2023 – 003: Cost Allocation of Salaries and Wages to LSC Grants Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023 Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1635.4(a) and 2 CFR 200.430), state that federal award recipients must base allocations of salaries and wages costs to grants on records that accurately reflect the work performed.
Condition: During our testing we noted:
Two instances of employees’ pay period salaries totaling $1,742 being allocated to a grant using a flat percentage of 10%, and
One instance of an employee’s pay period salary of $147 being allocated to two grants using a combination of their time an effort on those grants while the remaining portion of the employee’s salary was allocated to LSC and two other private grants using a base of total grant hours for the period divided by total hours coded to the Organization’s general fund.
As such, the salary costs mentioned above were allocated in an inconsistent manner to other grant payroll costs and were not fully representative of the employees’ time and effort.
Questioned costs: $1,742 of allocated salary expense described above, which is related to Assistance Listing Number 09.706060.
Context: These three instances were noting during testing of 26 payroll and payroll-related disbursements.
Cause: The Organization’s salaries and wages cost allocation methodology is primarily based on time and effort records, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s salaries and wages cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries and wages cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 004: Cost Allocation of Fringe Benefits to LSC Grants
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Native American Grant
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1630.5 and 2 CFR 200.403) state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.
Condition: During our testing we noted that 100% of medical insurance for a specific location was allocated to the grant. However, we noted that medical insurance for other pay periods and locations were allocated on a trimester basis using an allocation base of total grant hours for the period divided by total general fund hours. As such, the fringe benefit cost mentioned above was allocated in an inconsistent manner to other grant fringe benefit costs was not fully representative of the employees’ time and effort. However, management noted that these costs were allocated in a manner to comply with 45 CFR 1630.5(g) which allows LSC award recipients to allocate proportional share of another funding source’s share of an indirect cost to LSC funds.
Questioned costs: None.
Context: This single instance was noted during testing of 26 payroll and payroll-related disbursements.
Cause: The Organization’s employee benefit cost allocation methodology is primarily based on a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s employee benefit cost allocation methodology could cause costs to be allocated to grants in a manner where costs are not applied uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of expense data and maximize the use of automated allocations that are calculated in a consistent manner that ensure costs are applied uniformly to respective benefited activities.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 005: Retention of LSC Case File Retainer Agreement
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1611.9) state that federal award recipients must execute a retainer agreement with each client when extended service representation commences or as soon thereafter as is practicable. The agreement must include a statement identifying the legal problem for which representation was sought and the nature of the legal services to be provided. The recipient must maintain copies of all retainer agreements executed. No written retainer agreement is required when the recipient is only providing advice and counsel or brief service, or when legal services are being provided by a private attorney per the private attorney involvement provisions of 45 CFR 1614.
Condition: During our testing we were unable to see evidence of the required retainer agreement for a case file tested.
Questioned costs: None.
Context: This single instance was noted during testing of 60 case files.
Cause: The Organization’s case file review internal controls did not detect and prevent noncompliance with this requirement.
Effect: The Organization’s case file review internal controls may not detect and prevent noncompliance with this requirement.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization review its case file review internal controls to ensure that they are designed in a manner to detect and prevent noncompliance with this requirement.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 006: LSC Private Attorney Involvement (PAI) Cost Allocation and Documentation
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09.706060 - 2023 Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1614.7) states that federal award recipients shall demonstrate compliance with the PAI requirement by utilizing financial systems and procedures and maintaining supporting documentation to identify and account separately for costs related to the PAI requirement. It also states that non-personnel costs shall be allocated on the basis of reasonable operating data and that all methods of allocating common costs shall be clearly documentation. In addition, it states that any direct or indirect time of staff attorneys or paralegals is allocated as a cost to PAI, such costs must be documented by time sheets accounting for the time those employees have spent on PAI activities.
Condition: During our testing, we noted that:
One salary allocation over allocated $289 of expenses to the PAI requirement due to a manual adjustment of the individual’s salary during the pay period,
We were unable to view evidence for one allocation of $260 of payroll tax expenses related to one month during the year,
Ten salary allocations were allocated using time records related to the various work periods throughout the year but the expense was allocated using the salaries of the employees at the end of the year. The resulting salary allocation was $401 higher than what the allocation would have been using salaries in effect during the allocable work periods.
As such, the costs mentioned above were allocated in an inconsistent manner to grant payroll costs and were not fully representative of the employees’ time and effort and compensation.
Questioned costs: $950 of allocated salary and payroll tax expense described above, which is related to Assistance Listing Number 09.706060.
Context: These instances were noting during testing of 19 payroll and payroll-related PAI requirement costs.
Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It would also lead to challenges in maintaining sufficient supporting documentation of such cost allocations.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 007: Allocation of LSC Derivative Income
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1630.17) state that derivative income resulting from an activity supported in whole or in part with LSC funds shall be allocated to the fund in which the recipient’s LSC grant is recorded in the same proportion that the amount of LSC funds expended bears to the total amount expended by the recipient to support the activity.
Condition: During our testing, we noted that the Organization allocated interest income earned on LSC funds were allocated to the LSC based on the proportion of LSC funds earning interest as opposed to the ratio of LSC expenses compared to total Organization expenses.
Questioned costs: None.
Context: This instance was noted during our recalculation of the Organization’s interest income allocation to the LSC fund.
Cause: The Organization’s policy describes an allocation method for interest income that is different from the method described in the federal regulations.
Effect: The difference between the allocation method listed in the federal regulations and the method used by the Organization resulted in an under allocation of $198,593 of interest income to the LSC fund.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization update its derivative income allocation method, policy and procedures to reflect the method described in the federal regulations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 003: Cost Allocation of Salaries and Wages to LSC Grants Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023 Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1635.4(a) and 2 CFR 200.430), state that federal award recipients must base allocations of salaries and wages costs to grants on records that accurately reflect the work performed.
Condition: During our testing we noted:
Two instances of employees’ pay period salaries totaling $1,742 being allocated to a grant using a flat percentage of 10%, and
One instance of an employee’s pay period salary of $147 being allocated to two grants using a combination of their time an effort on those grants while the remaining portion of the employee’s salary was allocated to LSC and two other private grants using a base of total grant hours for the period divided by total hours coded to the Organization’s general fund.
As such, the salary costs mentioned above were allocated in an inconsistent manner to other grant payroll costs and were not fully representative of the employees’ time and effort.
Questioned costs: $1,742 of allocated salary expense described above, which is related to Assistance Listing Number 09.706060.
Context: These three instances were noting during testing of 26 payroll and payroll-related disbursements.
Cause: The Organization’s salaries and wages cost allocation methodology is primarily based on time and effort records, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s salaries and wages cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries and wages cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 004: Cost Allocation of Fringe Benefits to LSC Grants
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Native American Grant
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1630.5 and 2 CFR 200.403) state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.
Condition: During our testing we noted that 100% of medical insurance for a specific location was allocated to the grant. However, we noted that medical insurance for other pay periods and locations were allocated on a trimester basis using an allocation base of total grant hours for the period divided by total general fund hours. As such, the fringe benefit cost mentioned above was allocated in an inconsistent manner to other grant fringe benefit costs was not fully representative of the employees’ time and effort. However, management noted that these costs were allocated in a manner to comply with 45 CFR 1630.5(g) which allows LSC award recipients to allocate proportional share of another funding source’s share of an indirect cost to LSC funds.
Questioned costs: None.
Context: This single instance was noted during testing of 26 payroll and payroll-related disbursements.
Cause: The Organization’s employee benefit cost allocation methodology is primarily based on a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s employee benefit cost allocation methodology could cause costs to be allocated to grants in a manner where costs are not applied uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of expense data and maximize the use of automated allocations that are calculated in a consistent manner that ensure costs are applied uniformly to respective benefited activities.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 005: Retention of LSC Case File Retainer Agreement
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1611.9) state that federal award recipients must execute a retainer agreement with each client when extended service representation commences or as soon thereafter as is practicable. The agreement must include a statement identifying the legal problem for which representation was sought and the nature of the legal services to be provided. The recipient must maintain copies of all retainer agreements executed. No written retainer agreement is required when the recipient is only providing advice and counsel or brief service, or when legal services are being provided by a private attorney per the private attorney involvement provisions of 45 CFR 1614.
