 6625, 14th 
and Constitution Avenue, NW., Washington, DC 20230 (or via the Internet 
at dhynek@doc.gov).

FOR FURTHER INFORMATION CONTACT: Requests for additional information or 
copies of the information collection instrument and instructions should 
be directed to Kenneth M. Kukovich, EDA PRA Liaison, Office of 
Management Services, Economic Development Administration, Department of 
Commerce, HCHB Room 7227, 1401 Constitution Avenue, NW., Washington, DC 
20230; telephone: (202) 482-4965; fax: (202) 501-0766; e-mail: 
kkukovich@eda.doc.gov.

SUPPLEMENTARY INFORMATION:

I. Abstract

    The mission of the Economic Development Administration (EDA) is to 
lead the federal economic development agenda by promoting innovation 
and competitiveness, preparing American regions for growth and success 
in the worldwide economy. One of EDA's seven economic development 
programs is the Revolving Loan Fund (RLF) Program.
    Under the RLF Program, EDA's regional offices award competitive 
grants to units of state and local government, institutions of higher 
education, public or private non-profit institutions, EDA-approved 
economic development district organizations, and Indian Tribes to 
establish RLFs. Following a grant award, an RLF grantee disburses money 
from the RLF to make loans at interest rates that are at or below the 
current market rate to small businesses or to businesses that cannot 
otherwise borrow capital. On occasion, RLFs also make loans to finance 
public infrastructure. As the loans are repaid, the grantee uses a 
portion of interest earned to pay administrative expenses and adds the 
remaining principal and interest repayments to the RLF's capital base 
to make new loans. An RLF award that is well managed is actively used 
to make loans to eligible businesses and entities, continues to revolve 
funds, and does not have a termination date.
    One of the unique features of the program is that, by law, EDA must 
exercise fiduciary responsibility over its RLF portfolio in 
perpetuity--a significant challenge since many RLF grants date back to 
1979. To date, EDA has managed its RLF portfolio by requiring grantees 
to file the Semiannual Report for EDA-Funded RLF Grants (ED-209S) every 
six months. EDA has exercised its discretion to allow some grantees to 
file on an annual basis, and these grantees submit the Annual Report 
for EDA-Funded RLF Grants (ED-209A) once a year.
    However, a recent Department of Commerce (DOC) Office of Inspector 
General (OIG) report titled Aggressive EDA Leadership and Oversight 
Needed to Correct Persistent Problems in RLF Program (Audit Report No. 
OA-18200-7-0001/March 2007; for the full report, see https://
www.oig.doc.gov/oig/reports/2007/EDA-OA-18200-03-2007.pdf) found that 
EDA failed to exercise adequate oversight of the program. Specifically, 
the OIG found that EDA:
     Did not have an adequate tracking and oversight system.

[[Page 14215]]

