Sneak Preview: LSC OIG Guide Aims To Reduce Awardee Fraud

October 9, 2014 | By Jerry Ashworth | Post a Comment

xsass_bookshot(The following was excerpted from an article in the Single Audit Information Service.) The Legal Services Corporation is making available a new fraud guide to help its award recipients proactively detect and prevent fraud and regulatory violations. It also aligns with a major purpose of the uniform grant guidance. The guide was published by the LSC Office of Inspector General based on the results of 36 recent OIG investigations of fraud schemes and regulatory violations that cost LSC awardees more than $3.6 million. “The guide’s purpose is to provide suggestions for improvements to the management and fiscal oversight of [LSC grantees’] programs to help avoid program losses due to the misuse of funds in violation of LSC regulations,” OIG said. “Each chapter in the guide identifies potential issues faced by grantees and methods to detect and prevent them from affecting [their] program.”

The guide, in subsequent chapters, discusses the following types of fraud: timekeeping, travel, credit card use, accounting, payroll, office supplies, client trust funds, employee benefits and fraud committed by executive directors.

LSC regulations require all case handlers employed by an LSC award recipient to record the amount of time spent on each case, court matter or supporting activity. Several OIG investigations found that grantee employees who were supposed to enter their time into the grantee’s case management system (CMS) were not keeping accurate time and attendance records. Instead, they were recording their time up to two weeks following the activity. This lead to timekeeping frauds such as:

  • working on cases for their private clients while charging time to the grantee;
  • charging time for work on activities that are restricted under LSC guidelines;
  • claiming and receiving pay for hours not worked; and
  • falsifying hours worked in support of fraudulent travel reimbursements.

“Good case oversight by supervisory attorneys can deter time and attendance fraud,” the guide states. “Employee time entries can also be validated by comparing CMS case notes to client case files. If activities are recorded in the notes section of CMS, there should be some type of corresponding work product in the case file.”

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