Copyright 2000 Federal News Service, Inc.
Federal News Service
February 17, 2000, Thursday
SECTION: PREPARED TESTIMONY
LENGTH: 3971 words
HEADLINE:
PREPARED TESTIMONY OF JOHN N. ERLENBORN VICE-CHAIRMAN AND JOHN MCKAY PRESIDENT
LEGAL SERVICES CORPORATION
BEFORE THE
HOUSE COMMITTEE ON APPROPRIATIONS SUBCOMMITTEE ON COMMERCE,
JUSTICE, STATE, AND THE JUDICIARY
BODY:
Mr.
Chairman and Members of the Subcommittee, thank you very much for the
opportunity to testify. The Legal Services Corporation ("LSC"
or "the Corporation") welcomes this opportunity to present our Budget Request
for Fiscal Year 2001 and to report on our activities over the past year.
Although we live in a time of great economic prosperity, there are still
an estimated 34.5 million Americans living below the poverty level. 1 Some 10
million additional individuals with incomes up to 125 percent of the poverty
level are also potentially eligible for federally funded legal services.
America's children are particularly affected by poverty; even though the poverty
rate has slightly declined, 18.9 percent of children are still poor. 2 To
continue to ensure these Americans are not left out of the justice system, a
strong federal role in supporting legal services is vital. To fulfill LSC's
mandate successfully, the Board of Directors recently approved a new set of
"Strategic Directions" for 2000-2005. Over the next five years, LSC will develop
and implement initiatives to ensure that a dramatically increased number of
persons have access to the American civil justice system and that they receive
quality services. LSC will also use its national leadership position to engage
in a multi-year effort to address issues of access, availability, and quality of
relevant, responsive, client-centered legal assistance and representation
throughout the United States. 3 Although the Corporation is not obligated under
the Government Performance and Results Act (GPRA), LSC is endeavoring to use
GRPA as a guide for performance improvement, and as a critical tool in
implementing its multi-year strategic plan.
For FY 2001, LSC seeks an
appropriation of $340,000,000. Most
($24,000,000) of the increase above the FY 2000 level will go
to local programs that provide legal services to the poor in every state and
county in the United States. 4 We are also requesting
$10,000,000 to complete the funding of a technology initiative
designed to significantly increase access to legal information and assistance
for low-income Americans. Five million dollars ($5,000,000) was
provided for this project in FY 2000. Additionally, LSC is requesting
$2.1 million for legal needs research to provide LSC, Congress,
and the Administration with a national, up-to-date, credible and comprehensive
legal needs study.
LSC's FY 2001 budget request has been structured to
allow the Corporation to focus on (1) dramatically increasing the availability
of legal services to eligible persons; (2) ensuring legal services clients
receive appropriate and high quality legal assistance; and (3) ensuring legal
services programs fully comply with all legal requirements.
Program
Services to Clients: $313,000,000
The foundation of our
Budget Request is funding to preserve and maintain the services provided by
local programs that provide civil legal assistance to low-income persons
throughout the United States.
In FY 2001, we seek to increase grants to
local legal services programs by $24,000,000, or approximately
8 percent above the FY 2000 level of $289,000,000. This
increase will enable local programs to increase their levels of service and
provide legal assistance to a greater number of eligible low-income persons.
In FY 1995, the Congress appropriated $402,500,000 for
field programs. Assuming inflation stays steady at current rates through 2001,
almost $450,000,000 would be required in FY 2001 to maintain
the purchasing power of the FY 1995 level. Since all studies show there axe low-
income individuals with critical legal problems that do not have access to the
justice system, this increase will begin to allow LSC to address these unmet
needs.
Technology Initiative: $10,000,000
In FY
2001, LSC will allocate $10,000,000 for a technology initiative
designed to significantly increase access to legal information and assistance
for low-income Americans. A total of nearly $15,000,000 is
required for the project; $5,000,000 was appropriated in FY
2000.
Recent surveys have found that many local legal services programs
lack the technological capacity to make full use of new technology-based methods
of improving efficiency and expanding services to clients. LSC has directed
programs to enhance and expand technology based community legal education and
support for client self-help.LSC's Office of Inspector General, in an August
1996 report, Increasing Legal Services Delivery Capacity through Information
Technology, concluded that delivery capacity could be significantly increased
through enhanced use of available technology. The recommendations in the report
include greater use of centralized telephone and computer-based intake systems,
public-access kiosks providing legal information and forms, and the provision of
legal information through the Internet.
The grants will be provided to
fund projects that:
- Provide direct legal information - for example,
through statewide websites accessible through public facilities such as
libraries and other organizations;
- Increase services through advice
and brief service by developing centralized telephone intake systems and
exploring web-based and e- mail approaches;
- Create and improve
self-representation materials and guidance through expanded use of technology in
pro se clinics and through pro se projects, websites and stand-alone kiosks, now
available in some courthouses around the country;
- Increase private
attorney involvement through websites that facilitate pro bono services by
providing easier methods to connect lawyers and clients needing assistance; and
- Create a "model" legal services technology office that combines
several of these approaches in one office to encourage replication and allow for
extensive evaluation and study.
