2. February 28, 1998 Corporation Testimony on FY 1999 Appropriation Request. The Corporation disregarded the results of the OIG Study, and with the knowledge of the Corporation President and the Inspector General, the Corporation used information from the fact book for the 1996 program to gain congressional support for the FY 1999 appropriation.
3. March 20, 1998, Corporation Vice Chairman Sends Document to House and Senate Staff Detailing Inspector General's Attempt to Mislead Congressional Staff, Misuse of Office, and Violating Corporation's Communication Policy with Congress.
4. March 31, 1998, Semiannual Report to the Congress. The Board endorsed the report. The Inspector General stated there were no significant problems, abuses, or deficiencies to report. On page 9, the Inspector General stated a preliminary review of case statistics was completed. He did not inform the Congress that an OIG report had been issued to the Corporation in November 1997 for comment and that comments had been provided. He also did not report a principal conclusion of the report stating Corporation case statistics were unreliable and should not be used as a bulwark to support federally funding legal services. At the time, the Corporation had used unreliable case statistics in the February 1998 budget hearing.
5. March/April 1998 Corporation Issues Draft Report on Central Michigan Program. The Corporation's draft report for this examination identified a litany of case reporting problems. The Corporation provided the draft report to the Inspector General for comment. The OIG audit staff used substantial portions of the report to develop audit steps for the case reporting audits.
6. May 1998 Corporation Issues Fact Book for the 1997 Program to Congress, Press, and Public. On May 13, 1998, the Corporation President issued a nation-wide message on the Fact Book stating, we are just completing the Fact Book (nation-wide report on program performance) and we think this publication provides overwhelming documentation of LSC's success in achieving its mission, and we hope that it will build further support for the program in the Congress and the public. The fact book was issued to congressional appropriators and legislators in May 1998. It was released with an accompanying Corporation President message stating it included complete statistics on 1997 activities and preliminary reports and estimates for 1998. He also stated that the 1997 statistics augur well for the future of legal services and, despite a slight reduction in overall program staff, the number of cases closed during the year showed a modest increase over 1996 levels. The Corporation provided this document to congressional appropriators and legislators as the Congress deliberated on the FY 1999 appropriation and also used it to support the FY 2000 budget request.
7. May 26, 1998 Corporation Issues Report on Alameda Program. The Corporation provided this report to the Inspector General on May 27, 1998. It reported, among other things, that the program failed to carry out basic processes regarding client eligibility, case management, and case reporting. It deemed the program's intake system and client eligibility documentation as wholly inadequate. It evidenced reporting prohibited cases, providing services to over-income clients, duplicative reporting, and misuse of categories such as client withdrew and referred after legal assessment. It concluded by stated the program extensively violated Corporation reporting directives and provided multiple inaccurate numbers in report to the Corporation. The Corporation President decided to stop funding the program on June 26, 1998.
8. June 13, 1998 OIG Receives Draft Audit Report on Northern Virginia Program. The report identified significant case reporting problems including a 3,432 overstatement of open cases in the report to the Corporation. The report showed many of the cases were no longer being serviced and dated back to the early 90's and into the 80's. Evidence suggested many cases still in the system as open had been reported as closed in previous years.
9. June 26, 1998 Inspector General Analyzes Case Data in Corporation's Case Reporting System and Provides Report to OIG Staff and Corporation. The Inspector General analyzed case report information provided by 269 legal services programs. The information was obtained from the database that produced the fact book for the 1997 program. The Inspector General distributed the information to the OIG staff and discussed the analysis with the Corporation's Vice President for Programs and members of the headquarters staff on July 28, 1998. The Inspector General stated that the numbers are likely wrong and astounding. He cited cost per case variations ranging from $97 per case for one program to $4,642 for another. The variances signify problems with the quality of case data and possible uneconomical or inefficient program operations.
