Florida Rural Legal Services, Inc.

Finding 2025-004 – Case Requirements (Significant Deficiency and Non-compliance) Information on the Federal Program: Legal Services Corporation (LSC) Basic Field Grant, Disaster Project Grant, Disaster Grant Incurred Cost, and Technology Innovation Grant - FAL # 9.601037 Criteria: Title 45 CFR §1611.9 requires recipients to maintain a written retainer agreement for clients receiving extended legal services, along with a statement identifying the legal problem(s) for which representation is provided. Condition/Context: During our testing of regulations, we examined 71 case files. In one of the 71 files tested, the client file did not include a retainer agreement and client statement of fact as required for extended services by 45 CFR §1611.9. In addition, one case was closed under Code A and one was closed under Code B. Codes A and B represent limited counsel and advice. These cases should have been coded with extended service codes. Cause: Required documentation was not obtained and retained in the client file at the time extended legal services were performed. Effect: The Organization did not accurately report case data and outcomes. Questioned Costs: None reported Recommendation: We recommend the Organization strengthen its policies and procedures to ensure that legal problem codes are correct and required documents are obtained and retained in all client files for extended legal services. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2025-005 – Private Attorney Involvement (Significant Deficiency and Non-compliance) Information on the Federal Program: Legal Services Corporation (LSC) Basic Field Grant, Disaster Project Grant, Disaster Grant Incurred Cost, and Technology Innovation Grant - FAL # 9.601037 Criteria: Title 45 CFR §1614 requires a recipient to devote an amount of LSC funding equal to at least 12.5% of their annualized LSC basic field award to promoting the involvement of private attorneys, law students, law graduates, or other professionals to provide legal information and legal assistance to eligible clients. Condition/Context: During our testing of PAI expenditures, calculated the required amount of expenditures that should be allocated to private attorney involvement and noted that LSA did not meet the minimum requirement. LSA applied for and received a waiver from LSC, but LSA did not add the correct prior year carryforward amount to the calculation. Cause: LSA failed to add the correct prior year carryforward amount to the PAI calculation. Effect: The Organization did request an adequate waiver amount. Questioned Costs: None reported Recommendation: We recommend the Organization increase efforts to meet the 1614 minimum such as expanding PAI training and education as well as community outreach programs. LSA could also re-evaluate existing activities to determine if activities already being performed could qualify as PAI activities. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2025-006 – Cash Disbursement Internal Controls (Significant Deficiency) Information on the Federal Program: Legal Services Corporation (LSC) Basic Field Grant, Disaster Project Grant, Disaster Grant Incurred Cost, and Technology Innovation Grant - FAL # 9.601037 Criteria: 45 CFR § 1630 requires recipients to establish and maintain internal controls to ensure that costs charged to LSC grants are allowable and that restricted activities are not supported with LSC funds. Effective internal controls include timely supervisory approval of nonpayroll disbursements and employee certification of time records to demonstrate allowability and proper allocation of costs. LSA policies require nonpayroll invoices to be approved prior to payment and payroll to be approved by department heads and certified by employees. Condition/Context: During testing of internal controls related to compliance with 45 CFR § 1630, the auditors noted the following exceptions - For nonpayroll disbursements, 3 of 40 transactions tested were approved after the related purchase had occurred. For payroll, 1 of 40 employees tested did not sign and certify their timesheet for the pay period selected, despite organizational policies requiring employee certification. Cause: Purchase requests were not consistently submitted and approved in advance of the purchase date, and the time sheet was not properly certified, indicating a breakdown in adherence to established policies. Effect: Although the transactions were ultimately approved and the costs were otherwise allowable and properly charged to the program, failure to obtain timely approval increases the risk that purchases may be made without appropriate prior authorization. Questioned Costs: None reported Recommendation: We recommend management reinforce disbursement procedures to ensure purchase requests are submitted and approved in accordance with the established policy requiring approval prior to the date of purchase, thereby strengthening internal controls over disbursements. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2024-004 – Case Requirements (Significant Deficiency and Non-compliance) Information on the Federal Program: Legal Services Corporation (LSC) Basic Field Grant, Disaster Project Grant, Disaster Grant Incurred Cost, and Technology Innovation Grant - FAL # 9.601037 Criteria: 45 CFR 1644 requires for each case filed in court by its attorneys on behalf of a recipient client, recipients disclose the name and address of each party in the case, cause of action, name and address of the court where the case is filed, and the case number assigned by the court. Condition/Context: During our testing of regulations, we examined 71 case files. Of the 71 case files tested, none of the cases required disclosure. WA tested an additional 25 cases specifically for section 1644; seven cases met the requirements for disclosure and two of those cases were not properly disclosed to LSC. Cause: The required case disclosure was omitted from the report to LSC. Effect: The Organization did not properly disclose three cases. Questioned Costs: None reported Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the process of opening case files to ensure compliance with all required documentation and disclosure requirements. