Supreme Court approves FFLA’s reserves plan
The Supreme Court has approved an FFLA request to set aside nearly $143 million in a special reserve while the group formerly known as The Florida Bar Foundation distributes nearly $95 million in IOTA funds to legal aid organizations by a December 31 deadline.
Justices noted that FFLA’s proposed distribution of $94,832,278 to qualified grantee organizations throughout the state would still represent a 145% increase over the previous year.
“The Court finds that the proposed distribution and ‘additional reserve amount’ for fiscal year 2023-2024 funds are at this time reasonably prudent to promote stability in distribution of IOTA funds to qualified grantee organizations providing qualified legal services,” according to the October 4 Administrative Order, AOSC24-70.
The Supreme Court in March 2023 approved amendments to Rule 5-1.1 that require lawyers to place their trust accounts in institutions that tie IOTA interest rates to specific indexed rate points.
The state of Florida does not provide any funding for legal aid.
In its latest order, the Supreme Court notes that FFLA’s proposed $142,875,455 in additional reserve would be set aside “for the exclusive use and benefit of its present and future” qualified grantee organizations.
The order also refers to an FFLA “Spending and Reserve Policy,” adopted January 31, 2024, that among other things, calls for eventually maintaining a reserve of between $50 million and $100 million, depending on a five-year average of collections.
“FFLA expects that its policy will modulate spending, ‘smooth out’ the effects of interest rate fluctuations, and give grantees better notice and certainty. FFLA assures the Court that it will maintain IOTA reserve funds in a separate reserve account and that it will use any income earned from those funds exclusively for grantee distributions,” the order states.
The order also states that although the Supreme Court has no current objection to FFLA’s Spending and Reserve Policy, the approval is limited to the disposition of fiscal year 2023-2024 funds.
“The Court expects that, as to reserve amounts in future fiscal years, FFLA will continue to comply with the advance approval requirement of rule 5-1.1(g)(8).”