Condition: During our testing we were unable to see evidence of the required retainer agreement for a case file tested.
Questioned costs: None.
Context: This single instance was noted during testing of 60 case files.
Cause: The Organization’s case file review internal controls did not detect and prevent noncompliance with this requirement.
Effect: The Organization’s case file review internal controls may not detect and prevent noncompliance with this requirement.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization review its case file review internal controls to ensure that they are designed in a manner to detect and prevent noncompliance with this requirement.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 006: LSC Private Attorney Involvement (PAI) Cost Allocation and Documentation
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09.706060 - 2023 Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1614.7) states that federal award recipients shall demonstrate compliance with the PAI requirement by utilizing financial systems and procedures and maintaining supporting documentation to identify and account separately for costs related to the PAI requirement. It also states that non-personnel costs shall be allocated on the basis of reasonable operating data and that all methods of allocating common costs shall be clearly documentation. In addition, it states that any direct or indirect time of staff attorneys or paralegals is allocated as a cost to PAI, such costs must be documented by time sheets accounting for the time those employees have spent on PAI activities.
Condition: During our testing, we noted that:
One salary allocation over allocated $289 of expenses to the PAI requirement due to a manual adjustment of the individual’s salary during the pay period,
We were unable to view evidence for one allocation of $260 of payroll tax expenses related to one month during the year,
Ten salary allocations were allocated using time records related to the various work periods throughout the year but the expense was allocated using the salaries of the employees at the end of the year. The resulting salary allocation was $401 higher than what the allocation would have been using salaries in effect during the allocable work periods.
As such, the costs mentioned above were allocated in an inconsistent manner to grant payroll costs and were not fully representative of the employees’ time and effort and compensation.
Questioned costs: $950 of allocated salary and payroll tax expense described above, which is related to Assistance Listing Number 09.706060.
Context: These instances were noting during testing of 19 payroll and payroll-related PAI requirement costs.
Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It would also lead to challenges in maintaining sufficient supporting documentation of such cost allocations.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 007: Allocation of LSC Derivative Income
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1630.17) state that derivative income resulting from an activity supported in whole or in part with LSC funds shall be allocated to the fund in which the recipient’s LSC grant is recorded in the same proportion that the amount of LSC funds expended bears to the total amount expended by the recipient to support the activity.
Condition: During our testing, we noted that the Organization allocated interest income earned on LSC funds were allocated to the LSC based on the proportion of LSC funds earning interest as opposed to the ratio of LSC expenses compared to total Organization expenses.
Questioned costs: None.
Context: This instance was noted during our recalculation of the Organization’s interest income allocation to the LSC fund.
Cause: The Organization’s policy describes an allocation method for interest income that is different from the method described in the federal regulations.
Effect: The difference between the allocation method listed in the federal regulations and the method used by the Organization resulted in an under allocation of $198,593 of interest income to the LSC fund.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization update its derivative income allocation method, policy and procedures to reflect the method described in the federal regulations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 003: Cost Allocation of Salaries and Wages to LSC Grants Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023 Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1635.4(a) and 2 CFR 200.430), state that federal award recipients must base allocations of salaries and wages costs to grants on records that accurately reflect the work performed.
Condition: During our testing we noted:
Two instances of employees’ pay period salaries totaling $1,742 being allocated to a grant using a flat percentage of 10%, and
One instance of an employee’s pay period salary of $147 being allocated to two grants using a combination of their time an effort on those grants while the remaining portion of the employee’s salary was allocated to LSC and two other private grants using a base of total grant hours for the period divided by total hours coded to the Organization’s general fund.
As such, the salary costs mentioned above were allocated in an inconsistent manner to other grant payroll costs and were not fully representative of the employees’ time and effort.
Questioned costs: $1,742 of allocated salary expense described above, which is related to Assistance Listing Number 09.706060.
Context: These three instances were noting during testing of 26 payroll and payroll-related disbursements.
Cause: The Organization’s salaries and wages cost allocation methodology is primarily based on time and effort records, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s salaries and wages cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries and wages cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 004: Cost Allocation of Fringe Benefits to LSC Grants
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Native American Grant
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1630.5 and 2 CFR 200.403) state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.
Condition: During our testing we noted that 100% of medical insurance for a specific location was allocated to the grant. However, we noted that medical insurance for other pay periods and locations were allocated on a trimester basis using an allocation base of total grant hours for the period divided by total general fund hours. As such, the fringe benefit cost mentioned above was allocated in an inconsistent manner to other grant fringe benefit costs was not fully representative of the employees’ time and effort. However, management noted that these costs were allocated in a manner to comply with 45 CFR 1630.5(g) which allows LSC award recipients to allocate proportional share of another funding source’s share of an indirect cost to LSC funds.
Questioned costs: None.
Context: This single instance was noted during testing of 26 payroll and payroll-related disbursements.
Cause: The Organization’s employee benefit cost allocation methodology is primarily based on a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s employee benefit cost allocation methodology could cause costs to be allocated to grants in a manner where costs are not applied uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of expense data and maximize the use of automated allocations that are calculated in a consistent manner that ensure costs are applied uniformly to respective benefited activities.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 005: Retention of LSC Case File Retainer Agreement
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1611.9) state that federal award recipients must execute a retainer agreement with each client when extended service representation commences or as soon thereafter as is practicable. The agreement must include a statement identifying the legal problem for which representation was sought and the nature of the legal services to be provided. The recipient must maintain copies of all retainer agreements executed. No written retainer agreement is required when the recipient is only providing advice and counsel or brief service, or when legal services are being provided by a private attorney per the private attorney involvement provisions of 45 CFR 1614.
Condition: During our testing we were unable to see evidence of the required retainer agreement for a case file tested.
Questioned costs: None.
Context: This single instance was noted during testing of 60 case files.
Cause: The Organization’s case file review internal controls did not detect and prevent noncompliance with this requirement.
Effect: The Organization’s case file review internal controls may not detect and prevent noncompliance with this requirement.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization review its case file review internal controls to ensure that they are designed in a manner to detect and prevent noncompliance with this requirement.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 006: LSC Private Attorney Involvement (PAI) Cost Allocation and Documentation
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09.706060 - 2023 Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1614.7) states that federal award recipients shall demonstrate compliance with the PAI requirement by utilizing financial systems and procedures and maintaining supporting documentation to identify and account separately for costs related to the PAI requirement. It also states that non-personnel costs shall be allocated on the basis of reasonable operating data and that all methods of allocating common costs shall be clearly documentation. In addition, it states that any direct or indirect time of staff attorneys or paralegals is allocated as a cost to PAI, such costs must be documented by time sheets accounting for the time those employees have spent on PAI activities.
Condition: During our testing, we noted that:
One salary allocation over allocated $289 of expenses to the PAI requirement due to a manual adjustment of the individual’s salary during the pay period,
We were unable to view evidence for one allocation of $260 of payroll tax expenses related to one month during the year,
Ten salary allocations were allocated using time records related to the various work periods throughout the year but the expense was allocated using the salaries of the employees at the end of the year. The resulting salary allocation was $401 higher than what the allocation would have been using salaries in effect during the allocable work periods.
As such, the costs mentioned above were allocated in an inconsistent manner to grant payroll costs and were not fully representative of the employees’ time and effort and compensation.
Questioned costs: $950 of allocated salary and payroll tax expense described above, which is related to Assistance Listing Number 09.706060.
Context: These instances were noting during testing of 19 payroll and payroll-related PAI requirement costs.
Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It would also lead to challenges in maintaining sufficient supporting documentation of such cost allocations.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 007: Allocation of LSC Derivative Income
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1630.17) state that derivative income resulting from an activity supported in whole or in part with LSC funds shall be allocated to the fund in which the recipient’s LSC grant is recorded in the same proportion that the amount of LSC funds expended bears to the total amount expended by the recipient to support the activity.
Condition: During our testing, we noted that the Organization allocated interest income earned on LSC funds were allocated to the LSC based on the proportion of LSC funds earning interest as opposed to the ratio of LSC expenses compared to total Organization expenses.
