Chairman Mollohan, Congressman Wolf and Members of the Subcommittee, it is my privilege to appear at this hearing on the Fiscal Year 2011 Budget Request of the Legal Services Corporation. Thank you for your interest in civil legal assistance for low-income Americans and for your bipartisan support.

LSC was established by Congress as a Section 501(c)(3) nonprofit corporation to promote equal access to justice and to provide grants for high-quality civil legal assistance to low-income Americans. LSC distributes more than 95 percent of its total funding to 136 independent nonprofit legal aid programs in every state and in the District of Columbia, Guam, Micronesia, Puerto Rico and the Virgin Islands. These programs operate more than 900 legal aid offices.

I have practiced law in Atlanta for more than 40 years and have served as a director of the Georgia Legal Services Program, the Atlanta Legal Aid Society and the Federal Defender Program. In the mid-1980s, while serving as president of the Atlanta Bar Association, I helped the Atlanta Legal Aid Society lead a pro bono effort to provide representation to hundreds of Cuban detainees held in the Atlanta Federal Penitentiary.

Since April 2003, I have served as Chairman of the LSC Board, and it has been one of the most rewarding experiences of my legal career. Our Board has made it a practice to hold meetings in different parts of the country, and that has given us the opportunity to learn first-hand about the essential work of LSC programs and to meet with clients that the programs serve.

One of the highlights of these Board meetings is recognizing and honoring pro bono services provided by lawyers to legal aid clients. These private lawyers are an invaluable resource for LSC programs and an important part of LSC efforts to provide equal access to justice for the nation's poor. Three years ago, the Board adopted a resolution in support of increasing pro bono services, and 109 of our 136 legal aid programs have adopted similar resolutions.

I am joined today by Victor M. Fortuno, the longtime general counsel at LSC who is now also serving as the Corporation's interim president. Vic grew up in the New York neighborhood known as Hell's Kitchen, long before it became fashionable, and received his law degree from Columbia University. After law school, he worked as a staff attorney for a legal aid program in Philadelphia, and then served as an assistant district attorney for the city and county of Philadelphia. He joined LSC in 1983 as an attorney in the then- Office of Compliance and Review. Vic is a great resource for the Board of Directors and we greatly appreciate the counsel and support he provides to the Board and LSC management. Vic has the Board's full support in his new position.

Let me also say a few words about 2009. It was an eventful year for the Corporation and LSC programs across the nation that strive to meet the challenge of providing highquality civil legal assistance to the poor. In July, LSC celebrated its 35th anniversary and was honored with commemorative statements from Members of Congress and a Presidential Proclamation. In September, LSC released a new report on the "justice gap," showing that LSC programs, because of insufficient resources, continue to turn away about one million low-income Americans each year. 2009 also marked the beginning of a leadership transition for the Corporation -- nine presidential nominees for the LSC Board of Directors were announced and president Helaine Barnett stepped down after serving six years (making her the longest serving president in LSC's history), leading to the appointment of Vic as interim president. One nominee was seated in July 2009 and we are awaiting Senate confirmation of the remaining eight presidential nominees. Two additional nominees have not yet been announced.

Ensuring a smooth Board transition has been one of my priorities as the outgoing Board chairman. We held two orientation sessions -- the last on January 28 -- for the Obama Administration nominees, and LSC created an internet library to provide them easy access to materials used in the orientations. The LSC Inspector General provided separate briefings to the nominees.

The Fiscal Year 2011 Budget Request by the Corporation and the September 2009 report on the justice gap in America underscore the importance of legal aid and why LSC programs are in need of resources from government and private sources. Equally important is the proper use of the funds that Congress has entrusted to our stewardship. We consider good stewardship to be a core responsibility of the Board and the Corporation, and I would like to outline what the Board and LSC have done to improve accountability.

Two reports by the Government Accountability Office (GAO) prompted the Board and the Corporation to focus on the Board's oversight of the Corporation's financial and compliance responsibilities and to focus the Corporation's attention on improved internal cooperation and good management practices. We are making great progress. All 17 of the recommendations made in those two reports were accepted by LSC management and the Board. Nine have been judged by GAO to be fully implemented; eight have been judged to be partially implemented, and on three of those eight, management has recently submitted documentation of full implementation. The GAO is currently reviewing the most recently submitted documents.

