Information on Selected Legal Services Activities in North Carolina

HRD-82-38: Published: Feb 5, 1982. Publicly Released: Mar 8, 1982.

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GAO reviewed the Legal Services of North Carolina, Inc. (LSNC) and one of its subgrantees, Eastern Carolina Legal Services, Inc. (ECLS) to determine: (1) whether the services favored class-action litigation; (2) the reasonableness of the subgrantee's costs; (3) the reasonableness of the purchase and renovation of an office building; (4) the costs of operating LSNC as a central intermediary for 15 legal services; (5) the legality of the use of Federal funds to support lobbying activities; and (6) other miscellaneous issues.

GAO found that neither LSNC nor its subgrantees had placed primary emphasis on pursuing class-action litigation. Class-action cases were given low priority, because such cases require more staff resources than could be spared. For the first 9 months of 1981, ECLS had an average cost per accepted case of about $530, compared to an average of about $291 for other LSNC subgrantees. This was attributed to the fact that ECLS was a relatively new subgrantee which had incurred startup costs and had not yet generated a steady demand for its services. The fact that its clientele was from a generally rural area contributed to its higher than average cost per case. ECLS purchased and renovated a building for use as office space, because it seemed assured of continual Federal funding and the purchase was deemed to be more economical than leasing space. The reasonableness of the decision was difficult to assess retrospectively, since the options available to ECLS at the time of the purchase decision and their costs are unknown. As the principal grantee, LSNC gives subgrantees administrative support in such areas as budget and finance, accounting, community education, legislative advocacy, and long-range planning. The average per-case cost for LSNC subgrantees was about $90 lower than the estimated cost of comparable programs in other southern states because of the cost effectiveness of these centralized services. GAO found no evidence that the legal service's activities violated the anti-lobbying provisions of Federal regulations.

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