Criteria: Legal Services Corporation (LSC) grant recipients are required to establish and maintain adequate accounting systems and financial records to accurately account for all funds (both LSC and non-LSC funds). LSC requires recipients and subrecipients to (1) responsibly manage all funds pursuant to the cost standards and procedures of 45 C.F.R. Part 1630 and other LSC regulations at 45 C.F.R. Parts 1600-1644; and (2) record transactions in accounting records and, where required, prepare annual financial statements in accordance with GAAP. Recipients are also required to adhere to requirements of the LSC Financial Guide (effective January 1, 2023) including Section 2 "Accounting Systems and Governance" and Section 3 "Managing LSC Grants."
Condition/Context: The Organization's written policies and procedures did not meet the requirements outlined by the LSC Financial Guideline and other LSC regulations.
Cause: The Organization did not align its policies and procedures with the recently issued LSC Financial Guide. The updated Guide required operational changes that had not yet been implemented.
Effect: Lack of proscribed procedures and controls could result in the Organization administering the LSC Grant out of compliance with the Guide.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization revise their written policies and operational procedures to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s finding and will take immediate action to revise the Organization’s accounting manual to align with the regulatory requirements. The Director of Finance will work directly with the Organization’s assigned Fiscal Compliance Analyst from Legal Services Corporation (LSC) to ensure policies and procedures are aligned with LSC’s Financial Guide. The Director will review the Organization’s accounting manual annually and will notify the CEO and the Finance and Audit Committee of any updates to any policy and procedures.
Criteria: Legal Services Corporation (LSC) grant recipients for fee generating cases are required to compile with the allocation and recordation requirements of 45 C.F.R. § 1609.4 (b). Attorneys' fees received by a recipient or an employee of a recipient for representation supported in whole or in part with funds provided by LSC 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 representation.
Condition/Context: The Organization incorrectly allocated attorney's fees totaling $4,925 back to a non-LSC fund in four of four cases selected in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly review the allocation of attorneys' fees due to turnover.
Effect: Improper allocation could result in the Organization administering the LSC Grant out of compliance with the Guide.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization revise the allocation for those noted above, and ensure proper review of allocation to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s finding and will take immediate action to revise the attorney fees allocation. The Director of Finance will work directly with the Accounting team to ensure proper review of allocation of attorney fees.
Criteria: Legal Services Corporation (LSC) grant recipients are required to compile with the retainer agreements requirements of 45 C.F.R. § 1611.9 (b). (a) When a recipient provides extended service to a client, the recipient shall execute a written retainer agreement with the client. The retainer agreement shall be executed when representation commences or as soon thereafter as is practicable. Such retainer agreement must be in a form consistent with the applicable rules of professional responsibility and prevailing practices in the recipient's service area and shall include, at a minimum, a statement identifying the legal problem for which representation is sought, and the nature of the legal services to be provided. (b) No written retainer agreement is required for advice and counsel or brief service provided by the recipient to the client or for legal services provided to the client by a private attorney pursuant to 45 CFR part 1614. (c) The recipient shall maintain copies of all retainer agreements generated in accordance with this section.
Condition/Context: The Organization was unable to provide a copy of the retainer agreement for one case of 60 cases included in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly retain the client's retainer agreement due to a one-time failure in document preservation.
Effect: LSC funds could be utilized for unallowable activities.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization ensure proper retention of retainer agreements to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s findings. The Director of Litigation (Lisa Hollingsworth) will have the Regional Leaders remind their staff about the necessity of obtaining retainer agreements from clients in extended service cases.
Criteria: Legal Services Corporation (LSC) grant recipients for fee generating cases are required to compile with the allocation and recordation requirements of 45 C.F.R. § 1630.5 (a). expenditures are allowable under an LSC grant or contract only if the recipient can demonstrate that the cost was allocable to the grant or contract.
Condition/Context: The Organization was unable to provide support for expense allocations for 10 expenses of 40 expenses included in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly retain expense allocation support due to improper review and turnover.
Effect: LSC funds could be utilized for unallowable activities.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization ensure proper retention of expense allocation documentation to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s findings and will take immediate action to ensure the expense allocations are recorded properly. The Director of Finance (Vannam Khen) will work directly with the Finance staff to develop procedures to ensure expense allocations are recorded properly.
