Finding Text
Federal Agency: Legal Services Corporation (LSC) Federal Program Name: LSC Grants Assistance Listing Number: 09.706060 Federal Award Identification Number and Year: 09.706060 - 2025 Award Period: January 1, 2025 – December 31, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Federal regulations (45 CFR 1630.6(b)) specify that without LSC’s prior written approval, a recipient may not expend $25,000 or more of LSC funds on any of the following: (i) A single purchase or single lease of person property; (ii) A single contract for services; (iii) A single combined purchase or lease of personal property and contract for services; and (iv) Capital improvements. Condition: During our testing, we noted that the Organization expended $31,214 related to a single contract for $111,384 in the year under audit and it could not provide evidence that it obtained prior written approval from LSC for such costs. Questioned Costs: None. Context: This instance was noted during testing of four single contracts where the Organization expended more than $25,000. Cause: The Organization does not have a control process in place to ensure that it obtains prior written approval from LSC for all of its costs that require such an approval. Effect: The Organization may not be in compliance with federal regulations related to the expenditure of LSC funds. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization implement a control process to ensure that it obtains LSC prior written approval where required in accordance with 45 CFR 1630.6(b). Views of responsible officials: With respect to the recommended control process, CLS has an established procedure incorporated within its accounting manual. The organization will reinforce and ensure consistent application of this procedure throughout 2026.