[Federal Register Volume 63, Number 204 (Thursday, October 22, 1998)]
[Proposed Rules]
[Pages 56594-56596]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-28229]


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LEGAL SERVICES CORPORATION

45 CFR Part 1635


Timekeeping Requirement

AGENCY: Legal Services Corporations.

ACTION: Proposed rules.

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SUMMARY: This proposed rule would revise the Corporation's timekeeping 
rule to require full-time attorneys and paralegals to provide the date 
as well as the time spent on each case, matter or supporting activity. 
In addition, timekeeping records for full-time attorneys and paralegals 
would be required to be consistent with the recipient's time and 
attendance records.
    Public comment is requested on two alternative proposed 
requirements that would ensure that a recipient's part-time attorneys 
and paralegals do not engage in restricted activities during the time 
periods they are being compensated by an LSC recipient. The first 
alternative would revise the Corporation's timekeeping rule to require 
part-time attorneys who work for organizations that do restricted work 
to include additional information in their timekeeping records. In 
addition, their timekeeping records would be required to be consistent 
with the recipient's time and attendance records. The second 
alternative would require part-time attorneys and paralegals to certify 
in writing that they have not engaged in any restricted activities 
during the time for which they are compensated by a recipient. Comments 
on these and other possible alternatives are requested.

DATES: Comments should be received on or before December 21, 1998.

ADDRESSES: Comments should be submitted to the Office of the General 
Counsel, Legal Services Corporation, 750 First St. NE., 11th Floor, 
Washington, DC 20002-4250.

FOR FURTHER INFORMATION CONTACT: Suzanne Glasow, Office of the General 
Counsel, 202-336-8817.

SUPPLEMENTARY INFORMATION: This proposed rule is a response to the 
Corporation's Office of Inspector General's (OIG) Summary Report on 
Audits of Selected Grantees for Compliance with Selected Regulations 
(February 1998). The report found that timekeeping records could not 
demonstrate that part-time employees of grantees do not work on 
restricted activities 1 during any time for which they are 
compensated with LSC funds for their services. In order to address this 
finding, the OIG recommended revising the Corporation's timekeeping 
rule to require that part-time attorneys and paralegals who work part-
time for the recipient and part-time for an organization that engages 
in restricted activities (hereinafter referred to as ``part-time 
employees'') account for all hours worked for the recipient by date and 
time of day in their timekeeping records.
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    \1\ For the purposes of this requirement, the term restricted 
activities is an umbrella term that refers to the restrictions 
listed in the definitions of purpose prohibited by the LSC Act and 
activity prohibited by or inconsistent with section 504 in 45 CFR 
Sec. 1610.2(a) & (b). A particular activity is restricted only to 
the extent it is limited pursuant to statutory or regulatory law. 
Nothing in this rule is intended to expand on the scope of any 
restriction or the type of recipient funds implicated by a 
particular restriction.
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    The Operations and Regulations Committee (Committee) of the Legal 
Services Corporation's (LSC) Board of Directors (Board) met on 
September 11, 1998, in Chicago, Illinois, to consider proposed 
revisions to Sec. 1635.3(b)(1) of the Corporation's timekeeping rule 
intended to provide records that more clearly demonstrate that part-
time employees have not engaged in any restricted activities during the 
time for which they are compensated by the recipient. At the meeting, a 
certification requirement was suggested as an alternative to revising 
the timekeeping rule. The Committee decided to publish both the 
proposed timekeeping rule and the alternative certification requirement 
in this rule for public comment before making any decision on which is 
the better alternative. In addition, the Committee requests comments on 
any

[[Page 56595]]

other alternatives that might better address the OIG's concerns. 
Comments should address the legal and practical implications of each 
alternative in this rule. They should also address whether a particular 
alternative would achieve the desired end, that is, would it provide 
sufficient information to demonstrate whether part-time employees have 
engaged in restricted activities during time for which they have been 
compensated by the recipient.
    Generally, the revisions to the timekeeping rule would require 
part-time employees to include information in their timekeeping records 
that is not required for full-time employees. The certification 
requirement would require part-time employees to certify in writing 
that they have not engaged in any restricted activities during the time 
for which they have been compensated by a recipient. A more detailed 
analysis is provided below.

