Audit 315557

Finding 2023-001: Compliance finding – Governing Bodies Legal Services Corporation Basic Field Grant (ALN# 09.130010) Condition: As of December 31, 2023, the Board of Directors was composed of other members representing 7.14%, client members representing 35.72%, and attorney members representing 57.14%. Attorney members were less than the required 60% of the board of directors. Criteria or specific requirement: At least sixty percent (60%) of a governing body shall be attorney members. Cause: Lack of oversight by management. Effect: Governing body may not reasonably reflect the interests of the eligible clients in the area served or consist of members who are supportive of the purposes of the Legal Services Corporation Act and have an interest in, and knowledge of, the delivery of quality legal services to the poor. Questioned costs: No questioned costs were identified. Recommendation: A procedure be implemented to ensure that the Organization remains in compliance and does an internal review to ensure that board composition is maintained. Each set of board meeting minutes could contain a snapshot showing calculation of board composition in response to the requirements of 45 CFR 1607.3.

Finding 2023-002: Compliance finding – LSC Financial Guide Legal Services Corporation Basic Field Grant (ALN# 09.130010) Condition: Several policies and/or procedures in the Draft Accounting Manual have not been updated to take the new LSC Financial Guide into consideration. Changes are actively being made by management but are not yet codified in an updated manual. The new policies are a work in progress that would benefit from more dedicated, concentrated effort to substantively update the manual. Criteria or specific requirement: The LSC Financial Guide (Guide) is designed to assist recipients and subrecipients with fiscal responsibilities in the stewardship of grant funds provided by LSC. The effective date of the Guide is January 1, 2023. The Guide contains several new requirements that recipients must adopt, and best practice recommendations for financial management, including example reports and methods of compliance with specific requirements. Cause: Employee attrition and lack of resources. Effect: Required and recommended internal controls and accounting policies and procedures not contained in existing system. Questioned costs: No questioned costs were identified. Recommendation: Completion of an updated Accounting Manual, approved by the Board of Directors, taking into consideration the new requirements of the Guide. Completion of the Self-Assessment Questionnaire (Appendix 9) of the Guide on an annual or periodic basis. The referenced questionnaire is a tool for recipient's management to direct attention to practicable revisions of accounting procedures or internal controls to strengthen, improve, or simplify the existing system. Review the questionnaire at least annually, complete, and file for future reference.

Finding 2023-001: Compliance finding – Governing Bodies Legal Services Corporation Basic Field Grant (ALN# 09.130010) Condition: As of December 31, 2023, the Board of Directors was composed of other members representing 7.14%, client members representing 35.72%, and attorney members representing 57.14%. Attorney members were less than the required 60% of the board of directors. Criteria or specific requirement: At least sixty percent (60%) of a governing body shall be attorney members. Cause: Lack of oversight by management. Effect: Governing body may not reasonably reflect the interests of the eligible clients in the area served or consist of members who are supportive of the purposes of the Legal Services Corporation Act and have an interest in, and knowledge of, the delivery of quality legal services to the poor. Questioned costs: No questioned costs were identified. Recommendation: A procedure be implemented to ensure that the Organization remains in compliance and does an internal review to ensure that board composition is maintained. Each set of board meeting minutes could contain a snapshot showing calculation of board composition in response to the requirements of 45 CFR 1607.3.

Finding 2023-002: Compliance finding – LSC Financial Guide Legal Services Corporation Basic Field Grant (ALN# 09.130010) Condition: Several policies and/or procedures in the Draft Accounting Manual have not been updated to take the new LSC Financial Guide into consideration. Changes are actively being made by management but are not yet codified in an updated manual. The new policies are a work in progress that would benefit from more dedicated, concentrated effort to substantively update the manual. Criteria or specific requirement: The LSC Financial Guide (Guide) is designed to assist recipients and subrecipients with fiscal responsibilities in the stewardship of grant funds provided by LSC. The effective date of the Guide is January 1, 2023. The Guide contains several new requirements that recipients must adopt, and best practice recommendations for financial management, including example reports and methods of compliance with specific requirements. Cause: Employee attrition and lack of resources. Effect: Required and recommended internal controls and accounting policies and procedures not contained in existing system. Questioned costs: No questioned costs were identified. Recommendation: Completion of an updated Accounting Manual, approved by the Board of Directors, taking into consideration the new requirements of the Guide. Completion of the Self-Assessment Questionnaire (Appendix 9) of the Guide on an annual or periodic basis. The referenced questionnaire is a tool for recipient's management to direct attention to practicable revisions of accounting procedures or internal controls to strengthen, improve, or simplify the existing system. Review the questionnaire at least annually, complete, and file for future reference.