Finding Text
Finding 2025-001 Material Weakness: Eligibility Compliance And Control Finding ALN 09.526020 – Legal Services Corporation Contract Federal Agency: Legal Services Corporation (LSC) Pass-Through Entities: N/A Criteria Or Specific Requirement: 45 CRF Part 1611 requires that federal assistance be provided only to individuals that meet the financial eligibility requirements. Additionally, proper controls must be in place surrounding the determination of the eligibility of individuals. Condition: During our testing of client eligibility for the LSC program, we identified instances where legal services were provided to clients whose household income exceeded the applicable LSC income limit at the time eligibility was determined. Cause: The software system that the Corporation uses to determine eligibility incorrectly calculated the income limit for three individuals tested. Effect: Management did not detect this instance of noncompliance. Questioned Costs: Not determinable Context: Out of sixty files selected and tested, three files indicated legal services being provided to clients that were ineligible to receive assistance under LSC funding. Identification As A Repeat Finding: Not applicable Recommendation: We recommend that management perform checks over system-generated eligibility calculations. We also recommend that management contact the vendor to determine how miscalculation took place. Views Of Responsible Officials: The Corporation has reviewed the initial poverty calculation for cases opened in 2025 and 2026. It has determined that all cases opened from March 11, 2025 to March 10, 2026 were using a base125% federal poverty level (FPL) table instead of the 100% FPL table, as part of our electronic case management system’s (CMS) automatic determination of household percent of poverty, based upon income information entered into the CMS. Cases opened after March 10, 2026 were calculated using the 100% FPL table and are correct. LSEM is in discussions with its case management system vendor to determine how the error occurred when updating the tables for the 2025 federal poverty rates.