Audit of the Massachusetts Legal Assistance Corporation Objectives, Scope, and Methodology

An overview of the purpose and process of auditing the Massachusetts Legal Assistance Corporation

Overview

In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor has conducted a performance audit of certain activities of the Massachusetts Legal Assistance Corporation (MLAC) for the period July 1, 2019 through June 30, 2021.

We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Below is a list of our audit objectives, indicating each question we intended our audit to answer; the conclusion we reached regarding each objective; and, if applicable, where each objective is discussed in the audit findings.

Objective	Conclusion
Did MLAC award at least 80% of its General Support Grant funds to local legal aid organizations (LAOs) based on the number of eligible clients in the service area in accordance with Section 9 of Chapter 221A of the General Laws?	Yes
Did MLAC conduct peer reviews in accordance with its monitoring process?	No; see Finding 1
Did MLAC award statewide funding in accordance with its grant awarding process?	Yes
Did MLAC update its internal control plan (ICP) to address the impact of the 2019 coronavirus (COVID-19), as required by the Office of the Comptroller of the Commonwealth’s (CTR’s) “COVID-19 Pandemic Response Internal Controls Guidance”?	No; see Finding 2

 

To achieve our audit objectives, we gained an understanding of the internal controls that we determined to be relevant to the objectives by reviewing MLAC’s mission statement, policies, and procedures, as well as conducting interviews with key personnel. To obtain sufficient, appropriate audit evidence to address our audit objectives, we performed the following procedures.

LAO Grants

To determine whether MLAC awarded at least 80% of General Support Grant funds to LAOs, we obtained the population of grants that were disbursed to local LAOs during our audit period. There were 7 in fiscal year 2020 and 7 in fiscal year 2021, totaling 14 for the audit period. To perform our testing, we obtained the population of people living in Massachusetts with incomes below 125% of the federal poverty guidelines and calculated the percentages of that population in MLAC’s regional areas—Southeast, Northeast, Central West, and Boston—using American Community Survey³ data for fiscal years 2020 and 2021. For fiscal years 2020 and 2021, there were 935,644 and 917,556 residents in Massachusetts with incomes at or below 125% of the federal poverty level, respectively.

We obtained copies of checks and Automated Clearing House⁴ payment reports from MLAC to verify the payment amounts from MLAC to LAOs for fiscal year 2020 and fiscal year 2021. We then compared the amounts paid to the local LAOs to what was on MLAC’s General Support and Special Project Grants list, which is the master list of funding approved by MLAC’s board, for fiscal year 2020 and fiscal year 2021.

During a visit to the MLAC office, we reviewed supporting documentation for these payments as well as postings (journal entries within MLAC’s financial records) by MLAC’s fiscal manager to correct overpayments or underpayments discovered during MLAC’s reconciliation process.

After we determined the amounts paid to the each LAO, we filtered the payments by region, subtotaled the grants distributed to the local LAOs, and calculated the percentage of grants distributed to the LAOs. We then compared these percentages to our calculated percentages of poverty distribution based on the American Community Service data. Finally, we calculated the percentage of funds paid to local LAOs and paid to statewide LAOs.

Statewide LAOs

We tested 100% of the statewide LAOs funded during our audit period (10 in fiscal year 2020 and 10 in fiscal year 2021). We verified that MLAC had an application for funding on file, a signed assurance form, and a signed contract with board approval for each LAO funded during our audit period. We also verified that the amount on the contract matched the amount distributed on MLAC’s General Support and Special Project Grants list to determine whether MLAC funded statewide LAOs in accordance with its grant awarding process.

Peer Reviews

We requested a list of the two peer reviews that were performed during our audit period. For both peer reviews, we reviewed the final peer review reports and the fiscal review documents, both of which are required by MLAC’s monitoring process.

ICP

We requested a copy of MLAC’s ICP to determine whether MLAC updated it to address the impact of the COVID-19 pandemic as required by CTR’s “Internal Control Guide” because COVID-19 had caused a significant change to the work environment. We also examined the copy of the ICP to determine whether it contained the components required by CTR’s “COVID-19 Pandemic Response Internal Controls Guidance.”

Data Reliability Assessment

We obtained MLAC’s fiscal year 2020 and fiscal year 2021 General Support and Special Grants lists. To determine the reliability of the data on the lists, we interviewed management personnel who were responsible for the data. We reviewed 100% of the LAOs on the list and verified that there was a hardcopy signed contract and an application on file for each LAO.

Based on the results of the data reliability procedures performed above, we determined that the data were sufficiently reliable for our audit.

3.    The American Community Survey is an annual United States Census Bureau survey of community demographics, such as household makeup and income.

4.    Automated Clearing House is a system used for electronic fund transfers between consumers or financial institutions.

Date published:	June 16, 2023