Finding 501540 (2022-001)

July 29, 2024 The State Bar of California Office of Access and Inclusion 845 S. Figueroa Street Los Angeles, CA 90017 Neighborhood Legal Services of Los Angeles County (NLSLA) respectfully submits the following corrective action plan for the years ended December 31, 2022 and December 31, 2023 as a result of the Office of Access and Inclusion of the State Bar of California desk review of the Homelessness Prevention (HP) 3 Grants. Harrington Group Certified Public Accountants, LLP 2698 Mataro Street Pasadena, CA 91107 Audit period: January 1, 2022 – December 31, 2022; and January 1, 2023 – December 31, 2023 The findings from the 2022 and 2023 Schedule of Findings and Questioned Costs are discussed below. FINDING—FEDERAL AWARD PROGRAMS AUDITS Finding 2022-001 – Schedule of Expenditures of Federal Awards Reconciliation U.S Department of the Treasury Coronavirus State and Local Fiscal Recovery Funds—Assistance Listing No. 21.027 Significant Deficiency: The Schedule of Expenditures of Federal Awards (SEFA) was inaccurate and incomplete for the fiscal years-ended December 31, 2022 and 2023 as it did not include all programs that were federally funded. The original funding for the programs identified were not initially federally based. However, during COVID-19, the renewal of the programs continued through federal funding that were omitted from the SEFA reconciliation. Corrective Action: Under the direction of the Chief Financial Officer and as a new member of the fiscal team, the Director of Grants Management and Compliance will conduct a thorough review of all contracts, including renewal contracts, to confirm the funding source, whether NLSLA is the lead agency or a passthrough agency. If the renewal funding source is federally based, NLSLA will request a Notice of Federal Award to ensure proper inclusion in the annual SEFA and related Single Audit report. Under the direction of the Chief Financial Officer, the Controller will prepare the annual SEFA reconciliation to include all identified federally funded grants based on the contract agreements and provided Notice of Federal Awards. Person Responsible for Corrective Action: Chief Financial Officer Anticipated Completion Date for Corrective Action: The Corrective Action has been immediately implemented. If there are questions regarding this corrective action plan, please contact Lynne Hiortdahl, Chief Financial Officer, at (818) 291-1763 or LynneHiortdahl@nlsla.org. Sincerely, Lynne Hiortdahl Chief Financial Officer Recommendation: Implement procedures to designate management members responsible for the completion and accuracy of the SEFA. All government grants and contracts should be thoroughly reviewed to determine the funding source. Those identified as federal should be included in the SEFA. Neighborhood Legal Services of Los Angeles County | www.nlsla.org | Toll-Free Telephone: (800) 433-6251