Notice of Revisions to Performance Area Four of LSC's Performance Criteria, 14047-14060 [2018-06532]

Download as PDF Federal Register / Vol. 83, No. 63 / Monday, April 2, 2018 / Notices Type of Review: Extension. Title: Request to be Selected as Payee. OMB Number: 1240–0010. Agency Number: CM–910. Affected Public: Individuals or households; Business or other for profit; Not-for-profit institutions. Total Respondents: 250. Total Annual Responses: 250. Average Time per Response: 15 minutes. Estimated Total Burden Hours: 63 hours. Frequency: On occasion. Total Burden Cost (capital/startup): $0. Total Burden Cost (operating/ maintenance): $132.50. Comments submitted in response to this notice will be summarized and/or included in the request for Office of Management and Budget approval of the information collection request; they will also become a matter of public record. Dated: March 13, 2018. Yoon Ferguson, Agency Clearance Officer, Office of Workers’ Compensation Programs, U.S. Department of Labor. [FR Doc. 2018–05624 Filed 3–30–18; 8:45 am] BILLING CODE 4510–CK–P LEGAL SERVICES CORPORATION Notice of Revisions to Performance Area Four of LSC’s Performance Criteria Legal Services Corporation. Notice of revisions to guidelines. AGENCY: ACTION: To provide grantees with the most effective guidance, in 2018 the Legal Services Corporation revised Performance Area Four to refine and expand the areas of inquiry to focus on those criteria for which LSC has found the most deficiencies, particularly Criteria 1 (Board Governance), 4 (Financial Administration), and 7 (General Resource Development). The 2018 revisions codify the work of LSC staff with numerous grantees and provide evidence-based guidance to recipients on how to run a highperforming nonprofit organization. FOR FURTHER INFORMATION CONTACT: Lynn Jennings, Vice President for Grants Management, Legal Services Corporation, 3333 K Street NW, daltland on DSKBBV9HB2PROD with NOTICES SUMMARY: VerDate Sep<11>2014 19:06 Mar 30, 2018 Jkt 244001 Washington, DC 20007, (202) 295–1645, performancearea4@lsc.gov. LSC’s Performance Criteria indicate that legal services programs should be led and managed effectively with high-quality governance, administrative systems, procedures, and policies. Good leadership and strong internal operations increase the likelihood of effective program services for clients. Over the past several years, LSC has observed some areas of weakness in grantee governance through performance quality visits, compliance reviews, and Office of Inspector General (OIG) visits. The 2018 revisions codify the work of LSC staff with numerous grantees and provide evidence-based guidance to recipients on how to run a high-performing nonprofit organization. Since 2010, LSC’s Office of Program Performance has conducted 133 Program Quality Visits of 124 grantees. LSC issued 1,901 Tier One 1 recommendations across the reports summarizing those visits. Of the 1,901 Tier One recommendations, 695 recommendations—36.5%, the most of any performance area—pertained to Performance Area 4. From 2011 to 2016, LSC’s Office of Compliance and Enforcement conducted 111 Compliance Reviews of 106 grantees. LSC issued more than 1,200 Required Corrective Actions (RCAs) related to both regulatory and fiscal issues. Approximately 25% of the RCAs identified deficiencies in the grantees’ financial administration. Additionally, OIG conducted 41 A–50 reviews between June 2012 and September 2017. As a result of those reviews, the OIG made 160 referrals to OCE. The referrals covered issues related to timekeeping, SUPPLEMENTARY INFORMATION: 1 According to LSC’s Office of Program Performance Procedure Manual: • Tier One Recommendations are those recommendations that are determined to be significant and will be included in the next Request for Proposal to the grantee. • Tier One Recommendations are those that if addressed, have the potential for significantly improving program quality and/or program performance within the short term, i.e., two years. A Tier One Recommendation must: • be stated in simple straightforward terms such that there is no doubt by the program that a response is required; and • have an objective, the value of which equals or outweighs any additional burden that the recommendation imposes on the program (does not apply to statutory or regulatory requirements). PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 14047 deficiencies in policies and procedures, cost allocation, and internal controls. This is the background against which LSC evaluated the existing criteria for Performance Area 4. The statistics above gave LSC valuable information about which areas of grantee administration, leadership, and governance needed more rigorous evaluation. These Performance Criteria are guidelines for ensuring high program quality. They are not requirements. They reflect best practices to which programs should aspire and which they should, to the extent possible and consistent with program resources, attempt to achieve. These revisions do not reflect a change in the purposes of the Performance Criteria stated in the Introduction to the 2007 revised version. The purposes of the Performance Criteria are twofold. First, the Performance Criteria ‘‘guide LSC’s assessments of program performance generally and in the competitive grants process.’’ Second, the Performance Criteria serve as a ‘‘useful framework for internal program self-evaluations, planning, and program development, as well as external peer reviews and expert assessments by other funding sources.’’ LSC will begin using the revised Performance Area 4 on June 1, 2018. LSC management recognizes that it may take time, guidance, and experience for all grantees to adjust to the revisions. LSC will, therefore, provide training and forums to discuss the implementation of the changes. When conducting program assessments, LSC staff will take the scope of the revisions and each program’s capacity into consideration when making recommendations. As the table below indicates, LSC reorganized the order of the Performance Criteria. The current Criterion 3—Overall Management and Administration—includes a limited review of a grantee’s technology infrastructure and administration. To more accurately reflect the role technology plays in the daily operations of an organization and in providing efficient and effective client services, LSC proposed creating a separate, new technology criterion, Criterion 3: Technology Infrastructure and Administration. The criterion for Overall Administration and Management would now be Criterion 6, with Internal Communication being folded into the proposed Criterion 6. E:\FR\FM\02APN1.SGM 02APN1 14048 Federal Register / Vol. 83, No. 63 / Monday, April 2, 2018 / Notices PERFORMANCE AREA 4: CRITERION ORDERING Current ordering of Performance Area 4 Criteria Criterion Criterion Criterion Criterion Criterion Criterion Criterion 1: 2: 3: 4: 5: 6: 7: 2018 Revised ordering of Performance Area 4 Criteria Board Governance ................................................................ Leadership ............................................................................. Overall Management and Administration .............................. Financial Administration ........................................................ Human Resources Administration ......................................... Internal Communication ......................................................... General Resource Development and Maintenance .............. Criterion 1. Board Governance. The program articulates a clear mission for the organization. Each board member demonstrates commitment to the program and its mission through consistent engagement in Board activities that involve all other board members. The board effectively engages Criterion Criterion Criterion Criterion Criterion Criterion Criterion 1: 2: 3: 4: 5: 6: 7: Board Governance Leadership Technology Infrastructure and Administration Financial Administration Human Resources Administration Overall Management and Administration General Resource Development and Maintenance in strategic organizational planning with program leadership and staff. It is responsible for major policy decisions, while holding organizational management accountable for effective performance of their responsibilities. The board assists with or oversees, as appropriate, the organization’s efforts to Indicators develop and maintain resources. The board also promotes public awareness of the program in the community in a manner that aims to enhance the program’s overall effectiveness and influence. Areas of inquiry Board Composition, Size and Tenure As a whole, the board is appropriately diverse and representative of the various geographical areas and low-income populations served by the program. The size of the board is conducive to effective oversight ....... When determining board tenure, the board struck a balance between longevity and board experience and the need for new ideas and insights. The board has processes and procedures for recruiting and orienting new board members. • Is the board membership diverse and representative of the service area? • Is the board either composed of an appropriate mix of members that are sufficiently expert in areas applicable to the program’s operations and achievement of overall goals related to the mission—e.g. non-profit management, financial oversight, fundraising, community engagement—or has it taken steps to ensure that such expertise is available to the board on a consistent basis? • Does the board adhere to LSC regulations regarding board composition? • Is there evidence that the board’s size facilitates the effectiveness of its operation? • What is the tenure of each of the board members, including the board chair(s)? • Does the organization impose term limits on board membership? • If so, what are the term limits? • Does the board have a policy or practice regarding length of service on the board and on its Executive Committee? • If the board imposes term limits, how does the organization avoid the loss of the experience and expertise of valued directors? • Is there a process for removing board members? • Does the board have and follow established policies and practices regarding recruitment, qualification and retention and engagement of new members? • Is there a job description for board members explaining their role and duties? • Is the job description provided to board members? • Is there an onboarding process for new members? • Are board members given appropriate orientation and continuing training, including: training on the role of the board, potential conflicts of interest, and on fiscal, fiduciary, and other responsibilities? • Is there training on the LSC Act, LSC regulations, LSC performance criteria, and other best practices? Board Committees daltland on DSKBBV9HB2PROD with NOTICES The board’s committees structure promotes effective oversight of the organization. VerDate Sep<11>2014 19:06 Mar 30, 2018 Jkt 244001 PO 00000 Frm 00106 • What is the board’s committee structure? • What is the composition of each committee? • Does each committee have clearly defined responsibilities that are documented in written form? • If so, is there periodic review and updating of the documents? • Is there a committee responsible for assessing the performance of the board? • Is there an executive committee, and, if so, what is its composition? • How often does the executive committee meet? • What is the scope of business usually conducted? • Is there a separate Finance or Audit Committee? • Does a member of the audit or finance committee have a financial background? • If not, does the committee engage sufficient assistance from non-board sources to provide consistent and competent guidance on financial matters? • Is there a separate fundraising committee? Fmt 4703 Sfmt 4703 E:\FR\FM\02APN1.SGM 02APN1 Federal Register / Vol. 83, No. 63 / Monday, April 2, 2018 / Notices Indicators 14049 Areas of inquiry Board Meetings and Deliberations The board fulfills the meeting requirements of LSC regulations. The board has quorum requirements that are adhered to The board and committee meetings are well planned and focused to ensure that the board and its committees can carry out their oversight function. Meeting materials ..................................................................... Executive session ..................................................................... The board members are engaged and regularly attend and participate in board and committee meetings. Board and committee decisions are appropriately documented. • The board of directors meets at least four times a year. • There is public notice of meeting and meetings are public. • Is the board required to reach a membership attendance quorum before it can take formal action? • What is the percentage or number requirement for a quorum? • How many times within the past two years has the board tried to meet but has not had a quorum? • If there is no quorum, what percentage of the board attended each meeting? • Does the organization permit its board to act through virtual meetings such as email voting, in addition to remote participation by teleconferences or videoconference? • Are there guidelines or a protocol for virtual meetings? • Are there pre-circulated agendas for all board and committee meetings? • If so, who sets the agenda? • Do the board chair or committee chair and the executive officer contribute to the agenda? • Do individual members feel that the board packets distributed in the board and committee meetings provide them with useful information about the program and equip them to participate meaningfully in the board or committee meeting? • What is the quality of the materials? • How far in advance is board information circulated? • Do board materials contain updated financial information? • Do board meetings include an executive session without any staff (including the executive director)? • What is the level of attendance at board and committee meetings? • Do individual members prepare for and participate in meetings? • Are client board members actively engaged in board meetings and decisions? • Are board decisions appropriately documented in board minutes? • Minutes of full board and committee meetings are prepared, reviewed and approved by the board at least by the next scheduled meeting. • Who prepares the meeting minutes? • Apart from minutes of board meetings, does the board maintain a separately indexed chronological record of resolutions that reference their initial date of adoption and subsequent actions? Board Transparency and Accountability The board and members individually, are committed to the program and its mission. The board properly discloses and manages any organizational or personal conflicts. • Is the board supportive of the program? • Does the board have a policy or practice that effectively deals with conflicts of interest or potential conflicts of interest? • Is the policy or practice in writing? • Are organizational or individual conflicts addressed quickly and effectively? Board Engagement with Strategic Planning The board ensures that the program establishes and adheres to effective strategic planning. • Does the board adopt a mission statement, that has been collaboratively developed with management? • Does the board establish a vision for the future? • Does the board approve strategic goals? • Does the board articulate core values/principles? • What is the board’s role in developing the strategic plan? • Does the board work in close partnership with the management to ensure a successful planning process? • Does the board regularly review progress in accomplishing the goals of the strategic plan and take appropriate action to ensure implementation? • Does it periodically discuss progress toward strategic goals with program management? daltland on DSKBBV9HB2PROD with NOTICES Board Oversight of the Organization—Programmatic The board is involved in major policy decisions, aware of issues in and performance of the program, while leaving day-to-day management of program operations to program management personnel. VerDate Sep<11>2014 19:06 Mar 30, 2018 Jkt 244001 PO 00000 Frm 00107 • How are major policy decisions made? • Do board members understand and adhere to clear distinctions between board governance and program management? • Do board members understand the major issues at stake for the program? • How does the board exercise its oversight of program operations? • Does the board receive regular reports providing objective data on program performance? • Monitoring: Does the board receive periodic information on the work of the program? • Evaluating: Does the board seek information to evaluate the effectiveness of the program’s services? Fmt 4703 Sfmt 4703 E:\FR\FM\02APN1.SGM 02APN1 14050 Federal Register / Vol. 83, No. 63 / Monday, April 2, 2018 / Notices Indicators Areas of inquiry Board Oversight of the Organization—Financial The board exercises effective financial oversight .................... Ensure funds are used for intended charitable purposes, and funds are appropriately accounted for. The board safeguards investments .......................................... • Are board members aware of and accurate in their perception have a general understanding of the requirements of the program’s funding sources. • What systems and procedures does the board have to ensure effective financial oversight? • How often does the board review financial statements and do they understand what the financial statements say? • Do they have experience in or guidance from board members or other advisors in interpreting the financial statements? • Is there a finance and/or audit committee to select the independent auditor? • Is the Form 990 presented to the board and management team prior to or after it is filed with the IRS? • Are there opportunities for the CFO/Controller or highest ranking financial officer to confer with the board, or members of the board? • Has the board established budget guidelines? • Are policies in place to evaluate the organization’s investment decisions and performance? • Are policies in place to safeguard the organization’s assets and tax-exempt status? Evaluation of the Executive Director The board effectively evaluates the chief executive officer or executive director. The boards practices appropriate oversight over the Executive Director’s Compensation plan. • What is the process for evaluating the Executive Director and other top officers in the organization? • Do they employ a 360 evaluation? • Who is involved in the evaluation process? • How frequently does the board evaluate the chief executive officer or executive director? • What, if any, are the criteria used for evaluating the Executive Director? • Is there a process for reviewing and setting executive compensation? • If so, what is the process? • Who is involved in this process? • Are all board members aware of the Executive Director’s entire compensation package? • Is the Executive Director’s compensation based on market data? • Is there contemporaneous substantiation of the board’s deliberation and decision on the Executive Director’s compensation? Board’s Role as Ambassador for the Organization The board effectively promotes and expands the reach and influence of the program in the communities it serves. • Do individual members, including client members, speak on behalf of the organization to external audiences at appropriate opportunities? • Is there a protocol for who speaks on behalf of the board and the organization? • Does everyone know the ‘‘elevator speech?’’ • Do individual members represent the community to the organization by bringing back concerns, ideas, suggestions and compliments when they have merit or possibility? Board’s Role in Resource Development The board effectively promotes and expands the reach and influence of the program in the communities it serves, and develops additional resources for the program. The board ensures that the program is in compliance with state and local laws related to solicitation. The board ensures donations comply with LSC Requirements • Do board members assist effectively in fundraising and development activity? • Does the board consult and communicate with the Executive Director to identify and, where appropriate, pursue all types of needed resources? • Determines how board members will participate in fundraising from sources where they have knowledge or influence, such as the private bar? • Does the board receive regular reports on staff fundraising activity? • Has the organization adopted policies to ensure compliance with federal/state laws on solicitation of funds? • Are solicitation materials accurate? • Donations are properly recorded pursuant to LSC regulations daltland on DSKBBV9HB2PROD with NOTICES Continuous Learning and Assessment The board is committed to continuous improvement ............... VerDate Sep<11>2014 19:06 Mar 30, 2018 Jkt 244001 PO 00000 Frm 00108 • Does the organization maintain and provide its board members with an up-todate board handbook or on-line resources? • Do members keep up with issues that affect the functioning and future of the organization? • Does the board engage in periodic formal or informal self-assessment processes? Fmt 4703 Sfmt 4703 E:\FR\FM\02APN1.SGM 02APN1 Federal Register / Vol. 83, No. 63 / Monday, April 2, 2018 / Notices Indicators 14051 Areas of inquiry General Good Governance Practices • Does the board adopt and regularly evaluate a code of ethics that describes behaviors it wants to encourage and behavior it wants to discourage? • Did the board adopt a policy for handling employee and client complaints? • Are there established procedures for employees to report financial impropriety or misuse of the organization’s resources? • Does the organization have a whistleblower policy? • Does the board periodically review the bylaws to ensure that the organization is in compliance with its governing documents and relevant laws? • Does the board have policies establishing standards for document retention and destruction? • Does the organization keep books and records relevant to its tax-exempt status and IRS filings for appropriate time periods? • Are the program’s Form 990 and annual report reported on its public website? Are these documents available to the public upon request? The board ensures legal and ethical integrity and maintains accountability. The board ensures transparency and accountability by making information available to the public on the program’s mission, activities, finance and governance. The members of the board exercise independent judgment in general board decision-making. Criterion 2. Leadership. The program has effective leadership that establishes and maintains a shared sense of vision and mission. Program leadership means Is there evidence that board members engage in independent analysis of materials and information provided to them? a commitment to and achievement of the program’s goals and objectives according to a model that emphasizes teamwork, transparency, excellence, Indicators effectiveness, efficiency, and innovation. Areas of inquiry General Leadership • Starting with the chief executive officer, are there recognized, positive, and effective leaders in the program? • Do board members, community leaders, clients and the legal community express confidence in the program’s leadership? • What specific leadership and professional development training and activities has the program provided? • What are the outcomes of these efforts? • What opportunities are afforded staff to develop and exercise leadership skills? • Do staff see themselves as valued members of the program’s team? • Do program leaders model and encourage teamwork? • Do program leaders delegate effectively? • Does the program’s leadership seek the opinions and input of staff and other stakeholders in its decision-making processes? • Beginning with the executive director or chief executive officer, is there evidence that the leadership of the program communicates effectively with the board, staff and community stakeholders? • Do program leaders effectively address challenges and issues that impede the program’s progress in accomplishing its mission? • Starting with the executive director or chief executive officer, is there evidence that program leadership effectively models, motivates and inspires creativity, innovation, excellence, and achievement? Key program staff, starting with the executive director or chief executive officer, are respected and recognized as the program leaders. Program leaders hold themselves accountable for motivating staff, and for promoting an environment that embraces mentoring and the professional development of all staff, helping them to achieve their fullest potential. Key staff are appropriately involved in decision-making processes. The program’s leadership demonstrates strong, effective communication skills and the capacity to engage in positive conflict resolution. Mission and Vision Program leaders frame a vision and mission .......................... Program leaders model a high level of energy, commitment and integrity in carrying out the program’s mission. • • • • Is there a shared sense of vision and mission? Is it expressed in written form? Are staff aware of it? What mechanisms does the program’s leadership use to measure program effectiveness and adherence to the mission and vision? • In what ways does the program’s stated mission and vision guide the program’s planning and decision-making? daltland on DSKBBV9HB2PROD with NOTICES Diversity Starting with the executive director or chief executive officer, the program values and embraces diversity and provides opportunities for the development of a diverse group of leaders. VerDate Sep<11>2014 19:06 Mar 30, 2018 Jkt 244001 PO 00000 Frm 00109 • In what ways does the program and its leadership demonstrate inclusion and an appreciation for diversity? • Is the program’s leadership and management diverse, and, is there evidence that diversity and inclusion are valued by the program? Fmt 4703 Sfmt 4703 E:\FR\FM\02APN1.SGM 02APN1 14052 Federal Register / Vol. 83, No. 63 / Monday, April 2, 2018 / Notices Indicators Areas of inquiry Succession Plan The program has a leadership succession plan that addresses preserving institutional knowledge and strong leadership across all levels of program management. Criterion 3. Technology infrastructure and administration. The program provides a stable and secure technology infrastructure sufficient for staff to work • Does the program have a clear and reasonable succession plan? • Is it written? efficiently and effectively in the delivery of legal services and to support the operations of the organization. It devotes appropriate resources to Indicators provide the capacities outlined in LSC’s ‘‘Technologies That Should Be in Place in a Legal Aid Office Today.’’ Areas of inquiry Technology planning is ongoing and integrated into the overall strategic plan of the program, includes staff input, and is reviewed and updated at least annually. The program has competent IT staff and/or consultants with appropriate training and certifications to properly maintain and support its technology systems. • • • • • • • • • • The grantee informs employees of their rights when using grantee-owned computers. • The program devotes appropriate resources to establish and maintain its technological infrastructure, including planning and budgeting appropriately for ongoing replacement/upgrades of its technology systems. The program has a proper written IT security program to include robust IT security policies and procedures regarding protecting client and case data, ensuring the security and integrity of passwords, use of the Internet and social media, policies for the use of mobile devices, and if staff can bring their own devices (BYOD) to access work documents. Staff are familiar with and follow such policies and procedures. • The program has sufficient procedures to back up its data and has testing protocols to demonstrate that data recovery/protection policies work in practice. The program stays informed of new technology developments and how it can make better use of technology to meet its mission. • Who is involved in technology planning? Does the program get input from staff on technology needs? Has the program ever had an outside technology audit? How often is the technology plan reviewed and updated? Does the plan include deadlines for implementation? What type of network does the program have? Are there appropriate firewalls? Are servers hosted on-site, off-site, cloud-based? If on-site, where are they and how are they secured (locked office, server room, appropriate A/C)? What is the program’s IT security program, its policies, user security training and are the servers, computers and devices patched and kept up to on a regular schedule? Is the network scanned for IT vulnerabilities regularly? Does the grantee have a warning banner that appears while employees are logging on and notifies employees of their rights when using their granteeowned computer? What is the internet bandwidth in each office (any redundant connection available)? Do offices have Wi-Fi available (is it password protected)? • Is server equipment kept in a secure environment with appropriate ventilation and cooling? Are IT systems currently patched and updated? • Is there a disaster recovery plan (that includes periodic testing) for mission critical technology systems? • Are there security policies and procedures for protecting client and case data, sensitive personal and personnel data, and all communications from loss or unauthorized intrusion? • Are there security policies and procedures for use of the Internet and social media, content security on all devices, and integrity of passwords, retention and deletion of data? • Are employees given notice concerning prohibited uses of their computer equipment including a warning banner that notifies employees of their rights (including no expectation of privacy) when using their grantee-owned computer? • Is there routine IT security training for staff? • Is the user’s system access granted based on roles and responsibilities? • What are the backup procedures? • Are test restores done periodically from the backups? • What is the replacement cycle for technology equipment (desktops/laptops, servers, printers, scanners, copiers, telephones, etc.)? • What type of phone system does the program use? • How old is it? • When was the last upgrade? • What reports can it provide? • Who maintains it? daltland on DSKBBV9HB2PROD with NOTICES Extent to Which Technology Enhances Program Operations and Service Delivery Maximum use of technology is made to facilitate and enhance internal communication. VerDate Sep<11>2014 19:06 Mar 30, 2018 Jkt 244001 PO 00000 Frm 00110 • Does the program use technology effectively to enhance the efficiency of program operations and service delivery? • How does the program use technology to facilitate and enhance communication? • Does the program’s website effectively follow the Ernst and Young Best Practices (http://webassessment.lsc.gov/report/)? Fmt 4703 Sfmt 4703 E:\FR\FM\02APN1.SGM 02APN1 Federal Register / Vol. 83, No. 63 / Monday, April 2, 2018 / Notices Indicators 14053 Areas of inquiry Staff Training Program staff are provided with appropriate training on the use of technology. Criterion 4. Financial administration. The program has and follows financial policies, procedures, and practices that comport with Generally Accepted • Does the program have a policy for the secure use of its technology, including protecting data (including Personally Identifiable Information), use of the Internet and social media, password policies and if/when staff can bring their own devices? • Do staff understand and follow the policy? • What software does the program use, including case management system manufacturer and version? • Are staff provided with ongoing training in its use? Accounting Principles (GAAP), requirements of the program’s funding sources, and comply with federal, state and local government regulations. The Indicators program has established sound internal controls and conducts effective budget planning and oversight. Areas of inquiry Fiscal Policies and Staff The program has detailed written policies and procedures describing its financial operations which comply with all applicable requirements. The program follows such policies and procedures. The program has sufficient, capable, trained and effective staff dedicated to financial administration. • Is the program’s accounting manual current and updated as appropriate? • • • • • Top management and the governing body are actively involved in the budgeting process. The budget is updated periodically and changes/variances are reviewed. The program engages in financial planning beyond the current year. The program maintains LSC funds held for immediate operating expenses in federally-insured bank accounts. • • • • • How many financial staff does the program have? Does the program have competent financial personnel? What is the training and background of the financial staff? The job descriptions of personnel are clear and lay out the roles and responsibilities of each position. Is periodic training given to program staff, management, and the governing body regarding LSC regulations and accounting guide, as applicable? Is the budget consistent with the program’s mission, goals, and objectives? Does the program effectively adhere to its budget? Is the budget updated monthly (or at least quarterly), based on changes in revenues or expenditures? Does the program engage in financial planning beyond the current year? Does the recipient adhere to LSC Investment Guidelines? Board of Directors The recipient’s governing body has fulfilled its fiduciary responsibility to the program through the establishment of a financial oversight committee or committees. The financial oversight committee(s) has at least one member who is a financial expert or the board has access to a financial expert. The governing body regularly determines the compensation of the program’s Executive Director. The Executive Director’s expenses are approved by a member of the board. • Has the board established a financial oversight committee or committees that perform the roles of a finance committee and an audit committee? • Does the financial oversight committee collectively possess the knowledge to set the strategic, financial course for the recipient and oversee management in execution of the strategy? • Does the financial oversight committee have the leadership of individual wellversed in non-profit GAAP, COSO Internal Control Framework, and other relevant standards and guidelines? • Does the financial oversight committee meet on a regular basis? • Does the committee have a charter or governing document and fulfill the responsibilities outlined therein? • Does the financial oversight committee set the strategic direction of the recipient for financial and audit related matters? • Does a governing body set and review the compensation of the Executive Director using an independent compensation consultant, comparable pay studies from other nonprofit organizations, and/or a compensation survey? • Are there procedures in place that require approval of the Executive Director’s expenses by a member of the governing body? daltland on DSKBBV9HB2PROD with NOTICES Audited Financial Statements The program issues accurate financial statements on a timely basis. Executed one-time grants, such as TIG and PBIF awards, are reported separately in the program’s audited financial statements in accordance with 45 CFR 1628.3(e). VerDate Sep<11>2014 19:06 Mar 30, 2018 Jkt 244001 PO 00000 Frm 00111 • Are the audited financial statements submitted to LSC in accordance with the LSC Audit