Board Meeting Transcripts 2003

 

COMMITTEE MEMBERS PRESENT: 
Robert J. Dieter, Chair 
Thomas A. Fuentes 
Herbert S. Garten 
Frank B. Strickland, ex-officio

BOARD MEMBERS PRESENT: 
David Hall 
Maria Luisa Mercado 
Thomas R. Meites 
Florentino A. Subia

STAFF AND PUBLIC PRESENT: 
Victor M. Fortuno, Vice President for Legal Affairs, 
General Counsel & Corporate Secretary 
Randi Youells, Vice President for Programs 
John Eidleman, Acting Vice President for Compliance 
& Administration 
Leonard Koczur, Acting Inspector General, Office of
the Inspector General 
Laurie Tarantowicz, Assistant Inspector General and 
Legal Counsel 
David Maddox, Assistant Inspector General for
Resource Management 
David Richardson, Treasurer & Comptroller 
Patricia Hanrahan, Special Counsel to the VP for Programs 
Michael Genz, Director, Office of Program Performance (OPP) 
Cynthia Schneider, Acting Deputy Director, OPP 
Alice Dickerson, Director, Office of Human Resources 
Lisa Rosenberg, Congressional Liaison 
Elizabeth Cushing, Board Liaison 
Perry Wasserman, Special Assistant to the VP for Gov't 
Relations & Public Affairs 
Patricia Batie, FOIA Officer 
Julie Clark, Vice President for Government Relations, 
National Legal Aid and Defenders Association ("NLADA") 
Linda Perle, Senior Attorney-Legal Services, Center for 
Law and Social Policy ("CLASP") 
Helaine Barnett, Attorney in Charge, Civil Division, 
Legal Aid Society of New York 
Ken Perri, Executive Director, Monroe County Legal 
Assistance Corporation 
Bill O. Whitehurst, Chairman, ABA's Standing Committee 
for Legal Aid & Indigent Defendants ("SCLAID")

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C O N T E N T S
	Page
Approval of agenda	4
Approval of the minutes of the Committee's meeting of meeting of September 15, 2003	5
Report on LSC's Consolidated Operating Budget (COB) Expenses, and Other Funds Available through September 30. 2003	5
Consider and act on proposed Internal Budgetary Adjustments and COB reallocations	14
Consider and act on other business	19
Public comment	19
Consider and act on adjournment of meeting	19

MOTIONS:

Pages  4,  5,  13,  14,  19

P R O C E E D I N G S

(5:10 p.m.)            

CHAIRMAN DIETER: My name is Ralph Dieter. I'm the chairman of the Finance Committee, and I guess we'll call the meeting to order. It's 10 minutes after 5:00, and I anticipate we'll complete our business well before 6 o'clock.

I guess, for the record, Tom Fuentes is a member of the committee who is here at present, and so is Herb Garten.

Is there a motion to approve the agenda that appears --

M O T I O N

MR. FUENTES: So moved.

MR. GARTEN: Second.

CHAIRMAN DIETER: Okay. I guess we can vote. All in favor?

(A chorus of ayes.)

CHAIRMAN DIETER: The ayes have it. It's unanimous.

The second item on the agenda is approval of the minutes of the Committee's meeting September 15th.

M O T I O N

MR. FUENTES: Move approval.

MR. GARTEN: Second.

CHAIRMAN DIETER: All in favor?

(A chorus of ayes.)

CHAIRMAN DIETER: It's unanimous.

Then, moving on to Item 3, which concerns the documents that appear at Page 180 and 181 in the Board book, David Richardson is going to present the information to the Committee on that item.

MR. RICHARDSON: For the record, my name is David Richardson. I am the treasurer/comptroller of the Corporation.

We have before you the final budget and expense reporting for the year ending September 30, 2003. This particular budget year has been one that has been very interesting. We have, certainly, growth in our budget.

At the end of the year, there was a couple of small adjustments that needed to be made within the budget. They are detailed to you on Page 181 of the book.

Within our Office of Program Performance, we've had a couple of regular employees who have been out for some time, and we've had temporary employees filling in and completing their duties, so we are moving, asking the Board to approve a $15,000 adjustment from the personnel compensation and benefits budget lines to the temporary employee line.

The other adjustment that we're asking you to approve for us is, when we were getting for our move, we had discussed buying a new telephone system. There was some consulting needed to set the system up when it was purchased, and then there's some additional consulting that was needed.

That money was inappropriately budgeted in the capital line and should have been the consulting line, so it's just a matter of moving the consulting funds that are needed from the capital budget into the consulting line at this point.

The other items that I wanted to sort of go over with you very quickly are found on Page 182.

On 182, and I'm going to deal particularly with Column 3 of this report, Column 1 is the budget that you approved in September. It's got the June approved budget, but as you recall, we did some projections at the end of closing the June 30th calendar quarter, and then we projected spending for the next three months.

