Audit 409881

2025-001 Financial Eligibility Legal Services Corporation ALN#09.233100 Criteria: Per LSC § 1611.4 (a) Financial Eligibility, a recipient may provide legal assistance supported with LSC funds only to individuals whom the recipient has determined to be financially eligible for such assistance. Nothing in this part, however, prohibits a recipient from providing legal assistance to an individual without regard to that individual's income and assets if the legal assistance is wholly supported by funds from a source other than LSC, and is otherwise permissible under applicable law and regulation. Condition: During the LSC case file testing, we identified one instance, where the program client was not financially eligible for the LSC program but was reported as LSC eligible. Cause: A Legal Services NYC employee mistakenly classified the program client who was not LSC financial eligible as LSC financial eligible in the case system. Effect: Incorrect financial eligibility documentation may lead to the improper inclusion or exclusion of clients from receiving services under the LSC program. Questioned costs: There are no questioned costs noted. Context: Out of 60 cases selected for testing, one (1) case was erroneously reported as LSC eligible. *This is a repeated finding from the prior year. The prior year finding # was 2024-001. Recommendation: We recommend that Legal Services NYC continue to provide relevant training to employees involved in client intake regarding financial eligibility. Views of responsible officials: See corrective action plan.

2025-002 Financial Eligibility – Assets Definition and Household Legal Services Corporation ALN#09.233100 Criteria: Per LSC Reg.# 1611.2(d) Definition of Assets, “Assets” means cash or other resources of the applicant or members of the applicant’s household that are readily convertible to cash, which are currently and actually available to the applicant Condition: The recorded assets or household sizes considered for client financial eligibility determination for three (3) cases did not meet the asset definition as per the LSC regulation. Cause: Certain assets, including a primary residence, were inaccurately reported as assets or incorrect household sizes were used for eligibility determination. These assets should be excluded and correct household sizes should be used when assessing financial eligibility in accordance with LSC Reg.#1611.2(d). Effect: Incorrect financial eligibility documentation may lead to the improper inclusion or exclusion of clients from receiving services under the LSC program. Questioned costs: There are no questioned costs noted. Context: Out of 60 cases selected for testing, three (3) cases included assets that did not align with the asset definition as specified by LSC Reg. # 1611.2(d). *This is a repeated finding from the prior year. The prior year finding # was 2024-002. Recommendation: We recommend that Legal Services NYC continue to provide relevant training to employees involved in client intake regarding maintenance of asset ceiling waiver approvals. Views of responsible officials: See corrective action plan.

2025-003 Retainer Agreement Legal Services Corporation ALN#09.233100 Criteria: Per LSC Reg.# 1611.9(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. Condition: During testing, we noted that a required retainer agreement was not maintained for one individual receiving services under the program. As a result, the organization was unable to demonstrate the nature of legal services provided. Cause: The policy related to the retainer agreement was not appropriately applied by the organization. Effect: Without a completed retainer agreement, the organization increases the risk that the scope of representation, client rights, and services to be provided are not clearly documented and understood by both the client and the legal services provider. As a result, the organization may be unable to demonstrate compliance with Legal Services Corporation requirements, which could lead to questioned costs, adverse monitoring or audit findings, and increased legal or administrative disputes regarding the nature and extent of representation provided. Additionally, insufficient documentation may impair the organization's ability to support that federally funded legal services were provided in accordance with program requirements. Questioned costs: There are no questioned costs noted. Context: Out of 60 cases selected for testing, one (1) case did not have the proper retainer agreement as specified by LSC Reg. # 1611.9(a). Recommendation: We recommend that Legal Services NYC continue to provide relevant training to employees involved in client intake regarding maintenance of retainer agreements. Views of responsible officials: See corrective action plan.