Audit 304969

Finding 2023-004 – Allowable Costs (Material Weakness and Non-compliance) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR 1630 requires that costs are incurred, reasonable and necessary, allocable to the grant, adequately documented, and consistent with accounting policies and procedures. Condition/Context: We selected 50 disbursements for testing. Of those 50, 25 were for payroll and 25 were non-payroll disbursements. Of the 25 payroll items, 2 employees did not have an approved pay rate. Of the 25 non-payroll disbursements, 2 did not have proper supporting documentation such as an invoice and 8 were not properly approved for payment. Cause: Expenses allocated to the LSC grant were not properly supported and approved. Effect: The Organization did not comply with allowable cost documentation requirements. Questioned costs: $10,790 Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the disbursement process to ensure the Organization is in compliance with all required documentation and disclosure requirements.Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2023-005 – Internal Controls over Federal Awards (Material Weakness and Noncompliance) Information on the Federal Program: U.S. Department of Justice, Assistance Listing No.16.575 Victims of Crime Act (VOCA) Criteria: 2 CFR 200.303 requires non-federal entities to establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: We selected 50 disbursements for testing. Of those 50, 25 were for payroll and 25 were non-payroll disbursements. Of the 25 payroll, 2 employees did not have an approved pay rate. Of the 25 non-payroll, 9 of the expenses were allocated to the VOCA grant through a process in the accounting system. 7 out of the 9 allocations were not properly documented as reviewed and approved by management. Of the remaining 14 non-payroll disbursements, 4 lacked documentation of approval for payment. Cause: The Organization did not properly document controls established to review and approve expenses charged to the grant. Effect: The Organization did not comply with internal control compliance standards. Questioned costs: None Recommendation: We recommend the Organization strengthen its policies and procedures surrounding disbursement and allocation processes to document the review and approval process to meet the control standards. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2023-006 – Case Requirements (Significant Deficiency and Non-compliance) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR Section 1611 requires that a recipient must execute a retainer agreement for each client that receives extended services.Condition/Context: We examined 71 case files. Of those 71 cases, 13 required a signed retainer based on the level of service provided. Of those 13 cases, 2 cases did not have the required forms in the file. Cause: The assigned attorney did not obtain the required documentation for the file. Effect: The Organization did not comply with case documentation requirements. Questioned costs: None Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the process of opening and closing case files to ensure compliance with all required documentation and disclosure requirements. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2023-007 – Special Test and Provisions- Private Attorney Involvement (PAI) (Significant Deficiency and Non-compliance) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR 1614 requires a recipient of LSC funding to use at least 12.5% of their annual basic field grant to promote the involvement of private attorneys, law students, law graduates, or other professionals to provide legal information and legal assistance to eligible clients. Activities undertaken to meet this requirement include direct delivery of legal assistance to eligible programs. The Organization has elected to meet this requirement with a significant amount of pro bono work and allocating costs associated with facilitating the PAI requirement. Condition/Context: We tested 25 cases that were tracked for PAI compliance. Of the 25 cases, 3 were non-LSC-eligible cases. In addition, the Organization did not satisfy the 12.5% minimum requirement for PAI. Cause: Three cases were not types of cases allowable under LSC guidelines. In addition to the value of pro bono work, the Organization allocated expenses to PAI but failed to meet the 12.5% minimum. Effect: The Organization did not comply with PAI compliance requirements. Questioned costs: None Recommendation: We recommend the Organization strengthen its policies and procedures surrounding monitoring of PAI compliance to ensure only allowable pro bono cases are accepted. We also recommend the addition of a reduced fee program to facilitate outside involvement. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2023-008 – Allowable Costs (Significant Deficiency and Non-compliance) Information on the Federal Program: U.S. Department of Justice, Assistance Listing No.16.575 Victims of Crime Act Criteria: 2 CFR 200.405 establishes requirements for costs allocated to a grant award. These requirements include that costs must be approximated using a reasonable method. Condition/Context: We selected 50 disbursements for testing. Of those 50, 25 were for payroll and 25 were non-payroll disbursements. Of the 25 payroll, 4 employees’ pay allocated to the grant did not agree to the supporting timesheets and pay rates. Of the 25 non-payroll, there were 2 instances in which the costs allocated was not properly documented or supported by a reasonable method. Cause: Expenses allocated to the VOCA grant were not properly supported. Effect: The Organization did not comply with allowable cost documentation requirements. Questioned costs: $2,313 Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the disbursement process to ensure the Organization is in compliance with all required documentation and disclosure requirements. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2023-009 – Special Test & Provisions- Priorities in Use of Resources (Non-compliance) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR 1620 requires a recipient of LSC funding to adopt a written statement of priorities that determines the cases and matters that can be undertaken. All staff who handle cases or matters, or make decisions about case acceptance must sign an agreement acknowledging they have read and understand the priorities and read and understand an emergency situation, and will not undertake any case or matter that is not a priority or emergency. Condition/Context: We selected 25 payroll allocations charged to the LSC grant. Of those 25 employees tested, 5 did not have the required signed priority statement on file. Cause: The Organization did not obtain or retain the required priority statements for employees involved with cases or other matters. Effect: The Organization did not document compliance with priorities in use of resources compliance requirements.Questioned costs: None Recommendation: We recommend the Organization strengthen its policies and procedures surrounding employee onboarding to ensure the required statement is signed when a new employee is hired. In addition, the policy should include periodic review of employee files to ensure all required documentation is present and up to date. