Finding Text
Criteria: Legal Services Corporation (LSC) grant recipients for fee generating cases are required to compile with the allocation and recordation requirements of 45 C.F.R. § 1630.5 (a). expenditures are allowable under an LSC grant or contract only if the recipient can demonstrate that the cost was allocable to the grant or contract.
Condition/Context: The Organization was unable to provide support for expense allocations for 10 expenses of 40 expenses included in the sample. The sample was not a statistically valid sample.
Cause: The Organization did not properly retain expense allocation support due to improper review and turnover.
Effect: LSC funds could be utilized for unallowable activities.
Questioned Costs: N/A
Recommendation: It is recommended that the Organization ensure proper retention of expense allocation documentation to align with the regulatory guidance.
Views of Responsible Officials: Management agrees with the auditor’s findings and will take immediate action to ensure the expense allocations are recorded properly. The Director of Finance (Vannam Khen) will work directly with the Finance staff to develop procedures to ensure expense allocations are recorded properly.