Criteria: Legal Services Corporation (LSC) grant recipients are required to establish and maintain adequate accounting systems and financial records to accurately account for all funds (both LSC and non-LSC funds). LSC requires recipients and subrecipients to (1) responsibly manage all funds pursuant to the cost standards and procedures of 45 C.F.R. Part 1630 and other LSC regulations at 45 C.F.R. Parts 1600-1644; and (2) record transactions in accounting records and, where required, prepare annual financial statements in accordance with GAAP. Recipients are also required to adhere to requirements of the LSC Financial Guide (effective January 1, 2023) including Section 2 "Accounting Systems and Governance" and Section 3 "Managing LSC Grants."
Condition/Context: The Organization's written policies and procedures did not meet the requirements outlined by the LSC Financial Guideline and other LSC regulations.
Cause: The Organization did not align its policies and procedures with the recently issued LSC Financial Guide. The updated Guide required operational changes that had not yet been implemented.
Effect: Lack of proscribed procedures and controls could result in the Organization administering the LSC Grant out of compliance with the Guide.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization revise their written policies and operational procedures to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s finding and will take immediate action to revise the Organization’s accounting manual to align with the regulatory requirements. The Director of Finance will work directly with the Organization’s assigned Fiscal Compliance Analyst from Legal Services Corporation (LSC) to ensure policies and procedures are aligned with LSC’s Financial Guide. The Director will review the Organization’s accounting manual annually and will notify the CEO and the Finance and Audit Committee of any updates to any policy and procedures.
Criteria: Legal Services Corporation (LSC) grant recipients for fee generating cases are required to compile with the allocation and recordation requirements of 45 C.F.R. § 1609.4 (b). Attorneys' fees received by a recipient or an employee of a recipient for representation supported in whole or in part with funds provided by LSC 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 representation.
Condition/Context: The Organization incorrectly allocated attorney's fees totaling $4,925 back to a non-LSC fund in four of four cases selected in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly review the allocation of attorneys' fees due to turnover.
Effect: Improper allocation could result in the Organization administering the LSC Grant out of compliance with the Guide.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization revise the allocation for those noted above, and ensure proper review of allocation to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s finding and will take immediate action to revise the attorney fees allocation. The Director of Finance will work directly with the Accounting team to ensure proper review of allocation of attorney fees.
Criteria: Legal Services Corporation (LSC) grant recipients are required to compile with the retainer agreements requirements of 45 C.F.R. § 1611.9 (b). (a) When a recipient provides extended service to a client, the recipient shall execute a written retainer agreement with the client. The retainer agreement shall be executed when representation commences or as soon thereafter as is practicable. Such retainer agreement must be in a form consistent with the applicable rules of professional responsibility and prevailing practices in the recipient's service area and shall include, at a minimum, a statement identifying the legal problem for which representation is sought, and the nature of the legal services to be provided. (b) No written retainer agreement is required for advice and counsel or brief service provided by the recipient to the client or for legal services provided to the client by a private attorney pursuant to 45 CFR part 1614. (c) The recipient shall maintain copies of all retainer agreements generated in accordance with this section.
Condition/Context: The Organization was unable to provide a copy of the retainer agreement for one case of 60 cases included in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly retain the client's retainer agreement due to a one-time failure in document preservation.
Effect: LSC funds could be utilized for unallowable activities.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization ensure proper retention of retainer agreements to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s findings. The Director of Litigation (Lisa Hollingsworth) will have the Regional Leaders remind their staff about the necessity of obtaining retainer agreements from clients in extended service cases.
Criteria: Legal Services Corporation (LSC) grant recipients for fee generating cases are required to compile with the allocation and recordation requirements of 45 C.F.R. § 1630.5 (a). expenditures are allowable under an LSC grant or contract only if the recipient can demonstrate that the cost was allocable to the grant or contract.
Condition/Context: The Organization was unable to provide support for expense allocations for 10 expenses of 40 expenses included in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly retain expense allocation support due to improper review and turnover.
Effect: LSC funds could be utilized for unallowable activities.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization ensure proper retention of expense allocation documentation to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s findings and will take immediate action to ensure the expense allocations are recorded properly. The Director of Finance (Vannam Khen) will work directly with the Finance staff to develop procedures to ensure expense allocations are recorded properly.
