FAC Explorer

Finding 560087 (2024-002)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-05-12
Audit: 356058
Organization: Dakota Plains Legal Services, Inc. (SD)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: The Organization's fidelity bond coverage for 2024 is below the required minimum of ten percent of its annual funding, falling short by $6,414.
  • Impacted Requirements: Compliance with 45 CFR 1629 is at risk, which mandates adequate bonding to protect against losses from fraudulent acts.
  • Recommended Follow-Up: Management should increase fidelity bond coverage to at least $206,414 to meet federal requirements and ensure proper insurance against potential losses.

Finding Text

Legal Services Corporation FFAL #09‐742018 Legal Services Corporation – Basic Field – Basic FFAL #09‐742018 Legal Services Corporation – Basic Field – Native American Special Tests and Provisions – Bonding Requirements for Recipients Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria: 45 CFR 1629 requires the auditee be bonded or have similar insurance coverage to indemnify recipients against losses resulting from fraudulent or dishonest acts committed by one or more employees, officers, directors, agents, volunteers, and third‐party contractors who handle LSC funds. The auditee must carry coverage at a minimum level of at least ten percent of its annualized funding level for the previous fiscal year. Condition: The Organization’s fidelity bond coverage for 2024 does not meet the minimum level of at least ten percent of its annualized funding level for the previous fiscal year. Minimum coverage required during 2024 is calculated to be $206,414. The Organization’s fidelity bond coverage during 2024 is $200,000. Cause: There was a lapse in oversight of the internal control process ensuring the fidelity bond coverage meets the minimum level required based upon the annualized funding level for the previous fiscal year. Effect: Lack of compliance with minimum fidelity bond coverage could result in the Organization not being properly insured in the event of losses resulting from fraudulent or dishonest acts. Questioned Costs: None reported. Context/Sampling: No sampling was performed. Repeat Finding from Prior Year: No Recommendation: We recommend management review and increase their fidelity bond coverage to ensure compliance with the federal requirements. Views of Responsible Officials: Management is in agreement.

Corrective Action Plan

Legal Services Corporation FFAL #09-742018 Legal Services Corporation - Basic Field - General FFAL #09-742018 Legal Services Corporation - Basic Field - Native American Special Tests and Provisions - Bonding Requirements for Recipients Significant Deficiency in Internal Control over Compliance and Noncompliance Condition: The Organization's fidelity bond coverage for 2024 does not meet the minimum level of at least ten percent of its annualized funding level for the previous fiscal year. Minimum coverage required during 2024 is calculated to be $206,414. The Organization's fidelity bond coverage during 2024 is $200,000. Management's Response: Management has increased the fidelity bond coverage to at least 10% of the previous fiscal year's annualized funding level, and will work to maintain coverage of at least 10% of its annualized funding level. Responsible Individuals: Michelle Lovejoy, Program Administrator, Tom Mortland, Executive Director, Lori Stanford, Deputy Director Anticipated Completion Date: April 2025

Categories

Internal Control / Segregation of Duties Special Tests & Provisions Significant Deficiency

Other Findings in this Audit

  • 560088 2024-002
    Significant Deficiency
  • 560089 2024-003
    Material Weakness Repeat
  • 560090 2024-003
    Material Weakness Repeat
  • 560091 2024-004
    Material Weakness Repeat
  • 560092 2024-004
    Material Weakness Repeat
  • 1136529 2024-002
    Significant Deficiency
  • 1136530 2024-002
    Significant Deficiency
  • 1136531 2024-003
    Material Weakness Repeat
  • 1136532 2024-003
    Material Weakness Repeat
  • 1136533 2024-004
    Material Weakness Repeat
  • 1136534 2024-004
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
09.U02 Basic Field Grant - Native American $1.56M
09.U01 Basic Field Grant - Basic $656,405
93.044 Special Programs for the Aging, Title Iii, Part B, Grants for Supportive Services and Senior Centers $58,079
16.815 Tribal Civil and Criminal Legal Assistance Grants, Training and Technical Assistance $52,306
16.021 Justice Systems Response to Families $12,787