Virginia Legal Aid Society, Inc.

Condition – Insufficient fidelity bond coverage was maintained for a portion of the year ended June 30, 2025. Criteria – A recipient of LSC funds must supply fidelity bond coverage for all employees, officers, directors, agents, and volunteers and, if a recipient uses a third party for payroll, billing, or collection services, the recipient must either supply coverage covering the third party or ensure that the third party has a fidelity bond or similar insurance coverage. The recipient must carry fidelity bond coverage or similar coverage at a minimum level of at least ten percent of its annualized funding level for the previous fiscal year. Cause – Policies and procedures are in place to routinely remind all personnel to renew various insurance policies including fidelity bonding. However, it appears that management personnel were unaware of LSC’s minimum fidelity bond coverage requirements and, as a result, insufficient coverage was obtained. Effect – During the year ended June 30, 2025, there was a violation of LSC’s rules and regulations. Context – The aforementioned condition was not noted by any sampling methodology. This finding is a carryover of the finding noted in the prior year audit of Virginia Legal Aid Society, Inc. and, when notified of that finding, management immediately obtained sufficient fidelity bond coverage. However, the correct amount of bond coverage was obtained after the current fiscal year had begun resulting in an insufficient amount of coverage for a portion of the current fiscal year. Recommendation – None, sufficient fidelity bond coverage has been obtained. Views of Responsible Officials and Planned Corrective Actions – Please refer to the accompanying Corrective Action Plan of Virginia Legal Aid Society, Inc.

All prior findings have been corrected.

Finding No. 2024-001 (LSC Basic Field Grant, CFDA No. 09.447061): Condition – Insufficient fidelity bond coverage was maintained for the year ended June 30, 2024. Criteria – A recipient of LSC funds must supply fidelity bond coverage for all employees, officers, directors, agents, and volunteers and, if a recipient uses a third party for payroll, billing, or collection services, the recipient must either supply coverage covering the third party or ensure that the third party has a fidelity bond or similar insurance coverage. The recipient must carry fidelity bond coverage or similar coverage at a minimum level of at least ten percent of its annualized funding level for the previous fiscal year. Cause – Policies and procedures are in place to routinely remind all personnel to renew various insurance policies including fidelity bonding. However, it appears that management personnel were unaware of LSC’s minimum fidelity bond coverage requirements and, as a result, insufficient coverage was obtained. Effect – During the year ended June 30, 2024, there was a violation of LSC’s rules and regulations. Context – Not applicable. The aforementioned condition was not noted by any sampling methodology. Recommendation – Appropriate personnel of Virginia Legal Aid Society, Inc. should review LSC’s rules and regulations regarding fidelity bond coverage and immediately obtain the required coverage and design and institute procedures to ensure the required coverage is maintained on a prospective basis. Views of Responsible Officials and Planned Corrective Actions – Please refer to the accompanying Corrective Action Plan of Virginia Legal Aid Society, Inc.

A. Summary of Audit Results N/A – No response is required. Findings - Financial Statements Audit N/A – No findings. Findings and Questioned Costs - Major Federal Award Program Audit Finding No. 2024-001 (LSC Basic Field Grant, CFDA No. 09.447061): Comment on finding – Virginia Legal Aid Society, Inc. (the “Society”) agrees with the finding that insufficient fidelity bond coverage was maintained for the year ended June 30, 2024. Action planned – The Society will promptly obtain the required coverage and design and institute procedures to ensure the required coverage is maintained on a prospective basis. Status of Corrective Actions on Prior Findings All prior findings have been corrected.