Criteria: Legal Services Corporation (LSC) grant recipients are required to establish and maintain adequate accounting systems and financial records to accurately account for all funds (both LSC and non-LSC funds). LSC requires recipients and subrecipients to (1) responsibly manage all funds pursuant to the cost standards and procedures of 45 C.F.R. Part 1630 and other LSC regulations at 45 C.F.R. Parts 1600-1644; and (2) record transactions in accounting records and, where required, prepare annual financial statements in accordance with GAAP. Recipients are also required to adhere to requirements of the LSC Financial Guide (effective January 1, 2023) including Section 2 "Accounting Systems and Governance" and Section 3 "Managing LSC Grants."
Condition/Context: The Organization's written policies and procedures did not meet the requirements outlined by the LSC Financial Guideline and other LSC regulations.
Cause: The Organization did not align its policies and procedures with the recently issued LSC Financial Guide. The updated Guide required operational changes that had not yet been implemented.
Effect: Lack of proscribed procedures and controls could result in the Organization administering the LSC Grant out of compliance with the Guide.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization revise their written policies and operational procedures to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s finding and will take immediate action to revise the Organization’s accounting manual to align with the regulatory requirements. The Director of Finance will work directly with the Organization’s assigned Fiscal Compliance Analyst from Legal Services Corporation (LSC) to ensure policies and procedures are aligned with LSC’s Financial Guide. The Director will review the Organization’s accounting manual annually and will notify the CEO and the Finance and Audit Committee of any updates to any policy and procedures.
Criteria: Legal Services Corporation (LSC) grant recipients for fee generating cases are required to compile with the allocation and recordation requirements of 45 C.F.R. § 1609.4 (b). Attorneys' fees received by a recipient or an employee of a recipient for representation supported in whole or in part with funds provided by LSC 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 representation.
Condition/Context: The Organization incorrectly allocated attorney's fees totaling $4,925 back to a non-LSC fund in four of four cases selected in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly review the allocation of attorneys' fees due to turnover.
Effect: Improper allocation could result in the Organization administering the LSC Grant out of compliance with the Guide.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization revise the allocation for those noted above, and ensure proper review of allocation to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s finding and will take immediate action to revise the attorney fees allocation. The Director of Finance will work directly with the Accounting team to ensure proper review of allocation of attorney fees.
Criteria: Legal Services Corporation (LSC) grant recipients are required to compile with the retainer agreements requirements of 45 C.F.R. § 1611.9 (b). (a) When a recipient provides extended service to a client, the recipient shall execute a written retainer agreement with the client. The retainer agreement shall be executed when representation commences or as soon thereafter as is practicable. Such retainer agreement must be in a form consistent with the applicable rules of professional responsibility and prevailing practices in the recipient's service area and shall include, at a minimum, a statement identifying the legal problem for which representation is sought, and the nature of the legal services to be provided. (b) No written retainer agreement is required for advice and counsel or brief service provided by the recipient to the client or for legal services provided to the client by a private attorney pursuant to 45 CFR part 1614. (c) The recipient shall maintain copies of all retainer agreements generated in accordance with this section.
Condition/Context: The Organization was unable to provide a copy of the retainer agreement for one case of 60 cases included in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly retain the client's retainer agreement due to a one-time failure in document preservation.
Effect: LSC funds could be utilized for unallowable activities.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization ensure proper retention of retainer agreements to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s findings. The Director of Litigation (Lisa Hollingsworth) will have the Regional Leaders remind their staff about the necessity of obtaining retainer agreements from clients in extended service cases.
Criteria: Legal Services Corporation (LSC) grant recipients for fee generating cases are required to compile with the allocation and recordation requirements of 45 C.F.R. § 1630.5 (a). expenditures are allowable under an LSC grant or contract only if the recipient can demonstrate that the cost was allocable to the grant or contract.
Condition/Context: The Organization was unable to provide support for expense allocations for 10 expenses of 40 expenses included in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly retain expense allocation support due to improper review and turnover.
Effect: LSC funds could be utilized for unallowable activities.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization ensure proper retention of expense allocation documentation to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s findings and will take immediate action to ensure the expense allocations are recorded properly. The Director of Finance (Vannam Khen) will work directly with the Finance staff to develop procedures to ensure expense allocations are recorded properly.