Guide for Recipients and Auditors? • Has the program submitted their audited financial statements in a timely manner over the last 3 years? • Are executed one-time grants, such as TIG and PBIF awards, reported either as a supplemental schedule of related revenue and expense or a separate column within the financial statement? Fmt 4703 Sfmt 4703 E:\FR\FM\02APN1.SGM 02APN1 14054 Federal Register / Vol. 83, No. 63 / Monday, April 2, 2018 / Notices Indicators Areas of inquiry Annual program audits do not reveal any significant problems or issues; where such items have been identified, the program addresses them effectively and promptly. • Do past audits or outside reports and evaluations reflect problems? • Have any such problems been addressed? • Is there any evidence of failure to comply with applicable funder or governmental requirements? • What type of auditor’s report did the IPA issue regarding the financial statements? Unmodified or modified? If modified, why? • What type of auditor’s report did the IPA issue regarding Federal Awards? Unqualified or Qualified? If qualified, why? • Did the IPA issue findings in the audited financial statements? What were the findings? Have they been addressed? • Did the IPA issue a management letter? What did it contain? Has the recipient addressed the issues? • Are audit findings repeated from one fiscal year end to the next in the audited financial statements? • Does the recipient adequately address audit findings by performing the corrective actions outlined in the audited financial statements? Internal Controls • There is sufficient segregation of duties. • Do the accounting policies and procedures require an appropriate level of supervisory review and adequate checks and balances to ensure the accuracy, completeness and timeliness of transaction processing? • The recipient has established and adheres to an adequate system of internal control following the principles of the COSO Integrated Internal Control Framework. The recipient has established and maintains adequate accounting records and internal control procedures. which is designed to provide reasonable assurance of achieving the following objectives: (1) Safeguarding of assets against unauthorized use or disposition; (2) reliability of financial information and reporting; and (3) compliance with regulations and laws that have a direct and material effect on the program. Contracting The program has a contracting policy to prevent abuse, limit waste of scarce funds, and prevent possible questioned cost proceeding. • Does the program have a contracting policy? • Does the policy identify the contracting procedures for the various types of contracts, dollar thresholds, and competition requirements? • Is the process used for each contract action fully documented and is the documentation maintained in a central file? • Is the required approval level (including items that need to be approved by LSC) established for each contract type and dollar threshold, including when the board of directors should be notified and/or give approval? • Do policies include procedures for documenting and deviating from the approved contracting process, such as when sole-source contracts are executed? • Is each contract or agreement executed with a price, time-period, and services to be performed? Fraud Prevention • • • • • • The program has robust policies and safeguards in place to prevent fraud. • • • • • Assess the organization’s segregation of duties. Who has access to the program’s bank accounts? How are permissions and authorizations assigned? Does the program have Whistleblower and Conflict of Interest Policies? Is the program’s IT infrastructure adequately secure? Is the physical and logical access to the program’s computer network adequately secure? Does the program’s governance and management of IT resources promote effective operations and provide a robust system of internal control? Do the program’s computer applications incorporate and facilitate a robust system of internal control? Have thorough and well documented hiring practices and procedures? Are staff periodically trained or reminded of the Whistleblower and Conflict of Interest Policies? Does the program employ computer banners on all servers, computers and devices to inform employees of prohibited use activities and no right to privacy of grantee equipment? daltland on DSKBBV9HB2PROD with NOTICES Cash Disbursements The program’s disbursements are approved in writing by an authorized individual. VerDate Sep<11>2014 19:06 Mar 30, 2018 Jkt 244001 PO 00000 Frm 00112 • Are procedures adequate to provide that salary and wage rates are approved by an authorized individual and employees are paid in accordance with approved wage and salary plans? • Were invoices properly approved, with dates, before disbursement checks were processed? • Do policies and procedures for disbursements address unallowable expenses, purchase approvals, securing and approving new vendors, segregation of purchasing duties, and duplicate payment controls? Fmt 4703 Sfmt 4703 E:\FR\FM\02APN1.SGM 02APN1 Federal Register / Vol. 83, No. 63 / Monday, April 2, 2018 / Notices 14055 Indicators Areas of inquiry The program’s criteria and procedures for purchases are documented. • Is there a procedure for proper payment and approval of expenditures at an appropriate level of management? Cash Receipts The program has established internal control procedures related to cash receipts. The program maintains a client trust fund and accounting system to account for funds held on the client’s behalf. • Is initial accountability for cash established as soon as a cash item is received? • Do the accounting records adequately identify all cash receipts as to source and purpose? • Is an effective chain of custody in place for cash receipts? • Has the program established a method to determine the balance for each client trust account? • Does the program have a process to ensure that dormant funds are escheated to the state in compliance with state requirements? Asset and Property Records A physical inventory of property purchased with LSC funds is conducted at least once every two (2) years and the results are reconciled with property records. The program has established adequate internal controls to safeguard its petty cash funds. • Is a physical inventory conducted at least once every two (2) years? • Are any differences between the physical inventory and the accounting records reconciled? • Is there a surprise count of petty cash conducted periodically? • Are the petty cash and client trust funds secured in locked location? • Are all petty cash disbursements supported by an original receipt or appropriate supporting documentation? Subgrants The program has established adequate procedures related to the subgranting of LSC funds to ensure compliance and proper fiscal oversight. • Does the subgrant agreement or contract with the sub recipient specify financial reporting responsibility? • Where a relationship with a sub recipient exists, do the notes to the financial statements of the recipient and subrecipient fully disclose the nature of that relationship? Bonding of Recipients The program maintains fidelity bond coverage at a minimum level of at least ten (10) percent of the program’s annualized LSC funding level for the previous fiscal year, or of the initial grant or contract. The program carries adequate fidelity bond coverage for all staff required to be bonded. • Does the program carry at least the minimum level of fidelity bond coverage for fraud and employee dishonesty as described in 45 CFR Part 1629? • Does the program carry fidelity bond coverage for all staff required to be bonded: Every director, officer, employee and agent of a program who handles funds? Accounting Software The program’s accounting software is appropriate to support the operations and financial oversight of the organization. The program limits access to its accounting software ............. daltland on DSKBBV9HB2PROD with NOTICES Criterion 5. Human resources administration. The program promotes organizational excellence through the recruitment, management, and retention of a high-performing, diverse workforce consistent with its mission and goals. VerDate Sep<11>2014 19:06 Mar 30, 2018 Jkt 244001 • Does the program use up-to-date technology to enhance efficient financial operation? • Is the software appropriate to support the operations of the organization? • Does the accounting software incorporate adequate internal controls? • Is the recipient effectively using the software to ensure internal controls are in place? • Does the program limit access to its accounting software? • Does each user have his/her own password security based on their fiscal functions and are accounting software passwords changed periodically? • Is a user’s system access granted based on roles and responsibilities? The program develops and communicates sound policies and procedures that ensure compliance with applicable federal, state, and local laws and has a knowledgeable, accessible, and professional staff to the program in PO 00000 Frm 00113 Fmt 4703 Sfmt 4703 the areas of recruitment and retention, training, professional development, compensation and benefits, performance appraisal, and organizational governing personnel development. E:\FR\FM\02APN1.SGM 02APN1 14056 Federal Register / Vol. 83, No. 63 / Monday, April 2, 2018 / Notices Indicators Areas of inquiry Human Resources Staffing and Workplace Policies The program has sufficient, capable, trained, and effective professional staff assigned to human resources administration. The program has an employment handbook or manual with policies on hiring, supervision, promotion, compensation, and termination that are in compliance with applicable federal, state, and local laws. The program engages in human resources planning and policies are reviewed periodically. The program maintains accurate and timely personnel files and protects the confidentiality of personnel records as required by applicable law and contract. The program has a document retention policy for personnel files and that policy is adhered to by managers. • Who is responsible for the human resources functions within the program? • If responsibilities are shared, how are duties defined? • What is the background, experience and training of staff responsible for handling human resources? • What is the interaction between the human resources and finance staff? • Does the program have an employment handbook or manual with human resources policies? • Does the handbook or manual include Conflict of Interest and Whistleblower policies? • Does the handbook or manual include an ethics policy? • What is the program’s plan to maintain HR’s knowledge of best practices? • How often are the policies reviewed and updated? • • • • Where are personnel files kept? Are they paper or electronic? Who is responsible for maintaining personnel files? Are there procedures to control access to personnel files and protect the confidentiality of employees? • Does the program have a document retention policy for personnel files? • How long are they kept? • Where are they stored after employees separate from the organization? Program Staffing, Recruitment, and Retention The program has a capable, culturally competent, and diverse staff. The program has a comprehensive recruitment strategy that employs a variety of methods and sources to recruit highly qualified candidates. The program has a formal orientation process for all new hires. The program is able to forecast and determine its human resource needs and tracks fluctuations in the workforce, including turnover rates. • What is the current composition of the staff? • Is the current composition of the program staff diverse in terms of experience, gender, race, and disability status? • Does management create and sustain an environment that values and supports a diverse workforce? • Has the program adopted a disability inclusion plan? • What are the program’s recruitment practices? • What recruitment methods and sources are used? (e.g., online employment sites, job boards, referrals, social media, search firms)? • Are the job descriptions up-to-date and do they accurately explain job functions and separate essential from nonessential functions? • Are there job descriptions for all positions? • Is there a new hire orientation and is the orientation period defined? • What is the rate of turnover in the program? • Does the program evaluate internal and external factors related to turnover? • What is the average length of time an employee stays with the organization, by position type and category? • Does the program experience a high level of employee grievances? • Does the program have an effective plan to develop and retain new attorneys and paralegals (e.g. professional advancement along a defined career path)? • Are individual development plans created for each employee? Compensation & Benefits Policies The program has a compensation and benefits structure that promotes staff recruitment, retention and professional development. The program periodically assesses salaries, employee benefits, bonuses and COLAs. • What are the program’s fringe benefits and retention policies, such as a loan repayment assistance program, retirement plans, health insurance, and other financial and non-financial benefits? • Does the program regularly review its compensation structure and benefits? • Does that review include assessing market-based compensation studies? Staff Evaluation and Training daltland on DSKBBV9HB2PROD with NOTICES The program conducts regular and effective evaluations of all staff. The program leverages its budget appropriately for training opportunities that would benefit its entire staff. VerDate Sep<11>2014 19:06 Mar 30, 2018 Jkt 244001 PO 00000 Frm 00114 • • • • • • Does the program conduct performance evaluations or appraisals? If yes, how often? Does the program use a performance evaluation instrument? Is this evaluation linked to the program’s goals, vision, or strategic initiatives? Do such evaluations include setting goals for staff? Does the program foster an environment that emphasizes continuous learning, constructive feedback, improvement and excellence? • What training is available to staff? • Do all staff members have access to training opportunities? Fmt 4703 Sfmt 4703 E:\FR\FM\02APN1.SGM 02APN1 Federal Register / Vol. 83, No. 63 / Monday, April 2, 2018 / Notices 14057 Indicators Areas of inquiry The program conducts ongoing training for all staff on program policies, procedures, technology, and in substantive legal areas and advocacy skills. • Is there a formal, ongoing training for employees and managers (e.g., procedures, policies, technology, substantive legal areas)? • Who is responsible for planning and conducting training of existing employees? • Does the program ensure all staff receive regular training on the LSC Code of Conduct and LSC’s Grant Terms and Compliance requirements? • Does the program have a policy highlighting the importance of alerting the Office of Inspector General (OIG) to potential indicators of fraud, waste, and abuse of program funds and the requirement to do so promptly for loss over $200? • Does the program have a policy for identifying compliance concerns? Does the program train staff on the policy and reporting compliance concerns? • Does the program provide effective leadership and management training and support to mid-level supervisors and personnel engaged in administration and management? • Is there cultural competency training for all staff? • Have they attended? The program provides effective training for management and administrative staff. The program regularly conducts cultural competency training for all staff. Staff Morale and Workplace Climate To the extent that there are or have been serious morale or other internal personnel problems, the program is addressing or has addressed them effectively, and is taking or has taken appropriate steps to prevent their recurrence. The program has developed a process to address internal complaints, suggestions, and feedback. Program offices are professional and provide adequate space for conducting the program’s work. Criterion 6. Overall management and administration. The program is well managed and administered: Including management structure; processes and systems to ensure compliance with all • What is the recent history and current status of staff morale? • Does LSC’s employee survey indicate significant leadership challenges? • Does LSC’s employee survey indicate friction among staff members? • Does the program have a process accepting and resolving employee grievances? • Are program offices professional? • Do they provide adequate space for conducting the program’s work, provide appropriate privacy? • Does the program provide adequate maintenance services? funder requirements and state and federal law; capacity to address problems quickly and effectively, robust intra-staff and staff-management communications; effective Indicators administrative procedures; allocation of appropriate resources to management functions; and periodic evaluations of administrative operations. Areas of inquiry Allocation of Resources The program devotes appropriate resources to management The program has a management structure that effectively uses middle managers. The mix of program staff (managers, case handlers, and administrative staff) maximizes program resources to ensure the effective and efficient delivery of client services. daltland on DSKBBV9HB2PROD with NOTICES The program allocates appropriate resources to internal compliance. • Does the program devote an appropriate level of resources to management and administration? • What is the span of control in each division (i.e. what is the management to direct reporting ratios within the organization)? • How many middle managers are there? • Has the program made considered choices regarding the