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2023-004 – Allowable Costs (Material Weakness and Non-compliance) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR 1630 requires that costs are incurred, reasonable and necessary, allocable to the grant, adequately documented, and consistent with accounting policies and procedures. Condition/Context: We selected 50 disbursements for testing. Of those 50, 25 were for payroll and 25 were non-payroll disbursements. Of the 25 payroll items, 2 employees did not have an approved pay rate. Of the 25 non-payroll disbursements, 2 did not have proper supporting documentation such as an invoice and 8 were not properly approved for payment. Cause: Expenses allocated to the LSC grant were not properly supported and approved. Effect: The Organization did not comply with allowable cost documentation requirements. Questioned costs: $10,790 Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the disbursement process to ensure the Organization is in compliance with all required documentation and disclosure requirements.Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2023-005 – Internal Controls over Federal Awards (Material Weakness and Noncompliance) Information on the Federal Program: U.S. Department of Justice, Assistance Listing No.16.575 Victims of Crime Act (VOCA) Criteria: 2 CFR 200.303 requires non-federal entities to establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: We selected 50 disbursements for testing. Of those 50, 25 were for payroll and 25 were non-payroll disbursements. Of the 25 payroll, 2 employees did not have an approved pay rate. Of the 25 non-payroll, 9 of the expenses were allocated to the VOCA grant through a process in the accounting system. 7 out of the 9 allocations were not properly documented as reviewed and approved by management. Of the remaining 14 non-payroll disbursements, 4 lacked documentation of approval for payment. Cause: The Organization did not properly document controls established to review and approve expenses charged to the grant. Effect: The Organization did not comply with internal control compliance standards. Questioned costs: None Recommendation: We recommend the Organization strengthen its policies and procedures surrounding disbursement and allocation processes to document the review and approval process to meet the control standards. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2023-006 – Case Requirements (Significant Deficiency and Non-compliance) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR Section 1611 requires that a recipient must execute a retainer agreement for each client that receives extended services.Condition/Context: We examined 71 case files. Of those 71 cases, 13 required a signed retainer based on the level of service provided. Of those 13 cases, 2 cases did not have the required forms in the file. Cause: The assigned attorney did not obtain the required documentation for the file. Effect: The Organization did not comply with case documentation requirements. Questioned costs: None Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the process of opening and closing case files to ensure compliance with all required documentation and disclosure requirements. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2023-007 – Special Test and Provisions- Private Attorney Involvement (PAI) (Significant Deficiency and Non-compliance) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR 1614 requires a recipient of LSC funding to use at least 12.5% of their annual basic field grant to promote the involvement of private attorneys, law students, law graduates, or other professionals to provide legal information and legal assistance to eligible clients. Activities undertaken to meet this requirement include direct delivery of legal assistance to eligible programs. The Organization has elected to meet this requirement with a significant amount of pro bono work and allocating costs associated with facilitating the PAI requirement. Condition/Context: We tested 25 cases that were tracked for PAI compliance. Of the 25 cases, 3 were non-LSC-eligible cases. In addition, the Organization did not satisfy the 12.5% minimum requirement for PAI. Cause: Three cases were not types of cases allowable under LSC guidelines. In addition to the value of pro bono work, the Organization allocated expenses to PAI but failed to meet the 12.5% minimum. Effect: The Organization did not comply with PAI compliance requirements. Questioned costs: None Recommendation: We recommend the Organization strengthen its policies and procedures surrounding monitoring of PAI compliance to ensure only allowable pro bono cases are accepted. We also recommend the addition of a reduced fee program to facilitate outside involvement. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2023-008 – Allowable Costs (Significant Deficiency and Non-compliance) Information on the Federal Program: U.S. Department of Justice, Assistance Listing No.16.575 Victims of Crime Act Criteria: 2 CFR 200.405 establishes requirements for costs allocated to a grant award. These requirements include that costs must be approximated using a reasonable method. Condition/Context: We selected 50 disbursements for testing. Of those 50, 25 were for payroll and 25 were non-payroll disbursements. Of the 25 payroll, 4 employees’ pay allocated to the grant did not agree to the supporting timesheets and pay rates. Of the 25 non-payroll, there were 2 instances in which the costs allocated was not properly documented or supported by a reasonable method. Cause: Expenses allocated to the VOCA grant were not properly supported. Effect: The Organization did not comply with allowable cost documentation requirements. Questioned costs: $2,313 Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the disbursement process to ensure the Organization is in compliance with all required documentation and disclosure requirements. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2023-009 – Special Test & Provisions- Priorities in Use of Resources (Non-compliance) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR 1620 requires a recipient of LSC funding to adopt a written statement of priorities that determines the cases and matters that can be undertaken. All staff who handle cases or matters, or make decisions about case acceptance must sign an agreement acknowledging they have read and understand the priorities and read and understand an emergency situation, and will not undertake any case or matter that is not a priority or emergency. Condition/Context: We selected 25 payroll allocations charged to the LSC grant. Of those 25 employees tested, 5 did not have the required signed priority statement on file. Cause: The Organization did not obtain or retain the required priority statements for employees involved with cases or other matters. Effect: The Organization did not document compliance with priorities in use of resources compliance requirements.Questioned costs: None Recommendation: We recommend the Organization strengthen its policies and procedures surrounding employee onboarding to ensure the required statement is signed when a new employee is hired. In addition, the policy should include periodic review of employee files to ensure all required documentation is present and up to date. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.