Timekeeping Requirement

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

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

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]

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