Streamlining the Registration Process for Private Voluntary Organizations
| Published date | 31 July 2019 |
| Citation | 84 FR 37079 |
| Record Number | 2019-15685 |
| Section | Rules and Regulations |
| Court | Agency For International Development |
Federal Register, Volume 84 Issue 147 (Wednesday, July 31, 2019)
[Federal Register Volume 84, Number 147 (Wednesday, July 31, 2019)]
[Rules and Regulations]
[Pages 37079-37081]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-15685]
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AGENCY FOR INTERNATIONAL DEVELOPMENT
22 CFR Part 203
RIN 0412-AA91
Streamlining the Registration Process for Private Voluntary
Organizations
AGENCY: U.S. Agency for International Development (USAID).
ACTION: Final rule.
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SUMMARY: USAID is issuing a final rule to rescind the Agency's rules to
streamline the registration process for Private Voluntary Organizations
(PVOs). Foreign assistance has evolved since the establishment of the
requirement that PVOs register with USAID, and a careful review of the
Agency'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 required by statute to register PVOs as a
condition of eligibility have incorporated a simplified registration
process into each of their applications for funding. USAID published
the proposed rule and has determined to adopt a final rule to support
streamlining the PVO registration process.
DATES: This rule is effective August 30, 2019.
FOR FURTHER INFORMATION CONTACT: Daniel Grant, Telephone: (202) 712-
0497 or email: [email protected]
SUPPLEMENTARY INFORMATION: On February 12, 2019 (84 FR 3351), USAID
issued a proposed rule to rescind part 203 of title 22 of the Code of
Federal Regulations (CFR) (22 CFR part 203) to streamline the
registration process for PVOs. Effective upon the publication of this
final rule, PVOs would no longer be required to register with USAID to
compete for funding, with the exception of organizations that apply for
the Limited Excess-Property Program (LEPP), the Ocean-Freight
Reimbursement Program (OFR), or to other Federal Departments and
Agencies under Section 607(a) of the Foreign Assistance Act (FAA).
Applicants to the LEPP, the OFR, and for assistance under Section
607(a) of the FAA must complete and submit to USAID a self-
certification form to indicate they qualify as a PVO. The self-
certification form, which an authorized representative of the applicant
organization must sign, requires that a PVO confirm whether it is
registered as a U.S.-based organization or an international PVO.
Rescission of 22 CFR part 203 is expected to reduce the burden on the
public significantly; produce a total estimated annual cost savings of
$779,406 to USAID; and offer significant savings for the PVO community,
projected to range from approximately $2 million to $11 million per
year.
A. Discussion of Comments
USAID received one set of comments from an individual in response
to the proposed rule. A discussion of these comments follows:
The commenter sought clarification on the rule and the rulemaking
process, in addition to the laws associated with the registration of
PVOs. The three USAID programs that require registration because of
statute are the LEPP, the OFR, and applications to other U.S.
Government Departments and Agencies that seek to provide foreign
assistance in accordance with Section 607(a) of the FAA. The statute is
silent on the methodology for registration. While 22 CFR part 203
details a specific process, USAID has determined it is duplicative of
pre-award assessments and due-diligence requirements the Agency already
undertakes with all prospective awardees. Maintaining both sets of
requirements imposes a significant cost burden on PVOs (and PVOs only)
to obtain and maintain registration, a process largely duplicated if a
PVO is considered for an award. Replacing 22 CFR part 203 with a
legally compliant, simplified self-certification would streamline the
process significantly. USAID is updating
[[Page 37080]]
this process not because of changes in law or new legal requirements,
but to reduce costs and eliminate unnecessary regulation. Only PVOs
participating in the three specific programs mentioned above would have
to self-certify, and the Bureaus and Independent Offices within USAID
that manage these programs would provide guidance as necessary as part
of implementing them. Maintenance of a PVO registry is not necessary to
implement these programs. In addition, no law requires maintaining a
database of PVOs, which is duplicative of the role private rating
organizations now play. While different from the focus of the PVO-
registration program, initially established to help achieve USAID's
international-development mission, private rating organizations offer
the transparency on service organizations that the PVO-registration
process had also provided, although that was not the purpose of USAID's
PVO-registration program.
USAID published the proposed rule on February 12, 2019, and
issuance of this final rule serves as USAID's notification to, and
request for, input from the public on the streamlined registration
process for PVOs.
B. Background
USAID is issuing this final rule to rescind 22 CFR part 203, which
codified the rules for PVO registration with USAID and provided 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 detailing the annual renewals and
termination processes.
USAID has rescinded 22 CFR part 203 because the process to register
PVOs is no longer needed for the majority of programs open to PVOs
across the Agency. Therefore, the Agency has streamlined it to apply
only to programs that require registration by statute (LEPP, OFR, and
applications to other U.S. Government Departments and Agencies that
seek to provide foreign assistance in accordance with Section 607(a) of
the FAA). Combined, these programs serve fewer than 50 organizations.
USAID initially established its process to register PVOs to ensure
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 managed by warranted
USAID Agreement/Contract Officers in accordance with Agency policy
(Automated Directives System [ADS] Chapter 303: Grants and Cooperative
Agreements to Non-Governmental Organizations; and ADS Chapter 302:
USAID Direct Contracting), and as required by relevant regulations
(i.e., 2 CFR 200.205 for assistance, and 48 CFR part 9 for contracts).
The due-diligence process for registering PVOs under 22 CFR part 203 is
duplicative of these pre-award assessments, and organizations spend a
substantial amount of time and money to obtain and maintain
registration. 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 Agency's need to produce information on the sector through the
maintenance and publication of a registry.