Questioned costs: None.
Context: This instance was noted during our recalculation of the Organization’s interest income allocation to the LSC fund.
Cause: The Organization’s policy describes an allocation method for interest income that is different from the method described in the federal regulations.
Effect: The difference between the allocation method listed in the federal regulations and the method used by the Organization resulted in an under allocation of $198,593 of interest income to the LSC fund.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization update its derivative income allocation method, policy and procedures to reflect the method described in the federal regulations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 003: Cost Allocation of Salaries and Wages to LSC Grants Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023 Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1635.4(a) and 2 CFR 200.430), state that federal award recipients must base allocations of salaries and wages costs to grants on records that accurately reflect the work performed.
Condition: During our testing we noted:
Two instances of employees’ pay period salaries totaling $1,742 being allocated to a grant using a flat percentage of 10%, and
One instance of an employee’s pay period salary of $147 being allocated to two grants using a combination of their time an effort on those grants while the remaining portion of the employee’s salary was allocated to LSC and two other private grants using a base of total grant hours for the period divided by total hours coded to the Organization’s general fund.
As such, the salary costs mentioned above were allocated in an inconsistent manner to other grant payroll costs and were not fully representative of the employees’ time and effort.
Questioned costs: $1,742 of allocated salary expense described above, which is related to Assistance Listing Number 09.706060.
Context: These three instances were noting during testing of 26 payroll and payroll-related disbursements.
Cause: The Organization’s salaries and wages cost allocation methodology is primarily based on time and effort records, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s salaries and wages cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries and wages cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 004: Cost Allocation of Fringe Benefits to LSC Grants
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Native American Grant
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1630.5 and 2 CFR 200.403) state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.
Condition: During our testing we noted that 100% of medical insurance for a specific location was allocated to the grant. However, we noted that medical insurance for other pay periods and locations were allocated on a trimester basis using an allocation base of total grant hours for the period divided by total general fund hours. As such, the fringe benefit cost mentioned above was allocated in an inconsistent manner to other grant fringe benefit costs was not fully representative of the employees’ time and effort. However, management noted that these costs were allocated in a manner to comply with 45 CFR 1630.5(g) which allows LSC award recipients to allocate proportional share of another funding source’s share of an indirect cost to LSC funds.
Questioned costs: None.
Context: This single instance was noted during testing of 26 payroll and payroll-related disbursements.
Cause: The Organization’s employee benefit cost allocation methodology is primarily based on a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s employee benefit cost allocation methodology could cause costs to be allocated to grants in a manner where costs are not applied uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of expense data and maximize the use of automated allocations that are calculated in a consistent manner that ensure costs are applied uniformly to respective benefited activities.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 005: Retention of LSC Case File Retainer Agreement
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1611.9) state that federal award recipients must execute a retainer agreement with each client when extended service representation commences or as soon thereafter as is practicable. The agreement must include a statement identifying the legal problem for which representation was sought and the nature of the legal services to be provided. The recipient must maintain copies of all retainer agreements executed. No written retainer agreement is required when the recipient is only providing advice and counsel or brief service, or when legal services are being provided by a private attorney per the private attorney involvement provisions of 45 CFR 1614.
Condition: During our testing we were unable to see evidence of the required retainer agreement for a case file tested.
Questioned costs: None.
Context: This single instance was noted during testing of 60 case files.
Cause: The Organization’s case file review internal controls did not detect and prevent noncompliance with this requirement.
Effect: The Organization’s case file review internal controls may not detect and prevent noncompliance with this requirement.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization review its case file review internal controls to ensure that they are designed in a manner to detect and prevent noncompliance with this requirement.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 006: LSC Private Attorney Involvement (PAI) Cost Allocation and Documentation
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09.706060 - 2023 Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1614.7) states that federal award recipients shall demonstrate compliance with the PAI requirement by utilizing financial systems and procedures and maintaining supporting documentation to identify and account separately for costs related to the PAI requirement. It also states that non-personnel costs shall be allocated on the basis of reasonable operating data and that all methods of allocating common costs shall be clearly documentation. In addition, it states that any direct or indirect time of staff attorneys or paralegals is allocated as a cost to PAI, such costs must be documented by time sheets accounting for the time those employees have spent on PAI activities.
Condition: During our testing, we noted that:
One salary allocation over allocated $289 of expenses to the PAI requirement due to a manual adjustment of the individual’s salary during the pay period,
We were unable to view evidence for one allocation of $260 of payroll tax expenses related to one month during the year,
Ten salary allocations were allocated using time records related to the various work periods throughout the year but the expense was allocated using the salaries of the employees at the end of the year. The resulting salary allocation was $401 higher than what the allocation would have been using salaries in effect during the allocable work periods.
As such, the costs mentioned above were allocated in an inconsistent manner to grant payroll costs and were not fully representative of the employees’ time and effort and compensation.
Questioned costs: $950 of allocated salary and payroll tax expense described above, which is related to Assistance Listing Number 09.706060.
Context: These instances were noting during testing of 19 payroll and payroll-related PAI requirement costs.
Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It would also lead to challenges in maintaining sufficient supporting documentation of such cost allocations.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 007: Allocation of LSC Derivative Income
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1630.17) state that derivative income resulting from an activity supported in whole or in part with LSC funds shall be allocated to the fund in which the recipient’s LSC grant is recorded in the same proportion that the amount of LSC funds expended bears to the total amount expended by the recipient to support the activity.
Condition: During our testing, we noted that the Organization allocated interest income earned on LSC funds were allocated to the LSC based on the proportion of LSC funds earning interest as opposed to the ratio of LSC expenses compared to total Organization expenses.
Questioned costs: None.
Context: This instance was noted during our recalculation of the Organization’s interest income allocation to the LSC fund.
Cause: The Organization’s policy describes an allocation method for interest income that is different from the method described in the federal regulations.
Effect: The difference between the allocation method listed in the federal regulations and the method used by the Organization resulted in an under allocation of $198,593 of interest income to the LSC fund.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization update its derivative income allocation method, policy and procedures to reflect the method described in the federal regulations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 009: Cost Allocation of Compensation to Coronavirus State and Local Fiscal Recovery Grants
Federal Agency: Department of Treasury
Federal Program Name: COVID-19: Coronavirus State and Local Fiscal Recovery, Various – See SEFA
Assistance Listing Number: 21.027
Federal Award Identification Number and Year: Various – See SEFA
Pass-Through Agency: Various – See SEFA
Pass-Through Numbers: Various – See SEFA
Award Period: Various – see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented.
Condition: During our testing, we noted that:
We were unable to view evidence for one allocation of $23 of medical insurance expenses for one employee related to one month.
Three allocations of medical and dental insurance expenses totaling $1,903 were allocated using the percentage of total grant hours of the period instead of the percentage of total grant salary expense, which was the base used for other similar benefit expense allocations. We were unable to view support of the allocation based on total grant hours for the period. These amounts appeared to be under allocated by $549.
One salary allocation of $848 appeared to be under allocated by $1,689 when compared to time and effort records and compensation information. We were unable to see evidence that supported the allocation.
As such, the salary costs and fringe mentioned above were allocated in an inconsistent manner to other grant payroll costs were not fully representative of the employees’ time and effort and benefit obtained by grant from the allocated cost.
Questioned costs: $23 of allocated medical insurance expense described above, which is related to Assistance Listing Number 21.027 and the Eviction Clinic grant passed through from Arapahoe County.
Context: These six instances were noting during testing of 47 payroll and payroll-related disbursements.
Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Management also sometimes allocates employee benefit expense using a base of total grant salary expense for a period when compared to total salary expense for the same period. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments and varying allocation bases in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It would also lead to challenges in maintaining sufficient supporting documentation of such cost allocations.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 010: Review of Indirect Cost Rate Claims related to Coronavirus State and Local Fiscal Recovery Grants
Federal Agency: Department of Treasury
Federal Program Name: COVID-19: Coronavirus State and Local Fiscal Recovery, Various – See SEFA
Assistance Listing Number: 21.027
Federal Award Identification Number and Year: Various – See SEFA
Pass-Through Agency: Various – See SEFA
Pass-Through Numbers: Various – See SEFA
Award Period: Various – see SEFA
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Federal regulations (CFR 200.303), state federal award recipients must establish and maintain effective internal control over federal awards that provides reasonable assurance that federal award recipients are managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards.