Finding No. 2022-001 (LSC Basic Field Grant, CFDA No. 09.447061): Condition ? A required written statement of facts was not obtained for one of the cases that were tested for compliance. Criteria ? Whenever a recipient of LSC funds files a complaint in a court of law or otherwise initiates or participates in litigation against a defendant, or before a recipient engages in pre-complaint settlement negotiations with a prospective defendant on behalf of a client who has authorized it to file suit in the event that the settlement negotiations are unsuccessful, the recipient shall prepare a dated written statement signed by each plaintiff it represents, enumerating the particular facts supporting the complaint, insofar as they are known to the plaintiff when the statement is signed. Cause ? Policies and procedures are in place to routinely remind all personnel of LSC?s rules regulations for obtaining written statements of facts when required. During the intake process for the case, it was determined that the case would be referred to a private attorney for handling on a pro bono basis and, because of this referral, a checklist was completed appropriately indicating that the statement of facts was not applicable. However, after such referral and for various reasons, the case was brought back in-house for handling by a Society advocate and which subsequently resulted in a court filing requiring the statement of facts which was not obtained. It does not appear that this failure to obtain the required statement of facts was intentional but was primarily the result of the unusual and infrequent nature of the case, i.e., the original assignment of the case to a pro bono attorney and subsequent bringing it back inhouse at which time it was noted that the checklist had already been completed and, therefore, another opening checklist was not completed which may have alerted the responsible advocate that a statement of facts was required. Effect ? During the year ended June 30, 2022, there was a violation of LSC?s rules and regulations. Context ? Not applicable. Although the aforementioned condition was noted during the testing of sampled cases, it could not be projected to the remaining population of untested cases because of the aforementioned described unusual and infrequent nature of the case. Furthermore, and because of the same unusual and infrequent nature of the case, testing could not be extended to cases with similar characteristics. Recommendation ? Although cases of this nature are very infrequent, it is suggested that the Society review its internal control policies and procedures to determine if they might be revised to assist in the possible prevention of future occurrences. Views of Responsible Officials and Planned Corrective Actions ? Please refer to the accompanying Corrective Action Plan of Virginia Legal Aid Society, Inc.

A. Summary of Audit Results N/A ? No response required. B. Findings - Financial Statements Audit N/A ? No findings. C. Findings and Questioned Costs - Major Federal Award Program Audit Finding No. 2022-001 (LSC Basic Field Grant, CFDA No. 09.447061): Comment on finding ? Virginia Legal Aid Society, Inc. (the ?Society?) agrees with the finding that a required written statement of facts was not obtained. Action planned ? Although the Society believes that appropriate policies and procedures are in place to routinely remind all personnel of the requirements for obtaining written statements of facts, the Society will promptly review its internal control policies and procedures to determine if they might be revised to assist in the possible prevention of future occurrences regarding cases of this unusual nature. D. Status of Corrective Actions on Prior Findings All prior findings have been corrected.

Finding No. 2021-001 (LSC Basic Field Grant, CFDA No. 09.447061): Condition ? An employee of Virginia Legal Aid Society, Inc. engaged in grassroots lobbying in an attempt to influence others to support a funding request made of a local city council by Virginia Legal Aid Society, Inc. Criteria ? Recipients of LSC funds are prohibited by federal legislation (45 C.F.R ? 1612.4) from engaging in any grassroots lobbying. Cause ? Policies and procedures are in place to routinely remind all personnel of LSC prohibitions. However, the aforementioned condition was apparently caused by the employee?s erroneous belief that these actions were permissible self-funding lobbying. Effect ? During the year ended June 30, 2021, there was a violation of LSC?s rules and regulations. Context ? Not applicable. The aforementioned condition was not noted by any sampling methodology but, instead, was voluntarily brought to the attention of the auditor by staff of Virginia Legal Aid Society, Inc. Recommendation ? None. Virginia Legal Aid Society, Inc. has already taken the appropriate steps, i.e., to conduct monthly counseling sessions with the affected employee at which time LSC restriction policies are reviewed and discussed in detail. Views of Responsible Officials and Planned Corrective Actions ? Please refer to the accompanying Corrective Action Plan of Virginia Legal Aid Society, Inc.

A. Summary of Audit Results N/A ? No response required. B. Findings - Financial Statements Audit N/A ? No findings. C. Findings and Questioned Costs - Major Federal Award Program Audit Finding No. 2021-001 (LSC Basic Field Grant, CFDA No. 09.447061): Comment on finding ? Virginia Legal Aid Society, Inc. (the ?Society?) agrees with the finding that a Society employee engaged in grassroots lobbying. Action planned ? No further action is planned because the Society has already taken the appropriate steps, i.e., the conduct of monthly counseling sessions with the affected employee at which time Legal Services Corporation restriction policies are reviewed and discussed in detail. D. Status of Corrective Actions on Prior Findings All prior findings have been corrected. /s/ David B. Neumeyer, Executive Director, 10/28/2021 Virginia Legal Aid Society, Inc. -

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