[Federal Register Volume 62, Number 70 (Friday, April 11, 1997)]
[Notices]
[Pages 17881-17882]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9411]


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LEGAL SERVICES CORPORATION


Accounting Guide for LSC Recipients

AGENCY: Legal Services Corporation.

ACTION: Proposed guidelines.

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SUMMARY: The Legal Services Corporation (LSC or Corporation) hereby 
publishes for comment by interested parties a proposed Accounting Guide 
for LSC Recipients (Guide), which would replace the accounting portions 
of the 1981 and 1986 editions of LSC Audit and Accounting Guide for 
Recipients and Auditors (Audit and Accounting Guide). The Audit Guide 
for LSC Recipients and Auditors, issued in 1995 and revised by the LSC 
Office of Inspector General in 1996, replaced the audit portions of 
both editions of the Audit and Accounting Guide. Thus, when this Guide 
is published in final, all previous editions of the Audit and 
Accounting Guide will become obsolete.

DATES: Comments must be received on or before May 12, 1997.

ADDRESSES: Copies of the Guide may be downloaded from LSC Homepage or 
HANDSNET, or requested via E-mail at [email protected] or by voice 
mail at 202-336-8846 or by fax at 202-336-8854. Comments may be 
submitted in writing to the above E-mail address or to the Office of 
Program Operations, Legal Services Corporation, 750 1st Street, NE., 
Washington, DC 20002-4250, Attention: LSC Accounting Guide.

FOR FURTHER INFORMATION CONTACT: Charles Crittenden, Program Analyst, 
Office of Program Operations. (202) 336-8800.

SUPPLEMENTARY INFORMATION: In addition to assisting recipients and 
their auditors in understanding the accounting and reporting 
requirements for contracts and grants entered into with the LSC, the 
Guide revises and updates LSC accounting and financial reporting 
requirements and guidelines based on recently promulgated Generally 
Accepted Accounting Principles (GAAP) that apply to not-for-profit 
organizations. Using these new standards, the proposed Guide describes 
the accounting policies, guidelines, records, and internal control 
procedures that LSC considers adequate to provide proper accounting, 
financial reporting, and management of LSC funds.
    Additionally, the Guide provides in individual appendices: (1) 
illustrative financial statement formats acceptable to LSC; (2) 
descriptions of recommended accounting records; (3) a sample chart of 
accounts; (4) accounting policies and procedures for property; (5) 
accounting for client trust funds; (6) other regulatory requirements 
for not-for-profit organizations; (7) checklist of accounting and 
internal control procedures; (8) LSC regulations setting accounting 
policies; (9) listing of GAAP for not-for-profit organizations; and 
(10) a glossary of terms and definitions.
    The proposed guidelines are intended to reflect GAAP methods that 
will result in the most meaningful financial information for LSC, and 
for most readers of an LSC recipient's financial statements. The 
Corporation has established a 30-day comment period from the date of 
this notice, during which LSC invites general comments on the Guide and 
specific comments on the following issues:

[[Page 17882]]

    (1) Classification of LSC Funds and Property: i.e., unrestricted, 
temporarily restricted or permanently restricted in the financial 
statements. The Guide classifies LSC funds as temporarily restricted 
net assets that remain restricted until eligible expenses are incurred 
on permissible activity, unearned LSC funds (i.e., formerly deferred 
support) as refundable advances until earned, and property purchased 
with LSC funds as a permanent restricted net asset. We invite comments 
on the impact of this treatment of LSC funds and property.
    (2) Electronic transfer of Grant Activity: LSC is seeking to 
establish a uniform and effective means by which a recipient can 
electronically file audits and other financial reports with LSC. The 
electronic transfer necessarily would require uniform presentation of 
financial data. We solicit comments on the advisability and feasibility 
of accomplishing this result.
    (3) Cost Allocations: We invite comments on what guidance would be 
useful regarding cost allocation procedures and bases.
    (4) Appropriation of Net Assets/Fund Balances: The Guide proposes 
treating all unexpended funds at the end of the grant year as ``net 
assets,'' including amounts which could be deemed to be an excess 
``fund balance'' subject to recovery by LSC under 45 CFR 1628. We also 
invite comment on the appropriate accounting treatment of reserves for 
encumbrances and contingencies which should be included in net assets 
(fund balances).
    Where possible, comments should reference applicable paragraph 
numbers in the proposed revision.

    Dated: April 8, 1997.
Merceria L. Ludgood,
Deputy Director.
[FR Doc. 97-9411 Filed 4-10-97; 8:45 am]
BILLING CODE 7050-01-P