Finding Text
Finding 2024-0010 LSC Financial Guide § 3.2.4 Cash Disbursements Grantor: Legal Services Corporation Program Name: Legal Services Corporation Basic Field Grant CFDA No.: 09.952000 Award No.: Basic Field Grant Award Year: 2024 Repeat Finding From Prior Audit? No Finding Type: Significant deficiency Criteria: Per LSC Financial Guide § 3.2.4 Cash Disbursements, the recipient is required to have procedures for timely review and approval of transactions (including electronic transactions) , a process to confirm disbursements are made to approved payees, procedures in place to identify and prevent improper or duplicate payments, procedures in place to verify invoice details (vendor, quantities, and price of goods/services received) against goods/services received. 3.2.4.a Employee Expense Reimbursements Recipients are required to adopt written expense reimbursement policies and procedures. The policy should include procedure details, roles/responsibilities, reimbursement submission deadlines, documentation requirements, review/approval requirements. 3.2.4.b Travel Expenses, Recipients are required to have detailed local travel policies. 3.2.4.b.ii Travel Advances In the event a recipient allows employees to request and receive travel advances, the recipient’s travel policy must identify when the employee is permitted to request a travel advance, how much the employee is permitted to request, and the process for such an advance to be approved. The policy should also address those situations where an employee must repay an advance. Condition: MLSC did not have a complete cash disbursement policy to demonstrate compliance with LSC requirements. Cause : MLSC failed to update the cash disbursement policy to reflect the requirements under § 3.2.4 Cash Disbursements. Finding 2024-0010 LSC Financial Guide § 3.2.4 Cash Disbursements, continued Effect: MLSC's lack of a comprehensive cash disbursement policy that addresses timely review, approval, verification, and controls increases the risk of improper, duplicate, or unauthorized payments, leading to potential non-compliance with LSC requirements and financial mismanagement. Recommendation: MLS should develop and implement a complete cash disbursement policy that includes procedures for review and approval of transactions, confirmation of payees, prevention of improper or duplicate payments, and verification of invoice details. This will ensure adherence to the requirements outlined in LSC Financial Guide § 3.2.4 and strengthen internal controls over cash disbursements. Management’s Response and Corrective Action Plan: MLSC concurs with the audit finding. Management acknowledges that the previous cash disbursement policy did not fully incorporate the requirements outlined in LSC Financial Guide § 3.2.4. MLSC believes that with the implementation of the revised Cash Disbursement Policy and related staff training, all recommendations in the audit finding have been fully addressed. Responsible person: Exec. Director, Lee Pliscou and Chief Fiscal Officer, Jocelyn Mallari Corrective action planned: MLSC has reviewed and revised the policy, and the Board of Directors approved an updated Cash Disbursement policy that fully aligned with the LSC Financial Guide. MLSC staff were trained on the new procedures to ensure full understanding and compliance. The revised policy was shared with all the staff at MLSC’s share drive. Anticipated completion date: Completed