proportionality of non-advocacy staff as compared to case handlers, consistent with program resources, number of case handlers, and type of work? • Has the program established a risk management program/group to review and mitigate management systems risks? Such risks could include: Performance management (failure to achieve performance goals including implementation of the Strategic Plan); human capital management (failure to attract, motivate, and retain high quality staff); information management (failure to collect and share vital operational data and inability to support stable and safe IT operations, including the case management system); acquisitions management (higher contract costs and possible fraud, waste, and abuse risks). • Does the program have a compliance officer (or someone who serves in that role) to ensure compliance concerns are reported and managed effectively and efficiently? Decision Making Processes The program makes major decisions in a way that incorporates relevant information and input. VerDate Sep<11>2014 19:06 Mar 30, 2018 Jkt 244001 PO 00000 Frm 00115 • • • • What is the program’s decision making process? Is decision making authority clear when delegated? Is decision making timely and effective? Do staff members know whom to go to for decisions? Fmt 4703 Sfmt 4703 E:\FR\FM\02APN1.SGM 02APN1 14058 Federal Register / Vol. 83, No. 63 / Monday, April 2, 2018 / Notices Indicators Areas of inquiry The program has procedures for obtaining input on significant decisions, and for resolving complaints and problems effectively and timely. • Do staff feel that their input is sought on significant decisions? • Do staff feel that decisions are quickly and effectively communicated to all who are affected? • Does the program resolve employee complaints and problems effectively and timely? • Is there any evidence of non-compliance with state and federal laws, rules, and regulations? The program’s administrative structure, processes, and systems support compliance with state and federal laws, rules, and regulations. The program’s administrative structure, processes, and systems support compliance with funder requirements. • Is there any evidence of non-compliance with funder requirements? Continuity of Operations The program has developed and regularly updates an emergency plan to maintain operations and to minimize disruption in the event of an emergency. The program has a plan for providing client services in the event of a disaster or emergency affecting its client community. Criterion 7. General resource development. Consistent with the program’s mission, the program seeks to maintain and expand its base of funding • Does the program have a plan in the event of an emergency or disaster? • If yes, does the plan include: —The preservation of files, equipment, and computer data bases; —A process for communication between staff and management; —For the relocation of the program’s work sites? • Does the program attempt to coordinate with state/local emergency response and preparedness entities? • Does the program have a plan for providing client services in the event of a disaster or emergency affecting the client population? with the goal of enhancing program services and organizational sustainability. The program implements a strategy designed to identify funding Indicators sources to advance the mission and goals of the program. Areas of inquiry Staffing The program has attempted to develop, and to the extent possible, has effective relationships with other major institutional resources in the service area that are involved or might be able to provide some support in the provision of legal assistance to eligible clients, as well as help in expanding program funding. The program has sufficient, capable, trained, and effective staff dedicated to resource development, or uses consultant(s) or other organizations to supplement or lead that effort. The program has delineated responsibilities for resource development staff and communication (if applicable) staff. The program has engaged the board and staff in resource development and has provided adequate training. • Who are the program’s other major funders? • What percentage of non-LSC funding does the program receive? • How many of the funders have funded before or made multi-year commitments? • Who is responsible for the resource development efforts within the program? • Is the number of staff assigned to resource development appropriate given the size of the program and level of funding? • What are the duties for the person(s) responsible for these efforts? • How are those responsible for resource development evaluated for this work? • How are the resource development activities integrated with the program’s external communication efforts? • Does the program employ a separate staff person to handle the program’s communications? • Are staff and board actively engaged around resource development efforts? • Have staff and/or board members received training on resource development or fundraising? • If yes, who conducted the training? • Does the program have an advisory board that focuses on resource development, or does the board have a resource development committee focused on such activities? • Does the program’s governing body involve non-members with expertise in resource development? Resource Development Plan & Implementation daltland on DSKBBV9HB2PROD with NOTICES The program has a written plan describing its strategy to ensure that the program is supported by sufficient financial resources consistent with its mission. The program has a diverse funding stream and continually explores opportunities for increased funding. VerDate Sep<11>2014 19:06 Mar 30, 2018 Jkt 244001 PO 00000 Frm 00116 • Does the program have a written resource development plan, and is resource development a part of its overall strategic plan? • Does the plan identify possible funding sources and specific and realistic fundraising goals? • How often is this plan reviewed by management? By the board? • Does the program employ social media as a tool for increasing program revenue? • Has the program achieved diversity in funding: federal, state, local governments; individual donors; law firms; foundations; bar campaigns, restricted/unrestricted gifts? • What is the percentage of each funder type of the current budget? Fmt 4703 Sfmt 4703 E:\FR\FM\02APN1.SGM 02APN1 Federal Register / Vol. 83, No. 63 / Monday, April 2, 2018 / Notices Indicators 14059 Areas of inquiry The program is innovative in trying to develop new sources .. The program uses former and existing clients and former board members as a part of its funding efforts. The program sponsors events and activities to recognize its individual donors and supporters. • • • • • • • • • What tools does the program employ to engage new and existing donors? How are new and existing donors cultivated? How are donors acknowledged? Has the program conducted a feasibility study to determine the benefits and risks associated with its funding efforts? Does the program have an endowment? If yes, what are the permissible uses of the endowment? Does the program engage former clients in its funding efforts? Does the program engage former board members in fundraising and encourage them to contribute themselves? Does the program host donor recognition and cultivation events? How often? Monitoring and Evaluation The resource development plan has been approved by the board, is reviewed annually, and is consistent with the program’s budget. The program has a process to evaluate cost effectiveness of resource development activities. The program has carefully evaluated whether the requirements of prospective funding sources are consistent with the program’s mission, goals, priorities, objectives, and strategies. The program has developed a system to track donor gifts and other funding. This system is integrated with other systems including the accounting software. The program monitors its efforts to ensure that its mission is being communicated accurately and clearly to potential donors and funders. The program seeks both monetary and in-kind support from donors, corporations, and other funders. • Is the cycle of organizational budgeting in line with the resource development plan? • How does the program evaluate the cost effectiveness? • How does the program decide the priorities for funding? • • • • How does the program track gifts from donors and other funding sources? Does the program use fundraising or donor software? If so, which one? What efforts does the program make to ensure that its mission is being communicated accurately and clearly to the potential donors and funders? • What is the mix of support the grantee receives from various donors? other components; emphasizes innovation and creativity in delivery; is informed by current information concerning delivery research; is wellsuited to meeting the most pressing legal needs of the service area; and, Criterion 8. Coherent and comprehensive delivery structure. Overall, the program management maintains a delivery structure and approach that effectively utilizes and integrates staff, private attorneys, and given available resources, constitutes an effective and economical balancing of expenditures on the various functions and activities described in the four Performance Areas. Indicators Areas of inquiry The program has a reasonable, thoughtful and effective overall delivery system, which utilizes and integrates staff, private attorneys, volunteers, branch offices, outreach, and alternative delivery methods, and which strikes an effective balance on key issues such as specialization, experience of staff, use of attorneys and paralegals, and other major design choices. The program’s choices about allocation of resources to competing activities and functions are reasonable and balanced, and consistent with its mission, goals, priorities, objectives, and strategies. • Does the program have in place and regularly use systems to gauge the efficiency and effectiveness of its overall delivery system? • Is there evidence of actual assessment of efficiency and effectiveness? • Is there evidence of change as a result of that assessment? • Is there evidence of experimentation and innovation? Criterion 9. Participation in an integrated legal services delivery system. The program participates in, and seeks to expand and improve, statewide (and regional if relevant) legal assistance delivery systems to achieve equal access to justice and to meet the civil legal needs for low-income persons in the state. daltland on DSKBBV9HB2PROD with NOTICES Indicators Areas of inquiry The program participates in statewide (and regional if relevant) efforts to provide low-income persons in the state with equal access to a full range of civil legal assistance services in all forums. • Is the program engaged in statewide efforts (and regional efforts if relevant) to achieve the availability of a full range of civil legal assistance in all available forums? • Does the program participate in statewide (and regional if relevant) oversight activities to achieve an integrated statewide delivery system? • Is the program engaged in statewide efforts (and regional efforts if relevant) to eliminate barriers to access and provide meaningful services to low-income persons in the state? VerDate Sep<11>2014 19:06 Mar 30, 2018 Jkt 244001 PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 E:\FR\FM\02APN1.SGM 02APN1 14060 Federal Register / Vol. 83, No. 63 / Monday, April 2, 2018 / Notices Indicators Areas of inquiry The program participates in local, statewide (and regional if relevant) efforts to maximize the effective use of available human and financial resources and to increase such resources to better address the civil legal needs of the state’s low-income populations. The program coordinates with other providers, the bar, law schools, and other relevant entities in seeking to ensure that support is provided to advocates and managers, including training, dissemination and exchange of information, and communication and coordination among practitioners in key areas of law and practice. The program participates in statewide planning and oversight activities to achieve an integrated statewide delivery system, and coordinates and collaborates with other civil legal aid providers, private attorneys, government and corporate attorneys, the organized bar, courts and court personnel, law schools, and other public and private entities that provide legal and other social services to low-income persons. • Is the program engaged in statewide efforts (and regional efforts if relevant) to utilize existing financial and human resources effectively and efficiently? • Is the program engaged in statewide efforts (and regional efforts if relevant) to increase potential sources of funding, including financial resources, volunteer and in-kind resources? • Is the program engaged in statewide efforts (and regional efforts if relevant) to provide support to advocates and managers, including training, dissemination and exchange of information, and communication and coordination among practitioners in key areas of law and practice? Dated: March 27, 2018. Stefanie K. Davis, Assistant General Counsel. [FR Doc. 2018–06532 Filed 3–30–18; 8:45 am] BILLING CODE P LEGAL SERVICES CORPORATION Sunshine Act Meeting The Legal Services Corporation’s Board of Directors and its six committees will meet April 8–10, 2018. On Sunday, April 8, the first meeting will commence at 2:00 p.m., Eastern Daylight Time (EDT). On Monday, April 9, the first meeting will commence at 9:00 a.m., EDT, with the next meeting commencing promptly upon adjournment of the immediately preceding meeting. On Tuesday, April 10, the first meeting will commence at 9:00 a.m., EDT and will be followed by the closed session meeting of the Board of Directors that will commence promptly upon adjournment of the prior meeting. LOCATION: Legal Services Corporation, 3333 K Street NW, 3rd Floor F. William McCalpin Conference Center, Washington, DC 20007. PUBLIC OBSERVATION: Unless otherwise noted herein, the Board and all committee meetings will be open to public observation. Members of the public who are unable to attend in person but wish to listen to the public proceedings may do so by following the telephone call-in directions provided below. daltland on DSKBBV9HB2PROD with NOTICES DATE AND TIME: Call-In Directions for Open Sessions • Call toll-free number: 1–866–451– 4981; • When prompted, enter the following numeric pass code: 5907707348 VerDate Sep<11>2014 19:06 Mar 30, 2018 Jkt 244001 • As part of its efforts to expand access, provide a full range of services, maximize resources, and ensure support within the state, does the program coordinate and collaborate with other civil legal aid providers, private attorneys, government and corporate attorneys, the organized bar, courts and court personnel, law schools, and other public and private entities that provide legal and social services to low-income persons? • Once connected to the call, your telephone line will be automatically ‘‘MUTED’’. • To participate in the meeting during public comment press #6 to ‘‘UNMUTE’’ your telephone line, once you have concluded your comments please press *6 to ‘‘MUTE’’ your line. Members of the public are asked to keep their telephones muted to eliminate background noises. To avoid disrupting the meeting, please refrain from placing the call on hold if doing so will trigger recorded music or other sound. From time to time, the presiding Chair may solicit comments from the public. by management and LSC’s Inspector General, and to consider and act on the General Counsel’s report on potential and pending litigation involving LSC, and on a list of prospective funders.** Institutional Advancement Committee—Open, except that, upon a vote of the Board of Directors, the meeting may be closed to the public to consider and act on recommendation of new Leaders Council invitees and to receive a report on Development activities.** Audit Committee—Open, except that the meeting may be closed to the public to hear a briefing on the Office of Compliance and Enforcement’s active MEETING SCHEDULE enforcement matters.** Governance and Performance Review Time * Committee—Open, except that the Sunday, April 8, 2018: meeting may be closed to the public to 1. Operations & Regulahear a report on the President’s tions Committee ......... 2:00 p.m. evaluation of other officers.** Monday, April 9, 2018: A verbatim written transcript will be 1. Finance Committee ... 9:00 a.m. 2. Audit Committee. made of the closed session of the Board, 3. Institutional AdvanceInstitutional Advancement Committee, ment Committee. and Audit Committee meetings. The 4. Communications Subtranscript of any portions of the closed committee of the Instisessions falling within the relevant tutional Advancement provisions of the Government in the Committee. Sunshine Act, 5 U.S.C. 552b(c)(6) and 5. Governance and Performance Committee. (10), will not be available for public 6. Delivery of Legal inspection. A copy of the General Services Committee. Counsel’s Certification that, in his 7. Board of Directors. opinion, the closing is authorized by Tuesday, April 10, 2018: 1. Board of Directors ..... 9:00 a.m. law will be available upon request. * Please note that all times in this notice are in Eastern Daylight Time. Open, except as noted below. Board of Directors—Open, except that, upon a vote of the Board of Directors, a portion of the meeting may be closed to the public to hear briefings STATUS OF MEETING: PO 00000 Frm 00118 Fmt 4703 Sfmt 4703 ** Any portion of the closed session consisting solely of briefings does not fall within the Sunshine Act’s definition of the term ‘‘meeting’’ and, therefore, the requirements of the Sunshine Act do not apply to such portion of the closed session. 5 U.S.C. 552b (a) (2) and (b). See also 45 CFR 1622.2 & 1622.3. E:\FR\FM\02APN1.SGM 02APN1

