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Legislation Introduced to Provide Permanent Solution to E-rate Accounting Issue

Key senators representing both parties have introduced legislation to provide a permanent solution to the accounting issue that held up the approval of E-rate funding commitments for nearly five months late last year.

Sens. Olympia Snowe, R-ME, John D. Rockefeller IV, D-WV, Ted Stevens, R-AK, and Daniel Inouye, D-HA, introduced legislation February 1 that would permanently exempt the Universal Service Fund from the provisions of the Anti-Deficiency Act. The sponsors include the original sponsors of the E-rate program and the ranking members of the Senate Commerce, Science and Transportation Committee, which has oversight over the Federal Communications Commission.

In the closing days of the Congress, the House and Senate passed legislation to exempt the USF programs from the Anti-Deficiency Act for a period of a year to provide time to craft a long-term solution to the problem. The Universal Service Administrative Company had been required to comply with the federal government accounting standards by October 1, 2004, and that meant that the Schools and Libraries Division could not approve new funding commitments until USAC had collected enough money to cover them.

In a statement, Snowe noted that many government programs had already been exempted from the law. She added, "I want to ensure my colleagues that a permanent exemption from the Anti-Deficiency Act poses no risk of increased fraud or abuse in the E-rate program or in Universal Service as a whole. Some well-publicized abuses of E-rate did, in fact, occur, and I will fully support efforts to stamp out such government waste. But the Federal Communications Commission has repeatedly stated that there is absolutely no connection between the Anti-Deficiency Act and the ability of the inspector general to effectively monitor the program to stamp out waste, fraud and abuse. As such, government waste cannot be used as a valid reason for opposing this bill.

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