Finding 479303 (2023-007)

Material Weakness
Requirement
G
Questioned Costs
-
Year
2023
Accepted
2024-07-24
Audit: 315826
Organization: Colorado Legal Services, INC (CO)

AI Summary

  • Core Issue: The Organization incorrectly allocated interest income from LSC funds, violating federal regulations.
  • Impacted Requirements: Federal regulations (45 CFR 1630.17) require allocation based on LSC expenses compared to total expenses, not just LSC funds earning interest.
  • Recommended Follow-Up: Update the allocation policy and procedures to align with federal regulations to avoid under allocation of funds.

Finding Text

2023 – 007: Allocation of LSC Derivative Income Federal Agency: Legal Services Corporation (LSC) Federal Program Name: LSC Grants Assistance Listing Number: 09.706060 Federal Award Identification Number and Year: 09-706060 - 2023 Award Period: January 1, 2023 – December 31, 2023 Type of Finding:  Material Weakness in Internal Control over Compliance  Other Matters Criteria or specific requirement: Federal regulations (45 CFR 1630.17) state that derivative income resulting from an activity supported in whole or in part with LSC funds 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 activity. Condition: During our testing, we noted that the Organization allocated interest income earned on LSC funds were allocated to the LSC based on the proportion of LSC funds earning interest as opposed to the ratio of LSC expenses compared to total Organization expenses. Questioned costs: None. Context: This instance was noted during our recalculation of the Organization’s interest income allocation to the LSC fund. Cause: The Organization’s policy describes an allocation method for interest income that is different from the method described in the federal regulations. Effect: The difference between the allocation method listed in the federal regulations and the method used by the Organization resulted in an under allocation of $198,593 of interest income to the LSC fund. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization update its derivative income allocation method, policy and procedures to reflect the method described in the federal regulations. Views of responsible officials: There is no disagreement with the audit finding

Categories

Allowable Costs / Cost Principles Material Weakness Internal Control / Segregation of Duties

Other Findings in this Audit

  • 479294 2023-003
    Material Weakness
  • 479295 2023-004
    Significant Deficiency
  • 479296 2023-005
    Significant Deficiency
  • 479297 2023-006
    Material Weakness
  • 479298 2023-007
    Material Weakness
  • 479299 2023-003
    Material Weakness
  • 479300 2023-004
    Significant Deficiency
  • 479301 2023-005
    Significant Deficiency
  • 479302 2023-006
    Material Weakness
  • 479304 2023-003
    Material Weakness
  • 479305 2023-004
    Significant Deficiency
  • 479306 2023-005
    Significant Deficiency
  • 479307 2023-006
    Material Weakness
  • 479308 2023-007
    Material Weakness
  • 479309 2023-003
    Material Weakness
  • 479310 2023-004
    Significant Deficiency
  • 479311 2023-005
    Significant Deficiency
  • 479312 2023-006
    Material Weakness
  • 479313 2023-007
    Material Weakness
  • 479314 2023-008
    Material Weakness
  • 479315 2023-008
    Material Weakness
  • 479316 2023-008
    Material Weakness
  • 479317 2023-008
    Material Weakness
  • 479318 2023-008
    Material Weakness
  • 479319 2023-008
    Material Weakness
  • 479320 2023-008
    Material Weakness
  • 479321 2023-008
    Material Weakness
  • 479322 2023-008
    Material Weakness
  • 479323 2023-008
    Material Weakness
  • 479324 2023-008
    Material Weakness
  • 479325 2023-008
    Material Weakness
  • 479326 2023-008
    Material Weakness
  • 479327 2023-009
    Material Weakness
  • 479328 2023-010
    Significant Deficiency
  • 479329 2023-009
    Material Weakness
  • 479330 2023-010
    Significant Deficiency
  • 479331 2023-009
    Material Weakness
  • 479332 2023-010
    Significant Deficiency
  • 1055736 2023-003
    Material Weakness
  • 1055737 2023-004
    Significant Deficiency
  • 1055738 2023-005
    Significant Deficiency
  • 1055739 2023-006
    Material Weakness
  • 1055740 2023-007
    Material Weakness
  • 1055741 2023-003
    Material Weakness
  • 1055742 2023-004
    Significant Deficiency
  • 1055743 2023-005
    Significant Deficiency
  • 1055744 2023-006
    Material Weakness
  • 1055745 2023-007
    Material Weakness
  • 1055746 2023-003
    Material Weakness
  • 1055747 2023-004
    Significant Deficiency
  • 1055748 2023-005
    Significant Deficiency
  • 1055749 2023-006
    Material Weakness
  • 1055750 2023-007
    Material Weakness
  • 1055751 2023-003
    Material Weakness
  • 1055752 2023-004
    Significant Deficiency
  • 1055753 2023-005
    Significant Deficiency
  • 1055754 2023-006
    Material Weakness
  • 1055755 2023-007
    Material Weakness
  • 1055756 2023-008
    Material Weakness
  • 1055757 2023-008
    Material Weakness
  • 1055758 2023-008
    Material Weakness
  • 1055759 2023-008
    Material Weakness
  • 1055760 2023-008
    Material Weakness
  • 1055761 2023-008
    Material Weakness
  • 1055762 2023-008
    Material Weakness
  • 1055763 2023-008
    Material Weakness
  • 1055764 2023-008
    Material Weakness
  • 1055765 2023-008
    Material Weakness
  • 1055766 2023-008
    Material Weakness
  • 1055767 2023-008
    Material Weakness
  • 1055768 2023-008
    Material Weakness
  • 1055769 2023-009
    Material Weakness
  • 1055770 2023-010
    Significant Deficiency
  • 1055771 2023-009
    Material Weakness
  • 1055772 2023-010
    Significant Deficiency
  • 1055773 2023-009
    Material Weakness
  • 1055774 2023-010
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
09.U00 Basic Field Grant $6.00M
21.027 Eviction Legal Defense $1.06M
93.044 Special Programs for the Aging, Title Iii, Part B $695,061
21.027 Arapahoe Eviction Clinic $456,208
16.575 Civil Legal Services for Victims $454,910
16.320 Services for Victims of Human Trafficking $178,481
09.U00 Agricultural Worker Grant $162,560
09.U00 Native American Grant $144,793
21.008 Low Income Taxpayer Clinics (litc) $142,673
21.027 Eviction Diversion $114,994
09.U00 Technology Innovation Grants (tig) $71,397
16.815 Tribal Civil Legal Assistance $16,888
93.044 Supportive Services and Senior Centers $6,536