Legal Needs Research:
$2,100,000
The Corporation is requesting
$1.6 million for FY 2001 to conduct a comprehensive national
legal needs assessment and $500,000 to conduct additional
research through pilot projects. One of the challenges in meeting the legal
needs of indigent people has been the difficulty in assessing and understanding
the nature and scope of those needs. Although a comprehensive assessment has not
been performed since the early 1990's, there is much anecdotal evidence from all
LSC funded programs to show that the need for legal services far outstrips the
resources available, and every program has to tam away hundreds or thousands of
eligible applicants each year. A new study will provide LSC and the Congress
with an accurate picture of the extent and nature of unmet legal needs among
low-income Americans.
The additional $500,000
will fund pilot projects to collect data on (1) legal problems addressed through
non-traditional means such as legal education, (2) the number of qualified
applicants turned away due to lack of resources, and (3) outcomes for clients
resulting from the delivery of free legal services. This information is
necessary for LSC to provide a complete and accurate assessment of the impact of
federal funding on the legal problems of the poor.
LSC Management and
Administration: $12,500,000
The Corporation requests
$12,500,000 for Management and Administration for FY 2001, or
just over 3 percent of the total amount. The funds will be used to support the
functions of the Corporation's central administration. The increase will allow
for inflationary adjustments and includes $1.54 million to
strengthen LSC's compliance and enforcement activities by increasing the number
of on-site visits to grantees.
With a small, efficient staff, LSC
management ensures accountability to Congress and the taxpayers through
aggressive oversight and enforcement of federal laws and other requirements. The
Corporation uses its system of competition for grants to promote the efficient
and effective delivery of legal services. LSC encourages competition for grants
through broad circulation of information about availability of grant funds,
outreach, and provision of technical support to applicants. In the competition
process, LSC evaluates applications according to established quality standards
and awards grants to the applicants best able to provide high-quality legal
services in accordance with applicable legal requirements. LSC also uses the
competition process to promote increased volunteer private attorney involvement
and expansion of public-private partnerships through which other resources can
be secured to build upon federal funding. During the grant period, LSC follows
up with individual local programs on areas identified in the competition process
as requiring improvement in program quality and identifies broader issues
affecting the legal services delivery system. In FY 2001, LSC will continue to
seek the reconfiguration or consolidation of programs where it appears that
federal funds could be used more efficiently and effectively by programs. In
addition, LSC will seek to identify, test, and evaluate new strategies to
enhance the effectiveness and quality of legal services.
The
Corporation's compliance and enforcement activities are to enforce
compliance within applicable federal law and regulations. These include
investigating complaints and inquiries from clients, the public, and Members of
Congress and taking appropriate action; following up on referrals from the
Office of Inspector General regarding possible violations discovered through
compliance audits of local programs; developing and enforcing corrective action
plans; and imposing and enforcing sanctions where necessary. The FY 2001 budget
request includes funds to enhance these capabilities. The additional
$1.54 million will provide for 40 annual specialized on-site
compliance reviews, instead of the 15 or so the Corporation can conduct with the
current funding level. This request is partially in response to last year's
findings by the General Accounting Office (GAO) and LSC's OIG on the inaccuracy
of Case Service Reporting data and the lack of LSC systems and resources in
place to correct these problems.
Office of Inspector General:
$2,400,000
The Office of Inspector General seeks
$2.4 million for FY 2001, an increase of
$300,000 from FY 2000. The increase will fund an Assessment of
2000 Case Statistical Data. (The Appropriations Committees directed such an
assessment of 1999 data in the FY 2000 appropriation.)
The OIG mission
is to prevent and detect fraud and abuse, and to promote efficiency and
effectiveness in LSC operations and grant programs. In addition, the OIG
oversees routine monitoring of grantee compliance with laws and regulations
through annual audits by Independent Public Accountants of LSC grantees and
on-site reviews.
FY 1999 Activities
In 1996, Congress enacted
fundamental changes to the national legal services program, reaffirming the
federal government's commitment to providing representation for individuals
facing legal problems who would otherwise be unable to afford assistance. With
the intention of refocusing the LSC delivery system on serving individual
clients with particular legal needs, a series of new limitations were placed
upon activities in which LSC-funded programs can engage on behalf of their
clients, even with non-LSC funds. Among them are prohibitions on class actions,
challenges to welfare reform, collection of court-awarded attorneys' fees, many
types of lobbying, litigation on behalf of prisoners, and representation of
undocumented and other categories of aliens.