Agencies

[Federal Register Volume 83, Number 63 (Monday, April 2, 2018)]
[Notices]
[Pages 14047-14060]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-06532]


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LEGAL SERVICES CORPORATION


Notice of Revisions to Performance Area Four of LSC's Performance 
Criteria

AGENCY: Legal Services Corporation.

ACTION: Notice of revisions to guidelines.

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SUMMARY: To provide grantees with the most effective guidance, in 2018 
the Legal Services Corporation revised Performance Area Four to refine 
and expand the areas of inquiry to focus on those criteria for which 
LSC has found the most deficiencies, particularly Criteria 1 (Board 
Governance), 4 (Financial Administration), and 7 (General Resource 
Development). The 2018 revisions codify the work of LSC staff with 
numerous grantees and provide evidence-based guidance to recipients on 
how to run a high-performing nonprofit organization.

FOR FURTHER INFORMATION CONTACT: Lynn Jennings, Vice President for 
Grants Management, Legal Services Corporation, 3333 K Street NW, 
Washington, DC 20007, (202) 295-1645, [email protected].

SUPPLEMENTARY INFORMATION: LSC's Performance Criteria indicate that 
legal services programs should be led and managed effectively with 
high-quality governance, administrative systems, procedures, and 
policies. Good leadership and strong internal operations increase the 
likelihood of effective program services for clients.
    Over the past several years, LSC has observed some areas of 
weakness in grantee governance through performance quality visits, 
compliance reviews, and Office of Inspector General (OIG) visits. The 
2018 revisions codify the work of LSC staff with numerous grantees and 
provide evidence-based guidance to recipients on how to run a high-
performing nonprofit organization.
    Since 2010, LSC's Office of Program Performance has conducted 133 
Program Quality Visits of 124 grantees. LSC issued 1,901 Tier One \1\ 
recommendations across the reports summarizing those visits. Of the 
1,901 Tier One recommendations, 695 recommendations--36.5%, the most of 
any performance area--pertained to Performance Area 4. From 2011 to 
2016, LSC's Office of Compliance and Enforcement conducted 111 
Compliance Reviews of 106 grantees. LSC issued more than 1,200 Required 
Corrective Actions (RCAs) related to both regulatory and fiscal issues. 
Approximately 25% of the RCAs identified deficiencies in the grantees' 
financial administration. Additionally, OIG conducted 41 A-50 reviews 
between June 2012 and September 2017. As a result of those reviews, the 
OIG made 160 referrals to OCE. The referrals covered issues related to 
timekeeping, deficiencies in policies and procedures, cost allocation, 
and internal controls.
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    \1\ According to LSC's Office of Program Performance Procedure 
Manual:
     Tier One Recommendations are those recommendations that 
are determined to be significant and will be included in the next 
Request for Proposal to the grantee.
     Tier One Recommendations are those that if addressed, 
have the potential for significantly improving program quality and/
or program performance within the short term, i.e., two years.
    A Tier One Recommendation must:
     be stated in simple straightforward terms such that 
there is no doubt by the program that a response is required; and
     have an objective, the value of which equals or 
outweighs any additional burden that the recommendation imposes on 
the program (does not apply to statutory or regulatory 
requirements).
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    This is the background against which LSC evaluated the existing 
criteria for Performance Area 4. The statistics above gave LSC valuable 
information about which areas of grantee administration, leadership, 
and governance needed more rigorous evaluation.
    These Performance Criteria are guidelines for ensuring high program 
quality. They are not requirements. They reflect best practices to 
which programs should aspire and which they should, to the extent 
possible and consistent with program resources, attempt to achieve. 
These revisions do not reflect a change in the purposes of the 
Performance Criteria stated in the Introduction to the 2007 revised 
version. The purposes of the Performance Criteria are twofold. First, 
the Performance Criteria ``guide LSC's assessments of program 
performance generally and in the competitive grants process.'' Second, 
the Performance Criteria serve as a ``useful framework for internal 
program self-evaluations, planning, and program development, as well as 
external peer reviews and expert assessments by other funding 
sources.''
    LSC will begin using the revised Performance Area 4 on June 1, 
2018. LSC management recognizes that it may take time, guidance, and 
experience for all grantees to adjust to the revisions. LSC will, 
therefore, provide training and forums to discuss the implementation of 
the changes. When conducting program assessments, LSC staff will take 
the scope of the revisions and each program's capacity into 
consideration when making recommendations.
    As the table below indicates, LSC reorganized the order of the 
Performance Criteria. The current Criterion 3--Overall Management and 
Administration--includes a limited review of a grantee's technology 
infrastructure and administration. To more accurately reflect the role 
technology plays in the daily operations of an organization and in 
providing efficient and effective client services, LSC proposed 
creating a separate, new technology criterion, Criterion 3: Technology 
Infrastructure and Administration. The criterion for Overall 
Administration and Management would now be Criterion 6, with Internal 
Communication being folded into the proposed Criterion 6.

