Legal Aid of Mid-New York, Inc.

Approval of Payroll Timecards Condition: One out of the twenty employees tested who charged time to the Legal Services Corporation (LSC) grants, completed their timecard in a timely manner but the supervisor approved the timecard late. Criteria: Pursuant to the Organization’s accounting procedures manual, timecards must be completed by employees within 5 days of the pay period end date which should then be approved by the employee’s supervisor in a timely manner. Cause: The late review of timecards was due to human error. Effect: Failure to review and approve timecards in a timely manner could result could result in inappropriate allocation of payroll expense to LSC grants. Recommendation: The auditor recommends that supervisors review timecards in a timely manner in compliance with the Organization’s timekeeping policy. View of Responsible Official: The Executive Director will reinforce the importance of the timely review and approval of timecards to all supervisors.

Completion and Review of Payroll Timecards. Condition: One out of the twenty-one employees tested who charged time to the Legal Services Corporation (LSC) grants, completed and submitted their timecard late. Additionally, two out of the twenty-one employees tested completed their timecards in a timely manner but the supervisor approved the timecards late. Criteria: Pursuant to the Organization’s accounting procedures manual, timecards must be completed by employees within 5 days of the pay period end date which should then be approved by the employee’s supervisor in a timely manner. Cause: The late completion and late review of timecards was due to human error. Effect: Failure to complete and submit timecards in a timely manner results in delays related to the review and approval of timecards. Additionally, late review of timecards could result in inappropriate allocation of payroll expense to LSC grants. Recommendation: The auditor recommends that employees complete timecards and supervisors review timecards in a timely manner in compliance with the Organization’s timekeeping policy. View of Responsible Official: The Executive Director will reinforce the importance of the timely completion and review of timecards to all employees.

Retainer Agreement. Condition: One out of the sixty-one case files selected for testing did not have an executed retainer agreement. Criteria: Except where the service is brief advice and consultation by telephone or other non-in-person means, the Organization must obtain a signed retainer agreement with each client when extended representation commences or as soon thereafter as practicable. Cause: The attorney in charge of this case failed to obtain a signed retainer agreement. Effect: The Organization was not in compliance with the requirements set forth under 45 CFR § 1611. Recommendation: The auditor recommends that retainer agreements be executed as soon as practicable, unless only advice and counsel or brief service is provided. View of Responsible Official: The Executive Director will reinforce the importance of obtaining executed retainer agreements with all paralegals and attorneys.

Accounting Requirements. Condition: The Organization has not yet implemented written policies and procedures to adhere to the LSC Financial Guide, effective January 1, 2023. Criteria: The LSC Financial Guide sets forth financial, accounting and reporting standards for recipients of LSC funds and describes the accounting policies, records and internal control procedures to be maintained to ensure the integrity of financial, accounting, reporting systems. Cause: The Organization has written policies and procedures in the form of an Accounting Procedures Manual which was last updated in August 2020, and a Compliance Manual that was last updated in March 2020. Revising both of these manuals requires considerable internal collaboration. Effect: The Organization is not in compliance with the Part D, Other Compliance Requirements, Accounting Requirements of the Compliance Supplement for Audits of LSC Recipients (October 2023). Recommendation: Senior management of the Organization should review, revise and consolidate the Accounting Procedures Manual and Compliance Manual to more closely align to the financial, accounting and reporting requirements of the LSC Financial Guide. View of Responsible Official: Beginning in 2024, the Executive Director has been holding weekly meetings with senior management to revise and update the Accounting Procedures Manual and Compliance Manual with an anticipated completion date of June 30, 2024.

2022-003: Payroll Timecard Completion. Condition: Four of the nineteen employees tested who charged time to the Emergency Rental Assistance (ERA) program, completed and submitted timecards between one to two months after the pay period end date. Criteria: Pursuant to the Organization's accounting procedures manual, timecards must be completed by employees within five days of pay period end date which would then be approved by the employee's supervisor. Cause: The late completion of the timecards was due to human error or oversight. Effect: Failure to complete and submit timecards in a timely manner results in delays related to the review and approval of timecards. This in turn affects the proper allocation of time charged to the ERA program code. Recommendation: The auditor recommends that employees prepare and submit their timecards in a timely manner in compliance with the Organization's timekeeping policy. View of Responsible Official: The Executive Director noted that internal disciplinary procedures were followed for all four employees and he will reinforce the importance of the timely completion of timecards with all employees.

Criteria: Pursuant to 45 CFR 1611, the Organization must adopt guidelines for determining the financial eligibility of clients seeking legal assistance which should not exceed 125% of the amounts specified in the current official Federal Poverty Income Guidelines. One of the exceptions to this rule is when clients do not exceed the applicable asset ceiling or the asset ceiling has been waived, and the income does not exceed 200% of the Federal Poverty Guidelines. In this situation, the Organization is required to complete an excess income worksheet to document the reason the clients' income level is higher than 125% but still below the 200% before providing legal assistance. Condition: The auditors identified two instances of incomplete excess income worksheets for two cases reviewed where the income exceeded the 125% poverty threshold during testing of the sixty case files for the year ended December 31, 2019. Cause: This was an error in the execution of the attorneys on both cases. Effect: The Organization was not in compliance with the financial eligibility requirements as set forth under 45 CFR 1611.

Criteria: Pursuant to 45 CFR 1630, the cost standards and procedures govern the allowability of costs under LSC grants or contracts. Without prior written approval from LSC, no single service contract may be charged to LSC funds that exceed $25,000. Condition: In March 2019, the Organization purchased the LegalServer service contract for a total cost of $132,050 and allocated the entire cost to the NYS Judiciary Civil Legal Services (JCLS) grant. During October 2019, JCLS conducted an internal audit and disallowed the entire cost from being charged to the JCLS grant. In January 2020, in preliminary audit results, JCLS allowed a partial allocation of this service contract to JCLS funds and consequently, the Organization allocated the remaining costs between LSC funds and two other grants. For the year ended December 31, 2019, the Organization allocated $79,976 of the LegalServer service contract to LSC funds. This cost allocation, which exceeds the $25,000 threshold, was not previously approved by LSC. Cause: This was an unavoidable error given the circumstances. Effect: The Organization was not in compliance with the cost standards and procedures requirements as set forth under 45 CFR 1630. Questioned Cost: The LegalServer service contract of $79,976 was allocated to LSC funds without prior written approval. This is $54,976 above the $25,000 allowable threshold.

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