Competition
The 1998 competitive grants award process was substantially completed during the reporting
period. A funding decision in one service area is pending. This applicant was placed on short
funding to permit LSC to engage in a more extensive review and evaluation due to program
delivery issues that have potential compliance implications. A final funding decision for this
service area is expected in the near future. All other grant awards were completed for the 1998
calendar year.
Consistent with past practice, the Corporation assessed the 1998 competitive grants process and
made revisions where necessary to improve both the mechanics and the substantive content of
the process. This ongoing evaluation of the competitive grants process is required for the
Corporation to keep current with the dynamic changes and innovations in the delivery of legal
services.
In the 1998 competitive grants award process, as noted in the previous reporting period, LSC
solicited proposals and grant renewal applications for 346 service areas for calendar year 1998
funding.² During the 1998 competitive grants award process, the Corporation used an electronic
filing procedure for the Notice of Intent to Compete and two other Request for Proposal ("RFP")
forms. Both LSC staff and applicants' responses to this electronic filing process were
overwhelmingly positive. Its use simplified the process for applicants, while LSC staff had the
benefit of immediate access to proposal information from applicants. For the 1999 competitive
grants award process, the Corporation has expanded the use of electronic filing and will have all
eight proposal forms and the Grant Renewal Application submitted electronically.
As noted in previous reports, the competitive grants process captures a significant amount of
information about legal services delivery nationwide. The Corporation continues to work
directly with applicants and recipients to achieve improvements in delivery systems by setting
high quality standards, identifying areas for improvement within programs, providing technical
assistance, and making the decision not to fund those applicants that fail to demonstrate the
capacity to provide quality legal services to eligible clients. Two new initiatives were begun
during this period:
- One major activity has been the preparation for distribution of a technical assistance
document on the delivery of legal services. Shortly after the close of this reporting
period, the Corporation made available to all applicants, recipients, and other interested
parties, the evaluation guidelines that were used in evaluating the 1998 grants proposals.
These guidelines, based on the highly regarded ABA Standards for Providers of Civil
Legal Services to the Poor, the ABA Standards for Pro Bono Providers, and the LSC
Performance Criteria, are indicators of the factors that enable a legal services provider to
deliver effective and efficient legal services.
- A second major activity has been a renewed call to LSC recipients to engage in statewide
planning and coordination of the delivery of legal services. The purpose is to have each
state reevaluate its delivery system to identify areas where change is needed, with the
primary goal being an improved statewide delivery system for clients.
Corporation staff continue to balance the responsibility of implementing a competitive grants
process with the ongoing responsibility to provide guidance to current recipients.
Compliance Monitoring and Enforcement
The Corporation is gratified that the new system for compliance monitoring found substantial
compliance with Congressional restrictions. Moreover, as a result of the rapid referral of
findings to Management through the Audit Information Management System ("AIMS"),
developed by the OIG to track findings of grantee annual audits, Management was able to
resolve or otherwise formulate appropriate corrective action to address the few findings of non-compliance before the OIG's summary report of the IPA audits was issued.
Regarding the final, consolidated report on the special compliance audits conducted by the OIG,
Management has reviewed and is in basic agreement with the four recommendations of the OIG.
The two recommendations concerning the proper accommodation of the unique needs of
juveniles and mentally incapacitated adults and the need for more precise timekeeping
requirements for part-time employees will be addressed through proposed amendments to the
regulations or other clarifications of policy, as appropriate. The OIG findings with respect to the
inadequate controls of one grantee resulted in a follow-up, on-site review by management staff.
Appropriate action will be taken based on the findings of that visit. In addition, Management has
initiated a questioned cost proceeding to recover funds used by one grantee in relation to the two
class action cases found by OIG.
Regulatory Review
During this period the Corporation finalized two rules: one which revised the Corporation's rules
on costs standards and procedures, and the other to implement provisions of the Assisted Suicide
Funding Restriction Act of 1997 that are applicable to LSC funds. The Corporation also
published two proposed rules. One would revise the Corporation's Freedom of Information Act
(FOIA) rule to implement the Electronic Freedom of Information Act Amendments of 1996. The
other is a new rule intended to implement a new statutory provision requiring the disclosure of
certain case information on cases filed by recipient attorneys.
The Corporation anticipates that, in the second half of FY 1998, it will, at a minimum, finalize
the FOIA and case disclosure rules. It will also complete amendments to regulations governing
the Corporation's suspension or termination of financial assistance to recipients and to
implement the new statutory authority to debar recipients from future grant competition for good
cause. In addition, the Corporation will consider amendments to the regulations, as necessary, to
implement the recommendations from the OIG relating to accommodations for juveniles and
mentally incompetent adults and to more stringent timekeeping requirements for part-time
employees.