[[Page 14048]]



                 Performance Area 4: Criterion Ordering
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 Current ordering of Performance    2018 Revised ordering of Performance
         Area 4 Criteria                      Area 4 Criteria
------------------------------------------------------------------------
Criterion 1: Board Governance....  Criterion 1: Board Governance
Criterion 2: Leadership..........  Criterion 2: Leadership
Criterion 3: Overall Management    Criterion 3: Technology
 and Administration.                Infrastructure and Administration
Criterion 4: Financial             Criterion 4: Financial Administration
 Administration.
Criterion 5: Human Resources       Criterion 5: Human Resources
 Administration.                    Administration
Criterion 6: Internal              Criterion 6: Overall Management and
 Communication.                     Administration
Criterion 7: General Resource      Criterion 7: General Resource
 Development and Maintenance.       Development and Maintenance
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    Criterion 1. Board Governance. The program articulates a clear 
mission for the organization. Each board member demonstrates commitment 
to the program and its mission through consistent engagement in Board 
activities that involve all other board members. The board effectively 
engages in strategic organizational planning with program leadership 
and staff. It is responsible for major policy decisions, while holding 
organizational management accountable for effective performance of 
their responsibilities. The board assists with or oversees, as 
appropriate, the organization's efforts to develop and maintain 
resources. The board also promotes public awareness of the program in 
the community in a manner that aims to enhance the program's overall 
effectiveness and influence.

------------------------------------------------------------------------
          Indicators                        Areas of inquiry
------------------------------------------------------------------------
                   Board Composition, Size and Tenure
------------------------------------------------------------------------
As a whole, the board is         Is the board membership diverse
 appropriately diverse and       and representative of the service area?
 representative of the various   Is the board either composed of
 geographical areas and low-     an appropriate mix of members that are
 income populations served by    sufficiently expert in areas applicable
 the program.                    to the program's operations and
                                 achievement of overall goals related to
                                 the mission--e.g. non-profit
                                 management, financial oversight,
                                 fundraising, community engagement--or
                                 has it taken steps to ensure that such
                                 expertise is available to the board on
                                 a consistent basis?
                                 Does the board adhere to LSC
                                 regulations regarding board
                                 composition?
The size of the board is         Is there evidence that the
 conducive to effective          board's size facilitates the
 oversight.                      effectiveness of its operation?
When determining board tenure,   What is the tenure of each of
 the board struck a balance      the board members, including the board
 between longevity and board     chair(s)?
 experience and the need for     Does the organization impose
 new ideas and insights.         term limits on board membership?
                                 If so, what are the term
                                 limits?
                                 Does the board have a policy or
                                 practice regarding length of service on
                                 the board and on its Executive
                                 Committee?
                                 If the board imposes term
                                 limits, how does the organization avoid
                                 the loss of the experience and
                                 expertise of valued directors?
                                 Is there a process for removing
                                 board members?
The board has processes and      Does the board have and follow
 procedures for recruiting and   established policies and practices
 orienting new board members.    regarding recruitment, qualification
                                 and retention and engagement of new
                                 members?
                                 Is there a job description for
                                 board members explaining their role and
                                 duties?
                                 Is the job description provided
                                 to board members?
                                 Is there an onboarding process
                                 for new members?
                                 Are board members given
                                 appropriate orientation and continuing
                                 training, including: training on the
                                 role of the board, potential conflicts
                                 of interest, and on fiscal, fiduciary,
                                 and other responsibilities?
                                 Is there training on the LSC
                                 Act, LSC regulations, LSC performance
                                 criteria, and other best practices?
------------------------------------------------------------------------
                            Board Committees
------------------------------------------------------------------------
The board's committees           What is the board's committee
 structure promotes effective    structure?
 oversight of the organization.  What is the composition of each
                                 committee?
                                 Does each committee have
                                 clearly defined responsibilities that
                                 are documented in written form?
                                 If so, is there periodic review
                                 and updating of the documents?
                                 Is there a committee
                                 responsible for assessing the
                                 performance of the board?
                                 Is there an executive
                                 committee, and, if so, what is its
                                 composition?
                                 How often does the executive
                                 committee meet?
                                 What is the scope of business
                                 usually conducted?
                                 Is there a separate Finance or
                                 Audit Committee?
                                 Does a member of the audit or
                                 finance committee have a financial
                                 background?
                                 If not, does the committee
                                 engage sufficient assistance from non-
                                 board sources to provide consistent and
                                 competent guidance on financial
                                 matters?
                                 Is there a separate fundraising
                                 committee?
------------------------------------------------------------------------

[[Page 14049]]

 
                    Board Meetings and Deliberations
------------------------------------------------------------------------
The board fulfills the meeting   The board of directors meets at
 requirements of LSC             least four times a year.
 regulations.                    There is public notice of
                                 meeting and meetings are public.
The board has quorum             Is the board required to reach
 requirements that are adhered   a membership attendance quorum before
 to                              it can take formal action?
                                 What is the percentage or
                                 number requirement for a quorum?
                                 How many times within the past
                                 two years has the board tried to meet
                                 but has not had a quorum?
                                 If there is no quorum, what
                                 percentage of the board attended each
                                 meeting?
                                 Does the organization permit
                                 its board to act through virtual
                                 meetings such as email voting, in
                                 addition to remote participation by
                                 teleconferences or videoconference?
                                 Are there guidelines or a
                                 protocol for virtual meetings?
The board and committee          Are there pre-circulated
 meetings are well planned and   agendas for all board and committee
 focused to ensure that the      meetings?
 board and its committees can    If so, who sets the agenda?
 carry out their oversight       Do the board chair or committee
 function.                       chair and the executive officer
                                 contribute to the agenda?
Meeting materials.............   Do individual members feel that
                                 the board packets distributed in the
                                 board and committee meetings provide
                                 them with useful information about the
                                 program and equip them to participate
                                 meaningfully in the board or committee
                                 meeting?
                                 What is the quality of the
                                 materials?
                                 How far in advance is board
                                 information circulated?
                                 Do board materials contain
                                 updated financial information?
Executive session.............   Do board meetings include an
                                 executive session without any staff
                                 (including the executive director)?
The board members are engaged    What is the level of attendance
 and regularly attend and        at board and committee meetings?
 participate in board and        Do individual members prepare
 committee meetings.             for and participate in meetings?
                                 Are client board members
                                 actively engaged in board meetings and
                                 decisions?
Board and committee decisions    Are board decisions
 are appropriately documented.   appropriately documented in board
                                 minutes?
                                 Minutes of full board and
                                 committee meetings are prepared,
                                 reviewed and approved by the board at
                                 least by the next scheduled meeting.
                                 Who prepares the meeting
                                 minutes?
                                 Apart from minutes of board
                                 meetings, does the board maintain a
                                 separately indexed chronological record
                                 of resolutions that reference their
                                 initial date of adoption and subsequent
                                 actions?
------------------------------------------------------------------------
                  Board Transparency and Accountability
------------------------------------------------------------------------
The board and members            Is the board supportive of the
 individually, are committed     program?
 to the program and its          Does the board have a policy or
 mission. The board properly     practice that effectively deals with
 discloses and manages any       conflicts of interest or potential
 organizational or personal      conflicts of interest?
 conflicts.                      Is the policy or practice in
                                 writing?
                                 Are organizational or
                                 individual conflicts addressed quickly
                                 and effectively?
------------------------------------------------------------------------
                Board Engagement with Strategic Planning
------------------------------------------------------------------------
The board ensures that the       Does the board adopt a mission
 program establishes and         statement, that has been
 adheres to effective            collaboratively developed with
 strategic planning.             management?
                                 Does the board establish a
                                 vision for the future?
                                 Does the board approve
                                 strategic goals?
                                 Does the board articulate core
                                 values/principles?
                                 What is the board's role in
                                 developing the strategic plan?
                                 Does the board work in close
                                 partnership with the management to
                                 ensure a successful planning process?
                                 Does the board regularly review
                                 progress in accomplishing the goals of
                                 the strategic plan and take appropriate
                                 action to ensure implementation?
                                 Does it periodically discuss
                                 progress toward strategic goals with
                                 program management?
------------------------------------------------------------------------
            Board Oversight of the Organization--Programmatic
------------------------------------------------------------------------
The board is involved in major   How are major policy decisions
 policy decisions, aware of      made?
 issues in and performance of    Do board members understand and
 the program, while leaving      adhere to clear distinctions between
 day-to-day management of        board governance and program
 program operations to program   management?
 management personnel.           Do board members understand the
                                 major issues at stake for the program?
                                 How does the board exercise its
                                 oversight of program operations?
                                 Does the board receive regular
                                 reports providing objective data on
                                 program performance?
                                 Monitoring: Does the board
                                 receive periodic information on the
                                 work of the program?
                                 Evaluating: Does the board seek
                                 information to evaluate the
                                 effectiveness of the program's
                                 services?
------------------------------------------------------------------------

[[Page 14050]]

