The Universal Service Administrative Company Nov. 26 released the final report of the SLD’s Task Force on the Prevention of Waste, Fraud and Abuse and an interim response on its implementation of the recommendations.
The Universal Service Administrative Company Nov. 26 released the final report of the Schools and Libraries Division’s Task Force on the Prevention of Waste, Fraud and Abuse and an interim response on its implementation of the recommendations.
The task force’s recommendations, which followed the outlines of previously publicized draft recommendations, fell into four broad categories. In its September 22 report to the SLD, the task force identified 17 of the 29 recommendations that it said it believed could be implemented, in whole or in part, by November 1. USAC reported that it had taken action on most of these, but not all.
In the case of recommendations that fell under the heading of “Building Blocks,” including recommendations to revise the discount matrix for internal connections, consider the imposition of a funding ceiling on individual applicants and to modify the Form 470 to promote more effective competitive bidding, USAC said jurisdiction lay with the Federal Communications Commission. On a fourth recommendation in that area, USAC said it would soon begin discussions with the U.S. Department of Education, the FCC and the State Education Technology Directors Association to review the E-rate program’s technology planning requirements. Similar discussions are planned with the U.S. Institute for Museum and Library Services, which is in charge of federal funding for library systems.
The task force made 12 recommendations related to clarifying E-rate rules and procedures. USAC noted that this year it had attempted to provide clarification on a number of rules in time for its annual Train-the-Trainer workshops and that revisions to the formal eligible services list were issued on October 10, 2003, head of the start of the filing window for the 2004 funding year. It said “continuing discussions with FCC staff have provided additional clarification and expanded guidance on some matters” since the 2004 filing window opened and “appropriate information is posted to the USAC website as it becomes available.”
USAC said it would respond to a recommendation related to providing “reasonable standards for warranties or other defined hardware support services” following FCC action on “closely related recommendations on service life guidelines and equipment transferability.” Those items, it said, remained in the jurisdiction of the FCC.
In response to a recommendation that it share with applicants “the same detailed, product-specific information on eligible services that is provided to PIA reviewers,” USAC said it was “evaluating several options that will improve the product and service information available to applicants.” It said it recognized “the need to balance the interest in having a more detailed eligible services list with the potential concerns that could arise from posting product information that service providers have not had the opportunity to review.” These factors, it said, “require that the approach. . . must be carefully considered,” and active consideration is expected to take place in 2004.
The SLD said it would increase the size of the Program Integrity Assurance staff by 14 percent, adding 21 new positions to review applications at the beginning of the 2004 funding year. In addition, it said 40 temporary PIA positions were recently converted to permanent jobs. It said it had also moved to consolidate different types of application review to “decrease multiple applicant contacts and redundant requests for information.”
As part of its response to another recommendation, USAC said that the FCC’s Office of Inspector General planned to begin posting audit reports on the FCC Website.
The task force made five recommendations relating to improvements in compliance and enforcement activities. One, related to consultant disclosure and registration practices, was referred to the FCC. USAC said another, related to strengthened review before the issuance of Service Provider Identification Numbers and Eligible Telecommunications Provider designation, was under review with the FCC, but that it reviewed SPIN requests to ensure that they were not submitted by persons that had been debarred or suspended from program participation.(As of this date, only three persons have been suspended from participation in the E-rate program.)
USAC said three recommendations in the compliance and enforcement area had already been implemented. They included:
• Permitting applicants to ask the Client Service Bureau to verify that internal connections services had been performed before disbursements were made on Service Provider Invoices;
• Permitting applicants to notify the SLD to prevent their subunits from filing applications without authorization of their central authority. USAC said it was exploring alternatives to facilitate this process.
• Reporting audit results using audit compliance tiers, such as “compliant,” “generally compliant,” or “non-compliant.”
Another group of task force recommendations related to making more effective use of the resources of the SLD and program participants.
USAC said that it had already adopted a recommendation to give priority to resolving appeals that involved issues that the SLD had acknowledged were its own mistakes.
It said it had partially implemented a recommendation that applicants and service providers be advised on information that could be submitted with their invoicing forms to facilitate that review.
USAC said it was exploring options for providing more specific reports on the status of applications. It said it was reviewing some issues related to service substitutions and SPIN changes, and was discussing with the FCC some alternatives for identifying permissible service substitutions. It said it would also discuss alternatives for matching the complexity of application review with the complexity of the application.
USAC said two other recommendations, related to revising the deadline for automatic extension of installation deadlines and the role of Good Samaritans, would be referred to the FCC.
Earlier this year, it had been expected that the House Energy and Commerce subcommittee on oversight and investigations would hold hearings this fall on the potential for waste, fraud and abuse in the E-rate program. It now appears that Congress will adjourn this year before such hearings are held.
The full text of the Task Force report may be downloaded by clicking here.