The OIG continues to work closely with the Board and Corporation's staff on all these regulatory
efforts.
Technology
The Board remains committed to technological improvements to enhance the delivery of services
by its grantees in such areas as intake systems, case management, legal work production, legal
research, exchange of information, and program management. The current Budget request seeks
$17 million in FY 1999 for new initiatives to expand client self-help and improve the delivery of
legal services through better use of information technology. In addition, progress continues to be
made on the Corporation's internal technology initiatives to enhance the efficiency of its program
administration and oversight functions.
As noted in the section on Competition, the Grantee Information Management System
("GIMS"), was an unqualified success in achieving the electronic filing of three forms used in the
1998 competitive grant award process. Building on this success, the electronic filing procedures
will be expanded during the 1999 grant awards process to include all eight proposal forms and
the Grant Renewal Application. Moreover, all recipients but one successfully submitted their
Grant Activity Reports for 1998 to LSC through the Internet component of GIMS. Information
from GIMS has been compiled in the 1998 LSC Factbook, as well as in the state planning
materials which LSC is making available to all current recipients and others engaged in the state
planning initiative.
During the reporting period, the Corporation made substantial progress in the implementation of
its technology enhanced internal accounting and human resources systems. Employee training on
the new human resources system is nearly completed and has begun on the new accounting,
purchasing, and inventory system. When fully operational, these systems will assist the
Corporation in managing its programs effectively despite the increasing demands and
diminishing resources.
In addition, the Corporation has taken the initial steps toward assuring the readiness of its
information systems for the new millennium. The Corporation is addressing its Year 2000 needs,
as well as those of its grantees. The FY 1999 budget request for technology initiatives includes
the necessary funding for both the Corporation and its grantees to achieve Year 2000 compliance
and to move into the next millennium with the technological capacity to continue to provide
equal access to justice.
Strategic Planning
As reported last time, the Corporation has voluntarily undertaken to follow the planning process
for its budget set forth by The Government Performance and Results Act ("GPRA"). During the
reporting period, the Board, at its November 1997 meeting, considered and adopted a Strategic
Plan for FY 1998-FY 2003, covering the activities of both the Corporation's management and
administration and its Office of Inspector General. The Board also approved an Annual
Performance Plan for FY 1999 and submitted its FY 1999 Budget Request in support of that
plan. The planning process involved all LSC staff and the LSC Board of Directors, with
comments solicited from grantees, clients, other entities involved in the provision of legal
services, Congress and the Administration. The OIG provided helpful advice and comment to
the Corporation's management as it developed the programmatic portion of the proposed Plan.
As provided for by GPRA, LSC's proposed Strategic Plan sets forth: a statement of LSC's
mission; LSC's general goals for the period; how LSC plans to achieve those goals; key external
factors which could significantly affect LSC's achievement of its goals; how LSC's general goals
and objectives will be translated into more specific, objectively expressed performance goals for
each year in an Annual Performance Plan, and how LSC's performance will be evaluated. The
OIG drafted a separate section of the proposed Plan, devoted to the special mission, goals and
strategies of the Office of Inspector General.
During this period, the Board, in conjunction with its Strategic Planning process, completed its
first annual performance evaluation of the President and the Inspector General. With the
cooperation of, and after extensive consultation with, both the President and the Inspector
General, the Board adopted in July 1997 a detailed protocol to guide its evaluation of the two
Corporation executives who report directly and solely to the Board. In this reporting period, the
Board finalized the annual performance evaluation procedures at its meeting in November 1997,
and proceeded to complete the performance evaluations in February 1998. Overall, the Board
considered the process to be a productive learning experience. While the evaluation procedures
remain a "work in progress," the difficult work in 1997 has established a firm foundation on
which to build improvements for future evaluations. For example, with the Strategic Planning
process now in place, future evaluations will have the benefit of annual performance plans for the
President and the Inspector General, prepared in advance of the evaluation period -- a valuable
measuring standard which could not be used in this initial round of evaluations.
Other Matters
The Corporation prepared and presented to Congress a proposed $340 million budget for FY
1999, which as noted above, includes $17 million for new technology initiatives. The proposed
budget also sought a 5.5% increase in funding for basic grants, $23 million for initiatives in the
area of domestic violence and children's legal needs, and an increase in funding for management
and administration and the OIG.