10. July 20, 1998, Inspector General Receives and Comments on OIG Staff Analysis of Quality of Data in Corporation's Case Reporting System. The Inspector General received a written report from OIG staff, as requested, on the overall quality of grantee case reports submitted to the Corporation. This scope of the review was the 269 case service reports submitted by grantees for the 1997 program. It was performed at Corporation headquarters and supplemented by on-site visits to two local programs. The report concluded that the overall quality of data in the case reporting system was poor, at best. It identified an estimated several hundred thousand questionable cases in the system. It stated that the Corporation's policy of reporting cases primarily funded with non-Corporation funds makes the Corporation and grantees vulnerable to a possible charge that they may be padding the books to justify continuation of the program. It attributed the over-counting problems to Corporation efforts to bolster the case-count, local program mismanagement of cases, excessive open case inventories, excessive numbers of case referrals in the system and non-standard computer hardware and software as the underlying causes. 112 local programs exceeded open case norms and 55 programs exceeded case referral norms established by the Corporation. As examples of the problems, the author of this report used the Florida Rural program as an example of open case problems and the San Diego and San Francisco programs as examples of the referral problems with attendant client eligibility problems. After this review was completed and after the three programs had been contacted by OIG staff, the three programs collectively reduced reported case reports for the 1997 program from 102,979 open and closed cases to only 29,364 cases. The Inspector General thanked the author for the paper and expressed concern about how to deal with the "primarily" financed with non-Corporation funds issue. On an earlier date, he indicated in writing that this was a very serious problem. The Inspector General discussed contents of this report with the Corporation President and Vice President for Programs.
11. July 28, 1998, OIG Meets with Corporation Vice President and Headquarters Staff. The Inspector General arranged and attended the meeting. The issues contained in the June 26 and July 28 analysis were discussed along with the results of the Northern Virginia and Houston audits. The Northern Virginia audit disclosed serious case management problems. The Houston audit disclosed serious double-counting problems spanning quite a few years as well as problems with controlling open case inventories. The Inspector General subsequently reported the Northern Virginia program overstated open cases by 3,432 (69 percent of reported total). He also reported that the Houston program overstated closed cases by 1,945 cases (21.5 percent of reported total).
12. August 3, 1998 the Corporation Reduces Florida Rural Case Report for the 1997 Program by 39,471 cases. The OIG staff contacted the program on July 7, 1998, and received information from the program indicating the reported cases did not exist. After being informed by the OIG staff of this serious irregularity, the local program and the Corporation processed an internal adjustment but did not process an adjustment in the report provided to Congress. The Inspector General was aware of this serious case over-counting problem but did not authorize an audit of the program or tell Congress about it.
13. August 7, 1998, OIG Receives Draft Audit Report on the Houston Program. The audit was performed in June 1998 and identified serious problems with the management of open case inventories and reporting single case more than once. The program's database produced a report showing over 15,000 instances where the same client had more than one case in the system. The draft report was slightly delayed to allow OIG staff to complete the July 20 analysis of system deficiencies as requested by the Inspector General.
14. September 3, 1998, Assistant Inspector General Sends Letter to Corporation Vice President for Programs. As the result of an OIG audit of the San Diego program in August 1998, the Assistant Inspector General reported to the Corporation's Vice President for Programs the San Diego program had overstated the number of reported closed cases for the 1997 program by "at least 21,504" cases. This finding was developed and resolved during an on-site visit to the program several weeks earlier. The pervasive cause of this overstatement (over 14,000 instances) was the failure of the program to determine financial eligibility as required by the LSC Act and Corporation regulations. The local program claimed in a letter to OIG that it began counting these matters as cases several years earlier upon advice received from Corporation representatives. The local program admitted the overstatement and agreed to process an adjustment in August 1998. The OIG staff revisited the program in October to review other matters. The matter of the overstatement was resolved on the first day of the audit in August 1998 when the program agreed to process the adjustment. The adjustment eventually occurred on January 22, 1999 for 21,788 cases. The program followed up with reduced case figures for the 1998 program on March 1, 1999,that was 23,906 cases fewer than originally reported for the 1997 program. The Inspector General incorrectly stated in the September 29, 1999 hearing that this phase of the audit was not completed until October 1998.
15. September 12, 1998 Corporation Board Meets and Discusses Case Reporting Problems. The Corporation President discussed case reporting problems identified by OIG at the public session of the Board meeting. The minutes of this meeting chronicle exact comments. In subsequent public statements, the Corporation President admitted that the Inspector General kept him informed about the case reporting audits during the summer of 1998.
16. September 18, 1998 Corporation Issues Report on the Farmworker of North Carolina Legal Services Program. The Corporation reported, among other things, that the program failed to document client eligibility in a large percentage of cases as required by the LSC Act and Corporation regulations. It also reported that case reports provided to the Corporation inappropriately included ineligible and rejected matters, which overstated the case reports. The Corporation provided this report to OIG.
