[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] ======================================================================= ----------------------------------------------------------------------- LEGAL SERVICES CORPORATION Accounting Guide for LSC Recipients AGENCY: Legal Services Corporation. ACTION: Proposed guidelines. ----------------------------------------------------------------------- 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