On June 25, the General Accounting Office released a draft report to members of Congress revealing that groups funded by the scandal-ridden Legal Services Corporation (LSC) seriously overstated to LSC the number of cases handled in 1997. The audit found that the five largest recipients of LSC funding, programs in New York City, Chicago, Los Angeles, Baltimore and Puerto Rico, had overstated by 75,000 the number of cases they handled that year. This new emerging LSC scandal hits just as LSC is asking Congress for a $40 million funding increase for FY2000. This request comes on top of a $17 million increase that LSC received for FY1999. Last year’s funding increase, however, may have happened in part because of fictitious statistics delivered to Congress about the number of cases handled by LSC-funded programs.
LSC-funded groups are required each year to file case reports with LSC detailing how many cases were closed by the groups during the year, as well as how many cases remained open at the end of the year. The figures in the case reports are then compiled by LSC and sent to Congress in annual reports. In the past, Congress has relied heavily on these case numbers in determining how much funding LSC would receive for the next fiscal year. During last year’s budget debate in Congress, LSC provided Congress with statistics claiming that 1.9 million people received help from LSC-funded programs in 1997. This statistic, however may have been extremely inaccurate in light of the GAO’s findings.
The GAO’s audit was prompted by concerns from several members of Congress, including Reps. Dick Armey (R-TX) and Tom Latham (R-IA), after Associated Press reporter Karen Gullo wrote an article published April 8 detailing how about 70 percent of nearly 73,000 closed cases in four legal services programs were not valid. In fact, during the course of her investigation, Ms. Gullo reviewed five other programs not audited by the GAO and found that they had overcounted by at least 90,000. One of these programs, Florida Rural Legal Services, reported almost 45,000 new cases for 1997 when, in fact, it had only handled about 5,000 cases that year. Given that the review of just ten out of 269 programs has yielded a possible 165,000 bogus ‘cases’, it's clear that the legal services program is plagued with massive overreporting of cases.
Of the overcounting problem, LSC President John McKay made the remarkable
statement that "It's not significant in terms of overall cases and services we
are providing."
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