FAC Explorer

Audit 323047

FY End
2023-12-31
Total Expended
$35.84M
Findings
10
Programs
17
Organization: Legal Services Nyc and Constituent Corporations (NY)
Year: 2023 Accepted: 2024-09-30
Auditor: Rsm US LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
500263 2023-003 Significant Deficiency Yes P
500264 2023-004 Significant Deficiency Yes P
500265 2023-005 Significant Deficiency - P
500266 2023-006 Significant Deficiency - P
500267 2023-007 Significant Deficiency - P
1076705 2023-003 Significant Deficiency Yes P
1076706 2023-004 Significant Deficiency Yes P
1076707 2023-005 Significant Deficiency - P
1076708 2023-006 Significant Deficiency - P
1076709 2023-007 Significant Deficiency - P

Programs

ALN Program Spent Major Findings
09.223 Legal Services Corporation $16.06M Yes 5
93.558 Temporary Assistance for Needy Families $8.46M Yes 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $5.01M Yes 0
16.575 Crime Victim Assistance $2.02M - 0
93.914 Hiv Emergency Relief Project Grants $1.10M Yes 0
93.044 Special Programs for the Aging, Title Iii, Part B, Grants for Supportive Services and Senior Centers $564,516 Yes 0
14.418 Private Enforcement Initiatives $400,702 - 0
93.569 Community Services Block Grant $313,351 - 0
21.008 Low Income Taxpayer Clinics $265,388 - 0
93.048 Special Programs for the Aging, Title Iv, and Title Ii, Discretionary Projects $238,716 - 0
16.588 Violence Against Women Formula Grants $149,999 - 0
64.033 Va Supportive Services for Veteran Families Program $137,500 - 0
93.667 Social Services Block Grant $100,468 - 0
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $60,999 - 0
93.778 Medical Assistance Program $56,769 - 0
14.408 Fair Housing Initiatives Program $14,491 - 0
16.524 Legal Assistance for Victims $1,516 - 0

Contacts

Name Title Type
MBNLSWYMX798 Gregory Klemm Auditee
6464423554 Irmin Hutchinson Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: NOTE 1 BASIS OF PRESENTATION The accompanying consolidated schedule of expenditures of federal awards (the Schedule) includes the federal award activities of Legal Services NYC and its Constituent Corporations (collectively, Legal Services NYC) under programs of the federal government for the year ended December 31, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Legal Services NYC, it is not intended to and does not present the consolidated financial position, consolidated changes in net assets or consolidated cash flows of Legal Services NYC. NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursements. NOTE 3 INDIRECT COST RATE Legal Services NYC has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Legal Services NYC has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying consolidated schedule of expenditures of federal awards (the Schedule) includes the federal award activities of Legal Services NYC and its Constituent Corporations (collectively, Legal Services NYC) under programs of the federal government for the year ended December 31, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Legal Services NYC, it is not intended to and does not present the consolidated financial position, consolidated changes in net assets or consolidated cash flows of Legal Services NYC.
Title: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: NOTE 1 BASIS OF PRESENTATION The accompanying consolidated schedule of expenditures of federal awards (the Schedule) includes the federal award activities of Legal Services NYC and its Constituent Corporations (collectively, Legal Services NYC) under programs of the federal government for the year ended December 31, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Legal Services NYC, it is not intended to and does not present the consolidated financial position, consolidated changes in net assets or consolidated cash flows of Legal Services NYC. NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursements. NOTE 3 INDIRECT COST RATE Legal Services NYC has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Legal Services NYC has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursements.
Title: INDIRECT COST RATE Accounting Policies: NOTE 1 BASIS OF PRESENTATION The accompanying consolidated schedule of expenditures of federal awards (the Schedule) includes the federal award activities of Legal Services NYC and its Constituent Corporations (collectively, Legal Services NYC) under programs of the federal government for the year ended December 31, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Legal Services NYC, it is not intended to and does not present the consolidated financial position, consolidated changes in net assets or consolidated cash flows of Legal Services NYC. NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursements. NOTE 3 INDIRECT COST RATE Legal Services NYC has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Legal Services NYC has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Legal Services NYC has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.

