[Federal Register Volume 84, Number 29 (Tuesday, February 12, 2019)]
[Proposed Rules]
[Pages 3351-3353]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-01831]


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AGENCY FOR INTERNATIONAL DEVELOPMENT

22 CFR Part 203

RIN 0412-AA91


Streamlining the Private Voluntary Organization Registration 
Process

AGENCY: U.S. Agency for International Development.

ACTION: Proposed rule.

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SUMMARY: USAID is publishing this proposed rule to rescind agency rules 
in support of streamlining the Private Voluntary Organization (PVO) 
registration process. Foreign assistance circumstances have evolved 
since the establishment of the PVO registration process, and a careful 
review of USAID's business practices has concluded that there is no 
longer a need for the current, time-consuming and costly Agency-wide 
process. The remaining USAID programs that legislatively require PVOs 
to be registered as a condition of eligibility have incorporated a 
simplified registration process into each of their program's 
applications.

DATES: Comments must be received no later than March 14, 2019.

ADDRESSES: Address all comments concerning this notice to Daniel Grant, 
USAID, Bureau for Economic Growth, Education, and Environment, Office 
of Local Sustainability (E3/LS), 1300 Pennsylvania Avenue NW, 
Washington, DC 20523. Submit comments, identified by title of the 
action and Regulatory Information Number (RIN) by any of the following 
methods:
    1. Federal eRulemaking Portal: http://www.regulations.gov, 
following the instructions for submitting comments.
    2. Email: Submit electronic comments to [email protected].
    3. Mail (not advisable due to security screening): Daniel Grant, 
USAID, Bureau for Economic Growth, Education, and Environment, Office 
of Local Sustainability (E3/LS), 1300 Pennsylvania Avenue NW, 
Washington, DC 20523.

FOR FURTHER INFORMATION CONTACT: Daniel Grant, Telephone: 202-712-0497 
or email: [email protected].

SUPPLEMENTARY INFORMATION: PVOS applying for the Limited Excess 
Property Program (LEPP), the Ocean Freight Reimbursement Program (OFR), 
or to other agencies under Section 607(a) of the Foreign Assistance Act 
must complete and submit to USAID a self-certification form indicating 
that the organization meets the conditions to register as a PVO. The 
self-certification form requires that the PVO confirm whether it is 
registered as a U.S.-based organization or an international PVO and 
must be signed by an authorized representative of the applicant 
organization. Rescission of this rule is expected to significantly 
reduce the burden on the public and produce an estimated annual cost 
savings of $779,000 to USAID and significant projected savings for the 
PVO community, ranging from $2 million to $11.2 million per year.

A. Instructions

    All comments must be in writing and submitted through one of the 
methods specified in the ADDRESSES section above. All submissions must 
include the title of the action and RIN for this rulemaking. Please 
include your name, title, organization, postal address, telephone 
number, and email address in the text of the message. Please note that 
USAID recommends sending all comments to the Federal eRulemaking Portal 
because security screening precautions have slowed the delivery and 
dependability of surface mail to USAID/Washington. At the end of the 
comment period and until finalization of the action, all comments will 
be made available at http://www.regulations.gov for public review 
without change, including any personal information provided. We 
recommend you do not submit information that you consider Confidential 
Business Information (CBI) or any information that is otherwise 
protected from disclosure by statute. USAID will only address 
substantive comments on the rule. Comments that are insubstantial or 
outside the scope of the rule may not be considered.

B. Background

    USAID is issuing this proposed rule to rescind 22 CFR part 203. The 
regulation codifies the rules for PVO registration with USAID. More 
specifically, 22 CFR part 203 provides the registration process for 
PVOs, including the conditions for registration and documentation 
required to be submitted to USAID to complete a registration, as well 
as the annual renewals and termination processes.
    The rule is being rescinded because the current PVO registration 
process is not needed for the majority of programs open to PVOs across 
the Agency and therefore has been streamlined to apply only to the 
Agency programs that require registration by statute (Limited Excess 
Property Program, Ocean Freight Reimbursement Program, and U.S. 
Government agencies seeking to provide foreign assistance in accordance 
with Section 607(a) of the Foreign Assistance Act).
    USAID's PVO Registration process was originally created for 
purposes of designating that an organization met the definition of a 
PVO and specific organizational standards. Today, USAID examines all 
potential partner organizations, PVOs or otherwise, via a pre-award 
assessment in accordance with Agency policy (ADS 303: Grants and 
Cooperative Agreements to Non-