As a result of that, we came in with some revised figures for our budget, which you approved for us, and then at the end of the year, we look at those items again, as we close the year, to see if there's any adjustments that are needed.

There are no adjustments that would create a change within the total. The adjustments that I just referred to for the temporary employee pay and personnel compensations are up and down the budget lines, so there's no movement within the particular budgets.

The budget that's approved is $345,682,000. I will round to thousands when I speak, in referring to this.

Column 4 shows the expenses through September, and this is all the expenses and contracts for the grantees and for the corporate management and administration and the inspector general, and we have spent through this period $338,887,000; so we're projecting a carryover of 6 million almost 800,000 dollars for the year.

Now, a part of that you'll see, this is broken out in Column 5.

Within the delivery of legal assistance, there's 4,300,000, and that's made up of a small amount from basic field, the U.S. Court of Veterans' Appeals.

The grants from other funds available, you at the last meeting moved $914,000 from a recovery from Florida into this line, so there is $1,028,000 there, almost 29,000.

And then the technology initiative, the money that's available is $3,067,000.

Now, the technology initiative, those grants just started coming down this week, so that money is going out the door, some of it in December, and it'll continue to go out as the grants are approved.

Each of the grantees meet milestones, as we reduce those, as we get ready to pay out their money, and we don't pay them the additional money until they reach those milestones so that they can continue and take up the next step of the grant.

Within the management and administration, you'll see that there is a budget there of $14,368,000. We have spent $13,238,000. There is $1,130,000 that will go as carryover and help support next year's operations.

And within the inspector general, there's a budget of $3,649,000. Spent to date is $2,289,000, so there's $1,359,000 that will go into next year's budget to help support that.

On Page 183, you'll see the amount of the grant recover that you moved in in June, in Column 1. We had projected $100,000 in interest. We've only collected 88,000 for this year. The IOLTA program has been hit very hard, we've been hit hard by the receipt of interest on our funds.

The Equal Justice magazine was budgeted at 65,000, and we've collected sponsorship of the magazine of $42,220 up to this point.

Now, the deficits that we have here will have to be absorbed in creating the amount of money that's available for next year to support the program.

On Page 184, I'd just like to go over a little bit of the breakdown. You will notice the Board of Directors on 182 shows that we spent $202,489. The first column on Attachment B, 184, is the breakdown of the $202,000 that was spent.

You'll see that there's consulting money and travel. That, of course, is for your expenses coming to Board meetings and your attendance fees, and then the other associated costs that go along with the Board meeting.

Within the executive office --

MS. MERCADO: The consulting line, though, doesn't that include part of our presidential search?

MR. RICHARDSON: It does.

MS. MERCADO: Okay.

MR. RICHARDSON: I'm sorry, yes.

Each one across the line, the executive office, legal affairs, you'll see that those bottom figures match back to 182 to show the breakdown of money spent.

The items that I'd like to just sort of bring to your attention:

Within the legal affairs budget, there is an amount that was spent for the outside counsel, the 265,000. That money is for the ongoing counsel needs that we have.

The 47,000 in temporary pay is just money that we pay for law clerks that have help us throughout the year.

Within the financial and administrative services, there's three lines that I'd like to share with you:

The consulting, the 101,000 is for the moving expense, the hiring of our consulting firm that helped us with that, and the moving costs to the new location.

The rent for the year is 1.5 million, and that will go up a little bit in the next year. We've only been in the building now four months, but I think many of you have asked, we're settling in, and the location, and everybody enjoys, I think, the new location.

In the other operating, there's 209,000. That covers the insurance package that the Corporation has for the building and the liability coverage that is needed.

In the technology, there is 194,000 in the capital expenditures. That is for the telephone system and new computers and new servers that we purchased throughout the year.

The consulting line and the program performance, the 458,000, you've heard a little bit today about how some of that money was spent, with the state planning, the performance measures, the capability assessments. There's competition consultants, and there's certainly been some symposiums that we've helped support, the ALAG that Mr. Strickland attended at Harvard, those type of things we've helped to support this year.

Total spending: on Page 185, the percentage of the budget that was spent is 92.13 percent, so we're well within the spending limits of the monies available.

Within the inspector general's office, the spending is 62.75 percent.

What I'd like for you to do is to look at the -- there's an adjustment to the budget that is needed because of the movement of these monies.

We've come to the Board and asked that you approve a revision of the budget. It's not an increase, but it's a revision of the budget to more accommodate the spending levels, to account for the problems that we've just gone over, so it's moving some money within the budget to accommodate and more align the budget with the spending needs of the Corporation.

CHAIRMAN DIETER: That resolution is at 188.

MR. RICHARDSON: 188. Okay.

The resolution is asking that you approve the realignment of the management and administration budget. I said, it is not an increase. The resolution highlights the second whereas: Whereas, the Board has received the revised distribution of the management and administration budget, and we ask that you approve that.

