Audit 354985

Finding 2024-004 – Allowable Costs (Significant Deficiency and Non-compliance)(Repeat finding) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR 1630 requires that costs are incurred, reasonable and necessary, allocable to the grant, adequately documented, and consistent with accounting policies and procedures. Condition/Context: We selected 25 payroll disbursements for testing. Of those 25, one payroll expense was not properly allocated. The payroll disbursement tested was a paid time off buyback allocated 100% to LSC and supporting documentation did not agree to this allocation. Cause: Supporting documentation supported an allocation of 87% of the paid time off buyback but the whole expense was charged to LSC. Effect: The Organization did not comply with allowable cost allocation requirements. Questioned costs: $625 Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the disbursement process to ensure the Organization is in compliance with all required documentation and allocation requirements. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2024-005 – Internal Controls over Federal Awards (Significant Deficiency and Noncompliance)( Repeat finding) Information on the Federal Program: U.S. Department of Justice, Assistance Listing No.16.575 Victims of Crime Act (VOCA) Criteria: 2 CFR 200.303 requires non-federal entities to establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: We selected 50 disbursements for testing. Of those 50, 25 were for payroll and 25 were non-payroll disbursements. Of the 25 non-payroll, 4 lacked documentation of approval for payment.Cause: The Organization did not properly document controls established in its accounting manual to review and approve expenses charged to the grant. Effect: The Organization did not obtain proper approvals according to the policy of established controls. Questioned costs: None Recommendation: We recommend the Organization strengthen its policies and procedures surrounding disbursement and allocation processes to document the review and approval process to meet the control standards. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2024-006 – Special Test and Provisions- Private Attorney Involvement (PAI) (Significant Deficiency and Non-compliance) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR 1614 requires a recipient of LSC funding to use at least 12.5% of their annual basic field grant to promote the involvement of private attorneys, law students, law graduates, or other professionals to provide legal information and legal assistance to eligible clients. Activities undertaken to meet this requirement include direct delivery of legal assistance to eligible programs. The Organization has elected to meet this requirement with a significant amount of pro bono work and allocating costs associated with facilitating the PAI requirement. Condition/Context: During audit procedures, we tested the PAI requirements and activities and costs calculation in accordance with Section 1614. We determined the Organization did not meet the minimum PAI requirement for fiscal year 2024. Cause: The Organization applied for and received a waiver from LSC, but the calculation did not include the prior year waiver amount that increased the current year requirement. Effect: The Organization waiver amount did not cover the amount of PAI shortfall for fiscal year 2024. Questioned costs: None Recommendation: We recommend the Organization strengthen its policies and procedures surrounding monitoring of PAI compliance to ensure the current year requirement is correctly calculated to include cumulative obligations. We also recommend the addition of a reduced fee program to facilitate outside involvement. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2024-007 – Allowable Costs (Significant Deficiency and Non-compliance)(Repeat finding) Information on the Federal Program: U.S. Department of Justice, Assistance Listing No.16.575 Victims of Crime Act (VOCA) Criteria: 2 CFR 200.405 establishes requirements for costs allocated to a grant award. These requirements include that costs must be approximated using a reasonable method. Condition/Context: We selected 50 disbursements for testing. Of those 50, 25 were for payroll and 25 were non-payroll disbursements. Of the 25 non-payroll, there was 1 instance in which the cost allocated was not properly documented or supported by a reasonable method. Cause: Expense allocated to the VOCA grant was not properly supported. Effect: The Organization did not adequately document allocation methods required by allowable cost compliance requirements. Questioned costs: $216 Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the disbursement process to ensure the Organization is in compliance with all required documentation and disclosure requirements. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2024-008 – Case Requirements (Significant Deficiency and Non-compliance) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR 1644 requires for each case filed in court by its attorneys on behalf of a recipient client, recipients disclose the name and address of each party in the case, cause of action, name and address of the court where the case is filed, and the case number assigned by the court. Condition/Context: During our testing of regulations, we examined 71 case files. Of the 71 case files tested, 2 of the cases required disclosure. One case was not properly disclosed to LSC. Cause: The required case disclosure was omitted from the report to LSC. Effect: The Organization did not properly disclose one case. Questioned Costs: None reported Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the process of opening case files to ensure compliance with all required documentation and disclosure requirements. