Recommendations

Conduct a detailed review of all payroll processed in 2018 and 2019 to identify payroll over and underpayments and complete this review within six months of the issuance of this report.

To the extent consistent with the law, reimburse employees that were identified as underpaid and attempt to recover payment from all employees that were identified as overpaid in the above review.

Ensure that LSC unallowable costs are charged to funding sources other than LSC and reflected within the financial software to provide an audit trail.

Develop written procedures to maintain documents for Special Purpose, Disaster, or other similar grants. If the documents for requests and approvals of COVID-19 quarterly report extensions can be retrieved, keep them in a central location.

Ensure that OPP and OCE Policies and Procedures Manual are updated and complete, including policies and procedures for the oversight and monitoring of Disaster Program funds, which would include LSC CARES Act Funds.

Complete revisions and publish the OFAS Accounting Procedures Manual (LSC is currently working to complete and publish the draft OFAS Accounting Procedures Manual), including bank account verification policies and procedures.

Ensure that TRLA’s Employee Handbook is updated to reflect the current policies described in the Collective Bargaining Agreement.

We are referring $8,534 in questioned costs for further review and action. The questioned costs consist of
credit card purchases for which LAW did not maintain adequate documentation to support the purposes of
the transactions or explain why they were allowable under LSC regulations and guidance.

Develop an allocation methodology that will ensure that all attorneys’ fees are proportionately allocated to the fund in which the LSC grant is recorded in the same proportion that the amount of LSC funds were spent on a case or representation.

Review all LSLRA reimbursements within the audit period (January 1, 2022 to May 31, 2023) to verify that the employees reimbursed were at the experience level 24 and below, per the CBA. Document the results and any deviations from the policy, including review and approval.

We recommend that the Executive Director notify and obtain approval from LSC for the purchase of 50 laptops exceeding $25,000.

We recommend that the Executive Director develop and implement a process for tagging capitalized property and equipment.

We recommend that the Executive Director conduct a physical inventory of capitalized property and equipment as soon as possible, document the results, and do so at least every two years.

Update and implement contracting policies to include the following: • requirements for sole source justification;• discouragement of automatically renewing contracts, when possible and if terms allow. If automatically renewing contracts are unavoidable, consider setting up automated reminders to periodically reevaluate contracts;• requirements for periodic re-competition of contracts, when appropriate; and• requirements for full documentation for each contract action, including the request for proposals, vendor selection and approval.

We recommend that the Executive Director implement a control to ensure only authorized cardholders have access to card information. In the event another staff member needs to use a credit card and the cardholder cannot make the purchase for them, adequate documentation should be maintained to show that the cardholder authorized the purchase and access to the card was limited.

We recommend the Executive Director update NJP’s written policies for credit cards to include, at a minimum, the following:• guidelines on personal use and disallowed charges;• guidelines on properly documenting any deviations from policy;• restrictions on cash advances and ATM withdrawals;• deadlines for providing supporting documentation;• procedures for cardholders to review and acknowledge credit and purchase card policies.

We recommend that the Executive Director document the complete cost allocation process including the adjustments made to arrive at the final allocations for indirect costs.

We recommend that the Executive Director enable distinct user access roles for the NJP accounting staff that are commensurate with their responsibilities to ensure adequate segregation of duties is maintained in the accounting software.

We recommend that the Executive Director implement a process requiring dated approvals prior to expenses being incurred.

We recommend the Executive Director establish a process to document advance approval for employee travel, and, if appropriate, set a threshold above which such approval must be documented and not only given verbally.

We recommend that the Executive Director develop policies to ensure the timely disposition of outstanding checks.

We recommend that the Executive Director ensure NJP’s Accounting Manual (and, if applicable, Personnel Manual) is updated to include the grantee’s processes surrounding the referenced criteria. This includes:• payroll procedure details,• roles/responsibilities,• frequency,• documentation requirements, and• review/approval requirements (including changes/adjustments).

Develop written timekeeping policies and procedures, including timesheet review, and provide training to SALA staff and to new employees on charging leave and holiday time.

