Copyright 1999 Federal News Service, Inc.
Federal News Service
SEPTEMBER 29, 1999, WEDNESDAY
SECTION: IN THE NEWS
LENGTH:
3569 words
HEADLINE: PREPARED TESTIMONY OF
STATEMENT OF LAURIE E. EKSTRAND,
DIRECTOR, ADMINISTRATION OF JUSTICE
ISSUES,
GENERAL GOVERNMENT DIVISION
UNITED STATES GENERAL ACCOUNTING
OFFICE
BEFORE THE HOUSE COMMITTEE ON THE JUDICIARY
SUBCOMMITTEE ON COMMERCIAL AND ADMINISTRATIVE LAW
SUBJECT -
LEGAL SERVICES CORPORATION
MORE NEEDS TO BE DONE
TO
CORRECT CASE SERVICE REPORTING PROBLEMS
BODY:
Mr. Chairman and Members of the Committee:
I am pleased to be
here today to discuss two reviews that we have completed pertaining to case
service reporting by the Legal Services Corporation (LSC).
During the past year, both the LSC Office of the Inspector General (OIG) and we
identified misreporting by grantees on both the number of cases they closed
during calendar year 1997 and the number they had open at the end of that year.
In a June 1999 report, we estimated that nearly 75,000 of the approximately
221,000 cases reported to LSC by 5 of its largest grantees were questionable.1
In light of these findings, we were asked to determine (1) what efforts LSC and
its grantees have made to correct case reporting problems, and (2) whether these
efforts are likely to resolve the case reporting problems that occurred in 1997.
In a report issued earlier this month/2 we found the following:
revised its
written case reporting guidance and issued a new handbook to its grantees to
clarify case reporting requirements. Grantees reported changing their policies
and procedures to comply with LSC's new reporting requirements.
Although
most grantees indicated that LSC's revised case reporting guidance has clarified
reporting requirements for grantees, many grantees remained unclear about
certain aspects of LSC's reporting requirements.
Problems existed with LSC's
self-inspection, which sought to verify the accuracy of 1998 Case Service
Reporting (CSR) data.
We believe that more needs to be done to correct
reporting problems at LSC. We made eight recommendations to help LSC improve the
accuracy of future CSR reports.
Background
LSC was established in 1974
as a private, nonprofit, federally funded corporation to provide legal
assistance to low-income people in civil matters. LSC provides the assistance
indirectly, through grants to about 260 competitively selected local programs.
Grantees may receive additional funding from nonLSC sources. In fiscal years
1998 and 1999, LSC received appropriations of $283 million and $300 million,
respectively.
To qualify for LSC representation, clients must meet both
financial and citizenship/alien eligibility requirements. With respect to
financial eligibility, clients' income, in general, is not to exceed 125 percent
of the federal poverty guidelines. LSC regulations require that grantees (1)
adopt a form and procedure to obtain eligibility information and (2) preserve
that information for audit by LSC. With respect to citizenship/alien
eligibility, only citizens and certain categories of aliens are eligible for
services. For clients who are provided services in person, a citizen attestation
form or documentation of eligible alien status is required. For clients who are
provided services via the telephone, documentation of the inquiry regarding
citizenship/alien eligibility is required.
LSC uses a Case Service Reporting
system to gather quantifiable information from grantees on the services they
provide that meet LSC's definition of a case. The CSR Handbook is LSC's primary
official guidance to grantees on how to record and report cases. LSC relies on
such case information in its annual request for federal funding.
Audit
reports issued by LSC's OIG between October 1998 and July 1999 reported that
five grantees misreported the number of cases they had closed during calendar
year 1997 and the number of cases that remained open at the end of that year.
The OIG found that all five grantees overstated the number of closed cases,
while four overstated and one understated open cases.
Our Audit of Five LSC
Grantees Found That One-Third of 1997 Cases Were Questionable
In June 1999,
in response to Congress' request for information on whether the 1997 case data
of other LSC programs had problems similar to those reported by LSC's OIG, we
issued a report on our audit of five of LSC's largest grantees: Baltimore,
Chicago, Los Angeles, New York City, and Puerto Rico/We conducted a file review
of a random sample of cases at each of these grantees to determine the extent to
which they made overreporting errors in reporting cases closed during 1997 and
cases open on December 31, 1997. We found similar types of reporting errors to
those the OIG found and estimated that, overall, about 75,000 (+/- 6,100) of the
approximately 221,000 cases that the five grantees reported to LSC for 1997 were
questionable. Three grantees identified about 30,000 of their cases as
misreported prior to our case file review. The primary causes for these
self-identified overreporting errors were (1) improperly reporting to LSC cases
that were wholly funded by other sources, such as states, and (2) problems
related to case management reporting systems, such as grantee staffs' difficulty
in transitioning to new automated systems. Our case file review deemed
approximately 45,000 additional cases questionable for one of the following
reasons:
- The grantee reported duplicate cases for the same legal service
to the same client.