Finding Details

Finding 2023-003
2023-003 Retainer Agreements Legal Services Corporation ALN#09.233100 Criteria: Legal Services Corporation (LSC) Reg. #1611.9.a Financial Eligibility section 9 Retainer agreements requires that when an LSC grant recipient provides extended service to a client, the recipient shall execute a written retainer agreement with the client when representation commences or as soon thereafter as is practicable. Condition: A retainer was not executed for one (1) extensive service case. Cause: The policy related to the retainer agreement was not appropriately applied by the employee. Effect: Noncompliance with LSC regulations could impact future funding level. Context: Out of sixty (60) LSC cases selected for eligibility testing, a retainer was not executed for one (1) extensive service case. Questioned costs: There are no questioned costs noted. *This is a repeated finding from the prior year. The prior year finding # was 2022-001. Recommendation: We recommend that Legal Services NYC continue to provide relevant training to employees involved in client intake regarding the retainer agreements. Views of responsible officials: See corrective action plan.
Finding 2023-004
2023-004 Financial Eligibility – Assets Definition Legal Services Corporation ALN#09.233100 Criteria: Per LSC Reg.# 1611.2(d) Definition of Assets, “Assets” means cash or other resources of the applicant or members of the applicant’s household that are readily convertible to cash, which are currently and actually available to the applicant. Condition: The recorded assets considered for client financial eligibility determination for one case did not meet the asset definition as per the LSC regulation. Cause: Certain assets including a primary residence were inaccurately reported as assets. These assets should be excluded when assessing financial eligibility in accordance with LSC Reg.#1611.2(d). Effect: Incorrect or incomplete financial eligibility documentation may lead to the improper inclusion or exclusion of clients from receiving services under the LSC program. Context: Out of 60 cases selected for testing, one (1) case included assets that did not align with the asset definition as specified by LSC Reg. # 1611.2(d). Questioned costs: There are no questioned costs noted. *This is a repeated finding from the prior year. The prior year finding # was 2022-002. Recommendation: We recommend that Legal Services NYC continue to provide relevant training to employees involved in client intake regarding financial eligibility. Views of responsible officials: See corrective action plan.
Finding 2023-005
2023-005 Authorized exceptions to the annual income ceiling Legal Services Corporation ALN#09.233100 Criteria: LSC Reg. 1611.5 Authorized exceptions to the annual income ceiling provides the conditions for authorized exceptions. Condition: The income eligibility override was improperly applied in one client case, resulting in this case being incorrectly reported as program eligible. Cause: The case worker inadvertently applied a reason for authorized exceptions to the annual income ceiling which does not comply with LSC Reg. 1611.5. Effect: Incorrect or incomplete financial eligibility documentation may result in improperly including or excluding clients from receiving services under the LSC program. Context: Out of sixty (60) LSC cases selected for testing, an authorized exception to the annual income ceiling was improperly applied to one case. Questioned costs: There are no questioned costs noted. Recommendation: We recommend that Legal Services NYC continue to provide relevant training to employees involved in client intake regarding maintenance of asset ceiling waiver approvals. Views of responsible officials: See corrective action plan.
Finding 2023-006
2023-006 Costs requiring LSC prior approval Legal Services Corporation ALN#09.233100 Criteria: Per LSC Reg. 1630.6 Prior Approval: a recipient may not expend $25,000 or more of LSC funds on any of the following without LSC's prior written approval, (i) A single purchase or single lease of personal property; (ii) A single contract for services; (iii) A single combined purchase or lease of personal property and contract for services; and (iv) Capital improvements. Condition: One capital improvement purchase, amounting to $31,350, charged to the LSC funding did not receive the required prior approval as stipulated by LSC Reg. 1630.6. Cause: The expense was charged to the LSC program when the finance team performed the program cost allocation during their year-end closing process. However, the necessary LSC approval should have been obtained prior to charging this cost to the program. Effect: LSC could determine this to be an unallowed cost and could initiate a request for the return of funding. Context: We identified one capital improvement purchase that costs $25,000 or more out of the entire purchase population. Questioned costs: $31,350. Recommendation: We recommend that Legal Services NYC obtain LSC approval prior to making a purchase of $25,000 or more with the LSC funds in accordance with the LSC Reg. 1630. Views of responsible officials: See corrective action plan.
Finding 2023-007
2023-007 Standards governing allowability of costs under LSC grants or contracts Legal Services Corporation ALN#09.233100 Criteria: Per LSC Reg. 1630.5 Standards governing allowability of costs under LSC grants or contracts, allowable expenditures have to be the cost that were actually incurred in the performance of the grant or contract and the recipient was liable for payment. Condition: Two (2) expenditure items totaling $10,167 incurred in 2024 were incorrectly recorded in the financial system as 2023 expenses and were improperly charged to the LSC 2023 funding. Cause: The expenses were inadvertently recorded in the incorrect period, resulting in an improper charge to the LSC 2023 funding. Effect: LSC could determine this to be an unallowed cost and could initiate a request for the return of funding. Context: Out of sixty (60) expenditure items selected for testing, two (2) items totaling $10,167 were charged to the LSC 2023 grant, despite not having been incurred in that year. Questioned costs: $10,167 Recommendation: We recommend that the finance department implement an effective review process to ensure that expenses are recorded in the proper period. Views of responsible officials: See corrective action plan.