 
             Board Oversight of the Organization--Financial
------------------------------------------------------------------------
The board exercises effective    Are board members aware of and
 financial oversight.            accurate in their perception have a
                                 general understanding of the
                                 requirements of the program's funding
                                 sources.
                                 What systems and procedures
                                 does the board have to ensure effective
                                 financial oversight?
Ensure funds are used for        How often does the board review
 intended charitable purposes,   financial statements and do they
 and funds are appropriately     understand what the financial
 accounted for.                  statements say?
                                 Do they have experience in or
                                 guidance from board members or other
                                 advisors in interpreting the financial
                                 statements?
                                 Is there a finance and/or audit
                                 committee to select the independent
                                 auditor?
                                 Is the Form 990 presented to
                                 the board and management team prior to
                                 or after it is filed with the IRS?
                                 Are there opportunities for the
                                 CFO/Controller or highest ranking
                                 financial officer to confer with the
                                 board, or members of the board?
                                 Has the board established
                                 budget guidelines?
The board safeguards             Are policies in place to
 investments.                    evaluate the organization's investment
                                 decisions and performance?
                                 Are policies in place to
                                 safeguard the organization's assets and
                                 tax-exempt status?
------------------------------------------------------------------------
                  Evaluation of the Executive Director
------------------------------------------------------------------------
The board effectively            What is the process for
 evaluates the chief executive   evaluating the Executive Director and
 officer or executive director.  other top officers in the organization?
                                 Do they employ a 360
                                 evaluation?
                                 Who is involved in the
                                 evaluation process?
                                 How frequently does the board
                                 evaluate the chief executive officer or
                                 executive director?
                                 What, if any, are the criteria
                                 used for evaluating the Executive
                                 Director?
The boards practices             Is there a process for
 appropriate oversight over      reviewing and setting executive
 the Executive Director's        compensation?
 Compensation plan.              If so, what is the process?
                                 Who is involved in this
                                 process?
                                 Are all board members aware of
                                 the Executive Director's entire
                                 compensation package?
                                 Is the Executive Director's
                                 compensation based on market data?
                                 Is there contemporaneous
                                 substantiation of the board's
                                 deliberation and decision on the
                                 Executive Director's compensation?
------------------------------------------------------------------------
             Board's Role as Ambassador for the Organization
------------------------------------------------------------------------
The board effectively promotes   Do individual members,
 and expands the reach and       including client members, speak on
 influence of the program in     behalf of the organization to external
 the communities it serves.      audiences at appropriate opportunities?
                                 Is there a protocol for who
                                 speaks on behalf of the board and the
                                 organization?
                                 Does everyone know the
                                 ``elevator speech?''
                                 Do individual members represent
                                 the community to the organization by
                                 bringing back concerns, ideas,
                                 suggestions and compliments when they
                                 have merit or possibility?
------------------------------------------------------------------------
                  Board's Role in Resource Development
------------------------------------------------------------------------
The board effectively promotes   Do board members assist
 and expands the reach and       effectively in fundraising and
 influence of the program in     development activity?
 the communities it serves,      Does the board consult and
 and develops additional         communicate with the Executive Director
 resources for the program.      to identify and, where appropriate,
                                 pursue all types of needed resources?
                                 Determines how board members
                                 will participate in fundraising from
                                 sources where they have knowledge or
                                 influence, such as the private bar?
                                 Does the board receive regular
                                 reports on staff fundraising activity?
The board ensures that the       Has the organization adopted
 program is in compliance with   policies to ensure compliance with
 state and local laws related    federal/state laws on solicitation of
 to solicitation.                funds?
                                 Are solicitation materials
                                 accurate?
The board ensures donations      Donations are properly recorded
 comply with LSC Requirements.   pursuant to LSC regulations
------------------------------------------------------------------------
                   Continuous Learning and Assessment
------------------------------------------------------------------------
The board is committed to        Does the organization maintain
 continuous improvement.         and provide its board members with an
                                 up-to-date board handbook or on-line
                                 resources?
                                 Do members keep up with issues
                                 that affect the functioning and future
                                 of the organization?
                                 Does the board engage in
                                 periodic formal or informal self-
                                 assessment processes?
------------------------------------------------------------------------

[[Page 14051]]

 
                    General Good Governance Practices
------------------------------------------------------------------------
The board ensures legal and      Does the board adopt and
 ethical integrity and           regularly evaluate a code of ethics
 maintains accountability.       that describes behaviors it wants to
                                 encourage and behavior it wants to
                                 discourage?
                                 Did the board adopt a policy
                                 for handling employee and client
                                 complaints?
                                 Are there established
                                 procedures for employees to report
                                 financial impropriety or misuse of the
                                 organization's resources?
                                 Does the organization have a
                                 whistleblower policy?
                                 Does the board periodically
                                 review the bylaws to ensure that the
                                 organization is in compliance with its
                                 governing documents and relevant laws?
                                 Does the board have policies
                                 establishing standards for document
                                 retention and destruction?
                                 Does the organization keep
                                 books and records relevant to its tax-
                                 exempt status and IRS filings for
                                 appropriate time periods?
The board ensures transparency   Are the program's Form 990 and
 and accountability by making    annual report reported on its public
 information available to the    website? Are these documents available
 public on the program's         to the public upon request?
 mission, activities, finance
 and governance.
The members of the board        Is there evidence that board members
 exercise independent judgment   engage in independent analysis of
 in general board decision-      materials and information provided to
 making.                         them?
------------------------------------------------------------------------

    Criterion 2. Leadership. The program has effective leadership that 
establishes and maintains a shared sense of vision and mission. Program 
leadership means a commitment to and achievement of the program's goals 
and objectives according to a model that emphasizes teamwork, 
transparency, excellence, effectiveness, efficiency, and innovation.

------------------------------------------------------------------------
          Indicators                        Areas of inquiry
------------------------------------------------------------------------
                           General Leadership
------------------------------------------------------------------------
Key program staff, starting      Starting with the chief
 with the executive director     executive officer, are there
 or chief executive officer,     recognized, positive, and effective
 are respected and recognized    leaders in the program?
 as the program leaders.         Do board members, community
                                 leaders, clients and the legal
                                 community express confidence in the
                                 program's leadership?
Program leaders hold             What specific leadership and
 themselves accountable for      professional development training and
 motivating staff, and for       activities has the program provided?
 promoting an environment that   What are the outcomes of these
 embraces mentoring and the      efforts?
 professional development of     What opportunities are afforded
 all staff, helping them to      staff to develop and exercise
 achieve their fullest           leadership skills?
 potential.                      Do staff see themselves as
                                 valued members of the program's team?
                                 Do program leaders model and
                                 encourage teamwork?
                                 Do program leaders delegate
                                 effectively?
Key staff are appropriately      Does the program's leadership
 involved in decision-making     seek the opinions and input of staff
 processes.                      and other stakeholders in its decision-
                                 making processes?
The program's leadership         Beginning with the executive
 demonstrates strong,            director or chief executive officer, is
 effective communication         there evidence that the leadership of
 skills and the capacity to      the program communicates effectively
 engage in positive conflict     with the board, staff and community
 resolution.                     stakeholders?
                                 Do program leaders effectively
                                 address challenges and issues that
                                 impede the program's progress in
                                 accomplishing its mission?
                                 Starting with the executive
                                 director or chief executive officer, is
                                 there evidence that program leadership
                                 effectively models, motivates and
                                 inspires creativity, innovation,
                                 excellence, and achievement?
------------------------------------------------------------------------
                           Mission and Vision
------------------------------------------------------------------------
Program leaders frame a vision   Is there a shared sense of
 and mission.                    vision and mission?
                                 Is it expressed in written
                                 form?
                                 Are staff aware of it?
Program leaders model a high     What mechanisms does the
 level of energy, commitment     program's leadership use to measure
 and integrity in carrying out   program effectiveness and adherence to
 the program's mission.          the mission and vision?
                                 In what ways does the program's
                                 stated mission and vision guide the
                                 program's planning and decision-making?
------------------------------------------------------------------------
                                Diversity
------------------------------------------------------------------------
Starting with the executive      In what ways does the program
 director or chief executive     and its leadership demonstrate
 officer, the program values     inclusion and an appreciation for
 and embraces diversity and      diversity?
 provides opportunities for      Is the program's leadership and
 the development of a diverse    management diverse, and, is there
 group of leaders.               evidence that diversity and inclusion
                                 are valued by the program?
------------------------------------------------------------------------

[[Page 14052]]

 
                             Succession Plan
------------------------------------------------------------------------
The program has a leadership     Does the program have a clear
 succession plan that            and reasonable succession plan?
 addresses preserving            Is it written?
 institutional knowledge and
 strong leadership across all
 levels of program management.
------------------------------------------------------------------------

    Criterion 3. Technology infrastructure and administration. The 
program provides a stable and secure technology infrastructure 
sufficient for staff to work efficiently and effectively in the 
delivery of legal services and to support the operations of the 
organization. It devotes appropriate resources to provide the 
capacities outlined in LSC's ``Technologies That Should Be in Place in 
a Legal Aid Office Today.''

------------------------------------------------------------------------
          Indicators                        Areas of inquiry
------------------------------------------------------------------------
Technology planning is ongoing   Who is involved in technology
 and integrated into the         planning?
 overall strategic plan of the   Does the program get input from
 program, includes staff         staff on technology needs?
 input, and is reviewed and      Has the program ever had an
 updated at least annually.      outside technology audit?
                                 How often is the technology
                                 plan reviewed and updated?
                                 Does the plan include deadlines
                                 for implementation?
The program has competent IT     What type of network does the
 staff and/or consultants with   program have?
 appropriate training and        Are there appropriate
 certifications to properly      firewalls?
 maintain and support its        Are servers hosted on-site, off-
 technology systems.             site, cloud-based?
                                 If on-site, where are they and
                                 how are they secured (locked office,
                                 server room, appropriate A/C)?
                                 What is the program's IT
                                 security program, its policies, user
                                 security training and are the servers,
                                 computers and devices patched and kept
                                 up to on a regular schedule? Is the
                                 network scanned for IT vulnerabilities
                                 regularly?
The grantee informs employees    Does the grantee have a warning
 of their rights when using      banner that appears while employees are
 grantee-owned computers.        logging on and notifies employees of
                                 their rights when using their grantee-
                                 owned computer?
The program devotes              What is the internet bandwidth
 appropriate resources to        in each office (any redundant
 establish and maintain its      connection available)?
 technological infrastructure,   Do offices have Wi-Fi available
 including planning and          (is it password protected)?
 budgeting appropriately for
 ongoing replacement/upgrades
 of its technology systems.
The program has a proper         Is server equipment kept in a
 written IT security program     secure environment with appropriate
 to include robust IT security   ventilation and cooling? Are IT systems
 policies and procedures         currently patched and updated?
 regarding protecting client     Is there a disaster recovery
 and case data, ensuring the     plan (that includes periodic testing)
 security and integrity of       for mission critical technology
 passwords, use of the           systems?
 Internet and social media,      Are there security policies and
 policies for the use of         procedures for protecting client and
 mobile devices, and if staff    case data, sensitive personal and
 can bring their own devices     personnel data, and all communications
 (BYOD) to access work           from loss or unauthorized intrusion?
 documents. Staff are familiar   Are there security policies and
 with and follow such policies   procedures for use of the Internet and
 and procedures.                 social media, content security on all
                                 devices, and integrity of passwords,
                                 retention and deletion of data?
                                 Are employees given notice
                                 concerning prohibited uses of their
                                 computer equipment including a warning
                                 banner that notifies employees of their
                                 rights (including no expectation of
                                 privacy) when using their grantee-owned
                                 computer?
                                 Is there routine IT security
                                 training for staff?
                                 Is the user's system access
                                 granted based on roles and
                                 responsibilities?
The program has sufficient       What are the backup procedures?
 procedures to back up its       Are test restores done
 data and has testing            periodically from the backups?
 protocols to demonstrate that
 data recovery/protection
 policies work in practice.
The program stays informed of    What is the replacement cycle
 new technology developments     for technology equipment (desktops/
 and how it can make better      laptops, servers, printers, scanners,
 use of technology to meet its   copiers, telephones, etc.)?
 mission.                        What type of phone system does
                                 the program use?
                                 How old is it?
                                 When was the last upgrade?
                                 What reports can it provide?
                                 Who maintains it?
------------------------------------------------------------------------
   Extent to Which Technology Enhances Program Operations and Service
                                Delivery
------------------------------------------------------------------------
Maximum use of technology is     Does the program use technology
 made to facilitate and          effectively to enhance the efficiency
 enhance internal                of program operations and service
 communication.                  delivery?
                                 How does the program use
                                 technology to facilitate and enhance
                                 communication?
                                 Does the program's website
                                 effectively follow the Ernst and Young
                                 Best Practices (http://webassessment.lsc.gov/report/)?
------------------------------------------------------------------------

[[Page 14053]]

 
                             Staff Training
------------------------------------------------------------------------
Program staff are provided       Does the program have a policy
 with appropriate training on    for the secure use of its technology,
 the use of technology.          including protecting data (including
                                 Personally Identifiable Information),
                                 use of the Internet and social media,
                                 password policies and if/when staff can
                                 bring their own devices?
                                 Do staff understand and follow
                                 the policy?
                                 What software does the program
                                 use, including case management system
                                 manufacturer and version?
                                 Are staff provided with ongoing
                                 training in its use?
------------------------------------------------------------------------

    Criterion 4. Financial administration. The program has and follows 
financial policies, procedures, and practices that comport with 
Generally Accepted Accounting Principles (GAAP), requirements of the 
program's funding sources, and comply with federal, state and local 
government regulations. The program has established sound internal 
controls and conducts effective budget planning and oversight.