Criteria: Legal Services Corporation (LSC) grant recipients are required to establish and maintain adequate accounting systems and financial records to accurately account for all funds (both LSC and non-LSC funds). LSC requires recipients and subrecipients to (1) responsibly manage all funds pursuant to the cost standards and procedures of 45 C.F.R. Part 1630 and other LSC regulations at 45 C.F.R. Parts 1600-1644; and (2) record transactions in accounting records and, where required, prepare annual financial statements in accordance with GAAP. Recipients are also required to adhere to requirements of the LSC Financial Guide (effective January 1, 2023) including Section 2 "Accounting Systems and Governance" and Section 3 "Managing LSC Grants."
Condition/Context: The Organization's written policies and procedures did not meet the requirements outlined by the LSC Financial Guideline and other LSC regulations.
Cause: The Organization did not align its policies and procedures with the recently issued LSC Financial Guide. The updated Guide required operational changes that had not yet been implemented.
Effect: Lack of proscribed procedures and controls could result in the Organization administering the LSC Grant out of compliance with the Guide.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization revise their written policies and operational procedures to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s finding and will take immediate action to revise the Organization’s accounting manual to align with the regulatory requirements. The Director of Finance will work directly with the Organization’s assigned Fiscal Compliance Analyst from Legal Services Corporation (LSC) to ensure policies and procedures are aligned with LSC’s Financial Guide. The Director will review the Organization’s accounting manual annually and will notify the CEO and the Finance and Audit Committee of any updates to any policy and procedures.
Criteria: Legal Services Corporation (LSC) grant recipients for fee generating cases are required to compile with the allocation and recordation requirements of 45 C.F.R. § 1609.4 (b). Attorneys' fees received by a recipient or an employee of a recipient for representation supported in whole or in part with funds provided by LSC 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 representation.
Condition/Context: The Organization incorrectly allocated attorney's fees totaling $4,925 back to a non-LSC fund in four of four cases selected in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly review the allocation of attorneys' fees due to turnover.
Effect: Improper allocation could result in the Organization administering the LSC Grant out of compliance with the Guide.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization revise the allocation for those noted above, and ensure proper review of allocation to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s finding and will take immediate action to revise the attorney fees allocation. The Director of Finance will work directly with the Accounting team to ensure proper review of allocation of attorney fees.
Criteria: Legal Services Corporation (LSC) grant recipients are required to compile with the retainer agreements requirements of 45 C.F.R. § 1611.9 (b). (a) When a recipient provides extended service to a client, the recipient shall execute a written retainer agreement with the client. The retainer agreement shall be executed when representation commences or as soon thereafter as is practicable. Such retainer agreement must be in a form consistent with the applicable rules of professional responsibility and prevailing practices in the recipient's service area and shall include, at a minimum, a statement identifying the legal problem for which representation is sought, and the nature of the legal services to be provided. (b) No written retainer agreement is required for advice and counsel or brief service provided by the recipient to the client or for legal services provided to the client by a private attorney pursuant to 45 CFR part 1614. (c) The recipient shall maintain copies of all retainer agreements generated in accordance with this section.
Condition/Context: The Organization was unable to provide a copy of the retainer agreement for one case of 60 cases included in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly retain the client's retainer agreement due to a one-time failure in document preservation.
Effect: LSC funds could be utilized for unallowable activities.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization ensure proper retention of retainer agreements to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s findings. The Director of Litigation (Lisa Hollingsworth) will have the Regional Leaders remind their staff about the necessity of obtaining retainer agreements from clients in extended service cases.
Criteria: Legal Services Corporation (LSC) grant recipients for fee generating cases are required to compile with the allocation and recordation requirements of 45 C.F.R. § 1630.5 (a). expenditures are allowable under an LSC grant or contract only if the recipient can demonstrate that the cost was allocable to the grant or contract.
Condition/Context: The Organization was unable to provide support for expense allocations for 10 expenses of 40 expenses included in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly retain expense allocation support due to improper review and turnover.
Effect: LSC funds could be utilized for unallowable activities.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization ensure proper retention of expense allocation documentation to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s findings and will take immediate action to ensure the expense allocations are recorded properly. The Director of Finance (Vannam Khen) will work directly with the Finance staff to develop procedures to ensure expense allocations are recorded properly.
