Finding Text
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.