M O T I O N

MR. FUENTES: Mr. Chairman, I'd like to move the recommended action, and if we want to finesse the language --

CHAIRMAN DIETER: Yeah. I think we're going to ask Dick to -- Herb, do you want to explain your recommendation and perhaps the language that has to do with it, and how we account for the carryover?

M O T I O N

MR. GARTEN: I'll make the motion and then we can have a discussion.

CHAIRMAN DIETER: Okay.

MR. GARTEN: I move that after the reference to the consolidated operating budget totalling $345,480,872, we indicate in brackets, "[including the carryover from the prior fiscal year.]" End of bracket.

I also move that, after the provision for the office of inspector general of 3,648,565, we include the language in brackets, "[including the carryover from the prior fiscal year.]" End of bracket.

MR. FUENTES: Second.

MR. GARTEN: Okay. The Compliance Committee, in discussing this resolution, thought it would be well to clarify the difference between the congressional appropriation and the enactment that we're reflecting as being in the budget, and for that reason, we are suggesting that the parenthetical reference to the carryover from the prior fiscal year be included in this particular resolution.

CHAIRMAN DIETER: I've handed out to the other Board members an explanation of the carryover that I asked David to prepare in anticipation of the meeting, because In looking at the documents, I was having trouble understanding what we had approved as a budget and what the congressional appropriation has been, and how the carryover has been generated and handled.

So this document explains -- goes back for three fiscal years and shows the congressional appropriation, the other miscellaneous receipts that we have through the interest income or the Equal Justice magazine, total carryovers from prior years, the total funds in the budget, total expenditures, and then the carryover for the next fiscal year as adjusted going forward.

So, in looking at the resolution, we thought it would be a little more precise to show that we're not necessarily approving a spending level of 14,368,812, but that the money is available to be spent; and so that was the reason for noting these parentheticals showing the carryovers.

So I guess we're moving to recommend that the Board adopt the resolution with those changes at its meeting tomorrow, and would all the members of the Board that approved, indicate by saying aye?

(A chorus of ayes.)

CHAIRMAN DIETER: It passes unanimously.

And also, at the Board meeting, for the people that are not here, I'll hand out a copy, I guess, tomorrow, so that they can get an idea of what we're trying to clarify.

Yes, Tom?

MR. MEITES: I have a couple of questions. Should I wait 'til tomorrow to ask the questions about --

CHAIRMAN DIETER: Go ahead.

MR. MEITES: Do you have a copy of this?

MR. RICHARDSON: Yes, I do.

MR. MEITES: If you look down at the column, FY 2003 --

MR. RICHARDSON: Yes, sir.

MR. MEITES: -- at the bottom, you have temporary operating budget carryover 482,182.

MR. RICHARDSON: That's correct.

MR. MEITES: I see that you take that out for 2004.

MR. RICHARDSON: That's correct.

MR. MEITES: But below that, there's a number, 670,888 which kind of floats on the page and doesn't go anywhere. Where does 670,999 come from and what is its significance?

MR. RICHARDSON: When we did our budget, our temporary operating budget, we did not have total carryover figures, and really don't have an appropriation yet, so we had used what we had projected to be remaining at the end of the year.

So the additional carryover to be included in the 2004 budget, where you see the first footnote of 482,182, that will be increased an additional 672,000, so the amount of total carryover that would go to support the management and administration will be $1,100,000.

MR. MEITES: So some of those should carry over?

MR. RICHARDSON: That is correct.

CHAIRMAN DIETER: David is trying to educate me on why this is split that way, and I still don't understand.

So the 42 is what has been approved and the 617 is what has resulted.

MR. GARTEN: It might help to clarify things if there was a footnote there indicating exactly what you would spend.

MR. RICHARDSON: Okay.

CHAIRMAN DIETER: When you add those two figures together, that's what would carry over going forward.

MR. MEITES: Thank you.

CHAIRMAN DIETER: Any other questions by anybody about the document?

(No response.)

CHAIRMAN DIETER: Okay. David, do you have anything else to show the Board?

MR. RICHARDSON: I do not.

CHAIRMAN DIETER: I think that concludes consideration of Item 3 on the agenda.

MR. RICHARDSON: Actually, sir, that's all of it.

CHAIRMAN DIETER: Or items 3 and 4, and 5?

MR. RICHARDSON: Mm-hmm.

CHAIRMAN DIETER: So is there any public comment from any of the members of the public who are present at this late hour?

(No response.)

CHAIRMAN DIETER: If not, then --

M O T I O N

MR. FUENTES: Move to adjourn.

CHAIRMAN DIETER: -- move to adjourn? Is there a second?

MR. GARTEN: Second.

CHAIRMAN DIETER: All in favor?

(A chorus of ayes.)

CHAIRMAN DIETER: We'll conclude the meeting.

(Whereupon, at 5:26 p.m., the meeting was adjourned.)

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