- Some case files did not contain any documentation
supporting the grantee's determination that the client was either a U.S. citizen
or eligible alien.
- For cases reported as closed in 1997, some case files
showed no activity during the 12 months before the case was closed. For cases
reported as open as of December 31, 1997, some cases showed no grantee activity
during calendar year 1997.
- Some case files did not contain any
documentation that the grantee had determined that the client was financially
eligible for LSC services. LSC regulations did not require specific
documentation of these determinations in all cases. However, they required that
grantees (1) adopt a form and procedure to obtain eligibility information and
(2) preserve that information for audit by LSC.
LSC officials and executive
directors of the five grantees told us that they had taken or were planning to
take steps to correct these case reporting problems.
LSC's Clarified
Reporting Guidance Resulted in Program Changes, but Some Requirements Remain
Unclear to Many Grantees
LSC issued a new, 1999 CSR Handbook and distributed
other written communications intended to clarify reporting requirements to its
grantees.
The 1999 handbook, which replaced the 1993 edition, instituted
changes to some of LSC's reporting requirements and provided more detailed
information on other requirements.In responding to a GAO telephone survey, most
grantees indicated that the new guidance helped clarify LSC's reporting
requirements, and virtually all of them indicated that they had or planned to
make program changes as a result of the requirements. Many grantees, however,
identified areas of case reporting that remained unclear to them.
LSC Issued
New CSR Guidance
The 1999 CSR Handbook included changes to (1) procedures
for timely closing of cases; (2) procedures for management review of case
service reports; (3) procedures for ensuring single recording of cases; (4)
requirements to report LSC eligible cases, regardless of funding source; and (5)
requirements for reporting cases involving private attorneys separately.
On
November 24, 1998, LSC informed its grantees that two of the changes in the 1999
CSR Handbook were to be applied to the 1998 case data The two changes pertained
to timely closing of cases and management review of case service reports. The
remaining new provisions of the 1999 CSR Handbook were not applicable to 1998
cases. For example, for 1998, there was no requirement for grantees to ensure
that cases were not doublecounted. For 1999, LSC is requiring the use of
automated case management systems and procedures to ensure that cases involving
the same client and specific legal problem are not reported to LSC more than
once.
For 1998, grantees could report only those cases that were at least
partially supported by LSC funds. For 1999, LSC is requiring grantees to report
all LSC-eligible cases, regardless of funding source. LSC intends to estimate
the percentage of activity spent on LSC service by applying a formula that
incorporates the amount of funds grantees receive from other funding sources
compared with the amount they receive from LSC.
In addition to changing
certain reporting requirements, the 1999 handbook also provides more detailed
guidance to grantees than the 1993 handbook. For example, the 1999 handbook
provides more specific definitions of what constitutes a "case" and a "client"
for CSR purposes. The 1999 handbook also addresses documentation requirements
that were not discussed in the 1993 handbook. Grantee Directors Reported That
They Are Implementing Changes to Comply With Reporting Requirements
Based on
our survey of executive directors of 79 grantees, we estimate that over 90
percent/4 of grantee executive directors viewed the changes in the 1999 CSR
Handbook as being clear overall, and vim;ally all of them indicated that they
planned to or had made at least one change to their program operations as a
result of the revised case reporting requirements. These changes included
revising policies and procedures, providing training, modifying forms and/or
procedures used during client intake, implementing computer hardware and
software changes, and increasing reviews of cases.
Many Grantees Remain
Unclear About Certain Reporting Requirements
Although most of the grantee
executive directors reported that the new LSC guidance helped clarify
requirements, many of them also indicated that they were still unclear about
certain requirements and that additional clarification was needed Areas of
confusion or uncertainty that executive directors identified included
requirements pertaining to asset and citizenship/alien eligibility
documentation, single recording of cases, and who can provide legal services.
Most Grantees Certified the Accuracy of Their 1998 CSR Data, but Questions
About Data Accuracy and Interpretation Remain
LSC sought to determine the
accuracy of grantees' case data by requiring that grantees complete
self-inspections of their open and closed caseload data for 1998. Grantees were
required to determine whether the error rate in their data exceeded 5 percent.