17. September 23, 1998 OIG Meets with Corporation Vice President and Headquarters Staff on the Results of the First Phase of the San Diego Audit. The Inspector General arranged and attended this meeting. The OIG staff presented the audit findings on the 21,504 case overstatement as discussed in the Assistant Inspector General's letter of September 3. During the meeting other important issues were discussed. They related to access issues involving the program's computer and associate volunteer lawyer program.
18. September 23, 1998 Inspector General Comments on Inaccurate Case Data Supplied to Congress. Responding to a message from OIG staff that the Corporation's fact book for the 1997 program was grossly exaggerated, the Inspector General stated in writing he agreed that the information the Corporation provided to Congress was inaccurate. He also stated that he was not going to make a public comment on the Corporation's case statistics until February 2000. He said he wanted to give the Corporation a chance to fix the problem. This decision effectively prevented the Congress from learning about the case reporting problems prior to approving the FY 1999 appropriation.
19. September 30, 1998, Inspector General Semiannual Report to the Congress. The Inspector General reported that the Corporation did not have any significant problems, abuses, or deficiencies". The only reference in the report to the subject of case reporting was a simple statement that five case reporting audits had begun during the period. The Board endorsed this report. At the time of this report, Corporation leadership and the Inspector General were aware of three OIG analyses, which evidenced systemic case reporting problems. The July 20 analysis and report disclosed very serious case reporting and over-count problems at the Northern Virginia, Houston, San Diego, Florida Rural, and San Francisco programs as well as a host of other programs identified in the backup documents for this analysis. Despite evidence of significant case reporting problems, the Inspector General would not authorize an audit of the Florida Rural program and actually removed the San Francisco program from the audit schedule after discussions with the Corporation President. At the time, The Inspector General and the Corporation leadership were also aware of serious case reporting problems at the Central Michigan, Alameda, and Farmworker of North Carolina programs. They were also aware that the Corporation had provided inaccurate case information to Congress in support of the FY appropriation request in February 1998. They also knew that Congress was still deliberating on the FY 1999 appropriation. Final approval occurred on the appropriation on October 21, 1998.
20. October 1998 OIG Issues Final Audit Report on Northern Virginia Program. The audit was performed in April/May 1998 and identified overstatements totaling 3,959 cases.
21. October 21, 1998 Congress Approved a $17 million Appropriation Increase for the Corporation.
22. November 5, 1998 OIG Briefs the Second Phase of the San Diego Audit to Corporation's Vice President and Headquarters Staff. The Inspector General arranged and attended this meeting. The OIG briefed the Corporation's Vice President on the second phase of the San Diego audit. The OIG staff reported that it confirmed the program reported about 2,400 cases that did not exist. It also reported the program granted access to computer and associate program offices.
23. November 1998 Corporation Board Resolves Charges of Misconduct Against the Inspector General for Attempting to Mislead Congressional Staff, Misusing Office for Personal Purposes, and Violating Corporation's Communication Policy with Congress.
24. On or about December 2, 1998, OIG Briefs Results of Miami Audit to Corporation's Vice President and Headquarters Staff. The Inspector General and Assistant Inspector General reported that the program overstated 16,418 closed cases and 462 open cases in reports submitted to the Corporation for the 1997 program. The primary cause of the closed case overstatement was the failure of the program to determine client eligibility before referring the applicants elsewhere. The primary cause of the open case problem was the failure to manage open case inventories.
25. December 7, 1998, the Inspector General asks Corporation Board Chairman to Discuss the Results of OIG Audits with Private Association. The Inspector General asked the Board Chairman, in writing, to discuss serious case reporting problems identified by OIG audits at the annual meeting of the National Legal Aid and Defenders Association. The problems he asked to be discussed dealt with audit findings relating to the San Diego and Miami programs. At the time, the draft audit reports had not been formally issued. The final audit reports were issued in March 1999 after the March 3, budget hearing. At the time of the Inspector General's request, the Corporation Leadership and the Inspector General were unwilling to share this information with the Congress.
