Audit 358140

Finding 2024-001: Compliance finding – LSC Financial Guide Prior year Finding 2023-002 Legal Services Corporation Basic Field Grant (ALN# 09.130010) Condition: Several policies and/or procedures in the Draft Accounting Manual have not been updated to take the new LSC Financial Guide into consideration. Changes are actively being made by management but are not yet codified in an updated manual. The new policies are a work in progress that would benefit from more dedicated, concentrated effort to substantively update the manual. Criteria or specific requirement: The LSC Financial Guide (Guide) is designed to assist recipients and subrecipients with fiscal responsibilities in the stewardship of grant funds provided by LSC. The effective date of the Guide is January 1, 2023. The Guide contains several new requirements that recipients must adopt, and best practice recommendations for financial management, including example reports and methods of compliance with specific requirements. Cause: Employee attrition and transitioning to new service providers in multiple areas of operations during the year. Effect: Required and recommended internal controls and accounting policies and procedures not contained in existing system. Context: The Accounting Manual was reviewed by the auditors, and it was noted that not all policies and procedures were updated to comply with the requirements of the new LSC Financial Guide. This noncompliance results in no questioned costs. Recommendation: Completion of an updated Accounting Manual, approved by the Board of Directors, taking into consideration the new requirements of the Guide. Completion of the Self-Assessment Questionnaire (Appendix 9) of the Guide on an annual or periodic basis. The referenced questionnaire is a tool for recipient's management to direct attention to practicable revisions of accounting procedures or internal controls to strengthen, improve, or simplify the existing system. Review the questionnaire at least annually, complete, and file for future reference.

Finding 2024-001: Compliance finding – LSC Financial Guide Prior year Finding 2023-002 Legal Services Corporation Basic Field Grant (ALN# 09.130010) Condition: Several policies and/or procedures in the Draft Accounting Manual have not been updated to take the new LSC Financial Guide into consideration. Changes are actively being made by management but are not yet codified in an updated manual. The new policies are a work in progress that would benefit from more dedicated, concentrated effort to substantively update the manual. Criteria or specific requirement: The LSC Financial Guide (Guide) is designed to assist recipients and subrecipients with fiscal responsibilities in the stewardship of grant funds provided by LSC. The effective date of the Guide is January 1, 2023. The Guide contains several new requirements that recipients must adopt, and best practice recommendations for financial management, including example reports and methods of compliance with specific requirements. Cause: Employee attrition and transitioning to new service providers in multiple areas of operations during the year. Effect: Required and recommended internal controls and accounting policies and procedures not contained in existing system. Context: The Accounting Manual was reviewed by the auditors, and it was noted that not all policies and procedures were updated to comply with the requirements of the new LSC Financial Guide. This noncompliance results in no questioned costs. Recommendation: Completion of an updated Accounting Manual, approved by the Board of Directors, taking into consideration the new requirements of the Guide. Completion of the Self-Assessment Questionnaire (Appendix 9) of the Guide on an annual or periodic basis. The referenced questionnaire is a tool for recipient's management to direct attention to practicable revisions of accounting procedures or internal controls to strengthen, improve, or simplify the existing system. Review the questionnaire at least annually, complete, and file for future reference.