Legal Services Corp Ran $57.8M in Disaster Grants on Draft Rules

A Legal Services Corporation Office of Inspector General audit⧉ published July 28, 2025 found that LSC -- which distributes more than 90 percent of its budget⧉ to 130 grantee organizations -- had no comprehensive, finalized policies for administering the disaster grants it hands out after hurricanes, wildfires, and floods.▸ The gap covered two rounds of federally appropriated grants worth $57.8 million combined: $38 million awarded in 2022⧉ to 19 organizations for 2020-2021 disasters, and $19.8 million awarded in 2023⧉ to 14 organizations for 2022 disasters.

LSC's Office of Program Performance (OPP) runs the Disaster Grant Program, which pays out two kinds of federally appropriated awards: Disaster Supplemental Appropriation (DSA) grants, released after a FEMA major-disaster declaration, and Disaster Relief Emergency Grants, funded from returned Basic Field Grant money after other government-declared emergencies, including those declared by state governors or tribal governments.▸ The audit's scope covers exactly the money in the chart below -- the 2020-2021 and 2022 DSA rounds -- plus the 2023 DREGs, whose total isn't separately published because it's drawn from returned funds rather than its own appropriation. As of the audit, LSC's most recent dedicated disaster appropriation was the Disaster Relief Supplemental Appropriations Act of 2023, enacted December 29, 2022.

OPP has been revising its Special Grants policies since 2023.▸ It handed auditors a draft of the Disaster Grants Program Supplementary Procedures in May 2024 -- and, as of the audit's January 1, 2025 scope cutoff, still hadn't finalized it, with no completion date given. The draft itself showed the gap: Section 4.4.1 on program performance goals read "[Model Performance Plan document is in progress.]"; Section 5.10.2.1, on what happens when a grantee misses a documentation deadline, was labeled simply "TBD"; and Sections 12.0 and 13.0, covering how disaster-grant files are organized and how the Disaster Grants team does strategic planning, both read "[TO BE ADDED]." A federally appropriated grant program had been operating for years on a procedures manual that, in its own text, admitted it wasn't done.

The sequencing compounded the problem.▸ LSC's Office of Compliance and Enforcement (OCE) finalized its own Policies and Procedures Manual in September 2024, months before OPP finalized its companion manual in December 2024 -- both took effect January 1, 2025. Because OCE's manual was locked in first, three of its sections now point auditors and monitors toward OPP procedures that were renumbered or deleted in the later revision: Section 4.2 cites OPP Section 6.16, Section 5.4 cites OPP Section 7.3.2, and Section 7.7 cites OPP Section 6.1.6 -- none of which exist in the manual OCE staff would actually have to open. Separately, the application instructions LSC issued for all three disaster grant rounds describe personnel expenses in a way that conflicts with LSC's own Program Letter 21-01 -- an inconsistency the OIG's auditors first caught not in this review, but during a separate compliance audit of an LSC grantee, Lone Star Legal Aid⧉.

The audit's second finding is about the grantees themselves: LSC has never built training specific to administering disaster grants -- how to track disaster-related costs separately, prepare for pro bono surges, coordinate with the local disaster-response community, or update a continuity-of-operations plan.▸ The gap isn't hypothetical. On October 2, 2024, in Hurricane Helene's aftermath, LSC's president e-mailed grantees urging them to prepare for future disasters -- but the guidance he could point them to was general, because the disaster-specific curriculum the audit recommended still didn't exist.