The FCC Office of Inspector General (OIG) has released its Semi-annual Report to Congress, which covers their activity from April 1 through September 30th, 2008. In addition to outlining the OIG's preparations for the next round of audits, the Report provides information to Congress about current investigations and audits of the FCC, USAC, the Universal Service Fund (USF), and USF beneficiaries.
The FCC Office of Inspector General (OIG) has released its Semi-annual Report to Congress, which covers their activity from April 1 through September 30th, 2008. In addition to outlining the OIG's preparations for the next round of audits, the Report provides information to Congress about current investigations and audits of the FCC, USAC, the Universal Service Fund (USF), and USF beneficiaries. The OIG reports that it is also providing support to the U.S. Department of Justice and Federal Bureau of Investigations on criminal cases related to the E-rate program.
OIG Preparations for "Round 3" Audits
According to their Semi-annual Report, the OIG indicates that they have already selected the E-rate applicants that will be audited. The OIG does not identify any specific applicants or provide details on the number of applicants to be audited, or when the audits will commence. The OIG is currently in the process of hiring additional auditing firms for Round 3 and plan to hire more audit staff and increase their field presence by 200% over what was available for Round 2.
Results of "Round 2" Audits
The report outlines the OIG's preliminary results of the most recent round of attestation audits of the High Cost and E-rate USF programs. The OIG indicates that the results from the Round 2 audits has "not lessened [their] concern about about the possibilities for fraud, waste, and abuse in the Commission's USF programs administered by USAC." While no specific figures were provided, the auditors' preliminary estimates of the schools and libraries audited during Round 2 will exceed the threshold established in the Improper Payment Information Act of 2002 (IPIA). The threshold for "significant erroneous payments" under the IPIA is annual erroneous payments that exceed both 2.5% of the program payments and $10 million.
For the second round of audits, the OIG hired 12 accounting firms to audit a total of 260 schools and libraries. The report lists the E-rate beneficiaries audited, and the potential amount for recovery which is only $597,127.
FCC Office of Inspector General Semi-annual Report to Congress