Condition: During our testing, we were unable to see evidence of review and approval of two indirect cost claims by someone other than the preparer of the Organization’s indirect cost claims.
Questioned costs: None
Context: These instances were noted during the recalculation of the Organization’s indirect cost rate claim on two separate grants.
Cause: The Organization does not have a process in place that documents review and approval of submitted indirect cost claims.
Effect: The lack of such a control process could result in the Organization claiming incorrect amounts of indirect costs for reimbursement.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider implementing a process that documents review and approval of submitted indirect cost claims by someone other than the preparer of such claims. Documentation of contemporaneous review should also be maintained.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 009: Cost Allocation of Compensation to Coronavirus State and Local Fiscal Recovery Grants
Federal Agency: Department of Treasury
Federal Program Name: COVID-19: Coronavirus State and Local Fiscal Recovery, Various – See SEFA
Assistance Listing Number: 21.027
Federal Award Identification Number and Year: Various – See SEFA
Pass-Through Agency: Various – See SEFA
Pass-Through Numbers: Various – See SEFA
Award Period: Various – see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented.
Condition: During our testing, we noted that:
We were unable to view evidence for one allocation of $23 of medical insurance expenses for one employee related to one month.
Three allocations of medical and dental insurance expenses totaling $1,903 were allocated using the percentage of total grant hours of the period instead of the percentage of total grant salary expense, which was the base used for other similar benefit expense allocations. We were unable to view support of the allocation based on total grant hours for the period. These amounts appeared to be under allocated by $549.
One salary allocation of $848 appeared to be under allocated by $1,689 when compared to time and effort records and compensation information. We were unable to see evidence that supported the allocation.
As such, the salary costs and fringe mentioned above were allocated in an inconsistent manner to other grant payroll costs were not fully representative of the employees’ time and effort and benefit obtained by grant from the allocated cost.
Questioned costs: $23 of allocated medical insurance expense described above, which is related to Assistance Listing Number 21.027 and the Eviction Clinic grant passed through from Arapahoe County.
Context: These six instances were noting during testing of 47 payroll and payroll-related disbursements.
Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Management also sometimes allocates employee benefit expense using a base of total grant salary expense for a period when compared to total salary expense for the same period. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments and varying allocation bases in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It would also lead to challenges in maintaining sufficient supporting documentation of such cost allocations.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 010: Review of Indirect Cost Rate Claims related to Coronavirus State and Local Fiscal Recovery Grants
Federal Agency: Department of Treasury
Federal Program Name: COVID-19: Coronavirus State and Local Fiscal Recovery, Various – See SEFA
Assistance Listing Number: 21.027
Federal Award Identification Number and Year: Various – See SEFA
Pass-Through Agency: Various – See SEFA
Pass-Through Numbers: Various – See SEFA
Award Period: Various – see SEFA
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Federal regulations (CFR 200.303), state federal award recipients must establish and maintain effective internal control over federal awards that provides reasonable assurance that federal award recipients are managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards.
Condition: During our testing, we were unable to see evidence of review and approval of two indirect cost claims by someone other than the preparer of the Organization’s indirect cost claims.
Questioned costs: None
Context: These instances were noted during the recalculation of the Organization’s indirect cost rate claim on two separate grants.
Cause: The Organization does not have a process in place that documents review and approval of submitted indirect cost claims.
Effect: The lack of such a control process could result in the Organization claiming incorrect amounts of indirect costs for reimbursement.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider implementing a process that documents review and approval of submitted indirect cost claims by someone other than the preparer of such claims. Documentation of contemporaneous review should also be maintained.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 009: Cost Allocation of Compensation to Coronavirus State and Local Fiscal Recovery Grants
Federal Agency: Department of Treasury
Federal Program Name: COVID-19: Coronavirus State and Local Fiscal Recovery, Various – See SEFA
Assistance Listing Number: 21.027
Federal Award Identification Number and Year: Various – See SEFA
Pass-Through Agency: Various – See SEFA
Pass-Through Numbers: Various – See SEFA
Award Period: Various – see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented.
Condition: During our testing, we noted that:
We were unable to view evidence for one allocation of $23 of medical insurance expenses for one employee related to one month.
Three allocations of medical and dental insurance expenses totaling $1,903 were allocated using the percentage of total grant hours of the period instead of the percentage of total grant salary expense, which was the base used for other similar benefit expense allocations. We were unable to view support of the allocation based on total grant hours for the period. These amounts appeared to be under allocated by $549.
One salary allocation of $848 appeared to be under allocated by $1,689 when compared to time and effort records and compensation information. We were unable to see evidence that supported the allocation.
As such, the salary costs and fringe mentioned above were allocated in an inconsistent manner to other grant payroll costs were not fully representative of the employees’ time and effort and benefit obtained by grant from the allocated cost.
Questioned costs: $23 of allocated medical insurance expense described above, which is related to Assistance Listing Number 21.027 and the Eviction Clinic grant passed through from Arapahoe County.
Context: These six instances were noting during testing of 47 payroll and payroll-related disbursements.
Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Management also sometimes allocates employee benefit expense using a base of total grant salary expense for a period when compared to total salary expense for the same period. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments and varying allocation bases in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It would also lead to challenges in maintaining sufficient supporting documentation of such cost allocations.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 010: Review of Indirect Cost Rate Claims related to Coronavirus State and Local Fiscal Recovery Grants
Federal Agency: Department of Treasury
Federal Program Name: COVID-19: Coronavirus State and Local Fiscal Recovery, Various – See SEFA
Assistance Listing Number: 21.027
Federal Award Identification Number and Year: Various – See SEFA
Pass-Through Agency: Various – See SEFA
Pass-Through Numbers: Various – See SEFA
Award Period: Various – see SEFA
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Federal regulations (CFR 200.303), state federal award recipients must establish and maintain effective internal control over federal awards that provides reasonable assurance that federal award recipients are managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards.
Condition: During our testing, we were unable to see evidence of review and approval of two indirect cost claims by someone other than the preparer of the Organization’s indirect cost claims.
Questioned costs: None
Context: These instances were noted during the recalculation of the Organization’s indirect cost rate claim on two separate grants.
Cause: The Organization does not have a process in place that documents review and approval of submitted indirect cost claims.
Effect: The lack of such a control process could result in the Organization claiming incorrect amounts of indirect costs for reimbursement.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider implementing a process that documents review and approval of submitted indirect cost claims by someone other than the preparer of such claims. Documentation of contemporaneous review should also be maintained.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 003: Cost Allocation of Salaries and Wages to LSC Grants Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023 Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1635.4(a) and 2 CFR 200.430), state that federal award recipients must base allocations of salaries and wages costs to grants on records that accurately reflect the work performed.
Condition: During our testing we noted:
Two instances of employees’ pay period salaries totaling $1,742 being allocated to a grant using a flat percentage of 10%, and
One instance of an employee’s pay period salary of $147 being allocated to two grants using a combination of their time an effort on those grants while the remaining portion of the employee’s salary was allocated to LSC and two other private grants using a base of total grant hours for the period divided by total hours coded to the Organization’s general fund.
As such, the salary costs mentioned above were allocated in an inconsistent manner to other grant payroll costs and were not fully representative of the employees’ time and effort.
Questioned costs: $1,742 of allocated salary expense described above, which is related to Assistance Listing Number 09.706060.
Context: These three instances were noting during testing of 26 payroll and payroll-related disbursements.
Cause: The Organization’s salaries and wages cost allocation methodology is primarily based on time and effort records, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s salaries and wages cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries and wages cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 004: Cost Allocation of Fringe Benefits to LSC Grants
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Native American Grant
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1630.5 and 2 CFR 200.403) state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.