     Failed to ensure grantees' compliance with critical 
financial and audit reporting requirements.
     Failed to ensure efficient capital utilization by 
grantees. Under EDA's regulations, if an RLF grantee fails to satisfy 
its capital utilization requirement as set out in its RLF plan for two 
consecutive reporting periods, EDA can require the grantee to sequester 
``excess funds'' in a separate interest-bearing account and remit the 
interest earned on these funds to the U.S. Treasury. (Under 13 CFR 
307.16, ``capital utilization rate'' is the amount of RLF capital as 
currently loaned out or committed to be loaned out as a percentage of 
the RLF's capital base and ``excess funds'' is the difference between 
the actual percentage of RLF capital loaned and the applicable capital 
utilization percentage.)
     EDA's failure to require sequestration of excess funds on 
a consistent basis has resulted in lower capital utilization rates and 
lower remittances to the U.S. Treasury than would be commensurate with 
adequate oversight of the program.
     Did not use single audits as a tool for managing the RLF 
program. Under OMB Circular A-133, single audits are required of most 
RLF grantees.
    The OIG recommended that EDA develop an Action Plan to rectify 
these deficiencies and a ``standard grantee reporting and monitoring 
system that provides the critical information EDA needs to manage the 
RLF program and protect its assets.'' The OIG also recommended that EDA 
``ensure that all RLF grant recipients undergo required single audits 
and file reports with the Federal Audit Clearinghouse.''
    EDA agreed to implement the recommendations. As part of its 
implementation, EDA committed to reviewing the RLF reporting forms to: 
(a) Ensure all information needed to manage the RLF program and protect 
EDA assets is collected, (b) ensure that the form is suitably 
integrated into an automated RLF reporting, tracking, monitoring, and 
management system, and (c) to the extent possible, minimize the 
paperwork burden on RLF grantees.
    In addition, EDA will update its regulations to reflect these 
changes to the RLF program and to ensure effective management of 
federal funds.
    Through this review, EDA determined the following:
     The use of both annual and semi-annual reports is sub-
optimal. In terms of providing valuable information to EDA for program 
monitoring purposes, the ED-209A is not as useful as the ED-209S. Also, 
the lack of identical fields on the two reporting forms makes it 
difficult, if not impossible, to report on the status of the portfolio 
as a whole. Having different RLF grantees fill out either the ED-209A 
or the ED-209S effectively separates RLF grantees into two groups, with 
two different sets of reporting requirements and reporting dates, which 
contributes to the large number of missing or late reports highlighted 
by the OIG. For these reasons EDA has determined that all RLF grantees 
will report semi-annually using Form ED-209S.
     The fact that neither of the current reporting forms 
collects grantee EIN numbers makes it difficult, if not impossible, for 
EDA to determine whether a grantee has filed its single audit report 
with the Federal Audit Clearinghouse. Searching by EIN number is the 
most reliable way to locate single audit reports in the Clearinghouse 
database.
     EDA needs to begin collecting e-mail addresses to 
facilitate communication with grantees.
     Many of the fields of the current RLF reporting forms are 
duplicative, and therefore contribute to reporting inconsistencies and 
errors. Some fields should not change from reporting period to 
reporting period (e.g., amount of EDA investment assistance provided), 
but are still requested each and every time. Many others are calculated 
fields, for example the ``RLF income'' field (line B.8 of the current 
ED-209S) is calculated as interest earned plus earnings from accounts 
plus fees earned (lines B.5, B.6, and B.7). The use of a hardcopy form 
with a large number of fields that must be calculated by the grantee 
has led to a significant amount of mathematical errors.
    EDA addressed the issues highlighted above by creating a web-based 
grantee reporting system that eliminates all duplicative and calculable 
fields. This system is designed to allow grantees, if they so choose, 
to upload data directly from their accounting software into the Web-
based system, thus eliminating time-consuming data entry. 
Alternatively, grantees have the option of manually entering data into 
the Web-based system. All grantees will be provided with a unique user 
id and password, and the system will meet all NIST information 
technology security controls. All grantees will be required to report 
on a semi-annual basis and to provide e-mail contact information, as 
well as EIN and DUNS numbers. This system is expected to ``go live'' at 
the beginning of fiscal year 2009.

II. Method of Collection

    The report will be submitted electronically.

III. Data

    OMB Control Number: 0610-0095.
    Form Number: ED-209 (replaces ED-209S and ED-209A).
    Type of Review: Regular submission.
    Affected Public: Not for-profit institutions; state, local or 
tribal government.
    Estimated Number of Respondents: 1,168.
    Estimated Time per Response: 3 hours.
    Estimated Total Annual Burden Hours: 3,504.
    Estimated Total Annual Cost to Public: $0.

IV. Request for Comments

    Comments are invited on: (a) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information shall have practical 
utility; (b) the accuracy of the agency's estimate of the burden 
(including hours and cost) of the proposed collection of information; 
(c) ways to enhance the quality, utility, and clarity of the 
information to be collected; and (d) ways to minimize the burden of the 
collection of information on respondents, including through the use of 
automated collection techniques or other forms of information 
technology.
    Comments submitted in response to this notice will be summarized 
and/or included in the request for OMB approval of this information 
collection; they also will become a matter of public record.

    Dated: March 11, 2008.
Gwellnar Banks,
Management Analyst, Office of the Chief Information Officer.
[FR Doc. E8-5216 Filed 3-14-08; 8:45 am]
BILLING CODE 3510-24-P