Audit 307508

Separation of the Justice Center Criteria: Entities that receive funding from Legal Services Corporation (LSC) must employ detailed internal controls to ensure compliance with 45 C.F.R. 1610.8, Program Integrity, of Appendix A: Compliance Supplement for Audits of LSC Recipients from Legal Services Corporation Audit Guide for Recipients and Auditors dated October 2023. Specifically, the Organization must ensure objective integrity and independence from any organization that engages in restricted activities and includes operating in a manner that provides sufficient physical and financial separation from the entity. These requirements are to be followed under the activities allowed or unallowed compliance requirements of the Uniform Guidance. Condition: An affiliate of South Coastal Counties Legal Services, Inc. (SCCLS), the Justice Center of Southeast Massachusetts, LLC (JCSM), engages in restricted activity. During 2023, the Organization underwent a Program Integrity and Cost Standards Review from LSC, and they deemed the current arrangement of accounting for JCSM insufficient. Cause: SCCLS monitored the detailed activity of JCSM to properly track all restricted activities in the general ledger, however the physical and financial separation was not deemed appropriate based on the most recent review, which is open to interpretation. The requirements identify the sufficiency of separation will be determined on a case-by-case basis and will be based on the totality of the facts. Some facts and circumstances changed during the year, which overall changed the sufficiency of compliance. Effect: Non-compliance with program integrity requirements for the LSC grant award. Recommendation: We recommend management examine their internal processes and policies on how activities for both entities are separately accounted for to ensure proper separation consistent with LSC requirements. We understand management is currently reviewing various corrective action plans with LSC to ensure compliance with these requirements. Management Response: SCCLS is preparing a corrective action plan with LSC and is in the process of working with LSC to ensure that compliance with the corrective action plan will result in adequate separation between entities under Title 45 of the Code of Federal Regulations.

Separation of the Justice Center Criteria: Entities that receive funding from Legal Services Corporation (LSC) must employ detailed internal controls to ensure compliance with 45 C.F.R. 1610.8, Program Integrity, of Appendix A: Compliance Supplement for Audits of LSC Recipients from Legal Services Corporation Audit Guide for Recipients and Auditors dated October 2023. Specifically, the Organization must ensure objective integrity and independence from any organization that engages in restricted activities and includes operating in a manner that provides sufficient physical and financial separation from the entity. These requirements are to be followed under the activities allowed or unallowed compliance requirements of the Uniform Guidance. Condition: An affiliate of South Coastal Counties Legal Services, Inc. (SCCLS), the Justice Center of Southeast Massachusetts, LLC (JCSM), engages in restricted activity. During 2023, the Organization underwent a Program Integrity and Cost Standards Review from LSC, and they deemed the current arrangement of accounting for JCSM insufficient. Cause: SCCLS monitored the detailed activity of JCSM to properly track all restricted activities in the general ledger, however the physical and financial separation was not deemed appropriate based on the most recent review, which is open to interpretation. The requirements identify the sufficiency of separation will be determined on a case-by-case basis and will be based on the totality of the facts. Some facts and circumstances changed during the year, which overall changed the sufficiency of compliance. Effect: Non-compliance with program integrity requirements for the LSC grant award. Recommendation: We recommend management examine their internal processes and policies on how activities for both entities are separately accounted for to ensure proper separation consistent with LSC requirements. We understand management is currently reviewing various corrective action plans with LSC to ensure compliance with these requirements. Management Response: SCCLS is preparing a corrective action plan with LSC and is in the process of working with LSC to ensure that compliance with the corrective action plan will result in adequate separation between entities under Title 45 of the Code of Federal Regulations.