Legal services programs are
primarily focused on serving the basic, critical legal needs of low-income
individuals. Ten percent of LSC clients are elderly. The most common categories
of cases are family, homing, income maintenance, and consumer. More than one out
of every six LSC cases involves efforts to obtain protection from domestic
violence. Other case types frequently encountered include evictions,
foreclosures, child custody and support, child abuse or neglect, wage claims,
access to health care, and unemployment or disability claims.
The
Corporation continues to be diligent in maximizing the use of federal dollars
and in ensuring that the restrictions are enforced. We have been successful in
developing a system of effective oversight of the activities of all LSC grant
recipients.
State Planning
Beginning in February 1998, the
Corporation has required all grant recipients to participate in a process to
develop and implement a comprehensive, integrated statewide delivery system in
every state. The goals of this process are to ensure the following: that
programs ensure a delivery system that maximizes client access and provides high
quality legal assistance; that there are substantial opportunities for training
and information sharing between programs; that programs increase access to legal
services; and that programs are working together to increase resources and
develop new initiatives to expand the scope and reach of their services. In
concert with stakeholders (i.e. the courts), each LSC-funded program must,
therefore, assess the strengths and weaknesses of the current approach in their
state, establish goals to strengthen and expand services to eligible clients,
and determine the major steps and a timetable necessary to achieve those goals.
Our overall objective in this process is to promote the most effective use of
federal dollars in every state system.
As a component of the LSC
"Strategic Directions" mentioned above, the state planning initiative will
continue to address the following:
- Identify the most important issues
involving the delivery of legal services in each of the fifty states, the
territories and the District of Columbia, and
- Develop the financial
and programmatic capability to reach more clients within the state with a wider
range of services than ever before.
LSC is radically changing the
landscape of the national legal services delivery system. To date, programs in
every state have submitted plans to improve client services, and eight states
have significantly restructured their delivery systems with the goal of
improving services and reaching more clients. The Corporation will continue to
pursue the appropriate restructuring of state systems consistent with the
mission of the LSC Act and our strategic plan for 2000-2005.
Competition
The role of LSC is to manage and oversee the federal funds that support
the direct provision of legal services by some 237 grantees across the nation
and its territories. Since 1996, the Corporation has used a system of
competition for grants to promote the economical and effective delivery of legal
services, as required by Section 1007(a)(3) of the Legal Services
Corporation Act. We encourage local legal services providers and others
to compete for available grants by broadly circulating information about the
availability of grant funds and by providing outreach and technical support to
potential applicants.
In the competition process, LSC evaluates
applications according to established quality standards and awards grants to the
applicants best able to provide high-quality legal services in accordance with
applicable legal requirements. In 1999, our fourth year of competition, we
received grant applications from 169 applicants for 217 service areas in 41
states and the District of Columbia.
There were multiple
applicants in five (5) service areas. These FY 2000 grant decisions were made
this November. In most states where service areas were eligible for competition,
programs received regular, three-year grants. However, in some states, programs
received two- or one-year grants. These variations in grant terms were made to
encourage programs to continue developing methods to enhance effective statewide
services for clients and to allow for consolidation of service areas consistent
with state plans and prior LSC decisions. In some instances, shorter grant
periods were established to encourage improvement of program performance. In
addition, seventy-three current recipients whose grants were not up for
competition this year were subject to a grant renewal process to ensure their
continued compliance with grant conditions.
Competition has resulted in
improved legal assistance to our client community. First, it ensures the most
effective and efficient applicant in each service area is awarded the grant to
deliver legal assistance to low-income persons. While competition between more
than one applicant for a service area does not yet occur on a widespread basis,
the process has allowed for several changes in legal services providers in the
last four years. When necessary, programs are visited, short funding periods are
initiated and improvement efforts are undertaken. This process has led to
important improvements and, where reform was not forthcoming, to the replacement
of providers.
Second, through the use of technology, LSC is developing
the capacity to analyze application data in order to identify significant
statistics regarding the programs; for example, where programs are most
successful in leveraging non-LSC funding. Finally, the state planning process,
as a component of competition, asks programs and other legal services providers
in each state to work together to more effectively deliver services. This effort
has already led to the growth of centralized intake systems, to increased
consumer education and self-representation projects, and to more effective pro
bono efforts.
Challenges to LSC Regulations
The Corporation has
continued to vigorously and successfully defend its regulations and the
underlying statutory provisions in Carmen Velazquez et al. vs. Legal
Services Corporation (U.S. District Court, Eastern District of New
York).
