[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]
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