GAO testified about our progress in addressing governance and accountability issues at a hearing of the House Subcommittee on Commercial and Administrative Law, held on October 27, 2009. In her statement to the Subcommittee, GAO representative Susan Ragland said that LSC has built a "good foundation for completing implementation of the elements needed for a strong program of governance and internal controls." I am confident that LSC will carry through on the implementation of GAO recommendations as quickly as the procedures permit for documenting and vetting these kinds of changes. We are in agreement with GAO that it needs to be able to fully assess how the changes in LSC procedures and processes are working.

LSC management believes it has implemented all of the GAO recommendations and met the spirit of those recommendations. As you will recall, the GAO recommendations were discussed at last year's Subcommittee hearing. I will not go over the ground covered then by Lillian R. BeVier, who was the Board's vice chairman at that time. Still, as I said earlier, there are recommendations where we continue to work closely with GAO on additional documentation, and I want to update you on those areas. These include:

• Periodic Self-Assessment of Board Members and Committee Performance. The Board and individual self-assessments were completed for 2008 and 2009. Evaluations of the performance of Board committees are expected to be completed this year.
• Periodic Evaluations of Key Management Processes. These include, at a minimum, the processes for risk assessment and mitigation, internal controls and financial reporting. The Corporation has a risk assessment plan in place. The Board's Audit Committee, which has responsibility for financial and management controls, will discuss options for ensuring periodic evaluations of management processes at the Board's next meeting, scheduled for April.
• Risk-based criteria for selecting grantees for internal control and compliance program visits. LSC has risk-based criteria that is used to select grantees for internal control and compliance visits. GAO has requested additional documentation on how LSC management applies the risk-based criteria for the various types of oversight conducted during program visits. LSC is in discussions with GAO on this issue.
• Implement procedures to improve the effectiveness of the current LSC fiscal compliance reviews by revising LSC current guidelines. GAO recommended revising the guidelines to provide a direct link of results from Office of Program Performance reviews and other audit findings, guidance for performing follow-up responses during interviews, and examples of fiscal and internal control review procedures related to risk factors and circumstances at grantee programs. LSC has responded to these recommendations, and GAO has requested additional documentation related to specific follow-up questions used during grantee interviews. LSC is preparing material to include in office procedure manuals and will be training staff.
• Clear delineation of organizational roles and responsibilities for grantee oversight and monitoring including grantee internal controls and compliance. Following the GAO report, the Board approved a resolution defining organizational roles and responsibilities for grantee oversight and monitoring, and LSC put additional financial accountability procedures in place. LSC also has revised its accounting guide for grantees and has issued the draft for comment. Before closing out this recommendation, GAO has asked LSC to provide a comprehensive statement on grantee operational and other internal controls, to show that our focus goes beyond fiscal internal controls. Management is in the process of responding to that request.

Our collaboration with GAO is ongoing. Auditors are currently at LSC conducting reviews of the Office of Program Performance, the Office of Compliance and Enforcement and other functions. We expect to receive a report from GAO this spring. As I said earlier, stewardship is a central mission of the Board and the Corporation. Each day, the vast majority of LSC grantee programs do a good job, but we also know that effective management requires attention to detail and a commitment to continuous improvement. The Corporation will adhere to best practices and continue to tighten up financial and management controls as appropriate.

Mr. Chairman and members of the Subcommittee, let me say again in closing what an honor it is to be here today. It also is a privilege to work with my Board colleagues to support the mission of the Legal Services Corporation. It is a pleasure to work with so many committed professionals in our programs across the country and at LSC headquarters.

LSC programs keep the spotlight on the importance of civil legal aid and on the great challenges of these times, when millions of Americans are at risk of losing their jobs, their homes and their health care. We turn away far too many people who are desperate for legal assistance because we lack the resources. We are reaching out to judges, the private bar, law schools, businesses, state Access to Justice Commissions, other funders and other supporters of legal aid for help in closing the justice gap. As in the past, it is comforting to know that LSC can count on this Subcommittee as we strive to fulfill our national pledge of equal justice for all.

Again, thank you. I would be happy to answer any questions that you might have at the appropriate time.