Condition: During our testing we noted that 100% of medical insurance for a specific location was allocated to the grant. However, we noted that medical insurance for other pay periods and locations were allocated on a trimester basis using an allocation base of total grant hours for the period divided by total general fund hours. As such, the fringe benefit cost mentioned above was allocated in an inconsistent manner to other grant fringe benefit costs was not fully representative of the employees’ time and effort. However, management noted that these costs were allocated in a manner to comply with 45 CFR 1630.5(g) which allows LSC award recipients to allocate proportional share of another funding source’s share of an indirect cost to LSC funds.
Questioned costs: None.
Context: This single instance was noted during testing of 26 payroll and payroll-related disbursements.
Cause: The Organization’s employee benefit cost allocation methodology is primarily based on a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s employee benefit cost allocation methodology could cause costs to be allocated to grants in a manner where costs are not applied uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of expense data and maximize the use of automated allocations that are calculated in a consistent manner that ensure costs are applied uniformly to respective benefited activities.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 005: Retention of LSC Case File Retainer Agreement
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1611.9) state that federal award recipients must execute a retainer agreement with each client when extended service representation commences or as soon thereafter as is practicable. The agreement must include a statement identifying the legal problem for which representation was sought and the nature of the legal services to be provided. The recipient must maintain copies of all retainer agreements executed. No written retainer agreement is required when the recipient is only providing advice and counsel or brief service, or when legal services are being provided by a private attorney per the private attorney involvement provisions of 45 CFR 1614.
Condition: During our testing we were unable to see evidence of the required retainer agreement for a case file tested.
Questioned costs: None.
Context: This single instance was noted during testing of 60 case files.
Cause: The Organization’s case file review internal controls did not detect and prevent noncompliance with this requirement.
Effect: The Organization’s case file review internal controls may not detect and prevent noncompliance with this requirement.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization review its case file review internal controls to ensure that they are designed in a manner to detect and prevent noncompliance with this requirement.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 006: LSC Private Attorney Involvement (PAI) Cost Allocation and Documentation
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09.706060 - 2023 Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1614.7) states that federal award recipients shall demonstrate compliance with the PAI requirement by utilizing financial systems and procedures and maintaining supporting documentation to identify and account separately for costs related to the PAI requirement. It also states that non-personnel costs shall be allocated on the basis of reasonable operating data and that all methods of allocating common costs shall be clearly documentation. In addition, it states that any direct or indirect time of staff attorneys or paralegals is allocated as a cost to PAI, such costs must be documented by time sheets accounting for the time those employees have spent on PAI activities.
Condition: During our testing, we noted that:
One salary allocation over allocated $289 of expenses to the PAI requirement due to a manual adjustment of the individual’s salary during the pay period,
We were unable to view evidence for one allocation of $260 of payroll tax expenses related to one month during the year,
Ten salary allocations were allocated using time records related to the various work periods throughout the year but the expense was allocated using the salaries of the employees at the end of the year. The resulting salary allocation was $401 higher than what the allocation would have been using salaries in effect during the allocable work periods.
As such, the costs mentioned above were allocated in an inconsistent manner to grant payroll costs and were not fully representative of the employees’ time and effort and compensation.
Questioned costs: $950 of allocated salary and payroll tax expense described above, which is related to Assistance Listing Number 09.706060.
Context: These instances were noting during testing of 19 payroll and payroll-related PAI requirement costs.
Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It would also lead to challenges in maintaining sufficient supporting documentation of such cost allocations.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 007: Allocation of LSC Derivative Income
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1630.17) state that derivative income resulting from an activity supported in whole or in part with LSC funds shall be allocated to the fund in which the recipient’s LSC grant is recorded in the same proportion that the amount of LSC funds expended bears to the total amount expended by the recipient to support the activity.
Condition: During our testing, we noted that the Organization allocated interest income earned on LSC funds were allocated to the LSC based on the proportion of LSC funds earning interest as opposed to the ratio of LSC expenses compared to total Organization expenses.
Questioned costs: None.
Context: This instance was noted during our recalculation of the Organization’s interest income allocation to the LSC fund.
Cause: The Organization’s policy describes an allocation method for interest income that is different from the method described in the federal regulations.
Effect: The difference between the allocation method listed in the federal regulations and the method used by the Organization resulted in an under allocation of $198,593 of interest income to the LSC fund.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization update its derivative income allocation method, policy and procedures to reflect the method described in the federal regulations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 003: Cost Allocation of Salaries and Wages to LSC Grants Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023 Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1635.4(a) and 2 CFR 200.430), state that federal award recipients must base allocations of salaries and wages costs to grants on records that accurately reflect the work performed.
Condition: During our testing we noted:
Two instances of employees’ pay period salaries totaling $1,742 being allocated to a grant using a flat percentage of 10%, and
One instance of an employee’s pay period salary of $147 being allocated to two grants using a combination of their time an effort on those grants while the remaining portion of the employee’s salary was allocated to LSC and two other private grants using a base of total grant hours for the period divided by total hours coded to the Organization’s general fund.
As such, the salary costs mentioned above were allocated in an inconsistent manner to other grant payroll costs and were not fully representative of the employees’ time and effort.
Questioned costs: $1,742 of allocated salary expense described above, which is related to Assistance Listing Number 09.706060.
Context: These three instances were noting during testing of 26 payroll and payroll-related disbursements.
Cause: The Organization’s salaries and wages cost allocation methodology is primarily based on time and effort records, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s salaries and wages cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries and wages cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 004: Cost Allocation of Fringe Benefits to LSC Grants
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Native American Grant
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1630.5 and 2 CFR 200.403) state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.
Condition: During our testing we noted that 100% of medical insurance for a specific location was allocated to the grant. However, we noted that medical insurance for other pay periods and locations were allocated on a trimester basis using an allocation base of total grant hours for the period divided by total general fund hours. As such, the fringe benefit cost mentioned above was allocated in an inconsistent manner to other grant fringe benefit costs was not fully representative of the employees’ time and effort. However, management noted that these costs were allocated in a manner to comply with 45 CFR 1630.5(g) which allows LSC award recipients to allocate proportional share of another funding source’s share of an indirect cost to LSC funds.
Questioned costs: None.
Context: This single instance was noted during testing of 26 payroll and payroll-related disbursements.
Cause: The Organization’s employee benefit cost allocation methodology is primarily based on a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s employee benefit cost allocation methodology could cause costs to be allocated to grants in a manner where costs are not applied uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of expense data and maximize the use of automated allocations that are calculated in a consistent manner that ensure costs are applied uniformly to respective benefited activities.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 005: Retention of LSC Case File Retainer Agreement
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1611.9) state that federal award recipients must execute a retainer agreement with each client when extended service representation commences or as soon thereafter as is practicable. The agreement must include a statement identifying the legal problem for which representation was sought and the nature of the legal services to be provided. The recipient must maintain copies of all retainer agreements executed. No written retainer agreement is required when the recipient is only providing advice and counsel or brief service, or when legal services are being provided by a private attorney per the private attorney involvement provisions of 45 CFR 1614.
Condition: During our testing we were unable to see evidence of the required retainer agreement for a case file tested.
Questioned costs: None.
Context: This single instance was noted during testing of 60 case files.
Cause: The Organization’s case file review internal controls did not detect and prevent noncompliance with this requirement.
Effect: The Organization’s case file review internal controls may not detect and prevent noncompliance with this requirement.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization review its case file review internal controls to ensure that they are designed in a manner to detect and prevent noncompliance with this requirement.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 006: LSC Private Attorney Involvement (PAI) Cost Allocation and Documentation
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09.706060 - 2023 Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1614.7) states that federal award recipients shall demonstrate compliance with the PAI requirement by utilizing financial systems and procedures and maintaining supporting documentation to identify and account separately for costs related to the PAI requirement. It also states that non-personnel costs shall be allocated on the basis of reasonable operating data and that all methods of allocating common costs shall be clearly documentation. In addition, it states that any direct or indirect time of staff attorneys or paralegals is allocated as a cost to PAI, such costs must be documented by time sheets accounting for the time those employees have spent on PAI activities.
Condition: During our testing, we noted that:
One salary allocation over allocated $289 of expenses to the PAI requirement due to a manual adjustment of the individual’s salary during the pay period,
We were unable to view evidence for one allocation of $260 of payroll tax expenses related to one month during the year,
Ten salary allocations were allocated using time records related to the various work periods throughout the year but the expense was allocated using the salaries of the employees at the end of the year. The resulting salary allocation was $401 higher than what the allocation would have been using salaries in effect during the allocable work periods.