C. Impact Assessment
(1) Executive Orders (E.O.) 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 22 CFR part 203 is not an
``economically significant regulatory action'' under Section 3(f)(1) of
E.O. 12866. This final rule is not a major rule under Section 804 of
Title 5 of the United States Code (U.S.C.).
E.O.s 12866 and 13563 direct Federal Departments and Agencies to
assess all the 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 would
eliminate thousands of labor hours and save hundreds of thousands of
dollars for USAID and the estimated 550 PVOs currently registered with
the Agency.
USAID uses a contractor to manage the PVO-registration process,
which costs the Agency approximately $700,000 per year. In addition,
internal USAID annual labor costs related to the registration process
amount to $79,406 in burdened salary and benefit expenses (50 percent
of a General Schedule [GS]-13 Full-Time Equivalent [FTE]). With this
deregulation, USAID anticipates saving $779,406 in Federal Government
costs per year.
Moreover, USAID estimates that the deregulation would generate
significant cost-savings for affected PVOs. USAID recently surveyed all
550 PVO registrants to quantify the burden associated with the
registration process. Within the past ten years, the number of PVOs
registered with USAID on an annual basis has been consistent, ranging
from 550 to 553 PVOs per year. Based on the results of the survey,
USAID estimates that all 550 PVO registrants spent a total of 4,378
hours per year to prepare and file the 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 that ranges 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, because a component of
the registration process is the requirement to conduct an external
financial audit. USAID estimated the total number of external audits
conducted only for the purposes of registering as a PVO, but not used
because the organization did not receive an award from USAID, range
from 183 to 367. Based on market research,\2\ past experience, and
consultations with registered PVOs, the average cost of an independent
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 367 registrants (two-thirds of the
550 total registrants) that do not receive an award. This yields an
annual total of $11,010,000 in ``unfruitful'' 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 the absence of the rule. Multiplying
$10,000 by 183 (one-third of the 550 total registrants) yields a total
of $1,830,000 for our low-cost estimate of
[[Page 37081]]
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 $11,360,240. When added to the
expected costs internal to USAID of $779,406, the annual total of
incremental cost savings as a result of the rescission ranges from
$2,784,526 to $12,139,646. Therefore, the rescission of our PVO-
registration rule would 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 (E.O.) 13771
This rule is considered an E.O. 13771 deregulatory action. Details
on the estimated cost-savings of this rule appear in the rule's
economic analysis.
3. Regulatory Flexibility Act
Because the rescission of this regulation removes, rather than
imposes, the collection of information, USAID certifies that the
rescission would not have a significant economic impact on a
substantial number of small entities.
4. Paperwork Reduction Act (PRA)
The Paperwork Reduction Act (44 U.S.C. 3507) applies to this rule,
because it removes information-collection requirements formerly
approved by OMB. Rescission of this rule would reduce paperwork
significantly and eliminate information-collection requirements on the
550 PVOs that currently register with the Agency. USAID collects
information from all registered PVOs as part of the registration
requirement, such as financial data and a costly external financial
audit, to determine whether the PVO meets the conditions of
registration. Under the revised approach, only organizations that apply
for the Agency's LEPP or OFR, or to other U.S. Government Departments
and Agencies that seek to provide foreign assistance (about 50
organizations in total) would have to certify they meet USAID's PVO
requirements through the new, streamlined certification process
described earlier. USAID would not collect any other data or demand
extra financial audits from these organizations.
USAID previously collected information for to register PVOs under
the OMB-approved AID Form 1550-2 (OMB Approval Number 0412-0035), but
inadvertently operated in non-compliance with the PRA when OMB approval
of this form expired, and USAID did not seek extension of the OMB
approval when the Agency moved to an on-line 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 on-line system.
5. Administrative Procedures Act
USAID is issuing this deregulatory action 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 rescinded rule originally called for the collection of information,
such as a company's make-up of volunteers--since obviated once
statutory changes removed the volunteer requirement. Apart from that
requirement, statutory references to the registration of PVOs (such as
those in Sections 123 or 607 of the FAA) provide no further guidance or
requirements to the Agency on what such registration should entail. By
rescinding this rule, the Agency would be free to simplify and
streamline registration to remove barriers that impose expenses on
smaller organizations that wish to compete for USAID funds.
USAID also conducted surveys of the primary stakeholders to the
registration process--that of Agency's internal stakeholders and the
PVO community. Surveys of registered PVOs in 2012 and 2017 showed that
the PVO community did not see significant value in the registration
program delineated by 22 CFR part 203, and internal stakeholders for
the Agency determined that the information collected in accordance with
22 CFR 203 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, USAID
does not plan to replace the current rule with any other.
For the LEPP, the OFR, and PVOs that apply to other U.S. Government
Departments and Agencies that are seeking to provide foreign assistance
under Section 607(a) of the FAA, all of which still require
registration because of legislative requirements, as provided above,
the Agency has developed a simplified registration process as part of
the application process.
List of Subjects for 22 CFR Part 203
Foreign aid, Nonprofit organizations, Reporting and recordkeeping
requirements.
PART 203--[REMOVED]
0
For the reasons discussed in the preamble, and under the authority of
Sec. 621, Public Law 87-195, 75 Stat. 445, (22 U.S.C. 2381), as
amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673, 3 CFR, 1979 Comp., p.
435, USAID removes 22 CFR part 203.
Carrie Thompson,
Acting Assistant Administrator, Bureau for Economic Growth, Education,
and the Environment.
[FR Doc. 2019-15685 Filed 7-30-19; 8:45 am]
BILLING CODE 6116-01-P