Criteria: Legal Services Corporation (LSC) grant recipients are required to establish and maintain adequate accounting systems and financial records to accurately account for all funds (both LSC and non-LSC funds). LSC requires recipients and subrecipients to (1) responsibly manage all funds pursuant to the cost standards and procedures of 45 C.F.R. Part 1630 and other LSC regulations at 45 C.F.R. Parts 1600-1644; and (2) record transactions in accounting records and, where required, prepare annual financial statements in accordance with GAAP. Recipients are also required to adhere to requirements of the LSC Financial Guide (effective January 1, 2023) including Section 2 "Accounting Systems and Governance" and Section 3 "Managing LSC Grants."
Condition/Context: The Organization's written policies and procedures did not meet the requirements outlined by the LSC Financial Guideline and other LSC regulations.
Cause: The Organization did not align its policies and procedures with the recently issued LSC Financial Guide. The updated Guide required operational changes that had not yet been implemented.
Effect: Lack of proscribed procedures and controls could result in the Organization administering the LSC Grant out of compliance with the Guide.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization revise their written policies and operational procedures to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s finding and will take immediate action to revise the Organization’s accounting manual to align with the regulatory requirements. The Director of Finance will work directly with the Organization’s assigned Fiscal Compliance Analyst from Legal Services Corporation (LSC) to ensure policies and procedures are aligned with LSC’s Financial Guide. The Director will review the Organization’s accounting manual annually and will notify the CEO and the Finance and Audit Committee of any updates to any policy and procedures.
Criteria: Legal Services Corporation (LSC) grant recipients for fee generating cases are required to compile with the allocation and recordation requirements of 45 C.F.R. § 1609.4 (b). Attorneys' fees received by a recipient or an employee of a recipient for representation supported in whole or in part with funds provided by LSC 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 representation.
Condition/Context: The Organization incorrectly allocated attorney's fees totaling $4,925 back to a non-LSC fund in four of four cases selected in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly review the allocation of attorneys' fees due to turnover.
Effect: Improper allocation could result in the Organization administering the LSC Grant out of compliance with the Guide.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization revise the allocation for those noted above, and ensure proper review of allocation to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s finding and will take immediate action to revise the attorney fees allocation. The Director of Finance will work directly with the Accounting team to ensure proper review of allocation of attorney fees.
Criteria: Legal Services Corporation (LSC) grant recipients are required to compile with the retainer agreements requirements of 45 C.F.R. § 1611.9 (b). (a) When a recipient provides extended service to a client, the recipient shall execute a written retainer agreement with the client. The retainer agreement shall be executed when representation commences or as soon thereafter as is practicable. Such retainer agreement must be in a form consistent with the applicable rules of professional responsibility and prevailing practices in the recipient's service area and shall include, at a minimum, a statement identifying the legal problem for which representation is sought, and the nature of the legal services to be provided. (b) No written retainer agreement is required for advice and counsel or brief service provided by the recipient to the client or for legal services provided to the client by a private attorney pursuant to 45 CFR part 1614. (c) The recipient shall maintain copies of all retainer agreements generated in accordance with this section.
Condition/Context: The Organization was unable to provide a copy of the retainer agreement for one case of 60 cases included in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly retain the client's retainer agreement due to a one-time failure in document preservation.
Effect: LSC funds could be utilized for unallowable activities.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization ensure proper retention of retainer agreements to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s findings. The Director of Litigation (Lisa Hollingsworth) will have the Regional Leaders remind their staff about the necessity of obtaining retainer agreements from clients in extended service cases.
Criteria: Legal Services Corporation (LSC) grant recipients for fee generating cases are required to compile with the allocation and recordation requirements of 45 C.F.R. § 1630.5 (a). expenditures are allowable under an LSC grant or contract only if the recipient can demonstrate that the cost was allocable to the grant or contract.
Condition/Context: The Organization was unable to provide support for expense allocations for 10 expenses of 40 expenses included in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly retain expense allocation support due to improper review and turnover.
Effect: LSC funds could be utilized for unallowable activities.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization ensure proper retention of expense allocation documentation to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s findings and will take immediate action to ensure the expense allocations are recorded properly. The Director of Finance (Vannam Khen) will work directly with the Finance staff to develop procedures to ensure expense allocations are recorded properly.
