Audit 406732

2025-001: Physical Inventory Prior Year Finding No.: N/A Federal Agency: U.S. Congress via Legal Service Corporation CFDA No.: 06.643050 Compliance Requirements: Physical Inventory Condition: LSVI is required to conduct a physical inventory every 2 years. We noted during the audit that the physical inventory was not performed. Criteria: LSVI is required to conduct a physical inventory of property listed in the property subsidiary ledger every 2 years and, if applicable, test whether any differences between the physical inventory and property records were resolved (LSC Financial Guide (effective January 1, 2023)). An inventory is required at least every two years even if the assets purchased with LSC funds are fully depreciated. Context: This condition was identified per review of the LSC Financial Guide. Cause: The physical inventory was originally planned for completion during the fourth quarter of 2025 by the Administration and Finance Department but had to be rescheduled due to timing conflicts with other pending deadlines. Effect: LSVI is not fully compliant with the physical inventory requirement. Questioned Costs: $-0- Recommendation: Management should ensure that the physical inventory is conducted on time per LSC regulations. Views of Responsible Officials and Planned Corrective Action: This task was rescheduled multiple times, and the staff could not complete it before the end of 2025. The Physical Inventory will commence immediately and is expected to finish by May 10, 2026.