As such, the costs mentioned above were allocated in an inconsistent manner to grant payroll costs and were not fully representative of the employees’ time and effort and compensation.
Questioned costs: $950 of allocated salary and payroll tax expense described above, which is related to Assistance Listing Number 09.706060.
Context: These instances were noting during testing of 19 payroll and payroll-related PAI requirement costs.
Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It would also lead to challenges in maintaining sufficient supporting documentation of such cost allocations.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 007: Allocation of LSC Derivative Income
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1630.17) state that derivative income resulting from an activity supported in whole or in part with LSC funds shall be allocated to the fund in which the recipient’s LSC grant is recorded in the same proportion that the amount of LSC funds expended bears to the total amount expended by the recipient to support the activity.
Condition: During our testing, we noted that the Organization allocated interest income earned on LSC funds were allocated to the LSC based on the proportion of LSC funds earning interest as opposed to the ratio of LSC expenses compared to total Organization expenses.
Questioned costs: None.
Context: This instance was noted during our recalculation of the Organization’s interest income allocation to the LSC fund.
Cause: The Organization’s policy describes an allocation method for interest income that is different from the method described in the federal regulations.
Effect: The difference between the allocation method listed in the federal regulations and the method used by the Organization resulted in an under allocation of $198,593 of interest income to the LSC fund.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization update its derivative income allocation method, policy and procedures to reflect the method described in the federal regulations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 003: Cost Allocation of Salaries and Wages to LSC Grants Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023 Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1635.4(a) and 2 CFR 200.430), state that federal award recipients must base allocations of salaries and wages costs to grants on records that accurately reflect the work performed.
Condition: During our testing we noted:
Two instances of employees’ pay period salaries totaling $1,742 being allocated to a grant using a flat percentage of 10%, and
One instance of an employee’s pay period salary of $147 being allocated to two grants using a combination of their time an effort on those grants while the remaining portion of the employee’s salary was allocated to LSC and two other private grants using a base of total grant hours for the period divided by total hours coded to the Organization’s general fund.
As such, the salary costs mentioned above were allocated in an inconsistent manner to other grant payroll costs and were not fully representative of the employees’ time and effort.
Questioned costs: $1,742 of allocated salary expense described above, which is related to Assistance Listing Number 09.706060.
Context: These three instances were noting during testing of 26 payroll and payroll-related disbursements.
Cause: The Organization’s salaries and wages cost allocation methodology is primarily based on time and effort records, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s salaries and wages cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries and wages cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 004: Cost Allocation of Fringe Benefits to LSC Grants
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Native American Grant
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1630.5 and 2 CFR 200.403) state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.
Condition: During our testing we noted that 100% of medical insurance for a specific location was allocated to the grant. However, we noted that medical insurance for other pay periods and locations were allocated on a trimester basis using an allocation base of total grant hours for the period divided by total general fund hours. As such, the fringe benefit cost mentioned above was allocated in an inconsistent manner to other grant fringe benefit costs was not fully representative of the employees’ time and effort. However, management noted that these costs were allocated in a manner to comply with 45 CFR 1630.5(g) which allows LSC award recipients to allocate proportional share of another funding source’s share of an indirect cost to LSC funds.
Questioned costs: None.
Context: This single instance was noted during testing of 26 payroll and payroll-related disbursements.
Cause: The Organization’s employee benefit cost allocation methodology is primarily based on a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s employee benefit cost allocation methodology could cause costs to be allocated to grants in a manner where costs are not applied uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of expense data and maximize the use of automated allocations that are calculated in a consistent manner that ensure costs are applied uniformly to respective benefited activities.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 005: Retention of LSC Case File Retainer Agreement
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1611.9) state that federal award recipients must execute a retainer agreement with each client when extended service representation commences or as soon thereafter as is practicable. The agreement must include a statement identifying the legal problem for which representation was sought and the nature of the legal services to be provided. The recipient must maintain copies of all retainer agreements executed. No written retainer agreement is required when the recipient is only providing advice and counsel or brief service, or when legal services are being provided by a private attorney per the private attorney involvement provisions of 45 CFR 1614.
Condition: During our testing we were unable to see evidence of the required retainer agreement for a case file tested.
Questioned costs: None.
Context: This single instance was noted during testing of 60 case files.
Cause: The Organization’s case file review internal controls did not detect and prevent noncompliance with this requirement.
Effect: The Organization’s case file review internal controls may not detect and prevent noncompliance with this requirement.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization review its case file review internal controls to ensure that they are designed in a manner to detect and prevent noncompliance with this requirement.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 006: LSC Private Attorney Involvement (PAI) Cost Allocation and Documentation
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09.706060 - 2023 Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1614.7) states that federal award recipients shall demonstrate compliance with the PAI requirement by utilizing financial systems and procedures and maintaining supporting documentation to identify and account separately for costs related to the PAI requirement. It also states that non-personnel costs shall be allocated on the basis of reasonable operating data and that all methods of allocating common costs shall be clearly documentation. In addition, it states that any direct or indirect time of staff attorneys or paralegals is allocated as a cost to PAI, such costs must be documented by time sheets accounting for the time those employees have spent on PAI activities.
Condition: During our testing, we noted that:
One salary allocation over allocated $289 of expenses to the PAI requirement due to a manual adjustment of the individual’s salary during the pay period,
We were unable to view evidence for one allocation of $260 of payroll tax expenses related to one month during the year,
Ten salary allocations were allocated using time records related to the various work periods throughout the year but the expense was allocated using the salaries of the employees at the end of the year. The resulting salary allocation was $401 higher than what the allocation would have been using salaries in effect during the allocable work periods.
As such, the costs mentioned above were allocated in an inconsistent manner to grant payroll costs and were not fully representative of the employees’ time and effort and compensation.
Questioned costs: $950 of allocated salary and payroll tax expense described above, which is related to Assistance Listing Number 09.706060.
Context: These instances were noting during testing of 19 payroll and payroll-related PAI requirement costs.
Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It would also lead to challenges in maintaining sufficient supporting documentation of such cost allocations.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 007: Allocation of LSC Derivative Income
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1630.17) state that derivative income resulting from an activity supported in whole or in part with LSC funds shall be allocated to the fund in which the recipient’s LSC grant is recorded in the same proportion that the amount of LSC funds expended bears to the total amount expended by the recipient to support the activity.
Condition: During our testing, we noted that the Organization allocated interest income earned on LSC funds were allocated to the LSC based on the proportion of LSC funds earning interest as opposed to the ratio of LSC expenses compared to total Organization expenses.
Questioned costs: None.
Context: This instance was noted during our recalculation of the Organization’s interest income allocation to the LSC fund.
Cause: The Organization’s policy describes an allocation method for interest income that is different from the method described in the federal regulations.
Effect: The difference between the allocation method listed in the federal regulations and the method used by the Organization resulted in an under allocation of $198,593 of interest income to the LSC fund.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization update its derivative income allocation method, policy and procedures to reflect the method described in the federal regulations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 003: Cost Allocation of Salaries and Wages to LSC Grants Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023 Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1635.4(a) and 2 CFR 200.430), state that federal award recipients must base allocations of salaries and wages costs to grants on records that accurately reflect the work performed.
Condition: During our testing we noted:
Two instances of employees’ pay period salaries totaling $1,742 being allocated to a grant using a flat percentage of 10%, and
One instance of an employee’s pay period salary of $147 being allocated to two grants using a combination of their time an effort on those grants while the remaining portion of the employee’s salary was allocated to LSC and two other private grants using a base of total grant hours for the period divided by total hours coded to the Organization’s general fund.
As such, the salary costs mentioned above were allocated in an inconsistent manner to other grant payroll costs and were not fully representative of the employees’ time and effort.
Questioned costs: $1,742 of allocated salary expense described above, which is related to Assistance Listing Number 09.706060.
Context: These three instances were noting during testing of 26 payroll and payroll-related disbursements.
