Proposed rule to raise LSC approval threshold and clarify procurement, fundraising, and reporting rules
AI-generated summary for informational purposes only. Not legal advice. See the original source for the authoritative text.
This proposed rule would update how Legal Services Corporation grant recipients handle costs, purchases, property, and fundraising proceeds. The biggest practical change is that the prior-approval threshold would rise from $25,000 to $50,000, so recipients would need LSC approval only after they commit to spending more than that amount. The rule also says fundraising proceeds are not treated as derivative income, but recipients must reimburse the LSC account for fundraising costs charged to the grant. For compliance teams, the proposal also gives LSC more room to extend review timelines for complex requests, clarifies what documents must be kept in procurement files, and replaces a fixed April 30 accounting deadline with a deadline tied to the recipient’s audit cycle. LSC says the goal is to reduce administrative burden while tightening accountability for federal funds.
AI-generated summary. May contain errors. Refer to official sources for legal decisions.
Key Changes
- Raises the prior-approval threshold for certain LSC-funded purchases and contracts from $25,000 to $50,000.
- Clarifies that recipients must get approval before they legally commit to spend above the threshold.
- Treats fundraising proceeds as not derivative income, but requires reimbursement to the LSC account for fundraising costs charged to the grant.
+ 2 more changes with Pro
Obligations
What this law requires
LSC recipients that charge allowable fundraising costs to an LSC grant must reimburse the recipient’s LSC account from fundraising proceeds in an amount equal to the fundraising costs charged to the grant.
Recipients must obtain LSC prior written approval before incurring a legal obligation to expend more than $50,000 of LSC funds on covered purchases or contracts, including purchases or leases of personal property and contracts for services.
LSC recipients must obtain LSC prior written approval before incurring a legal obligation to expend more than $50,000 of LSC funds on covered purchases, leases, contracts, or other specified costs.
Recipients using more than $50,000 of LSC funds for purchases or contracts must request and receive LSC prior approval under the part 1631 process before proceeding.
Where costs are apportioned between LSC funds and other funding sources, recipients must seek prior approval once the portion allocable to LSC funds exceeds $50,000.