[[Page 3352]]

Governmental Organizations; and ADS 302: USAID Direct Contracting), and 
as required by relevant regulations (i.e. 2 CFR 200.205 for assistance, 
and FAR Part 9 for contracts). This process is carried out by warranted 
USAID Agreement/Contract Officers. The 22 CFR part 203 due diligence 
process for PVO registration process is duplicative of these pre-award 
assessments. In addition, PVOs invest a substantial amount of time and 
money to obtain and maintain registration.
    Only three USAID activities are required by statute to have PVOs 
register with USAID as a condition of eligibility: The Limited Excess 
Property Program (LEPP), the Ocean Freight Reimbursement Program (OFR) 
(see FAA section 123 generally and FAA section 607(a)), and granting 
approval to U.S. Government agencies seeking to provide foreign 
assistance under FAA Section 607(a). Combined, these programs serve 
fewer than 50 organizations. USAID has established a simplified 
registration process for users of the three activities (consisting of 
self-certification) to save considerable time and resources.
    Finally, USAID's PVO registration has historically played the role 
that private rating organizations now play--publishing data on PVOs and 
other types of non-governmental organizations. The extensive 
information publicly available through other providers has eliminated 
the need for the Agency to produce information on the sector through 
the maintenance and publication of a registry.

C. Impact Assessment

1. Executive Orders 12866 and 13563--Regulatory Planning and Review

    Under E.O. 12866, USAID must determine whether a regulatory action 
is ``significant'' and therefore subject to the requirements of the 
E.O. and subject to review by the Office of Management and Budget 
(OMB). USAID has determined that this rule is not an ``economically 
significant regulatory action'' under Section 3(f)(1) of E.O. 12866. 
This proposed rule is not a major rule under 5 U.S.C. 804.
    E.O.s 12866 and 13563 direct agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). E.O. 13563 emphasizes the 
importance of quantifying both costs and benefits, reducing costs, 
harmonizing rules, and promoting flexibility. Streamlining the 
duplicative Agency-wide registration program eliminates thousands of 
labor hours and saves hundreds of thousands of dollars for USAID and 
the estimated 550 PVOs currently registered with USAID.
    USAID utilizes a contractor to manage the PVO registration process, 
costing the Agency approximately $700,000 per year. In addition, 
internal USAID labor costs related to the registration process amount 
to $79,406 in burdened salary and benefit expenses (50% of a GS-13 
FTE). With the proposed deregulation, USAID anticipates that it would 
save $779,406 in government costs per year.
    Moreover, USAID estimates that the deregulation will generate 
significant cost savings for PVOs affected. USAID recently surveyed all 
PVO registrants (550 in total) to quantify the burden associated with 
the registration process. Within the past ten years, the number of PVOs 
registering with USAID on an annual basis has been consistent, ranging 
from 550 to 553 PVOs per year. Based on survey results, USAID estimates 
that all 550 PVO registrants spent 4,378 hours to prepare and file 
registration forms. Using market research, USAID estimates that the 
burdened labor cost for PVO staff to conduct tasks related to 
registration ranges from $40 to $80 per hour.\1\ Applying those rates 
to the total 4,378 personnel-hours yields an estimated cost ranging 
from $175,120 to $350,240 for PVO staff to register.
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    \1\ Calculated based on nationwide data on nonprofit program 
manager salaries (https://www.glassdoor.com/Salaries/nonprofit-program-manager-salary-SRCH_KO0,25.htm), with employee benefit costs 
added into the hourly rates (https://www.bls.gov/news.release/ecec.nr0.htm).
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    In addition, with rescission of the rule, USAID concludes that PVOs 
would achieve significant further cost savings since a component of the 
PVO registration process is the conduct of a financial audit. USAID 
estimated the total amount of audits that were conducted for PVO 
registration purposes but not used to range from 183 (low estimate) to 
363 (high estimate). This estimated range refers to PVOs that obtained 
audits for PVO registration only but did not receive an award from 
USAID. Based on market research,\2\ past experience, and consultations 
with registered PVOs, the average cost of an audit ranges from $10,000 
to $30,000. USAID then calculated a low estimate and high estimate of 
cost savings. For the high estimate, USAID applied the rate of $30,000 
to 363 registrants (two-thirds of the 550 total registrants) that do 
not receive an award. This yields an annual total of $10,890,000 in 
expenses avoided. For the low estimate, we applied the $10,000 rate as 
the audit cost and added the assumption that half of registrants 
without awards would have procured financial audits, even in absence of 
the rule. Multiplying $10,000 by 183 (one-third of 550 total 
registrants) yields a total of $1,830,000 for our low cost estimate of 
cost savings associated with avoided audit expenses. When estimates for 
PVO staff time and financial audits are combined, the cost savings for 
affected PVOs ranges from $2,005,120 to $11,240,240. When added to the 
expected costs internal to USAID of $779,406, this yields an annual 
total of incremental cost savings as a result of the rescission from 
$2,784,526 to $12,019,646. Rescission of our PVO registration rule 
benefits USAID and our PVOS by streamlining processes and achieving 
significant cost savings.
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    \2\ https://www.councilofnonprofits.org/nonprofit-audit-guide/what-is-independent-audit, http://www.financialexecutives.org/ferf/download/2015%20Final/2015-018.pdf.
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2. Executive Order 13771

