The
Legal Services Corporation (LSC), a federally funded agency that
provides free legal aid to the poor through 269 grantee offices
around the country, is asking Congress for a $40 million increase
in funding for fiscal year (FY) 2000. The request, which will be
considered under the Commerce, Justice, State, the Judiciary, and
Related Agencies appropriations bill, represents a 13 percent
increase over FY 1999 funding--despite the fact that various
government watchdogs and the media have reported serious problems
with the LSC's case-reporting statistics and performance
numbers.
Information on the LSC's handling of cases
is important because it is the only tangible information on the
agency's overall performance currently available to Congress.
Congress relies on the accuracy and integrity of reporting on
performance measures to determine the amount of funding agencies
should receive, and agencies use their performance numbers to
justify their budget requests to congressional appropriators. Until
this year, Congress has not seriously questioned the accuracy of
the LSC's reported numbers. But preliminary audits conducted by the
LSC's own inspector general (IG) in 1998 have caused Members of
Congress and the media to question the accuracy of LSC's 1997
caseload data.
Every program audited by the IG, and more
recently by the U.S. General Accounting Office (GAO), since the
1997 case statistics were released in the LSC's 1998 Factbook has
demonstrated serious misreporting of the LSC caseload, and this has
given rise to concerns about systemic performance deficiencies
throughout the agency. In fact, the IG and GAO audits reveal that
for 11 grantees that reported 370,000 cases, only 198,000 cases
were deemed valid.
For
the most part, audited LSC grantee offices overstated the number of
cases handled, either because the cases were ineligible to be
counted in the first place or because a case was counted more than
once. In other instances, the statistics were inflated because
telephone contacts and nonexistent cases were included in the
numbers. Investor's Business Daily even quoted a former LSC
employee who said that telephone calls made to the LSC offices were
counted as cases simply to "build up numbers to report to LSC and
other funding sources." Despite the heightened scrutiny the agency
received due to mounting evidence of misreporting, LSC officials
still have not been forthcoming with accurate data for
Congress.
As
early as July 1998, the agency's inspector general told LSC
President John McKay that case statistics at several offices were
seriously flawed. In October 1998, when it approved a $17 million
increase in LSC funding--the first such increase in two
years--Congress was still unaware of this information. In fact, the
LSC's leadership did not report these performance problems to
Congress for another five months, until March 1999. The agency
should have viewed the IG's findings as serious enough to bring to
the attention of Congress before this $17 million decision was
made.
As
the evidence of management problems has emerged, many Members of
Congress have become concerned that the LSC misled Congress
intentionally. On May 3, 1999, five Members asked the GAO to audit
additional LSC grantee offices to assess how widespread the
reporting error problem is before Congress considers LSC funding
for FY 2000. The GAO's recently released findings further discredit
the LSC's 1997 case numbers and raise serious questions about all
of the data supplied by this federal entity to Congress.
No
one would deny that the less privileged in society benefit
significantly from free legal assistance. But it is entirely
unacceptable for Congress or the states to continue to disburse
taxpayer funds to LSC programs without considering credible and
accurate information on how current money is being spent. Indeed,
just as donors would alter their charitable contributions if they
learned a charity had misrepresented its activities in its annual
report, so too should Congress be vigilant with taxpayer dollars
when LSC misrepresents the number of clients served.
In
1993, Congress passed the Government Performance and Results Act
with bipartisan support and the Administration's stamp of approval.
The act codified Washington's desire to hold federal programs
accountable for their performance and their use of taxpayer
dollars. It is useless, however, unless Congress can rely on the
information provided by federal agencies. Without accurate
information about the performance of Legal Services Corporation
grantees, Congress cannot hold the agency accountable for its
performance.
Congress should demand that the LSC
immediately release its overdue 1999 Factbook so that Members can
consider 1998 caseload data during the FY 2000 appropriations
process. It also should reduce FY 2000 funding to offset the
funding provided in previous years with overinflated statistics;
conduct oversight hearings; and, to secure better information in
the future, establish both quality and quantity measures that allow
it to verify the accuracy of the LSC's information, including
requiring annual independent audits, preventing the LSC from
administratively changing the definition of reportable cases, and
applying the Federal False Statements Act to the LSC and its
grantees.
Once
Congress has a clear picture of the agency's performance, Members
should ask first whether the federal government should be running
this program. If not, funding should be transferred to the U.S.
Department of Justice to provide block grants to the states based
on the number of eligible poor in each jurisdiction.
Virginia
L. Thomas is a Senior Fellow in Government Studies and Ryan
H. Rogers is a former Research Assistant in Government Studies at
The Heritage Foundation.