26. December 16, 1998, OIG Management Receives Draft Audit Report on San Diego Program. The first phase of the San Diego audit was completed in August 1998 and identified a closed case overstatement in the case report for the 1997 program totaling at least 21,500 cases. The second phase of the audit was completed in October and identified an additional 500 closed case overstatement. The primary reason for of the overstatement of at least 14,000 cases was because the program did not determine eligibility as required by the LSC Act, Corporation regulations, and case reporting standards. The program also did not accept these telephone applicants into the program or legally assess the merits of the issues presented to the program.
27. December 30, 1998, the San Francisco Program Requests the Corporation to Reduce Reported Case Statistics for the 1997 program by 12,356 cases. The OIG staff contacted the program in the spring on several occasions to arrange an audit of the program. The executive director eventually went on sabbatical leave. The Inspector General removed this program from the audit schedule in July 1998 after discussions with the Corporation President. The reduced numbers appear to pertain to the failure of the program to determine client eligibility prior to referring applicants elsewhere. The Corporation and OIG staff reported this reduction to the Inspector General in January 1999.
28. December 31, 1998, OIG Management Receives Draft Audit Report on Miami Program. The Miami audit was performed in November 1998 and identified the overstatements in the case report for the 1997 program totaling 462 open cases and 16,418 closed cases. The primary reason for the closed case overstatement was because the program did not determine eligibility as required by the LSC Act, Corporation regulation, and case reporting standards. The program also did not accept these telephone applicants into the program or legally assess the merits of the issues presented to the program. If eligibility is not determined local programs should not accept applicants into the program or legally access the merits of issues.
29. January 22, 1999, the Corporation Reduces the San Diego Program Case Report by 21,788 cases. The case reduction was the result of an agreement reached on August 10, 1998, with the OIG staff. The reduction was necessary primarily because the program did not determine client eligibility prior to referring applicants elsewhere and reporting the cases to the Corporation. The Corporation and OIG staff reported this reduction to the Inspector General in January 1999.
30. On or about March 1, 1999, the Miami Program Submits a Case Report for the 1998 Program that was 17,110 Cases less than the Previous Year. The substantial case reduction over the previous year was the direct result of OIG work. The reduction was necessary primarily because the program did not determine client eligibility.
31. March 3, 1999, Budget Hearing before the House Appropriations Subcommittee. The Corporation used the fact book for the 1997 program and the closed case portion of the handbook to justify, in part, a requested appropriation increase of $40 million for the program. In written testimony and opening remarks, the Corporation Leadership did not mention anything about any case reporting problems. When asked by a Subcommittee member, the leadership and Inspector General denied existence of a problem. When pressed, they stated IG Act and government auditing standards prevented them from informing the Congress about problems that did exist. They insisted the problems were not significant and widespread.
32. March 15-19, 1999, House Government Reform and Oversight Staff Contacted the Inspector General. The House staff asked the Inspector General about the case reporting problems discussed in the March 3 budget hearing. The Inspector General assured the staff that the case reporting problems occurred in one discreet category (referred after legal assessment), were not program wide, and were not found at other programs audited by the OIG. As evidenced by the facts, these statements of the Inspector General were untrue.
33. March 1999 OIG Issues Final Audit Report on San Diego Program. The audit was performed in August and October 1998 and identified several thousand cases that did not exist, significant eligibility problems, and net overstatements totaling 21,741 cases.
34. March 1999 OIG Issues Final Audit Report on Miami Program. The audit was performed in November 1998 and identified significant eligibility problems and overstatements totaling 16,193 cases.
35. March 31, 1999, Semiannual Report to the Congress. The Inspector General reported issuing three audit reports (Northern Virginia, San Diego, and Miami) during the period, two after the March 3 hearing, which reported overstatements totaling about 42,000 cases. The Board endorsed the report and stated the vast majority of overstatements pertained to "legitimate services". In fact, about 30,000 of the case overstatements in this report were primarily the result of program failure to properly determine client eligibility as required by the LSC Act and Corporation regulations before referring applicants elsewhere. In these instances, the local program recorded telephone contacts as cases even though no legal services were provided and they did not even "legally assess" the legal issues presented to them because the calls were handled by telephone operators. The Corporation Board misrepresented the 30,000 cases to Congress as "legitimate services" when, in fact, they represented "potential violations" of the LSC Act and Corporation regulations.
