Finding 504405 (2024-002)

2024-002 Significant Deficiency Identified: During our audit, we noted that LASP did not meet the adjusted PAI requirement of $278,524. Management’s Response to Finding: LASP acknowledges that it did not meet the Private Attorney Involvement (PAI) spending requirement for the fiscal year, with actual expenditures totaling $204,348, resulting in a shortfall of $74,176. This shortfall occurred due to errors in the reporting of the prior year’s PAI waiver request. LASP is committed to compliance with all PAI requirements and has taken immediate corrective actions to improve the accuracy of its reporting processes. While this reporting oversight led to a shortfall, it is important to note that PAI spending increased by 23% over the previous year, rising from $165,785 in fiscal year-end 2023 to $204,348 in fiscal year-end 2024. This improvement continues a positive trend and reflects LASP’s dedication to expanding PAI-related activities and strengthening private attorney involvement. Further, LASP’s recently appointed Pro Bono Director has already made significant improvements in the tracking and reporting of eligible PAI hours, including those contributed by law student interns and management-related projects. These efforts provide a more accurate reflection of actual expenditures and strengthen LASP's compliance with PAI requirements. Corrective Actions Implemented: 1. Improved Tracking and Monitoring: LASP has implemented monthly tracking procedures to monitor actual PAI spending against established requirements. This approach will ensure that any discrepancies are identified promptly, allowing for timely corrective measures to meet PAI targets. 2. Waiver Documentation and Approval: The $74,176 shortfall has been documented for inclusion in next year’s PAI requirement. LASP has received approval from the Legal Services Corporation (LSC) to carry forward the unmet spending requirement to the next fiscal period. 3. Enhanced Training Programs: LASP has implemented training programs for staff involved in PAI reporting, covering the latest PAI requirements and reporting best practices. The Pro Bono Director will oversee the training program to ensure staff are accurately tracking and reporting PAI expenditures. 4. Strengthened Oversight and Internal Controls: Additional layers of review have been integrated into the PAI reporting process to enhance the accuracy and completeness of reports, helping to prevent future errors and fostering a culture of compliance. Commitment to Improvement: LASP Management is committed to addressing the identified significant deficiency and reinforcing internal controls over PAI compliance. The corrective actions are intended to prevent future oversights and ensure the accurate and timely reporting of PAI expenditures. The effectiveness of these initiatives will be closely monitored with further adjustments made as needed to maintain compliance with LSC and auditing standards. LASP is dedicated to fulfilling its mission through the effective use of PAI resources and is confident that these measures will enable the organization to meet and exceed PAI requirements in future reporting periods.