    This proposed rule is considered an E.O. 13771 deregulatory action. 
Details on the estimated cost savings of this rule can be found in the 
rule's economic analysis.

3. Regulatory Flexibility Act

    Because the rescission of this regulation removes rather than 
imposes collection of information, USAID certifies that the proposed 
rescission will not have a significant economic impact on a substantial 
number of small entities.

4. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. Chapter 3507) applies to 
this rule since this rule removes information collection requirements 
formerly approved by the Office of Management and Budget (OMB). 
Rescission of this rule will significantly reduce paperwork and 
eliminate information collection requirements on the 550 PVOs that 
register with the Agency. USAID collects information from all 
registered PVOs as part of the registration requirement, such as data 
on their organization, including financial information and provision of 
a costly financial audit, in order to determine whether the PVO meets 
the conditions of registration. Under the revised approach, only 
organizations applying for the Agency's LEPP, OFR awards, or are 
working with other U.S. government agencies seeking to provide foreign 
assistance (about 50 organizations in total) would be required to 
certify that they meet USAID's PVO requirements through the new 
certification process

[[Page 3353]]

described earlier. No other data or financial audits would be 
collected.
    USAID previously collected information for PVO registration 
purposes under the OMB-approved AID Form 1550-2 (OMB Approval Number 
0412-0035) but inadvertently operated in non-compliance with the 
Paperwork Reduction Act (PRA) when OMB approval of this form expired, 
and USAID did not seek extension of the OMB approval when the Agency 
moved to an online system for PVO registration. USAID's online PVO 
registration system required that PVOs provide the same information 
requested on AID Form 1550-2, including financial data. As such, the 
public reporting burden for collection of information remained the same 
under the online system.

5. Administrative Procedures Act

    The Agency plans to issue this deregulatory action since the 
purpose of the rule is to remove an unneeded hurdle to doing business 
with the Agency that imposes unnecessary and excessive costs on the 
private sector with no value to the Government. The rule proposed for 
rescission originally called for the collection of information, such as 
a company's volunteer make-up--a requirement for PVOs that has since 
been obviated once the volunteer requirement was removed by law. Apart 
from that requirement, statutory references to registration of PVOs 
(such as those in FAA sections 123 or 607) provide no further guidance 
or requirements to the Agency on what such registration should entail. 
By rescinding this rule, the Agency is free to simplify and streamline 
registration to remove costly barriers to doing business with the 
Agency.
    The Agency also conducted surveys of the primary stakeholders to 
the registration process--that of Agency internal stakeholders and the 
PVO community. Surveys of registered PVOs in 2012 and in 2017 showed 
that the PVO community did not see significant value in the 
registration program delineated by the rule at issue, and internal 
stakeholders for the Agency determined that the information collected 
in accordance with the rule at issue served no purpose for the Agency. 
These findings contributed to the decision to remove both the 
registration program and the rule that required such a rigorous 
registration process. Additionally, no new rule is being put in place 
in lieu of the present rule.
    For the Limited Excess Property Program, the Ocean Freight 
Reimbursement Program, and PVOs who are affiliated with U.S. Government 
agencies seeking to provide foreign assistance under FAA Section 
607(a), which all still require registration due to legislative 
requirements, as provided above, the Agency has developed a simplified 
registration process to be implemented as part of the application 
process.

    Dated: December 21, 2018.
James Peters,
Acting Senior Deputy Assistant Administrator, Bureau for Economic 
Growth, Education, and Environment, U.S. Agency for International 
Development.
[FR Doc. 2019-01831 Filed 2-11-19; 8:45 am]
 BILLING CODE 6116-01-P