Finding 976315 (2023-003)

Service Contract Prior Approval Federal Program: Legal Services Corporation (09-805230) grant period ending December 31, 2023 Finding Type: Significant deficiency Condition/Context: The Organization failed to obtain prior approval for a contract for security guard service for which over $25,000 was charged to LSC. Criteria: 45 CFR Parts 1630 Cost Standards and Procedures and 1631 Purchasing and Property Management require prior approval by LSC for certain purchases for which over $25,000 of LSC funds will be utilized. Questioned Costs: $29,924 Cause: Prior approval was request from LSC; however, the contract was sent back to the Organization by LSC with items for clarification/correction. At the time application was returned, the submitting party was on sick leave. They inadvertently missed the notification that the request was returned and failed to follow-up on it, so the prior approval was never successfully obtained. Effect: The Organization is seeking retroactive approval; however, it is possible the amount charged to LSC may be disallowed. Repeat Finding: No Recommendation: The organization should implement additional policies and procedures requiring periodic follow-up and review of outstanding prior approval request to ensure the process is seen through to the end and the necessary approvals are obtained. Views of Responsible Officials and Planned Corrective Actions: Management accepts the finding. See management’s Corrective Action Plan included at the end of the report.