Recommendation
We recommend DNA formally respond, in detail, to all deficiencies reported in the OIG Report, including Accounting Policies and other Policies such as the Vehicle Use Policy.
As the Board needs to formally adopt all revised policies as noted in the OIG Report, we recommend:
DNA prov...
Recommendation
We recommend DNA formally respond, in detail, to all deficiencies reported in the OIG Report, including Accounting Policies and other Policies such as the Vehicle Use Policy.
As the Board needs to formally adopt all revised policies as noted in the OIG Report, we recommend:
DNA provide the Board a redline copy of the changes for each revised policy.
Correlate each revised policy to each finding in the OIG report and,
Provide the Board each related policy section guidance in the LSC Financial Guide.
Management Response
Corrective Action: As of April 30, 2025, our accounting department is fully staffed and we are supporting accounting staff training needs. As of April 30, 2025, management has drafted updates to many of the policies and procedures referenced in the OIG report. Updated policies, including a revised Accounting Manual and an updated Personnel Manual will be presented to the Board, the Board Budget & Audit Committee, or the Board Executive Committee prior to the June 2, 2025 OIG response deadline.
Management acknowledges that during the 2024 audit period the Legal Services Corporation Office of Inspector General (OIG) issued a final report on December 2, 2024 noting inadequate accounting policies, practices, and oversight for the period of January 1, 2022 through April 30, 2023. Also, while many of the policies noted in the OIG report have been updated, the policies mentioned in the OIG report have not been reviewed or adopted by the Board.
Three primary causes contributed to the deficiencies noted during the period under review by the OIG (January 1, 2022 through April 30, 2023), and before the issuance of the final LSC OIG report in December 2024:
Staffing shortages. For most of the January 1, 2022 to April 30, 2023 review period DNA had three vacancies in our five-person accounting operation. Additionally, our Chief Financial Officer was hired during the middle of the period under review, and even though he has extensive legal services accounting experience, he just started learning about DNA's organizational structure and accounting practices, and refamiliarizing himself with LSC accounting policies and financial guidelines.
A change in LSC accounting standards applicable to nonprofit LSC funded organizations was implemented during the period under review which made some of our policies and procedures outdated.
Management made a strategic decision to wait for the issuance of the final OIG report to ensure that updates to policies and practices would fully align with the OIG's expectations, rather than implementing piecemeal or interim measures that might have required further revision.
Due Date of Completion: June 2, 2025
Responsible Person(s): Executive Director and Chief Financial Officer