Criteria: Legal Services Corporation (LSC) grant recipients are required to establish and maintain adequate accounting systems and financial records to accurately account for all funds (both LSC and non-LSC funds). LSC requires recipients and subrecipients to (1) responsibly manage all funds pursuant to the cost standards and procedures of 45 C.F.R. Part 1630 and other LSC regulations at 45 C.F.R. Parts 1600-1644; and (2) record transactions in accounting records and, where required, prepare annual financial statements in accordance with GAAP. Recipients are also required to adhere to requirements of the LSC Financial Guide (effective January 1, 2023) including Section 2 "Accounting Systems and Governance" and Section 3 "Managing LSC Grants."
Condition/Context: The Organization's written policies and procedures did not meet the requirements outlined by the LSC Financial Guideline and other LSC regulations.
Cause: The Organization did not align its policies and procedures with the recently issued LSC Financial Guide. The updated Guide required operational changes that had not yet been implemented.
Effect: Lack of proscribed procedures and controls could result in the Organization administering the LSC Grant out of compliance with the Guide.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization revise their written policies and operational procedures to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s finding and will take immediate action to revise the Organization’s accounting manual to align with the regulatory requirements. The Director of Finance will work directly with the Organization’s assigned Fiscal Compliance Analyst from Legal Services Corporation (LSC) to ensure policies and procedures are aligned with LSC’s Financial Guide. The Director will review the Organization’s accounting manual annually and will notify the CEO and the Finance and Audit Committee of any updates to any policy and procedures.
Criteria: Legal Services Corporation (LSC) grant recipients for fee generating cases are required to compile with the allocation and recordation requirements of 45 C.F.R. § 1609.4 (b). Attorneys' fees received by a recipient or an employee of a recipient for representation supported in whole or in part with funds provided by LSC 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 representation.
Condition/Context: The Organization incorrectly allocated attorney's fees totaling $4,925 back to a non-LSC fund in four of four cases selected in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly review the allocation of attorneys' fees due to turnover.
Effect: Improper allocation could result in the Organization administering the LSC Grant out of compliance with the Guide.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization revise the allocation for those noted above, and ensure proper review of allocation to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s finding and will take immediate action to revise the attorney fees allocation. The Director of Finance will work directly with the Accounting team to ensure proper review of allocation of attorney fees.
Criteria: Legal Services Corporation (LSC) grant recipients are required to compile with the retainer agreements requirements of 45 C.F.R. § 1611.9 (b). (a) When a recipient provides extended service to a client, the recipient shall execute a written retainer agreement with the client. The retainer agreement shall be executed when representation commences or as soon thereafter as is practicable. Such retainer agreement must be in a form consistent with the applicable rules of professional responsibility and prevailing practices in the recipient's service area and shall include, at a minimum, a statement identifying the legal problem for which representation is sought, and the nature of the legal services to be provided. (b) No written retainer agreement is required for advice and counsel or brief service provided by the recipient to the client or for legal services provided to the client by a private attorney pursuant to 45 CFR part 1614. (c) The recipient shall maintain copies of all retainer agreements generated in accordance with this section.
Condition/Context: The Organization was unable to provide a copy of the retainer agreement for one case of 60 cases included in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly retain the client's retainer agreement due to a one-time failure in document preservation.
Effect: LSC funds could be utilized for unallowable activities.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization ensure proper retention of retainer agreements to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s findings. The Director of Litigation (Lisa Hollingsworth) will have the Regional Leaders remind their staff about the necessity of obtaining retainer agreements from clients in extended service cases.
Criteria: Legal Services Corporation (LSC) grant recipients for fee generating cases are required to compile with the allocation and recordation requirements of 45 C.F.R. § 1630.5 (a). expenditures are allowable under an LSC grant or contract only if the recipient can demonstrate that the cost was allocable to the grant or contract.
Condition/Context: The Organization was unable to provide support for expense allocations for 10 expenses of 40 expenses included in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly retain expense allocation support due to improper review and turnover.
Effect: LSC funds could be utilized for unallowable activities.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization ensure proper retention of expense allocation documentation to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s findings and will take immediate action to ensure the expense allocations are recorded properly. The Director of Finance (Vannam Khen) will work directly with the Finance staff to develop procedures to ensure expense allocations are recorded properly.