I. Timekeeping Rule

    Three changes are proposed for Sec. 1635.3(b)(1) of the timekeeping 
rule. One applies only to part-time employees, another applies only to 
full-time employees and the third applies to both.
    Part-time employees: The proposed revision applicable only to part-
time employees would require that their time records provide the date 
and exact time of day for time spent on each case, matter or supporting 
activity. This would provide sufficient information to check against 
other available documents to determine whether a part-time employee was 
compensated by the recipient during the time for which the employee 
engaged in restricted activities for another organization.
    Full-time employees: The proposed revision applicable only to full-
time employees would require that such employees provide the date for 
time spent on each case, matter or supporting activity. A total number 
of hours spent on a particular case, for example, has little 
significance unless put into the context of a particular time frame, 
such as a grant year, a month, a pay period or a work day. For the 
purposes of this rule, a work day is proposed as most useful in 
determining how time is spent by recipient employees.
    Part-time and full-time employees: The proposed rule would also 
require that the time records for both full-time and part-time 
employees be consistent with the recipient's time and attendance 
records used for payroll purposes. This means that time spent by an 
employee must at least add up to the amount of time reflected in the 
attendance records. Records are not inconsistent if the timekeeping 
records reflect more time than the attendance records. For example, 
exempt employees' actual hours of work are often more than the amount 
of hours necessary to count as a workday for payroll purposes. Records 
would be inconsistent, however, if the timekeeping records reflect 
fewer hours on a particular day than the attendance records because the 
employee is being paid with program funds for hours not reflected in 
the timekeeping records and there would be no records for that day 
demonstrating how the time was spent.
    This requirement does not mean that the timekeeping and attendance 
records must be mechanically integrated into the same recordkeeping 
system. It means that when compared, the timekeeping and attendance 
records will not be found to be inconsistent.

II. Certification

    The certification alternative would require part-time employees to 
certify in writing that they have not engaged in any restricted 
activities during a time for which they have been compensated by a 
recipient. To certify means to ``authenticate or vouch for a thing in 
writing,'' to ``attest as being true or as represented,'' to ``testify 
in writing.'' See Blacks Law Dictionary 207 (Fifth Edition 1979); 
Random House Webster's College Dictionary 215, Second Edition 
(1997).2
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    \2\ To certify means to attest authoritatively, and any form 
which affirms the fact in writing is sufficient.'' Doherty v. 
McDowell, 276 F. 728, 730 ( D.Me 1921).
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    A false certification, depending on the applicable law or 
circumstances, may constitute a violation of civil or criminal law. For 
LSC purposes, a false certification by a recipient employee could 
possibly implicate certain Federal laws related to the use of Federal 
funds that are currently applicable to LSC recipients pursuant to 45 
CFR Part 1640. Violations of certain laws listed in Part 1640 carry 
severe sanctions for false statements or claims to the Federal 
government regarding the use of Federal funds. See for example, 18 
U.S.C. 287, 371, 1001 and 31 U.S.C. 3729; United States v. Columbia/HCA 
Healthcare Corporation, 125 F.3d 899 (5th Cir. 1997)(``false 
certifications of compliance create liability under the [False Claims 
Act] when certification is a prerequisite to obtaining a government 
benefit.''); United States v. Burns, 104 F.3d 529 (2nd Cir. 
1997)(falsified timesheets submitted for pay under government funded 
program found to be violation of 18 U.S.C. 1001).
    Under Part 1640, whether or not a recipient or an employee of a 
recipient has violated any of the applicable Federal laws is determined 
by the Federal court having jurisdiction of the matter. The Corporation 
does not prosecute or make judgments under the applicable Federal laws 
but it has authority to terminate funding under the conditions set out 
in Sec. 1640.4. Several of the laws included in Part 1640 prohibit 
making false claims to the government regarding the use of Federal 
funds. LSC funds are Federal funds for the purposes of the laws 
included in Part 1640. Thus, a false certification regarding activities 
for which the applicable employee is compensated with LSC funds, in 
certain circumstances, may put the employee at risk of prosecution for 
violation of such laws. Employees who sign such certifications should 
be fully informed of the implications and sign forms that, to the best 
of their knowledge, are true and accurate.
    The only provision revised in the proposed timekeeping rule is 
Sec. 1635.3(b)(1). However, the entire rule is published so that the 
proposed revisions may be considered in context.