The Inspector General, under the heading "Legislative and Regulatory Review," reports that he
received during the period the litigation reports which he had characterized in his prior report as
"a refusal of access to requested documents." We note that despite the satisfactory resolution of
this issue, the IG continues to recommend a "legislative clarification of the effect of common law
privileges, such as attorney client, on the IG's statutory right of access to agency information and
documents." In light of this recommendation, the Corporation must likewise reiterate its position
that -- at least with regard to the particular incident reported by the IG -- the issue was not that of
statutory access by the OIG to Corporation documents subject to attorney-client privilege, but
rather, the more complex issue of whether such access to privileged documents results in a
waiver of that privilege as to all other third parties. In conjunction with its OIG, the Corporation
found a non-legislative solution to the issue which balances both the need for OIG access and the
Corporation's interests in preserving its attorney-client privilege. The Corporation continues to
find ill-advised any recommended legislative solution which does not, likewise, address both the
question of access and the issue of waiver of the attorney-client privilege.
[TOC]
PROGRAM INTEGRITY
Status of Findings and Recommendations
The Board is pleased that the Inspector General's Report for this period reflects no pattern of
noncompliance among the grantees or any significant compliance findings.
As noted above, Management had taken action to ensure compliance with all reported audit
findings referred by the OIG from the annual recipient audits even before receiving the summary
report in this reporting period.
Regarding the Grantee Compliance Audits conducted by the OIG, only four recommendations
are addressed to Management and it is in basic agreement with the OIG's suggestions. First, the
OIG recommended that Management take appropriate action with respect to one grantee which
did not have adequate controls in place to ensure compliance. Based on this recommendation,
Management conducted its own on-site review of the grantee during the reporting period. The
report from that visit is being prepared and will recommend appropriate action to be taken based
on its findings. Second, the OIG recommended appropriate corrective action be taken with
respect to one grantee that continued representation in two class action cases beyond the deadline
for divestiture. In response to this recommendation, Management has initiated a questioned cost
proceeding to recover funds related to the prohibited representation. Third, the OIG
recommended that Management evaluate the need for clarification of LSC regulations that fail to
accommodate the unique needs of juveniles and mentally incompetent adults. Management
agrees with the need to evaluate the regulations and will consider appropriate amendments to or
clarifications of its policies as they relate to these clients. Fourth, the OIG recommended that
LSC require all part-time employees of grantees to account for their time worked by date and
time of day as a means to ensure they are not doing restricted work while receiving LSC funds.
Management agrees with the need for grantees to maintain sufficiently detailed records to
determine compliance with the Act and regulations. Modifications to LSC's timekeeping
regulations have already been scheduled and will be expanded to encompass the OIG proposals
or other specific controls equally effective in demonstrating compliance.
Inspection of Alternative Work Arrangements
During the reporting period, the Corporation received the final report from the OIG of its
Inspection of Alternative Work Arrangements, which focused on implementation of the
Corporation's alternative work schedule policies for the period March 8, 1997 to June 30, 1997.
The report found no significant deficiencies and the recommendations to provide more flexible
options and improve documentation requirements were generally consistent with those developed
by management through its own on-going internal review of personnel procedures.
Implementation of the recommendations was, therefore, begun prior to the issuance of the final
report.
Corporation's Annual Financial Statement Audit
Corporation is once again pleased with the unqualified opinion given by the independent CPA
firm auditing its annual corporate financial statement audit. The statements were found to be
fairly presented and free of material errors and no material weaknesses were found with regard to
the Corporation's compliance with laws and regulations and its internal controls.
Investigations
Corporation management has completed work with the landlord's office of Tenant Services and
the Federal Protective Services Agency to develop a new Workplace Safety Awareness Program.
The OIG recommendation regarding the use of Corporation ID badges was supported in that
report, and implementation of the program is currently in progress.
[TOC]
TABLE 1
Management Report on
Office of Inspector General Audits of Grantees
Issued With Questioned Costs
For the Six-Month Period Ending March 31, 1998
| |
Number of Reports |
Questioned Costs |
Unsupported Costs |
| A. Audit Reports for grantees on which no management decision had been made by the commencement of the reporting period. |
0 |
$0 |
$0 |
| B. Audit Reports issued during the reporting period. |
0 |
$0 |
$0 |
| Subtotals (A + B) |
0 |
$0 |
$0 |
| MINUS: |
| C. Audit Reports for which a management decision was made during the reporting period: |
0 |
$0 |
$0 |
| (i) dollar value of recommendations that were agreed to by management |
0 |
$0 |
$0 |
| (ii) dollar value of recommendations that were not agreed to by management. |
0 |
$0 |
$0 |
| D. Audit Reports for which no management decision had been made by the end of the reporting period. |
0 |
$0 |
$0 |
| Audit Reports for which no management decision had been made within six months of issuance. |
0 |
$0 |
$0 |