36. April 8, 1999 Associated Press Investigation Reveals that Five Legal Services Programs (Northern Virginia, San Diego, Miami, Florida Rural, and San Francisco) Overstated Annual Caseload by more than 90,000 Cases.
37. April 8, 1999 Corporation Issues Press Release Claiming, among other things, the National Impact of Case Reporting Issue is Minor, Programs have No Incentive to Over-report Cases, and the Inspector General Has Not Found Any Evidence of Fraud.
38. April 1999 Corporation Board Passes a Resolution to Increase Inspector General's Salary.
39. May 3, 1999, House Majority Leader, Chairman of House Government Reform and Oversight Committee, and Three Members of House Appropriations Subcommittee Ask GAO to Review Case Over-counting Problems. The GAO reviews five of the largest programs in the system (New York, Chicago, Baltimore, Los Angeles, and Puerto Rico) and finds, in a report issued June 25, 1999, the programs overstated annual caseloads by nearly 75,000 of about 221,000 cases reported to the Corporation and Congress for the 1997 program.
40. May 14, 1999, Board Member Sends Letter to House Majority Leader and Entire House of Representative Criticizing House Member Who Inquired About Case Reporting Problem in March 3, 1999 Budget Hearing.
41. May 14, 1999, Corporation Requests Local Programs to Self-Inspect and Certify Reported 1998 Case Data.
42. May 1999 OIG Issues Final Audit Report on Prairie State Program. The Audit was performed October 1998 and identified eligibility problems and case overstatements totaling 1,642 cases.
43. June 25, 1999 GAO Issues Report to Congress on Substantial Problems in Case Reporting by Five of LSC's Largest Grantees (Baltimore, Chicago, Los Angeles, New York City, and Puerto Rico Programs. The review was performed in May/June 1999 and identified that nearly 75,000 of about 221,000 cases reported by these programs for LSC's 1997 legal services program were questionable.
44. July 1999 OIG Issues Final Audit Report on Houston (Gulf Coast) Program. The audit was performed in June 1998 and identified eligibility problems and case overstatements totaling 2,023 cases.
45. August 1999 OIG Issues Final Audit Report on Wisconsin Program. The audit was performed in July 1998 and identified case overstatements totaling 698 cases.
46. September 1999 OIG Issues Final Audit Report on Eastern Missouri Program. The audit was performed June 1999 and identified eligibility problems and case overstatements totaling 5,872 cases.
47. September 1999 OIG Issues Final Audit Report on Philadelphia Program. The audit was performed April 1999 and identified eligibility problems and case overstatements totaling 3,332 cases.
48. September 1999 OIG Issues Final Audit Report on Monroe County Program. The audit was performed April 1999 and identified eligibility problems and case overstatements totaling 4,926 cases.
49. September 1999 OIG Issues Final Audit Report on Baltimore Program. The audit was performed May 1999 and identified case overstatements total 4,499 cases.
50. September 1999 the OIG Still Had Not Issued Final Audit Report on New Orleans Program. This audit began in June 1998 and reviewed 1997 program data. The OIG revisited the program in October 1998. OIG revisited this program again in October 1999, audited 1998 program data, and issued a report in 2000 identifying overstatements 1,319 cases. The OIG did not explain what happened to the earlier evaluation of the 1997 case statistics.
51. September 29, 1999 Hearing Before House Judiciary Subcommittee.
The Inspector General did not disclose (1) all case reporting problems
identified through all OIG activities such as the OIG analyses and examinations;
(2) the provision of the government auditing standards allowing interim
oral and written reports on unfinished audits; (3) the complete circumstances
on the San Diego audit; and (4) the failure of many programs to determine
eligibility as required by the LSC Act and Corporation regulations as the
primary reason for the case over-counting. The Inspector General testified
to the Subcommittee that the primary cause of the case overstatements identified
during the course of the OIG reviews was because local programs failed
to provide legal services on 30,053 reported cases. He failed to mention
that these 30,053 reported cases were deemed invalid by his audit staff
primarily because local programs failed to determine eligibility as required
by the LSC Act and Corporation regulations and also failed to provide any
legal service to the people who contacted the programs by phone. This non-compliance
with law is a much more serious matter and undoubtedly would have triggered
concern about the integrity of the entire program had the Inspector General
been truthful in his testimony.
Index of the LSC Case Over-Counting Scandal
Legal Services Accountability Project Page