Cause: The Organization’s salaries and wages cost allocation methodology is primarily based on time and effort records, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s salaries and wages cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries and wages cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 004: Cost Allocation of Fringe Benefits to LSC Grants
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Native American Grant
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1630.5 and 2 CFR 200.403) state that expenditures are allowable under an LSC (or federal) grant or contract only if the recipient can demonstrate that the cost was consistent with accounting policies and procedures that apply uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.
Condition: During our testing we noted that 100% of medical insurance for a specific location was allocated to the grant. However, we noted that medical insurance for other pay periods and locations were allocated on a trimester basis using an allocation base of total grant hours for the period divided by total general fund hours. As such, the fringe benefit cost mentioned above was allocated in an inconsistent manner to other grant fringe benefit costs was not fully representative of the employees’ time and effort. However, management noted that these costs were allocated in a manner to comply with 45 CFR 1630.5(g) which allows LSC award recipients to allocate proportional share of another funding source’s share of an indirect cost to LSC funds.
Questioned costs: None.
Context: This single instance was noted during testing of 26 payroll and payroll-related disbursements.
Cause: The Organization’s employee benefit cost allocation methodology is primarily based on a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s employee benefit cost allocation methodology could cause costs to be allocated to grants in a manner where costs are not applied uniformly to both LSC (or, federal)-funded and non-LSC (of, federal) -funded activities.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of expense data and maximize the use of automated allocations that are calculated in a consistent manner that ensure costs are applied uniformly to respective benefited activities.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 005: Retention of LSC Case File Retainer Agreement
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1611.9) state that federal award recipients must execute a retainer agreement with each client when extended service representation commences or as soon thereafter as is practicable. The agreement must include a statement identifying the legal problem for which representation was sought and the nature of the legal services to be provided. The recipient must maintain copies of all retainer agreements executed. No written retainer agreement is required when the recipient is only providing advice and counsel or brief service, or when legal services are being provided by a private attorney per the private attorney involvement provisions of 45 CFR 1614.
Condition: During our testing we were unable to see evidence of the required retainer agreement for a case file tested.
Questioned costs: None.
Context: This single instance was noted during testing of 60 case files.
Cause: The Organization’s case file review internal controls did not detect and prevent noncompliance with this requirement.
Effect: The Organization’s case file review internal controls may not detect and prevent noncompliance with this requirement.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization review its case file review internal controls to ensure that they are designed in a manner to detect and prevent noncompliance with this requirement.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 006: LSC Private Attorney Involvement (PAI) Cost Allocation and Documentation
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09.706060 - 2023 Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1614.7) states that federal award recipients shall demonstrate compliance with the PAI requirement by utilizing financial systems and procedures and maintaining supporting documentation to identify and account separately for costs related to the PAI requirement. It also states that non-personnel costs shall be allocated on the basis of reasonable operating data and that all methods of allocating common costs shall be clearly documentation. In addition, it states that any direct or indirect time of staff attorneys or paralegals is allocated as a cost to PAI, such costs must be documented by time sheets accounting for the time those employees have spent on PAI activities.
Condition: During our testing, we noted that:
One salary allocation over allocated $289 of expenses to the PAI requirement due to a manual adjustment of the individual’s salary during the pay period,
We were unable to view evidence for one allocation of $260 of payroll tax expenses related to one month during the year,
Ten salary allocations were allocated using time records related to the various work periods throughout the year but the expense was allocated using the salaries of the employees at the end of the year. The resulting salary allocation was $401 higher than what the allocation would have been using salaries in effect during the allocable work periods.
As such, the costs mentioned above were allocated in an inconsistent manner to grant payroll costs and were not fully representative of the employees’ time and effort and compensation.
Questioned costs: $950 of allocated salary and payroll tax expense described above, which is related to Assistance Listing Number 09.706060.
Context: These instances were noting during testing of 19 payroll and payroll-related PAI requirement costs.
Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It would also lead to challenges in maintaining sufficient supporting documentation of such cost allocations.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 007: Allocation of LSC Derivative Income
Federal Agency: Legal Services Corporation (LSC)
Federal Program Name: LSC Grants
Assistance Listing Number: 09.706060
Federal Award Identification Number and Year: 09-706060 - 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (45 CFR 1630.17) state that derivative income resulting from an activity supported in whole or in part with LSC funds shall be allocated to the fund in which the recipient’s LSC grant is recorded in the same proportion that the amount of LSC funds expended bears to the total amount expended by the recipient to support the activity.
Condition: During our testing, we noted that the Organization allocated interest income earned on LSC funds were allocated to the LSC based on the proportion of LSC funds earning interest as opposed to the ratio of LSC expenses compared to total Organization expenses.
Questioned costs: None.
Context: This instance was noted during our recalculation of the Organization’s interest income allocation to the LSC fund.
Cause: The Organization’s policy describes an allocation method for interest income that is different from the method described in the federal regulations.
Effect: The difference between the allocation method listed in the federal regulations and the method used by the Organization resulted in an under allocation of $198,593 of interest income to the LSC fund.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization update its derivative income allocation method, policy and procedures to reflect the method described in the federal regulations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 008: Matching Requirements of Aging Cluster Grants
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Aging Cluster - Special Programs for the Aging, Title III, Part B
Assistance Listing Number: 93.044
Federal Award Identification Number and Year: Various – Aging Cluster
Pass-Through Agency: Various – Aging Cluster, see SEFA
Pass-Through Numbers: Various – Aging Cluster, see SEFA
Award Period: Various – Aging Cluster, see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations and specific federal award pass-through agreements require the Organization to contribute matching funds to support the services to be provided with the federal award funds.
Condition: During our testing we noted that the Organization did not meet its required match for four separate grants. The Organization’s matching requirements for the grant period of these grants totaled $88,530 and the Organization contributed a total of $80,908 of matching funds during the period, resulting in an undermatch of $7,622. However, we also noted that in total the Organization over matched five other separate grants tested for a total of $27,011.
Questioned costs: None
Context: These instances were noting during testing of matching requirements for 10 federal award pass-through agreements.
Cause: The Organization does not have a control process in place to ensure that it meets its matching requirements within the grant period.
Effect: The Organization may not meet its matching requirements under federal award agreements.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization implement a control process to ensure that it meets its matching requirements within the grant period.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 009: Cost Allocation of Compensation to Coronavirus State and Local Fiscal Recovery Grants
Federal Agency: Department of Treasury
Federal Program Name: COVID-19: Coronavirus State and Local Fiscal Recovery, Various – See SEFA
Assistance Listing Number: 21.027
Federal Award Identification Number and Year: Various – See SEFA
Pass-Through Agency: Various – See SEFA
Pass-Through Numbers: Various – See SEFA
Award Period: Various – see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented.
Condition: During our testing, we noted that:
We were unable to view evidence for one allocation of $23 of medical insurance expenses for one employee related to one month.
Three allocations of medical and dental insurance expenses totaling $1,903 were allocated using the percentage of total grant hours of the period instead of the percentage of total grant salary expense, which was the base used for other similar benefit expense allocations. We were unable to view support of the allocation based on total grant hours for the period. These amounts appeared to be under allocated by $549.
One salary allocation of $848 appeared to be under allocated by $1,689 when compared to time and effort records and compensation information. We were unable to see evidence that supported the allocation.
As such, the salary costs and fringe mentioned above were allocated in an inconsistent manner to other grant payroll costs were not fully representative of the employees’ time and effort and benefit obtained by grant from the allocated cost.
Questioned costs: $23 of allocated medical insurance expense described above, which is related to Assistance Listing Number 21.027 and the Eviction Clinic grant passed through from Arapahoe County.
Context: These six instances were noting during testing of 47 payroll and payroll-related disbursements.
Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Management also sometimes allocates employee benefit expense using a base of total grant salary expense for a period when compared to total salary expense for the same period. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments and varying allocation bases in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It would also lead to challenges in maintaining sufficient supporting documentation of such cost allocations.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 010: Review of Indirect Cost Rate Claims related to Coronavirus State and Local Fiscal Recovery Grants
Federal Agency: Department of Treasury
Federal Program Name: COVID-19: Coronavirus State and Local Fiscal Recovery, Various – See SEFA
Assistance Listing Number: 21.027
Federal Award Identification Number and Year: Various – See SEFA
Pass-Through Agency: Various – See SEFA
Pass-Through Numbers: Various – See SEFA
Award Period: Various – see SEFA
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Federal regulations (CFR 200.303), state federal award recipients must establish and maintain effective internal control over federal awards that provides reasonable assurance that federal award recipients are managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards.
