Audit 356232

Significant Deficiency: See Finding 2024-001 Separation of the Justice Center Information on the Federal Program: The significant deficiency relates to Federal funds received from Legal Services Corporation (LSC), Basic Field Grant, grant recipient #122087, under Assistance Listing number 09.122087, compliance requirement special tests and provisions. Criteria:Entities that receive funding from Legal Services Corporation (LSC) must employ detailed internal controls to ensure compliance with 45 C.F.R. 1610.8, Program Integrity, of Appendix A: Compliance Supplement for Audits of LSC Recipients from Legal Services Corporation Audit Guide for Recipients and Auditors dated October 2023. Specifically, the Organization must ensure objective integrity and independence from any organization that engages in restricted activities and includes operating in a manner that provides sufficient physical and financial separation from the entity. These requirements are to be followed under the activities allowed or unallowed compliance requirements of the Uniform Guidance. Condition: An affiliate of South Coastal Counties Legal Services, Inc. (SCCLS), the Justice Center of Southeast Massachusetts, LLC (JCSM), engages in restricted activity. During 2023, the Organization underwent a Program Integrity and Cost Standards Review from LSC, and they deemed the current arrangement of accounting for JCSM insufficient even though SCCLS has had this arrangement for several years and had gone through this review in prior years. During 2024, the Organization continued working with LSC to determine the appropriate separation to satisfy the requirements. With consultation from LSC, the Organization was instructed to wait until the Program Integrity Review was completed before submission of their formal Program Integrity Certification. Cause: SCCLS monitored the detailed activity of JCSM to properly track all restricted activities in the general ledger, however, the physical and financial separation was not deemed appropriate based on the most recent review, which is open to interpretation. The requirements identify the sufficiency of separation will be determined on a case-by-case basis and will be based on the totality of the facts. Some facts and circumstances changed during the year, which overall changed the sufficiency of compliance. Effect: Non-compliance with program integrity requirements for the LSC grant award. Was the finding a repeat of a finding in the immediately prior year?: Yes Was the sampling a statistically valid sample?: No Questioned Costs?: None Recommendation: We recommend management examine their internal processes and policies on how activities for both entities are separately accounted for to ensure proper separation consistent with LSC requirements. We understand management has been working with LSC and has already implemented several recommendations from the review. Management Response: Management prepared and developed a corrective action plan with LSC and has met with LSC on a biweekly basis working with LSC to ensure that compliance with the corrective action plan will result in adequate separation between entities under Title 45 of the Code of Federal Regulations. Multiple aspects of the plan have been implemented, with full compliance expected in 2025.

Significant Deficiency: See Finding 2024-001 Separation of the Justice Center Information on the Federal Program: The significant deficiency relates to Federal funds received from Legal Services Corporation (LSC), Basic Field Grant, grant recipient #122087, under Assistance Listing number 09.122087, compliance requirement special tests and provisions. Criteria:Entities that receive funding from Legal Services Corporation (LSC) must employ detailed internal controls to ensure compliance with 45 C.F.R. 1610.8, Program Integrity, of Appendix A: Compliance Supplement for Audits of LSC Recipients from Legal Services Corporation Audit Guide for Recipients and Auditors dated October 2023. Specifically, the Organization must ensure objective integrity and independence from any organization that engages in restricted activities and includes operating in a manner that provides sufficient physical and financial separation from the entity. These requirements are to be followed under the activities allowed or unallowed compliance requirements of the Uniform Guidance. Condition: An affiliate of South Coastal Counties Legal Services, Inc. (SCCLS), the Justice Center of Southeast Massachusetts, LLC (JCSM), engages in restricted activity. During 2023, the Organization underwent a Program Integrity and Cost Standards Review from LSC, and they deemed the current arrangement of accounting for JCSM insufficient even though SCCLS has had this arrangement for several years and had gone through this review in prior years. During 2024, the Organization continued working with LSC to determine the appropriate separation to satisfy the requirements. With consultation from LSC, the Organization was instructed to wait until the Program Integrity Review was completed before submission of their formal Program Integrity Certification. Cause: SCCLS monitored the detailed activity of JCSM to properly track all restricted activities in the general ledger, however, the physical and financial separation was not deemed appropriate based on the most recent review, which is open to interpretation. The requirements identify the sufficiency of separation will be determined on a case-by-case basis and will be based on the totality of the facts. Some facts and circumstances changed during the year, which overall changed the sufficiency of compliance. Effect: Non-compliance with program integrity requirements for the LSC grant award. Was the finding a repeat of a finding in the immediately prior year?: Yes Was the sampling a statistically valid sample?: No Questioned Costs?: None Recommendation: We recommend management examine their internal processes and policies on how activities for both entities are separately accounted for to ensure proper separation consistent with LSC requirements. We understand management has been working with LSC and has already implemented several recommendations from the review. Management Response: Management prepared and developed a corrective action plan with LSC and has met with LSC on a biweekly basis working with LSC to ensure that compliance with the corrective action plan will result in adequate separation between entities under Title 45 of the Code of Federal Regulations. Multiple aspects of the plan have been implemented, with full compliance expected in 2025.