According to LSC, about three-fourths of the grantees certified that the error
in their data was 5 percent or less. LSC used the results of the self-
inspections to estimate the total number of case closings in 1998. Our review of
LSC's selfinspection process raised concerns about the accuracy and
interpretation of the results, and what the correct number of certifying
programs should be.
LSC Grantees Conducted self-Inspections of 1998 CSR Data
On May 14, 1999, LSC issued a memo to all grantees instructing them to
complete a self-inspection procedure by July 1, 1999. The purpose of the
self-inspection was to ensure that (1) grantees were properly applying
instructions in the 1999 edition of the CSR Handbook that were applicable to the
1998 data, and (2) LSC had accurate case statistical information to report to
Congress for calendar year 1998.
LSC provided detailed guidance to grantees
on the procedures for the self-inspection. Each grantee was to select and
separately test random samples of open and closed cases to determine whether the
number of cases it reported to LSC earlier in the year was correct. Grantees
were to verify that the case file contained a notation of the type of assistance
provided, the date on which the assistance was provided, and the name of the
case handier providing the assistance. Grantees were also to determine whether
assistance had ceased prior to January 1, 1998; was within certain service
categories as defined by the 1999 handbook; was provided by an attorney or
paralegal; and was not prohibited or restricted. Finally, grantees were to
verify that each case had eligibility information on household income, size,
assets, citizenship attestation for in-person cases, and indication of
citizenship/alien status for telephone-only cases.
If any single aspect of a
case failed to meet LSC's requirements, the case was to be classified as an
error for reporting purposes. If the grantees found that their CSR case sampling
had an error rate of 5 percent or less, the program directors and policy board
chairs were to sign a certification form and return it to LSC. Grantees who
could not certify to the correctness of their 1998 CSR data were to submit a
letter to LSC describing (1) the problems they had identified during the
self-inspection process and (2) the corrective actions they had instituted to
address the problems. Grantees could resubmit their 1998 CSR data to LSC if they
identified one or more problems in the random sample and corrected their entire
1998 database so that the problems no longer appeared. If, by correcting the
problems, the error rate in the data was reduced to 5 percent or less, the
grantees could resubmit their 1998 data along with a signed certification
attesting to the substantial accuracy of the resubmitted data In this way,
grantees who were unable to certify at one point in time could certify at a
later point in time.
Most Grantees Certified Their 1998 CSR Data
According to LSC officials, about three-fourths of the grantees certified
the accuracy of their 1998 case data As of August 26, 1999, LSC documents
indicated that 199 of 261, grantees/5 (76 percent) reported substantially
correct CSR data to LSC. The remaining 62 grantees (24 percent) did not certify
to LSC that their CSR data were substantially correct. According to LSC, 30 of
the 50 largest grantees did not certify their 1998 data LSC officials told us
they were surprised that such a large number of grantees certified their 1998
CSR data. They attributed the results to the following factors: (1) the
selfinspection did not attempt to identify duplicate cases; (2) grantees
received the new 1999 handbook in November 1998 and had already implemented some
of the new requirements; and (3) grantees were less likely to report as cases
telephone referrals in which no legal advice had been given and/or clients'
eligibility had not been determined because they were aware that the OIG
identified this as a problem.
On the basis of the self-inspection results,
LSC estimated that grantees closed 1.1 million cases in 1998.
Self-Inspection Results Raised Concerns
Our review raised some concerns
about LSC's interpretation of the self-inspection results and about the accuracy
of the data provided to LSC by grantees. As a result, we could not assess the
accuracy of LSC's estimate of the number of certified programs and case closures
for 1998.
LSC did not issue standardized procedures for grantees to use in
reporting the results of their self-inspections. Grantees that could not certify
their data wrote letters to LSC that contained varying degrees of detail about
data errors that they found. Since LSC did not have a standard protocol for
collecting the results of the self:inspections, LSC officials in some cases had
to rely on their own interpretations of grantees' descriptions of the problems
they had discovered.
We are uncertain how many programs should have
been counted as certified because we are uncertain if LSC applied a consistent
definition of "certification." Most programs that were on LSC's certification
list determined that they had error rates of 5 percent or less for both open and
closed cases. However, LSC placed some programs on the certified list if the
program's overall error rate for closed cases was 5 percent or less, even if the
overall error rate actually was higher than 5 percent. In two instances,
executive directors told us that they did not certify their CSR data because
their overall error rate exceeded 5 percent However, these programs appeared on
LSC's list of certified programs. When we asked an LSC official about this, he
told us that they advised grantees that if their closed case error rate did not
exceed 5 percent, they should certify" their data. In response to our inquiry,
the official reviewed the certification letters submitted by nearly 200
grantees, and identified 5 certified programs whose error rates for open cases
exceeded 5 percent. Given that some grantees submitted only an overall estimate
of data error, we do not know how many programs qualified to be certified
overall, just for closed cases, or just for open cases.