Finding 2023-003
2023-003 Retainer Agreements Legal Services Corporation ALN#09.233100 Criteria: Legal Services Corporation (LSC) Reg. #1611.9.a Financial Eligibility section 9 Retainer agreements requires that when an LSC grant recipient provides extended service to a client, the recipient shall execute a written retainer agreement with the client when representation commences or as soon thereafter as is practicable. Condition: A retainer was not executed for one (1) extensive service case. Cause: The policy related to the retainer agreement was not appropriately applied by the employee. Effect: Noncompliance with LSC regulations could impact future funding level. Context: Out of sixty (60) LSC cases selected for eligibility testing, a retainer was not executed for one (1) extensive service case. Questioned costs: There are no questioned costs noted. *This is a repeated finding from the prior year. The prior year finding # was 2022-001. Recommendation: We recommend that Legal Services NYC continue to provide relevant training to employees involved in client intake regarding the retainer agreements. Views of responsible officials: See corrective action plan.
Finding 2023-004
2023-004 Financial Eligibility – Assets Definition Legal Services Corporation ALN#09.233100 Criteria: Per LSC Reg.# 1611.2(d) Definition of Assets, “Assets” means cash or other resources of the applicant or members of the applicant’s household that are readily convertible to cash, which are currently and actually available to the applicant. Condition: The recorded assets considered for client financial eligibility determination for one case did not meet the asset definition as per the LSC regulation. Cause: Certain assets including a primary residence were inaccurately reported as assets. These assets should be excluded when assessing financial eligibility in accordance with LSC Reg.#1611.2(d). Effect: Incorrect or incomplete financial eligibility documentation may lead to the improper inclusion or exclusion of clients from receiving services under the LSC program. Context: Out of 60 cases selected for testing, one (1) case included assets that did not align with the asset definition as specified by LSC Reg. # 1611.2(d). Questioned costs: There are no questioned costs noted. *This is a repeated finding from the prior year. The prior year finding # was 2022-002. Recommendation: We recommend that Legal Services NYC continue to provide relevant training to employees involved in client intake regarding financial eligibility. Views of responsible officials: See corrective action plan.
Finding 2023-005
2023-005 Authorized exceptions to the annual income ceiling Legal Services Corporation ALN#09.233100 Criteria: LSC Reg. 1611.5 Authorized exceptions to the annual income ceiling provides the conditions for authorized exceptions. Condition: The income eligibility override was improperly applied in one client case, resulting in this case being incorrectly reported as program eligible. Cause: The case worker inadvertently applied a reason for authorized exceptions to the annual income ceiling which does not comply with LSC Reg. 1611.5. Effect: Incorrect or incomplete financial eligibility documentation may result in improperly including or excluding clients from receiving services under the LSC program. Context: Out of sixty (60) LSC cases selected for testing, an authorized exception to the annual income ceiling was improperly applied to one case. Questioned costs: There are no questioned costs noted. Recommendation: We recommend that Legal Services NYC continue to provide relevant training to employees involved in client intake regarding maintenance of asset ceiling waiver approvals. Views of responsible officials: See corrective action plan.
Finding 2023-006
2023-006 Costs requiring LSC prior approval Legal Services Corporation ALN#09.233100 Criteria: Per LSC Reg. 1630.6 Prior Approval: a recipient may not expend $25,000 or more of LSC funds on any of the following without LSC's prior written approval, (i) A single purchase or single lease of personal property; (ii) A single contract for services; (iii) A single combined purchase or lease of personal property and contract for services; and (iv) Capital improvements. Condition: One capital improvement purchase, amounting to $31,350, charged to the LSC funding did not receive the required prior approval as stipulated by LSC Reg. 1630.6. Cause: The expense was charged to the LSC program when the finance team performed the program cost allocation during their year-end closing process. However, the necessary LSC approval should have been obtained prior to charging this cost to the program. Effect: LSC could determine this to be an unallowed cost and could initiate a request for the return of funding. Context: We identified one capital improvement purchase that costs $25,000 or more out of the entire purchase population. Questioned costs: $31,350. Recommendation: We recommend that Legal Services NYC obtain LSC approval prior to making a purchase of $25,000 or more with the LSC funds in accordance with the LSC Reg. 1630. Views of responsible officials: See corrective action plan.
Finding 2023-007
2023-007 Standards governing allowability of costs under LSC grants or contracts Legal Services Corporation ALN#09.233100 Criteria: Per LSC Reg. 1630.5 Standards governing allowability of costs under LSC grants or contracts, allowable expenditures have to be the cost that were actually incurred in the performance of the grant or contract and the recipient was liable for payment. Condition: Two (2) expenditure items totaling $10,167 incurred in 2024 were incorrectly recorded in the financial system as 2023 expenses and were improperly charged to the LSC 2023 funding. Cause: The expenses were inadvertently recorded in the incorrect period, resulting in an improper charge to the LSC 2023 funding. Effect: LSC could determine this to be an unallowed cost and could initiate a request for the return of funding. Context: Out of sixty (60) expenditure items selected for testing, two (2) items totaling $10,167 were charged to the LSC 2023 grant, despite not having been incurred in that year. Questioned costs: $10,167 Recommendation: We recommend that the finance department implement an effective review process to ensure that expenses are recorded in the proper period. Views of responsible officials: See corrective action plan.