Audit on Selected Internal Controls at Legal Aid Foundation of Los Angeles

Submitting OIG:

Legal Services Corporation OIG

Date Issued:

Thursday, January 11, 2024

Agency Reviewed / Investigated:

Legal Services Corporation

Submitting OIG-Specific Report Number:

AU 24-02

Location(s):

Los Angeles, CA

United States

Type of Report:

Audit

Questioned Costs:

$217,461

Funds for Better Use:

Number of Recommendations:

Report updated under NDAA 5274:

View Document:

Attachment	Size
LAFLA-Report-Final-Report.pdf	1.5 MB

Additional Details Link:

https://www.oig.lsc.gov/sites/default/files/2024-01/LAFLA_Report_Final_Report.pd…

Related Open Recommendations

Recommendation Number	Recommendation Status	Significant Recommendation
3	Open	No
Update the language on the CBA so that the guidance is clear as to whether the amount to be reimbursed is the required monthly loan amount not to exceed $500 per month, as long as the accumulated payments are not higher than the loan amount.
4	Open	No
Review LSLR transactions from January 1, 2020, through February 28, 2022, including but not limited to obtaining complete Applications, verifying the minimum loan repayment amounts based on Supporting Documentation, and verifying reimbursement amounts paid. Recover, if any, confirmed overpayments to date.
5	Open	No
Implement a new policy to adequately document any deviation from CBA § 7.7.2.
6	Open	No
Reconcile the general ledger record with the LSLR tracking spreadsheet to ensure accurate accounting and recording of law school reimbursements.
13	Open	No
Update manuals, including but not limited to the Accounting Manual, Employee Handbook, and CBA to include policies and procedures for cell phone stipends issued to non-management and non-attorney employees.
16	Open	No
Work with the Board President to enhance or implement procedures to ensure that the Board President reviews, approves, and adequately documents their approval of the Executive Director’s credit card expenditures with a signature and date.
23	Open	No
Develop a formal and comprehensive contract procurement process including "needs" requests, approvals, required documents, and documentation of any deviation from the procurement process to be kept on file that is centrally located and readily accessible.
24	Open	No
Review the following active contracts to obtain and file the required documentation as follows: • Contract for the Architect Design Service. • Documentation of "needs" requests and approvals for all 12 contracts. • Current contracts for three outdated contracts. • Documentation of bids or justification, if the contract was sole-sourced, for the 11 contracts (All contracts, except for the Architect Design Service contract) missing this documentation. • Documentation of final approvals for the 11 contracts (All contracts, except for the Architect Design Service contract) missing this documentation. • Documentation providing justification or rationale for the payments made to the three vendors (Janitorial, Graphic Design, and Landscaping Service contracts) that were inconsistent with contract terms. • Documentation reflecting that payment transactions for two contracts (Wi-Fi/Hot Spot and Staffing service contracts) within the audit scope period were made in accordance with the contract. • Documentation that Wi-Fi/Hot Spot Service contract and invoice are addressed to LAFLA.
25	Open	No
Update the procurement policies similar to the Procurement Policy Drafting 101: Guidance for LSC Grantees including but not limited to the following: • A requirement of certification of best value or price comparison for procurements between $X to $X. • A requirement of request for quotes and evaluation sheet for procurements between $X to $X. • A requirement of request for proposals, evaluation plan, team, and sheet for procurements greater than $X. • A requirement for periodically re-competing recurring purchases and long-standing contracts.
26	Open	No
Update the Micro-Purchases section of the Accounting Manual to clearly state that the employees authorized to incur costs on behalf of LAFLA require approvals prior to purchasing.

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Legal Services Corporation OIG

Legal Services Corporation

The LSC Office of Inspector General operates under the Inspector General Act. In 1988, Congress amended the IG Act and required LSC and about 30 other small, federally funded entities to establish independent Offices of Inspector General.

The OIG has two principal missions: to assist management in identifying ways to promote efficiency and effectiveness in the activities and operations of LSC and its grantees; and to prevent and detect fraud and abuse. Thus the OIG assists management in fostering, and overcoming obstacles to, good program management and in preventing future problems; and it must identify and report on current problems.

The OIG's primary tool for achieving these missions is fact-finding through financial, performance and other types of audits, evaluations and reviews, as well as investigations into allegations of wrongdoing. Its fact-finding activities enable the OIG to develop recommendations to LSC and grantee management for actions or changes that will correct problems, better safeguard the integrity of funds, and improve procedures or otherwise increase efficiency or effectiveness. The OIG is also tasked with ensuring the quality of audits of LSC and its grantees that are conducted by independent public accountants, and with reviewing proposed and existing regulations and legislation affecting the operations and activities of LSC and the programs it funds.

In addition to the missions shared by all OIGs, Congress, starting with LSC's FY96 appropriation, directed that the primary tool for monitoring grantee compliance with legal requirements is to be the annual grantee audits conducted by independent public accountants under guidance developed by the OIG, thus adding participation in monitoring compliance to the role of the OIG. In addition, Congress specified the OIG’s authority to conduct its own reviews of grantee compliance.

The OIG is headed by the Inspector General who reports to and is under the general supervision of the Board. The IG has broad authority to manage the OIG, including setting OIG priorities and activities, and to hire OIG personnel and consultants and experts.

To ensure the objectivity of the IG, the IG Act grants the LSC IG the independence to determine what reviews are performed; to gain access to all documents needed for OIG reviews; to publish findings and recommendations based on OIG reviews; and to report OIG findings and recommendations to the LSC Board of Directors and to Congress. The IG Act also prohibits LSC from assigning to its IG any of LSC’s own "program operating responsibilities." This means that the OIG does not perform functions assigned to LSC by the Legal Services Corporation Act, other than those transferred to the OIG under the IG Act, and those otherwise assigned by Congress, for example in the FY96 appropriations act.

The IG must report serious problems to the LSC Board of Directors and must also report to appropriate law enforcement authorities, when through audit, investigation or otherwise, the IG has found that there are reasonable grounds to believe that a crime has occurred. The OIG is not an "arm" of the Congress, as is the Comptroller General, but is required by law to keep the Congress informed through semiannual reports and other means. The IG also provides periodic reports to the Board and management of LSC and occasionally to the Boards of Directors and management of LSC grantees. Some of these reports will be specific (e.g., an audit of a particular grantee or an investigation of a theft), while others will be of more general interest to management.

Although the OIG is not a part of LSC management, it also is not an adversary of LSC management. To be effective, the OIG works cooperatively with the Board and management, seeks their input prior to choosing topics for OIG review, and keeps them informed of OIG activities. Within their different statutory roles, the OIG and management of LSC share a common commitment to improving the federal legal services program and increasing the availability of legal services to the poor.

https://www.oig.lsc.gov/

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Audit on Selected Internal Controls at Legal Aid Foundation of Los Angeles

Related Open Recommendations

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