Condition: During our testing, we were unable to see evidence of review and approval of two indirect cost claims by someone other than the preparer of the Organization’s indirect cost claims.
Questioned costs: None
Context: These instances were noted during the recalculation of the Organization’s indirect cost rate claim on two separate grants.
Cause: The Organization does not have a process in place that documents review and approval of submitted indirect cost claims.
Effect: The lack of such a control process could result in the Organization claiming incorrect amounts of indirect costs for reimbursement.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider implementing a process that documents review and approval of submitted indirect cost claims by someone other than the preparer of such claims. Documentation of contemporaneous review should also be maintained.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 009: Cost Allocation of Compensation to Coronavirus State and Local Fiscal Recovery Grants
Federal Agency: Department of Treasury
Federal Program Name: COVID-19: Coronavirus State and Local Fiscal Recovery, Various – See SEFA
Assistance Listing Number: 21.027
Federal Award Identification Number and Year: Various – See SEFA
Pass-Through Agency: Various – See SEFA
Pass-Through Numbers: Various – See SEFA
Award Period: Various – see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented.
Condition: During our testing, we noted that:
We were unable to view evidence for one allocation of $23 of medical insurance expenses for one employee related to one month.
Three allocations of medical and dental insurance expenses totaling $1,903 were allocated using the percentage of total grant hours of the period instead of the percentage of total grant salary expense, which was the base used for other similar benefit expense allocations. We were unable to view support of the allocation based on total grant hours for the period. These amounts appeared to be under allocated by $549.
One salary allocation of $848 appeared to be under allocated by $1,689 when compared to time and effort records and compensation information. We were unable to see evidence that supported the allocation.
As such, the salary costs and fringe mentioned above were allocated in an inconsistent manner to other grant payroll costs were not fully representative of the employees’ time and effort and benefit obtained by grant from the allocated cost.
Questioned costs: $23 of allocated medical insurance expense described above, which is related to Assistance Listing Number 21.027 and the Eviction Clinic grant passed through from Arapahoe County.
Context: These six instances were noting during testing of 47 payroll and payroll-related disbursements.
Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Management also sometimes allocates employee benefit expense using a base of total grant salary expense for a period when compared to total salary expense for the same period. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments and varying allocation bases in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It would also lead to challenges in maintaining sufficient supporting documentation of such cost allocations.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 010: Review of Indirect Cost Rate Claims related to Coronavirus State and Local Fiscal Recovery Grants
Federal Agency: Department of Treasury
Federal Program Name: COVID-19: Coronavirus State and Local Fiscal Recovery, Various – See SEFA
Assistance Listing Number: 21.027
Federal Award Identification Number and Year: Various – See SEFA
Pass-Through Agency: Various – See SEFA
Pass-Through Numbers: Various – See SEFA
Award Period: Various – see SEFA
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Federal regulations (CFR 200.303), state federal award recipients must establish and maintain effective internal control over federal awards that provides reasonable assurance that federal award recipients are managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards.
Condition: During our testing, we were unable to see evidence of review and approval of two indirect cost claims by someone other than the preparer of the Organization’s indirect cost claims.
Questioned costs: None
Context: These instances were noted during the recalculation of the Organization’s indirect cost rate claim on two separate grants.
Cause: The Organization does not have a process in place that documents review and approval of submitted indirect cost claims.
Effect: The lack of such a control process could result in the Organization claiming incorrect amounts of indirect costs for reimbursement.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider implementing a process that documents review and approval of submitted indirect cost claims by someone other than the preparer of such claims. Documentation of contemporaneous review should also be maintained.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 009: Cost Allocation of Compensation to Coronavirus State and Local Fiscal Recovery Grants
Federal Agency: Department of Treasury
Federal Program Name: COVID-19: Coronavirus State and Local Fiscal Recovery, Various – See SEFA
Assistance Listing Number: 21.027
Federal Award Identification Number and Year: Various – See SEFA
Pass-Through Agency: Various – See SEFA
Pass-Through Numbers: Various – See SEFA
Award Period: Various – see SEFA
Type of Finding:
Material Weakness in Internal Control over Compliance
Other Matters
Criteria or specific requirement: Federal regulations (CFR 200.403), state that allowable costs must be consistent with policies and procedures of federal award recipients that apply uniformly to both federally-financed and other activities of the Organization. It also states that costs must be adequately documented.
Condition: During our testing, we noted that:
We were unable to view evidence for one allocation of $23 of medical insurance expenses for one employee related to one month.
Three allocations of medical and dental insurance expenses totaling $1,903 were allocated using the percentage of total grant hours of the period instead of the percentage of total grant salary expense, which was the base used for other similar benefit expense allocations. We were unable to view support of the allocation based on total grant hours for the period. These amounts appeared to be under allocated by $549.
One salary allocation of $848 appeared to be under allocated by $1,689 when compared to time and effort records and compensation information. We were unable to see evidence that supported the allocation.
As such, the salary costs and fringe mentioned above were allocated in an inconsistent manner to other grant payroll costs were not fully representative of the employees’ time and effort and benefit obtained by grant from the allocated cost.
Questioned costs: $23 of allocated medical insurance expense described above, which is related to Assistance Listing Number 21.027 and the Eviction Clinic grant passed through from Arapahoe County.
Context: These six instances were noting during testing of 47 payroll and payroll-related disbursements.
Cause: The Organization’s salary, wage and employee benefit cost allocation methodology is primarily based on time and effort records and a periodic calculation of grant hours versus general fund hours multiplied by period costs, but it often includes manual adjustments based on review of individual time records and expense data. Management also sometimes allocates employee benefit expense using a base of total grant salary expense for a period when compared to total salary expense for the same period. Therefore, the methodology is challenging to apply consistently, document contemporaneously, and apply in accordance with federal regulations.
Effect: The inclusion of frequent manual adjustments and varying allocation bases in the Organization’s salaries, wages, and employee benefit cost allocation methodology could cause costs to be allocated to grants that are not reflective of the time and effort spent on grant activities nor compensation paid to employees during relevant work periods. It would also lead to challenges in maintaining sufficient supporting documentation of such cost allocations.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider updating its salaries, wages, and employee benefit cost allocation methodology and process to reduce the frequency of manual adjustments based on review of individual time records and expense data and maximize the use of automated allocations based on employees’ time and effort records, effective compensation during work periods, and that are calculated in a consistent manner. We also recommend that the Organization maintain contemporaneous documentation supporting all cost allocations.
Views of responsible officials: There is no disagreement with the audit finding
2023 – 010: Review of Indirect Cost Rate Claims related to Coronavirus State and Local Fiscal Recovery Grants
Federal Agency: Department of Treasury
Federal Program Name: COVID-19: Coronavirus State and Local Fiscal Recovery, Various – See SEFA
Assistance Listing Number: 21.027
Federal Award Identification Number and Year: Various – See SEFA
Pass-Through Agency: Various – See SEFA
Pass-Through Numbers: Various – See SEFA
Award Period: Various – see SEFA
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Federal regulations (CFR 200.303), state federal award recipients must establish and maintain effective internal control over federal awards that provides reasonable assurance that federal award recipients are managing federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards.
Condition: During our testing, we were unable to see evidence of review and approval of two indirect cost claims by someone other than the preparer of the Organization’s indirect cost claims.
Questioned costs: None
Context: These instances were noted during the recalculation of the Organization’s indirect cost rate claim on two separate grants.
Cause: The Organization does not have a process in place that documents review and approval of submitted indirect cost claims.
Effect: The lack of such a control process could result in the Organization claiming incorrect amounts of indirect costs for reimbursement.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend that the Organization consider implementing a process that documents review and approval of submitted indirect cost claims by someone other than the preparer of such claims. Documentation of contemporaneous review should also be maintained.
Views of responsible officials: There is no disagreement with the audit finding