LEGAL SERVICES

CORPORATION

More Needs to Be Done to

Correct Case Service

Reporting Problems

Statement of Laurie E. Ekstrand,

Director, Administration of Justice Issues,

General Government Division

United States General Accounting Office

GAO Testimony

Before the Subcommittee on Commercial and

Administrative Law

Committee on the Judiciary

House of Representatives

For Release

on Delivery

2:00 p.m. EDT

Wednesday

September 29, 1999

GAO/T-GGD-99-185

Statement 

Legal Services Corporation: More Needs to

Be Done to Correct Case Service Reporting

Problems

Page 1 GAO/T-GGD-99-185 LSC Case Reporting Problems

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 month2

 we found the following:

• LSC 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.

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 non-LSC 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

 

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-99-183, September 20, 1999).

Background
Statement

Legal Services Corporation: More Needs to Be Done to Correct Case Service Reporting

Problems

Page 2 GAO/T-GGD-99-185 LSC Case Reporting Problems

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.

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.3

 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.

 

3

GAO/GGD-99-135R, June 25, 1999.

Our Audit of Five LSC

Grantees Found That

One-Third of 1997

Cases Were

Questionable
Statement

Legal Services Corporation: More Needs to Be Done to Correct Case Service Reporting

Problems

Page 3 GAO/T-GGD-99-185 LSC Case Reporting Problems

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 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.

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.

LSC’s Clarified

Reporting Guidance

Resulted in Program

Changes, but Some

Requirements Remain

Unclear to Many

Grantees

LSC Issued New CSR

Guidance
Statement

Legal Services Corporation: More Needs to Be Done to Correct Case Service Reporting

Problems

Page 4 GAO/T-GGD-99-185 LSC Case Reporting Problems

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 double

counted. 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.

Based on our survey of executive directors of 79 grantees, we estimate that

over 90 percent4

 of grantee executive directors viewed the changes in the

1999 CSR Handbook as being clear overall, and virtually 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 staff

training, modifying forms and/or procedures used during client intake,

implementing computer hardware and software changes, and increasing

reviews of cases.

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

 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.

Grantee Directors Reported

That They Are

Implementing Changes to

Comply With Reporting

Requirements

Many Grantees Remain

Unclear About Certain

Reporting Requirements
Statement

Legal Services Corporation: More Needs to Be Done to Correct Case Service Reporting

Problems

Page 5 GAO/T-GGD-99-185 LSC Case Reporting Problems

citizenship/alien eligibility documentation, single recording of cases, and

who can provide legal services.

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 self-inspection process raised

concerns about the accuracy and interpretation of the results, and what

the correct number of certifying programs should be.

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 selfinspection. 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

handler 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

Most Grantees

Certified the Accuracy

of Their 1998 CSR

Data, but Questions

About Data Accuracy

and Interpretation

Remain

LSC Grantees Conducted

Self-Inspections of 1998

CSR Data
Statement

Legal Services Corporation: More Needs to Be Done to Correct Case Service Reporting

Problems

Page 6 GAO/T-GGD-99-185 LSC Case Reporting Problems

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.

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 grantees5

 (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 self-inspection 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.

Our review raised some concerns about LSC’s interpretation of the selfinspection 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.

 

5

LSC funded 262 programs in 1998. Funding for one program was discontinued in 1999, and LSC has no

self-inspection results for this program.

Most Grantees Certified

Their 1998 CSR Data

Self-Inspection Results

Raised Concerns
Statement

Legal Services Corporation: More Needs to Be Done to Correct Case Service Reporting

Problems

Page 7 GAO/T-GGD-99-185 LSC Case Reporting Problems

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 “partially

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 self-inspection

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.
Statement

Legal Services Corporation: More Needs to Be Done to Correct Case Service Reporting

Problems

Page 8 GAO/T-GGD-99-185 LSC Case Reporting Problems

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.

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.

In our September 20, 1999, report6

 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;

 

6

 GAO/GGD-99-183, September 20, 1999.

Conclusions

Recommendations
Statement

Legal Services Corporation: More Needs to Be Done to Correct Case Service Reporting

Problems

Page 9 GAO/T-GGD-99-185 LSC Case Reporting Problems

• 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.

Contacts and Acknowledgement

For further information regarding this testimony please contact Laurie E.

Ekstrand or Evi Rezmovic on (202) 512-8777. Individuals making key

contributions to this testimony included Mark Tremba and Jan

Montgomery.
Page 10 GAO/T-GGD-99-185 LSC Case Reporting Problems
Page 11 GAO/T-GGD-99-185 LSC Case Reporting Problems
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