------------------------------------------------------------------------
          Indicators                        Areas of inquiry
------------------------------------------------------------------------
                        Fiscal Policies and Staff
------------------------------------------------------------------------
The program has detailed         Is the program's accounting
 written policies and            manual current and updated as
 procedures describing its       appropriate?
 financial operations which
 comply with all applicable
 requirements. The program
 follows such policies and
 procedures.
The program has sufficient,      How many financial staff does
 capable, trained and            the program have?
 effective staff dedicated to    Does the program have competent
 financial administration.       financial personnel?
                                 What is the training and
                                 background of the financial staff?
                                 The job descriptions of
                                 personnel are clear and lay out the
                                 roles and responsibilities of each
                                 position.
                                 Is periodic training given to
                                 program staff, management, and the
                                 governing body regarding LSC
                                 regulations and accounting guide, as
                                 applicable?
Top management and the           Is the budget consistent with
 governing body are actively     the program's mission, goals, and
 involved in the budgeting       objectives?
 process. The budget is          Does the program effectively
 updated periodically and        adhere to its budget?
 changes/variances are           Is the budget updated monthly
 reviewed. The program engages   (or at least quarterly), based on
 in financial planning beyond    changes in revenues or expenditures?
 the current year.               Does the program engage in
                                 financial planning beyond the current
                                 year?
The program maintains LSC        Does the recipient adhere to
 funds held for immediate        LSC Investment Guidelines?
 operating expenses in
 federally-insured bank
 accounts.
------------------------------------------------------------------------
                           Board of Directors
------------------------------------------------------------------------
The recipient's governing body   Has the board established a
 has fulfilled its fiduciary     financial oversight committee or
 responsibility to the program   committees that perform the roles of a
 through the establishment of    finance committee and an audit
 a financial oversight           committee?
 committee or committees. The    Does the financial oversight
 financial oversight             committee collectively possess the
 committee(s) has at least one   knowledge to set the strategic,
 member who is a financial       financial course for the recipient and
 expert or the board has         oversee management in execution of the
 access to a financial expert.   strategy?
                                 Does the financial oversight
                                 committee have the leadership of
                                 individual well-versed in non-profit
                                 GAAP, COSO Internal Control Framework,
                                 and other relevant standards and
                                 guidelines?
                                 Does the financial oversight
                                 committee meet on a regular basis?
                                 Does the committee have a
                                 charter or governing document and
                                 fulfill the responsibilities outlined
                                 therein?
                                 Does the financial oversight
                                 committee set the strategic direction
                                 of the recipient for financial and
                                 audit related matters?
The governing body regularly     Does a governing body set and
 determines the compensation     review the compensation of the
 of the program's Executive      Executive Director using an independent
 Director.                       compensation consultant, comparable pay
                                 studies from other nonprofit
                                 organizations, and/or a compensation
                                 survey?
The Executive Director's         Are there procedures in place
 expenses are approved by a      that require approval of the Executive
 member of the board.            Director's expenses by a member of the
                                 governing body?
------------------------------------------------------------------------
                      Audited Financial Statements
------------------------------------------------------------------------
The program issues accurate      Are the audited financial
 financial statements on a       statements submitted to LSC in
 timely basis.                   accordance with the LSC Audit Guide for
                                 Recipients and Auditors?
                                 Has the program submitted their
                                 audited financial statements in a
                                 timely manner over the last 3 years?
Executed one-time grants, such   Are executed one-time grants,
 as TIG and PBIF awards, are     such as TIG and PBIF awards, reported
 reported separately in the      either as a supplemental schedule of
 program's audited financial     related revenue and expense or a
 statements in accordance with   separate column within the financial
 45 CFR 1628.3(e).               statement?

[[Page 14054]]

 
Annual program audits do not     Do past audits or outside
 reveal any significant          reports and evaluations reflect
 problems or issues; where       problems?
 such items have been            Have any such problems been
 identified, the program         addressed?
 addresses them effectively      Is there any evidence of
 and promptly.                   failure to comply with applicable
                                 funder or governmental requirements?
                                 What type of auditor's report
                                 did the IPA issue regarding the
                                 financial statements? Unmodified or
                                 modified? If modified, why?
                                 What type of auditor's report
                                 did the IPA issue regarding Federal
                                 Awards? Unqualified or Qualified? If
                                 qualified, why?
                                 Did the IPA issue findings in
                                 the audited financial statements? What
                                 were the findings? Have they been
                                 addressed?
                                 Did the IPA issue a management
                                 letter? What did it contain? Has the
                                 recipient addressed the issues?
                                 Are audit findings repeated
                                 from one fiscal year end to the next in
                                 the audited financial statements?
                                 Does the recipient adequately
                                 address audit findings by performing
                                 the corrective actions outlined in the
                                 audited financial statements?
------------------------------------------------------------------------
                            Internal Controls
------------------------------------------------------------------------
The recipient has established    There is sufficient segregation
 and maintains adequate          of duties.
 accounting records and          Do the accounting policies and
 internal control procedures.    procedures require an appropriate level
 which is designed to provide    of supervisory review and adequate
 reasonable assurance of         checks and balances to ensure the
 achieving the following         accuracy, completeness and timeliness
 objectives: (1) Safeguarding    of transaction processing?
 of assets against               The recipient has established
 unauthorized use or             and adheres to an adequate system of
 disposition; (2) reliability    internal control following the
 of financial information and    principles of the COSO Integrated
 reporting; and (3) compliance   Internal Control Framework.
 with regulations and laws
 that have a direct and
 material effect on the
 program.
------------------------------------------------------------------------
                               Contracting
------------------------------------------------------------------------
The program has a contracting    Does the program have a
 policy to prevent abuse,        contracting policy?
 limit waste of scarce funds,    Does the policy identify the
 and prevent possible            contracting procedures for the various
 questioned cost proceeding.     types of contracts, dollar thresholds,
                                 and competition requirements?
                                 Is the process used for each
                                 contract action fully documented and is
                                 the documentation maintained in a
                                 central file?
                                 Is the required approval level
                                 (including items that need to be
                                 approved by LSC) established for each
                                 contract type and dollar threshold,
                                 including when the board of directors
                                 should be notified and/or give
                                 approval?
                                 Do policies include procedures
                                 for documenting and deviating from the
                                 approved contracting process, such as
                                 when sole-source contracts are
                                 executed?
                                 Is each contract or agreement
                                 executed with a price, time-period, and
                                 services to be performed?
------------------------------------------------------------------------
                            Fraud Prevention
------------------------------------------------------------------------
The program has robust           Assess the organization's
 policies and safeguards in      segregation of duties.
 place to prevent fraud.         Who has access to the program's
                                 bank accounts?
                                 How are permissions and
                                 authorizations assigned?
                                 Does the program have
                                 Whistleblower and Conflict of Interest
                                 Policies?
                                 Is the program's IT
                                 infrastructure adequately secure?
                                 Is the physical and logical
                                 access to the program's computer
                                 network adequately secure?
                                 Does the program's governance
                                 and management of IT resources promote
                                 effective operations and provide a
                                 robust system of internal control?
                                 Do the program's computer
                                 applications incorporate and facilitate
                                 a robust system of internal control?
                                 Have thorough and well
                                 documented hiring practices and
                                 procedures?
                                 Are staff periodically trained
                                 or reminded of the Whistleblower and
                                 Conflict of Interest Policies?
                                 Does the program employ
                                 computer banners on all servers,
                                 computers and devices to inform
                                 employees of prohibited use activities
                                 and no right to privacy of grantee
                                 equipment?
------------------------------------------------------------------------
                           Cash Disbursements
------------------------------------------------------------------------
The program's disbursements      Are procedures adequate to
 are approved in writing by an   provide that salary and wage rates are
 authorized individual.          approved by an authorized individual
                                 and employees are paid in accordance
                                 with approved wage and salary plans?
                                 Were invoices properly
                                 approved, with dates, before
                                 disbursement checks were processed?
                                 Do policies and procedures for
                                 disbursements address unallowable
                                 expenses, purchase approvals, securing
                                 and approving new vendors, segregation
                                 of purchasing duties, and duplicate
                                 payment controls?

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The program's criteria and       Is there a procedure for proper
 procedures for purchases are    payment and approval of expenditures at
 documented.                     an appropriate level of management?
------------------------------------------------------------------------
                              Cash Receipts
------------------------------------------------------------------------
The program has established      Is initial accountability for
 internal control procedures     cash established as soon as a cash item
 related to cash receipts.       is received?
                                 Do the accounting records
                                 adequately identify all cash receipts
                                 as to source and purpose?
                                 Is an effective chain of
                                 custody in place for cash receipts?
The program maintains a client   Has the program established a
 trust fund and accounting       method to determine the balance for
 system to account for funds     each client trust account?
 held on the client's behalf.    Does the program have a process
                                 to ensure that dormant funds are
                                 escheated to the state in compliance
                                 with state requirements?
------------------------------------------------------------------------
                       Asset and Property Records
------------------------------------------------------------------------
A physical inventory of          Is a physical inventory
 property purchased with LSC     conducted at least once every two (2)
 funds is conducted at least     years?
 once every two (2) years and    Are any differences between the
 the results are reconciled      physical inventory and the accounting
 with property records.          records reconciled?
The program has established      Is there a surprise count of
 adequate internal controls to   petty cash conducted periodically?
 safeguard its petty cash        Are the petty cash and client
 funds.                          trust funds secured in locked location?
                                 Are all petty cash
                                 disbursements supported by an original
                                 receipt or appropriate supporting
                                 documentation?
------------------------------------------------------------------------
                                Subgrants
------------------------------------------------------------------------
The program has established      Does the subgrant agreement or
 adequate procedures related     contract with the sub recipient specify
 to the subgranting of LSC       financial reporting responsibility?
 funds to ensure compliance      Where a relationship with a sub
 and proper fiscal oversight.    recipient exists, do the notes to the
                                 financial statements of the recipient