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2024-004 – Allowable Costs (Significant Deficiency and Non-compliance)(Repeat finding) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR 1630 requires that costs are incurred, reasonable and necessary, allocable to the grant, adequately documented, and consistent with accounting policies and procedures. Condition/Context: We selected 25 payroll disbursements for testing. Of those 25, one payroll expense was not properly allocated. The payroll disbursement tested was a paid time off buyback allocated 100% to LSC and supporting documentation did not agree to this allocation. Cause: Supporting documentation supported an allocation of 87% of the paid time off buyback but the whole expense was charged to LSC. Effect: The Organization did not comply with allowable cost allocation requirements. Questioned costs: $625 Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the disbursement process to ensure the Organization is in compliance with all required documentation and allocation requirements. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2024-005 – Internal Controls over Federal Awards (Significant Deficiency and Noncompliance)( Repeat finding) Information on the Federal Program: U.S. Department of Justice, Assistance Listing No.16.575 Victims of Crime Act (VOCA) Criteria: 2 CFR 200.303 requires non-federal entities to establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: We selected 50 disbursements for testing. Of those 50, 25 were for payroll and 25 were non-payroll disbursements. Of the 25 non-payroll, 4 lacked documentation of approval for payment.Cause: The Organization did not properly document controls established in its accounting manual to review and approve expenses charged to the grant. Effect: The Organization did not obtain proper approvals according to the policy of established controls. Questioned costs: None Recommendation: We recommend the Organization strengthen its policies and procedures surrounding disbursement and allocation processes to document the review and approval process to meet the control standards. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2024-006 – Special Test and Provisions- Private Attorney Involvement (PAI) (Significant Deficiency and Non-compliance) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR 1614 requires a recipient of LSC funding to use at least 12.5% of their annual basic field grant to promote the involvement of private attorneys, law students, law graduates, or other professionals to provide legal information and legal assistance to eligible clients. Activities undertaken to meet this requirement include direct delivery of legal assistance to eligible programs. The Organization has elected to meet this requirement with a significant amount of pro bono work and allocating costs associated with facilitating the PAI requirement. Condition/Context: During audit procedures, we tested the PAI requirements and activities and costs calculation in accordance with Section 1614. We determined the Organization did not meet the minimum PAI requirement for fiscal year 2024. Cause: The Organization applied for and received a waiver from LSC, but the calculation did not include the prior year waiver amount that increased the current year requirement. Effect: The Organization waiver amount did not cover the amount of PAI shortfall for fiscal year 2024. Questioned costs: None Recommendation: We recommend the Organization strengthen its policies and procedures surrounding monitoring of PAI compliance to ensure the current year requirement is correctly calculated to include cumulative obligations. We also recommend the addition of a reduced fee program to facilitate outside involvement. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2024-007 – Allowable Costs (Significant Deficiency and Non-compliance)(Repeat finding) Information on the Federal Program: U.S. Department of Justice, Assistance Listing No.16.575 Victims of Crime Act (VOCA) Criteria: 2 CFR 200.405 establishes requirements for costs allocated to a grant award. These requirements include that costs must be approximated using a reasonable method. Condition/Context: We selected 50 disbursements for testing. Of those 50, 25 were for payroll and 25 were non-payroll disbursements. Of the 25 non-payroll, there was 1 instance in which the cost allocated was not properly documented or supported by a reasonable method. Cause: Expense allocated to the VOCA grant was not properly supported. Effect: The Organization did not adequately document allocation methods required by allowable cost compliance requirements. Questioned costs: $216 Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the disbursement process to ensure the Organization is in compliance with all required documentation and disclosure requirements. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2024-008 – Case Requirements (Significant Deficiency and Non-compliance) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR 1644 requires for each case filed in court by its attorneys on behalf of a recipient client, recipients disclose the name and address of each party in the case, cause of action, name and address of the court where the case is filed, and the case number assigned by the court. Condition/Context: During our testing of regulations, we examined 71 case files. Of the 71 case files tested, 2 of the cases required disclosure. One case was not properly disclosed to LSC. Cause: The required case disclosure was omitted from the report to LSC. Effect: The Organization did not properly disclose one case. Questioned Costs: None reported Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the process of opening case files to ensure compliance with all required documentation and disclosure requirements. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2023-003 – Case Requirements (Significant Deficiency and Non-compliance) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Disaster Project Grant, Disaster Grant Incurred Cost, and Technology Grant - FAL # 9.601037 Criteria: 45 CFR Section 1620 requires recipients to establish priorities for the use of its LSC and non-LSC resources. In addition, the recipient’s case files must support the priorities outlined in the written plan. 45 CFR 1644 requires for each case filed in court by its attorneys on behalf of a recipient client, recipients to disclose the name and address of each party in the case, cause of action, name and address of the court where the case is filed, and the case number assigned by the court. Condition/Context: During our testing of regulations, we examined 71 case files. Of the 71 case files tested, one case was coded to a legal problem code that does not fall under the established priorities. Of the 71 case files tested, two cases met the requirements for disclosure and one of those cases was not properly disclosed to LSC. Cause: The assigned attorney did not properly close the case resulting in inaccurate case data and required case disclosure was omitted. Effect: LSA is not in compliance with case requirements. Questioned Costs: None reported Recommendation: We recommend LSA strengthen its policies and procedures surrounding the process of opening and closing case files to ensure compliance with all required documentation and disclosure requirements. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2023-004 – Allowable Costs (Material Weakness and Non-compliance) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR 1630 requires that costs are incurred, reasonable and necessary, allocable to the grant, adequately documented, and consistent with accounting policies and procedures. Condition/Context: We selected 50 disbursements for testing. Of those 50, 25 were for payroll and 25 were non-payroll disbursements. Of the 25 payroll items, 2 employees did not have an approved pay rate. Of the 25 non-payroll disbursements, 2 did not have proper supporting documentation such as an invoice and 8 were not properly approved for payment. Cause: Expenses allocated to the LSC grant were not properly supported and approved. Effect: The Organization did not comply with allowable cost documentation requirements. Questioned costs: $10,790 Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the disbursement process to ensure the Organization is in compliance with all required documentation and disclosure requirements.Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2023-005 – Internal Controls over Federal Awards (Material Weakness and Noncompliance) Information on the Federal Program: U.S. Department of Justice, Assistance Listing No.16.575 Victims of Crime Act (VOCA) Criteria: 2 CFR 200.303 requires non-federal entities to establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: We selected 50 disbursements for testing. Of those 50, 25 were for payroll and 25 were non-payroll disbursements. Of the 25 payroll, 2 employees did not have an approved pay rate. Of the 25 non-payroll, 9 of the expenses were allocated to the VOCA grant through a process in the accounting system. 7 out of the 9 allocations were not properly documented as reviewed and approved by management. Of the remaining 14 non-payroll disbursements, 4 lacked documentation of approval for payment. Cause: The Organization did not properly document controls established to review and approve expenses charged to the grant. Effect: The Organization did not comply with internal control compliance standards. Questioned costs: None Recommendation: We recommend the Organization strengthen its policies and procedures surrounding disbursement and allocation processes to document the review and approval process to meet the control standards. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2023-006 – Case Requirements (Significant Deficiency and Non-compliance) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR Section 1611 requires that a recipient must execute a retainer agreement for each client that receives extended services.Condition/Context: We examined 71 case files. Of those 71 cases, 13 required a signed retainer based on the level of service provided. Of those 13 cases, 2 cases did not have the required forms in the file. Cause: The assigned attorney did not obtain the required documentation for the file. Effect: The Organization did not comply with case documentation requirements. Questioned costs: None Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the process of opening and closing case files to ensure compliance with all required documentation and disclosure requirements. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2023-007 – Special Test and Provisions- Private Attorney Involvement (PAI) (Significant Deficiency and Non-compliance) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR 1614 requires a recipient of LSC funding to use at least 12.5% of their annual basic field grant to promote the involvement of private attorneys, law students, law graduates, or other professionals to provide legal information and legal assistance to eligible clients. Activities undertaken to meet this requirement include direct delivery of legal assistance to eligible programs. The Organization has elected to meet this requirement with a significant amount of pro bono work and allocating costs associated with facilitating the PAI requirement. Condition/Context: We tested 25 cases that were tracked for PAI compliance. Of the 25 cases, 3 were non-LSC-eligible cases. In addition, the Organization did not satisfy the 12.5% minimum requirement for PAI. Cause: Three cases were not types of cases allowable under LSC guidelines. In addition to the value of pro bono work, the Organization allocated expenses to PAI but failed to meet the 12.5% minimum. Effect: The Organization did not comply with PAI compliance requirements. Questioned costs: None Recommendation: We recommend the Organization strengthen its policies and procedures surrounding monitoring of PAI compliance to ensure only allowable pro bono cases are accepted. We also recommend the addition of a reduced fee program to facilitate outside involvement. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2023-008 – Allowable Costs (Significant Deficiency and Non-compliance) Information on the Federal Program: U.S. Department of Justice, Assistance Listing No.16.575 Victims of Crime Act Criteria: 2 CFR 200.405 establishes requirements for costs allocated to a grant award. These requirements include that costs must be approximated using a reasonable method. Condition/Context: We selected 50 disbursements for testing. Of those 50, 25 were for payroll and 25 were non-payroll disbursements. Of the 25 payroll, 4 employees’ pay allocated to the grant did not agree to the supporting timesheets and pay rates. Of the 25 non-payroll, there were 2 instances in which the costs allocated was not properly documented or supported by a reasonable method. Cause: Expenses allocated to the VOCA grant were not properly supported. Effect: The Organization did not comply with allowable cost documentation requirements. Questioned costs: $2,313 Recommendation: We recommend the Organization strengthen its policies and procedures surrounding the disbursement process to ensure the Organization is in compliance with all required documentation and disclosure requirements. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2023-009 – Special Test & Provisions- Priorities in Use of Resources (Non-compliance) Information on the Federal Program: Legal Services Corporation Basic Field Grant, Award No. 09.610020 Criteria: 45 CFR 1620 requires a recipient of LSC funding to adopt a written statement of priorities that determines the cases and matters that can be undertaken. All staff who handle cases or matters, or make decisions about case acceptance must sign an agreement acknowledging they have read and understand the priorities and read and understand an emergency situation, and will not undertake any case or matter that is not a priority or emergency. Condition/Context: We selected 25 payroll allocations charged to the LSC grant. Of those 25 employees tested, 5 did not have the required signed priority statement on file. Cause: The Organization did not obtain or retain the required priority statements for employees involved with cases or other matters. Effect: The Organization did not document compliance with priorities in use of resources compliance requirements.Questioned costs: None Recommendation: We recommend the Organization strengthen its policies and procedures surrounding employee onboarding to ensure the required statement is signed when a new employee is hired. In addition, the policy should include periodic review of employee files to ensure all required documentation is present and up to date. Views of Responsible Officials: See Management’s View and Corrective Action Plan included at the end of the report.

Finding 2020-001 ? Grant Management Information on the federal program: U.S. Department of Transportation, CFDA Number 20.933 National Infrastructure Investments and U.S. Department of Treasury, CFDA Number 21.015 Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States. Criteria: 2 CFR Part 200-Subpart D establishes post federal award requirements including general financial management requirements and the need for written policies and procedures for federal compliance requirements. Condition: The Authority?s financial policies and procedures do not address federal compliance requirements required by the Uniform Guidance. Cause: The Authority has financial policies and procedures in place for not for profit accounting and controls but they have not been updated to include written policies required by the Uniform Guidance. Effect: The Authority did not comply with the standards for financial and program management. Recommendation: We recommend the Authority develop a grant management policy manual to accompany the financial policies and procedures to ensure compliance with federal requirements. Views of Responsible Officials: See Corrective Action Plan included at the end of the report.

Finding 2020-002 ? Equipment Management Information on the federal program: U.S. Department of Transportation, CFDA Number 20.933 National Infrastructure Investments and U.S. Department of Treasury, CFDA Number 21.015 Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States. Criteria: 2 CFR Part 200.313 establishes conditions and obligations for equipment acquired under a federal award. The requirements cover the use, management, and disposal of the equipment. Management requires that property records must be maintained that include a description of the property, an identification number, the source of funding for the property, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property. In addition, a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition: Although all current expenditures are currently recorded in construction in progress and therefore not in the fixed asset system at year end, the Authority could not identify assets purchased with federal funds in the most recent inventory taken. Cause: The Authority does not currently have a process in place to identify specific assets acquired with federal funds. Effect: The Authority did not comply with equipment management compliance requirements. Recommendation: We recommend the Authority develop a process to identify assets acquired with federal funds in the fixed asset system. Views of Responsible Officials: See Corrective Action Plan included at the end of the report.