Criteria: Legal Services Corporation (LSC) grant recipients are required to establish and maintain adequate accounting systems and financial records to accurately account for all funds (both LSC and non-LSC funds). LSC requires recipients and subrecipients to (1) responsibly manage all funds pursuant to the cost standards and procedures of 45 C.F.R. Part 1630 and other LSC regulations at 45 C.F.R. Parts 1600-1644; and (2) record transactions in accounting records and, where required, prepare annual financial statements in accordance with GAAP. Recipients are also required to adhere to requirements of the LSC Financial Guide (effective January 1, 2023) including Section 2 "Accounting Systems and Governance" and Section 3 "Managing LSC Grants."
Condition/Context: The Organization's written policies and procedures did not meet the requirements outlined by the LSC Financial Guideline and other LSC regulations.
Cause: The Organization did not align its policies and procedures with the recently issued LSC Financial Guide. The updated Guide required operational changes that had not yet been implemented.
Effect: Lack of proscribed procedures and controls could result in the Organization administering the LSC Grant out of compliance with the Guide.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization revise their written policies and operational procedures to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s finding and will take immediate action to revise the Organization’s accounting manual to align with the regulatory requirements. The Director of Finance will work directly with the Organization’s assigned Fiscal Compliance Analyst from Legal Services Corporation (LSC) to ensure policies and procedures are aligned with LSC’s Financial Guide. The Director will review the Organization’s accounting manual annually and will notify the CEO and the Finance and Audit Committee of any updates to any policy and procedures.
Criteria: Legal Services Corporation (LSC) grant recipients for fee generating cases are required to compile with the allocation and recordation requirements of 45 C.F.R. § 1609.4 (b). Attorneys' fees received by a recipient or an employee of a recipient for representation supported in whole or in part with funds provided by LSC 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 representation.
Condition/Context: The Organization incorrectly allocated attorney's fees totaling $4,925 back to a non-LSC fund in four of four cases selected in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly review the allocation of attorneys' fees due to turnover.
Effect: Improper allocation could result in the Organization administering the LSC Grant out of compliance with the Guide.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization revise the allocation for those noted above, and ensure proper review of allocation to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s finding and will take immediate action to revise the attorney fees allocation. The Director of Finance will work directly with the Accounting team to ensure proper review of allocation of attorney fees.
Criteria: Legal Services Corporation (LSC) grant recipients are required to compile with the retainer agreements requirements of 45 C.F.R. § 1611.9 (b). (a) When a recipient provides extended service to a client, the recipient shall execute a written retainer agreement with the client. The retainer agreement shall be executed when representation commences or as soon thereafter as is practicable. Such retainer agreement must be in a form consistent with the applicable rules of professional responsibility and prevailing practices in the recipient's service area and shall include, at a minimum, a statement identifying the legal problem for which representation is sought, and the nature of the legal services to be provided. (b) No written retainer agreement is required for advice and counsel or brief service provided by the recipient to the client or for legal services provided to the client by a private attorney pursuant to 45 CFR part 1614. (c) The recipient shall maintain copies of all retainer agreements generated in accordance with this section.
Condition/Context: The Organization was unable to provide a copy of the retainer agreement for one case of 60 cases included in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly retain the client's retainer agreement due to a one-time failure in document preservation.
Effect: LSC funds could be utilized for unallowable activities.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization ensure proper retention of retainer agreements to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s findings. The Director of Litigation (Lisa Hollingsworth) will have the Regional Leaders remind their staff about the necessity of obtaining retainer agreements from clients in extended service cases.
Criteria: Legal Services Corporation (LSC) grant recipients for fee generating cases are required to compile with the allocation and recordation requirements of 45 C.F.R. § 1630.5 (a). expenditures are allowable under an LSC grant or contract only if the recipient can demonstrate that the cost was allocable to the grant or contract.
Condition/Context: The Organization was unable to provide support for expense allocations for 10 expenses of 40 expenses included in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly retain expense allocation support due to improper review and turnover.
Effect: LSC funds could be utilized for unallowable activities.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization ensure proper retention of expense allocation documentation to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s findings and will take immediate action to ensure the expense allocations are recorded properly. The Director of Finance (Vannam Khen) will work directly with the Finance staff to develop procedures to ensure expense allocations are recorded properly.
