LEGAL AID OF NORTHWEST TEXAS

Finding 2023-001 Major Federal Program: 09.744050 – Legal Services Corporation – Basic Field Grant Compliance Requirements: Allowable Costs and Cost Principles Criteria: The Compliance Supplement for Audits of LSC Recipients and LSC Regulations 45 CFR§ 1631.3 requires that any capital improvements using more than $25,000 of LSC Funds have documented requests for LSC approval and that approval has been granted within 30 days. Audit procedures revealed that capital improvements of $45,000 related to roof repairs were not approved by LSC. Condition: (X) Compliance Finding (X) Significant Deficiency ( ) Material Weakness Context: Capital improvements of $45,000 related to roof repairs were not approved by LSC within 30 days of occurring under exigent circumstances. Effect and Questioned Costs: Repair costs of $45,000, although not approved in accordance with LSC guidelines, were expended on allowable costs. Likely Questioned costs were indeterminable. Recommendation: We recommend review procedures be put in place to ensure the all capital improvements are approved appropriately prior to purchase or within 30 days of occurring under exigent circumstances. Response: See Corrective Action Plan.

Finding 2023-002 Major Federal Program: 21.027 - COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Compliance Requirements: Reporting Criteria: Entities are required to report federal financial assistance on the Schedule of Expenditures of Federal Awards (SEFA), including the federal assistance listing number (FALN) and amounts passed through to sub-recipients. Condition: (X) Compliance Finding (X) Significant Deficiency ( ) Material Weakness Context: The FALN carried forward from the previous contract year was not updated to reflect a change in the grantor’s funding source from 16.575 – Crime Victims Assistance – Rural Safe at Home Project to 21.027 – COVID-19: Coronavirus State and Local Fiscal Recovery Funds. Effect and Questioned Costs: One revised, the SEFA properly reflected $1,617,909 of expenditures under Coronavirus State and Local Fiscal Recovery Funds (FALN 21.027). As a result of the revision, FALN 21.027 was required to be audited as a major program and required reissuance of the audit report. The testing of the direct and material compliance requirements for FALN 21.027 resulted in no additional compliance or controls over compliance findings. Likely questioned costs were indeterminable. Recommendation: We recommend review procedures be put in place to ensure that all funding sources from grantors are updated to properly reflect the applicable financial assistance listing numbers on the SEFA. Response: See Corrective Action Plan.