On January 7, 1999, the Second Circuit upheld as constitutional
virtually all of the statutory restrictions on the use of funds by LSC's
grantees that were challenged in Velazquez v. Legal Services
Corporation. However, the panel was divided with respect to welfare
reform. The majority found that the proviso to the exception for
"suits-for-benefits" that bars challenges to existing welfare reform laws
discriminates on the basis of viewpoint -- that is, it permits representation
only if it favors the status quo over change. On October 5, 1999, LSC filed a
petition for a writ of certiorari for the limited purpose of Supreme Court
review of the 2d Circuit's ruling that the "suit-for-benefits" proviso on the
restriction on welfare reform litigation was unconstitutional as viewpoint
discrimination. The Department of Justice fried a petition upholding the
statutory restrictions in their entirety on December 5, 1999. The Court is in
recess until February 24, 2000, and it is unlikely that action will be taken on
the cross petitions for certiorari before that date.
Challenge to IOLTA
funding
Also of note to the committee, a serious challenge to a
significant source of non-LSC funding, state IOLTA (Interest On Lawyer Trust
Accounts) programs, has been dismissed. After the Supreme Court on June 15,
1998, ruled in Hon. Thomas Phillips v. Washington Legal Foundation that IOLTA
funds are the private property of clients, the case went back to a lower Texas
court to determine if the state has taken private property and must compensate
the owners for it. On January 28, 2000, U.S. District Court Judge Nowlin issued
his ruling in the remanded IOLTA case, captioned Washington Legal Foundation, et
al. v. Texas Equal Access to Justice Foundation, et al., dismissing the case
with prejudice on all counts. While the plaintiffs are expected to appeal the
decision, this news is good for LSC grantees, considering that in 1998, they
received over $63,457,108 from IOLTA programs, which accounts
for eleven percent of their total income.
Compliance Monitoring
The Corporation's FY 1996 appropriations language also mandated a new
system for oversight of program compliance. The principal mechanism for checking
grantee compliance with all statutory and regulatory requirements and
restrictions is now the grantee's annual audit. These audits are conducted by
Independent Public Accountants ("IPA's"), under the guidance and oversight by
LSC's OIG. LSC Management retains responsibility for interpreting applicable law
and regulations, investigating complaints, and enforcing compliance. Management
worked cooperatively with the OIG to implement the new system, Which is now
fully in place.
The results to date demonstrate substantial compliance
by grantees with the new Congressional requirements and restrictions. As
reported by the OIG in its Recipient Audit Reports for 1998, the IPA's did not
report any cases of noncompliance with statutory prohibitions or restrictions on
the types of matters for which legal assistance may be provided.
Case
Service Reporting Follow-up
Last year, this committee raised serious
concerns about the accuracy of LSC's case service reporting (CSR) system. Since
then, LSC has taken steps to improve the system and has implemented the
recommendations of the GAO in its September 1999 report. 5 Last year, it
required programs to complete a self-inspection process to certify to the
Corporation that their CSR data was substantially accurate. Sixty programs were
not able to certify their data, and LSC has put each of these programs on a
corrective action plan. The Office of Compliance and Enforcement is currently
conducting follow-up, and a select number of on-site visits are being conducted
to analyze whether the corrective action is sufficient. After implementing
recommendations from the GAO on improving this self-inspection procedure, LSC is
again this year requiting programs to assess the accuracy of their 1999 CSR
numbers. Additionally, we will continue to further clarify to programs what
types of information they should be reporting to LSC. As directed by the
subcommittee, LSC's 1999 CSR data will be reported to Congress by April 30,
2000, and its accuracy will be assessed by the LSC Inspector General by July 30,
2000. LSC's FY 2001 Request includes additional resources to allow the
Corporation to conduct 40 additional specialized, on-site compliance reviews.
These reviews will allow LSC Management to identify program weaknesses,
implement effective corrective action plans, and provide program specific
guidance and oversight.
Conclusion
Mr. Chairman and Members of
the Subcommittee, we thank you for this opportunity to share with you our Budget
Request for FY 2001. We believe that LSC provides a vital role in our society by
upholding the laws and enforcing the rights on which our democracy rests. LSC
looks forward to working with the subcommittee this year to ensure we can
continue to fulfill these duties in FY 2001 and in future years.
1 U.S.
Census Bureau, Poverty in the United States: 1998,
http://www.census.gov/prod/99pubs/p60-207.pdf
2 Center for Budget and
Policy Priorities, Analysis of 1998 Poverty and Income Data, (September 1999).
3 Legal Services Corporation, Strategic Directions
2000-2005, (January 29, 2000).
4 With its FY 2000 budget of
$303,841,000, LSC funds 237 local legal services programs,
providing service to low-income residents in every county in the nation. Federal
funds received by grantees are leveraged to raise nearly $260
million annually in other funding to help support their activities. Many state
and local governments appropriate funds for legal services to the poor, and
programs are also eligible to compete for other types of federal and private
grant money.
5 General Accounting Office, Legal Services
Corporation: More Needs to be Done to Correct Case Service Reporting
Problems, (September 29, 1999).
END
LOAD-DATE: February 18, 2000