Provide training to all SALA employees involved in coding costs as direct or indirect. The training should include the definitions of direct and indirect costs and should contain explicit guidance on how to account for each type of expense.

Update SALA’s Accounting Manual to include a specific, compliant method for charging support staff salaries directly to sponsored funding sources as well as policies and procedures to account for hours worked in excess of the SALA 35 hours per week requirement.

Once the Accounting Manual is updated, provide training to its accounting staff.

Update the SALA Accounting Manual with detailed second-party review procedures to ensure that unallowable expenses are not charged to the LSC grants.

Once the Accounting Manual is updated with detailed procedures, train applicable SALA staff on the timecard and second-party review procedures.

Develop detailed review procedures and/or checklists to be used in oversight reviews of records created to support accounting entries and/or compliance assessments.

We identified questioned costs of $438,032 due to improper documentation and non-compliance with disaster grant requirements.QC further broken down as follows:
• LADRC – Leave & Holiday Hours totaling $39,983 in Questioned Costs.
• Incurred Costs Grant – Unallowable Expenses Totaling $287,624 in Questioned Costs.
• Incurred Costs Grant – Leave Hours Totaling $110,425 in Questioned Costs.

We recommend the CEO perform a review of the Incurred Costs Grant budget application and timekeeping records related to the disasters from 2020 and 2021 to identify the actual hours worked and corresponding costs for case time and administrative leave hours for office closures. The review should clearly distinguish between distinct categories of hours, including actual case/matter/supporting activity hours and leave.

We recommend the CEO implement a procedure to ensure that all relevant information, including the dates of office closures, offices impacted or closed, and staff on administrative leave due to disasters Hurricane Laura and Winter Storm Uri are adequately documented; and do so each time such actions are taken in response to future disasters.

We recommend that the CEO revise LSLA’s contracting policy to require recompeting recurring purchases and long-standing contracts every three to five years.

We recommend that the CEO implement a process to ensure LSLA follows its procurement policy. This includes documenting bids for all applicable purchases. Additionally, sole-source justifications should be documented and approved.

We recommend that the CEO implement a process to ensure unauthorized personnel do not enter into contracts on behalf of LSLA. Alternatively, if LSLA decides that it would be beneficial to allow more flexibility in contract approval authority, this should be formalized in the written policies and any deviations from the written policies should be adequately documented and approved.

We recommend that the CEO ensure LSLA's written cost allocation policies are updated to fully align with LSC requirements. Subjective adjustments should be minimized, and the considerations resulting in those adjustments should be formalized in the policies.

We recommend that the CEO update LSLA’s cost allocation methodology to ensure unrestricted funds are equitably included as a source to pay for indirect costs.

We recommend that the CEO ensure LSLA allocates the maximum allowable indirect costs to all funding sources, as per LSC guidance.

We recommend the CEO update the LSLA Accounting Manual to include policies and procedures surrounding card usage, statement reviews, payment processes and the credit card reconciliation process.

We recommend the CEO establish explicit written policies and procedures for board travel reimbursement policies. In addition, the policies should stipulate when per diem allowance limits can be overridden as well as the required documentation of review and approval.

We recommend that the CEO revise LSLA's written policies to include the following details:
• Timeline for preparing management reports
• Identification of known commitments
• Contents of the income and expense report
• Support of projections by schedules that document assumptions used to arrive at final projected amounts
• Budget constructions from cost centers
• Format of management reports
• Preparation of a budget to actual report or similar report containing the required information

We recommend that the CEO implement a process to document management's review of monthly reports. This should include a signature and date to denote the review and ensure compliance with LSC’s Financial Guide.

We recommend the CEO update the LSLA Accounting Manual to include policies for reconciling labor costs with timekeeping records, and to ensure that paid time off is allocated proportionally based on hours worked across different funding sources.

We recommend that the CEO ensure LSLA's written policies reflect the actual practices in place and comply with the applicable legal requirements for unclaimed client funds.