Criteria: Legal Services Corporation (LSC) grant recipients are required to establish and maintain adequate accounting systems and financial records to accurately account for all funds (both LSC and non-LSC funds). LSC requires recipients and subrecipients to (1) responsibly manage all funds pursuant to the cost standards and procedures of 45 C.F.R. Part 1630 and other LSC regulations at 45 C.F.R. Parts 1600-1644; and (2) record transactions in accounting records and, where required, prepare annual financial statements in accordance with GAAP. Recipients are also required to adhere to requirements of the LSC Financial Guide (effective January 1, 2023) including Section 2 "Accounting Systems and Governance" and Section 3 "Managing LSC Grants."
Condition/Context: The Organization's written policies and procedures did not meet the requirements outlined by the LSC Financial Guideline and other LSC regulations.
Cause: The Organization did not align its policies and procedures with the recently issued LSC Financial Guide. The updated Guide required operational changes that had not yet been implemented.
Effect: Lack of proscribed procedures and controls could result in the Organization administering the LSC Grant out of compliance with the Guide.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization revise their written policies and operational procedures to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s finding and will take immediate action to revise the Organization’s accounting manual to align with the regulatory requirements. The Director of Finance will work directly with the Organization’s assigned Fiscal Compliance Analyst from Legal Services Corporation (LSC) to ensure policies and procedures are aligned with LSC’s Financial Guide. The Director will review the Organization’s accounting manual annually and will notify the CEO and the Finance and Audit Committee of any updates to any policy and procedures.
Criteria: Legal Services Corporation (LSC) grant recipients for fee generating cases are required to compile with the allocation and recordation requirements of 45 C.F.R. § 1609.4 (b). Attorneys' fees received by a recipient or an employee of a recipient for representation supported in whole or in part with funds provided by LSC 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 representation.
Condition/Context: The Organization incorrectly allocated attorney's fees totaling $4,925 back to a non-LSC fund in four of four cases selected in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly review the allocation of attorneys' fees due to turnover.
Effect: Improper allocation could result in the Organization administering the LSC Grant out of compliance with the Guide.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization revise the allocation for those noted above, and ensure proper review of allocation to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s finding and will take immediate action to revise the attorney fees allocation. The Director of Finance will work directly with the Accounting team to ensure proper review of allocation of attorney fees.
Criteria: Legal Services Corporation (LSC) grant recipients are required to compile with the retainer agreements requirements of 45 C.F.R. § 1611.9 (b). (a) When a recipient provides extended service to a client, the recipient shall execute a written retainer agreement with the client. The retainer agreement shall be executed when representation commences or as soon thereafter as is practicable. Such retainer agreement must be in a form consistent with the applicable rules of professional responsibility and prevailing practices in the recipient's service area and shall include, at a minimum, a statement identifying the legal problem for which representation is sought, and the nature of the legal services to be provided. (b) No written retainer agreement is required for advice and counsel or brief service provided by the recipient to the client or for legal services provided to the client by a private attorney pursuant to 45 CFR part 1614. (c) The recipient shall maintain copies of all retainer agreements generated in accordance with this section.
Condition/Context: The Organization was unable to provide a copy of the retainer agreement for one case of 60 cases included in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly retain the client's retainer agreement due to a one-time failure in document preservation.
Effect: LSC funds could be utilized for unallowable activities.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization ensure proper retention of retainer agreements to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s findings. The Director of Litigation (Lisa Hollingsworth) will have the Regional Leaders remind their staff about the necessity of obtaining retainer agreements from clients in extended service cases.
Criteria: Legal Services Corporation (LSC) grant recipients for fee generating cases are required to compile with the allocation and recordation requirements of 45 C.F.R. § 1630.5 (a). expenditures are allowable under an LSC grant or contract only if the recipient can demonstrate that the cost was allocable to the grant or contract.
Condition/Context: The Organization was unable to provide support for expense allocations for 10 expenses of 40 expenses included in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly retain expense allocation support due to improper review and turnover.
Effect: LSC funds could be utilized for unallowable activities.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization ensure proper retention of expense allocation documentation to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s findings and will take immediate action to ensure the expense allocations are recorded properly. The Director of Finance (Vannam Khen) will work directly with the Finance staff to develop procedures to ensure expense allocations are recorded properly.