Finding Text
Finding No. 2024-001 (LSC Basic Field Grant, CFDA No. 09.447061):
Condition – Insufficient fidelity bond coverage was maintained for the year ended June 30, 2024. Criteria – A recipient of LSC funds must supply fidelity bond coverage for all employees, officers, directors, agents, and volunteers and, if a recipient uses a third party for payroll, billing, or collection services, the recipient must either supply coverage covering the third party or ensure that the third party has a fidelity bond or similar insurance coverage. The recipient must carry fidelity bond coverage or similar coverage at a minimum level of at least ten percent of its annualized funding level for the previous fiscal year.
Cause – Policies and procedures are in place to routinely remind all personnel to renew various insurance policies including fidelity bonding. However, it appears that management personnel were unaware of LSC’s minimum fidelity bond coverage requirements and, as a result, insufficient coverage was obtained.
Effect – During the year ended June 30, 2024, there was a violation of LSC’s rules and regulations.
Context – Not applicable. The aforementioned condition was not noted by any sampling methodology.
Recommendation – Appropriate personnel of Virginia Legal Aid Society, Inc. should review LSC’s rules and regulations regarding fidelity bond coverage and immediately obtain the required coverage and design and institute procedures to ensure the required coverage is maintained on a prospective basis.
Views of Responsible Officials and Planned Corrective Actions – Please refer to the accompanying Corrective Action Plan of Virginia Legal Aid Society, Inc.