Waste of the Day: Arizona Law Firm’s Mistaken Grant Spending

Topline: A nonprofit law firm in southern Arizona misused almost $50,000 of government grants in 2021 and 2022, according to an investigation from the Legal Service Corporation’s inspector general.

The Southern Arizona Legal Aid story

Key facts: Southern Arizona Legal Aid provides free legal services for low-income families in nine Arizona counties and 11 of the state’s Native American communities. It receives grants from the Legal Service Corporation (LSC), a taxpayer-funded nonprofit established by Congress to help Americans who can’t afford legal help.

The law firm is only supposed to use grant money for specific purposes, but $27,167 was spent on “indirect costs.” Those included 1,203 hours of paid leave for staff spread across 80 timesheets, $2,143 for new phones and computer screens, $197 for food at a Board of Directors meeting and more.

The law firm also likely used grant funds to pay the salaries of staff who were working on projects unrelated to the grant. The firm billed the government $823,406 for salaries but “did not maintain records” of what employees were working on. Auditors estimated that $21,720 of the salary costs should not have been paid for using grant money, totaling $48,887 is misused funds.

The inspector general recommended that the law firm’s executive director “develop written timekeeping policies” and train his staff to review timesheets properly.

Auditors also found math errors in the law firm’s accounting records, even though grant recipients are required to have accurate bookkeeping. 

How many other nonprofits make similar errors?

Grant recipients also must have a Board of Directors where at least 33% of members are low-income individuals who would be eligible for free legal assistance from the nonprofit. Only 26% of the Arizona law firm’s directors meet the criteria.

Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com. 

Background: Southern Arizona Legal Aid relies on the government for nearly all of its funding. It received more than $8 million from government grants and contracts and just over $2 million from other sources in 2021 and 2022, according to the inspector general report.

Most of the grants come from the Legal Services Corporation, which Congress funded with $560 million in 2024. 

President-elect Donald Trump tried to eliminate nearly all of the Legal Service Corporation’s funding during his first year as president in 2017, but over one thousand legal academics signed a letter urging him to reverse course. Trump has been mum on the issue since then.

Summary: Southern Arizona Legal Aid’s fiscal problems may represent a small dollar cost, but the firm is just one of 130 funded by the Legal Services Corporation. It’s vital that taxpayer money sent to the nonprofit is used carefully.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.

This article was originally published by RCI and made available via RealClearWire.