We are also
concerned that LSC's instructions to grantees on how to conduct the
self-inspections may have led some of the smaller grantees to select too few
test cases to make a reliable assessment of the proportion of error in their
case data Because these were smaller grantees, this limitation would have had
little effect on LSC's estimate of the total closed caseload. However, it could
have affected LSC's count of the number of certified programs.
LSC does not
know how well grantees conducted the selfinspection process, nor how accurate
the results are. We spoke with several executive directors who did not correctly
follow LSC's reporting requirements. Incorrect interpretations of LSC guidance
may have resulted in some programs certifying their 1998 data when they should
not have, and other programs not certifying their 1998 data when they should
have. An LSC official told us that, although they have conducted CSR training
sessions for grantee executive directors, thousands of case handlers in grantee
offices have not received such training. The official acknowledged that written
guidance and telephone contacts with grantees may not be sufficient to ensure
correct and consistent understanding of reporting requirements, and that LSC
plans to consider alternative ways of providing training to staff.
LSC
officials told us that the self-inspection was valuable and that LSC plans to
have grantees complete self-inspections again early next year as part of the
1999 CSR reporting process.
Conclusions
LSC's 1999 CSR Handbook and
other written communications have improved the clarity of reporting requirements
for its grantees. However, many grantees remained unclear about and/or
misunderstood certain aspects of the reporting requirements. LSC's practice of
disseminating guidance primarily by written or telephone communications may not
be sufficient to ensure that grantees correctly and consistently interpret the
requirements.
LSC sought to determine the accuracy of grantees' 1998 case
statistics by requiring grantees to conduct self-inspections. However, we do not
know the extent to which the results of the self-inspection process are
accurate. The validity of the results are difficult to determine because LSC did
not standardize the way that grantees were to report their results, some of the
grantees used samples that were too small to assess the proportion of error in
their data, some grantees did not correctly follow LSC's reporting guidance, and
LSC had done no verification of the grantees' self-inspection procedures.
We
do not believe that LSC's actions, to date, have been sufficient to fully
resolve the case reporting problems that occurred in 1997.
Recommendations
In our September 20, 1999, report/6 we recommended that the President of
LSC:
- clarify and disseminate information on the specific information on
client assets that grantees must obtain, record, and maintain;
- clarify and
disseminate information on the types of citizenship/alien eligibility
information grantees must obtain, record, and maintain for clients who receive
legal assistance only over the telephone;
- clarify and disseminate LSC's
criteria for single recording of cases;
- clarify and disseminate LSC's
policy concerning who can provide legal assistance to clients for the service to
be counted as a case;
- explore options for facilitating correct and
consistent understanding of reporting requirements, including developing and
disseminating a training video for grantee staff; - develop a standard protocol
for future self-inspections to ensure that grantees systematically and
consistently report their results for open and closed cases;
- direct
grantees to select samples for future self-inspections that are sufficient to
draw reliable conclusions about magnitude of case data errors; and finally,
- ensure that procedures are in place to validate the results of LSC's 1998
self-inspection, as well as of any future self-inspections.
In a written
response to a draft of our report, the President of LSC generally agreed with
our findings and noted that he plans to implement our recommendations to the
fullest extent possible.
Mr. Chairman, this concludes my prepared statement.
I would be pleased to answer any questions that you or other Members of the
Committee may have.
FOOTNOTES:
1 Legal Services
Corporation; Substantial Problems in 1997 Case Reporting by Five
Grantees (GAO/GGD-99-135R, June 25, 1999).
2 Legal Services
Corporation; More Needs to Be Done to Correct Case Service Reporting
Problems (GAO/GGD-99-188, September 290, 1999).
3 GAO/GGD-99-135R, June
25,1999.
4 We conducted telephone interviews with a random sample of
executive directors of 79 grantees. All percentage estimates from the results of
this survey have 95 percent confidence intervals with a margin of error of 10
percent or less.
5 LSC funded 262 progrms in l998. Funding for one program
was discontinued in l999, and LSC has no self-inspection results for this
program.
6 GAO/GGD-99-183, September 20, 1999.
LOAD-DATE: October 1, 1999