List of Subjects in 45 CFR Part 1635

    Legal services, Reporting and recordkeeping requirements.

    For reasons set out in the preamble, LSC proposes to revise 45 CFR 
Part 1635 to read as follows:

PART 1635--TIMEKEEPING REQUIREMENT

Sec.
1635.1  Purpose.
1635.2  Definitions.
1635.3  Timekeeping requirement.
1635.4  Administrative provisions.

    Authority: 42 U.S.C. 2996e(b)(1)(A), 2996g(a), 2996g(b), 
2996g(e).


Sec. 1635.1  Purpose.

    This part is intended to improve accountability for the use of all 
funds of a recipient by:
    (a) Assuring that allocations of expenditures of Corporation funds 
pursuant to 45 CFR part 1630 are supported by accurate and 
contemporaneous records of the cases, matters, and supporting 
activities for which the funds have been expended;
    (b) Enhancing the ability of the recipient to determine the cost of 
specific functions; and
    (c) Increasing the information available to the Corporation for 
assuring recipient compliance with Federal law and corporation rules 
and regulations.


Sec. 1635.2  Definitions.

    As used in this part--
    (a) A case is a form of program service in which an attorney or 
paralegal of a

[[Page 56596]]

recipient provides legal services to one or more specific clients, 
including, without limitation, providing representation in litigation, 
administrative proceedings, and negotiations, and such actions as 
advice, providing brief services and transactional assistance, and 
assistance with individual PAI cases.
    (b) A matter is an action which contributes to the overall delivery 
of program services but does not involve direct legal advice to or 
legal representation of one or more specific clients. Examples of 
matters include both direct services, such as community education 
presentations, operating pro se clinics, providing information about 
the availability of legal assistance, and developing written materials 
explaining legal rights and responsibilities; and indirect services, 
such as training, continuing legal education, general supervision of 
program services, preparing and disseminating desk manuals, PAI 
recruitment, intake when no case is undertaken, and tracking 
substantive law developments.
    (c) A supporting activity is any action that is not a case or 
matter, including management and general, and fundraising.


Sec. 1635.3  Timekeeping requirement.

    (a) All expenditures of funds for recipient actions are, by 
definition, for cases, matters, or supporting activities. The 
allocation of all expenditures must be carried out in accordance with 
45 CFR part 1630.
    (b) Time spent by attorneys and paralegals must be documented by 
time records which record the amount of time spent on each case, 
matter, or supporting activity.
    (1) Time records must be created contemporaneously and account for 
time in increments not greater than one-quarter of an hour which 
comprise all of the efforts of the attorneys and paralegals for which 
compensation is paid by the recipient. Such time records for full-time 
attorneys and paralegals must also provide the date for time spent on 
each case, matter or supporting activity. Such time records for part-
time attorneys and paralegals who also work for an organization that 
engages in restricted activities must also provide the date and exact 
time of day for time spent on each case, matter or supporting activity 
for the recipient. Finally, such time records must be consistent with 
the time and attendance records used for payroll purposes.
    (2) Each record of time spent must contain: for a case, a unique 
client name or case number; for matters or supporting activities, an 
identification of the category of action on which the time was spent.
    (c) The timekeeping system must be implemented within 30 days of 
the effective date of this regulation or within 30 days of the 
effective date of a grant or contract, whichever is later.
    (d) The timekeeping system must be able to aggregate time record 
information from the time of implementation on both closed and pending 
cases by legal problem type.


Sec. 1635.4  Administrative provisions.

    Time records required by this section shall be available for 
examination by auditors and representatives of the Corporation, and by 
any other person or entity statutorily entitled to access to such 
records. The Corporation shall not disclose any time record except to a 
Federal, State or local law enforcement official or to an official of 
an appropriate bar association for the purpose of enabling such bar 
association official to conduct an investigation of an alleged 
violation of the rules of professional conduct.

    Dated: October 16, 1998.
Victor M. Fortuno,
General Counsel.
[FR Doc. 98-28229 Filed 10-21-98; 8:45 am]
BILLING CODE 7050-01-P