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2024-004 – Allowable Costs (Significant Deficiency and Non-compliance)(Repeat finding) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR 1630 requires that costs are incurred, reasonable and necessary, allocable to the grant, adequately documented, and consistent with accounting policies and procedures. Condition/Context: We selected 25 payroll disbursements for testing. Of those 25, one payroll expense was not properly allocated. The payroll disbursement tested was a paid time off buyback allocated 100% to LSC and supporting documentation did not agree to this allocation. Cause: Supporting documentation supported an allocation of 87% of the paid time off buyback but the whole expense was charged to LSC. Effect: The Organization did not comply with allowable cost allocation requirements. Questioned costs: $625 Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the disbursement process to ensure the Organization is in compliance with all required documentation and allocation requirements. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2024-005 – Internal Controls over Federal Awards (Significant Deficiency and Noncompliance)( Repeat finding) Information on the Federal Program: U.S. Department of Justice, Assistance Listing No.16.575 Victims of Crime Act (VOCA) Criteria: 2 CFR 200.303 requires non-federal entities to establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: We selected 50 disbursements for testing. Of those 50, 25 were for payroll and 25 were non-payroll disbursements. Of the 25 non-payroll, 4 lacked documentation of approval for payment.Cause: The Organization did not properly document controls established in its accounting manual to review and approve expenses charged to the grant. Effect: The Organization did not obtain proper approvals according to the policy of established controls. Questioned costs: None Recommendation: We recommend the Organization strengthen its policies and procedures surrounding disbursement and allocation processes to document the review and approval process to meet the control standards. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2024-006 – Special Test and Provisions- Private Attorney Involvement (PAI) (Significant Deficiency and Non-compliance) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR 1614 requires a recipient of LSC funding to use at least 12.5% of their annual basic field grant to promote the involvement of private attorneys, law students, law graduates, or other professionals to provide legal information and legal assistance to eligible clients. Activities undertaken to meet this requirement include direct delivery of legal assistance to eligible programs. The Organization has elected to meet this requirement with a significant amount of pro bono work and allocating costs associated with facilitating the PAI requirement. Condition/Context: During audit procedures, we tested the PAI requirements and activities and costs calculation in accordance with Section 1614. We determined the Organization did not meet the minimum PAI requirement for fiscal year 2024. Cause: The Organization applied for and received a waiver from LSC, but the calculation did not include the prior year waiver amount that increased the current year requirement. Effect: The Organization waiver amount did not cover the amount of PAI shortfall for fiscal year 2024. Questioned costs: None Recommendation: We recommend the Organization strengthen its policies and procedures surrounding monitoring of PAI compliance to ensure the current year requirement is correctly calculated to include cumulative obligations. We also recommend the addition of a reduced fee program to facilitate outside involvement. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2024-007 – Allowable Costs (Significant Deficiency and Non-compliance)(Repeat finding) Information on the Federal Program: U.S. Department of Justice, Assistance Listing No.16.575 Victims of Crime Act (VOCA) Criteria: 2 CFR 200.405 establishes requirements for costs allocated to a grant award. These requirements include that costs must be approximated using a reasonable method. Condition/Context: We selected 50 disbursements for testing. Of those 50, 25 were for payroll and 25 were non-payroll disbursements. Of the 25 non-payroll, there was 1 instance in which the cost allocated was not properly documented or supported by a reasonable method. Cause: Expense allocated to the VOCA grant was not properly supported. Effect: The Organization did not adequately document allocation methods required by allowable cost compliance requirements. Questioned costs: $216 Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the disbursement process to ensure the Organization is in compliance with all required documentation and disclosure requirements. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2024-008 – Case Requirements (Significant Deficiency and Non-compliance) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR 1644 requires for each case filed in court by its attorneys on behalf of a recipient client, recipients disclose the name and address of each party in the case, cause of action, name and address of the court where the case is filed, and the case number assigned by the court. Condition/Context: During our testing of regulations, we examined 71 case files. Of the 71 case files tested, 2 of the cases required disclosure. One case was not properly disclosed to LSC. Cause: The required case disclosure was omitted from the report to LSC. Effect: The Organization did not properly disclose one case. Questioned Costs: None reported Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the process of opening case files to ensure compliance with all required documentation and disclosure requirements. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.