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FCC OIG Still Concerned about Improper Payments to E-rate Beneficiaries

The FCC Office of Inspector General (OIG) released their bi-annually report to Congress outlining their activities over the last six months. The report details their activities from October 1, 2008 to March 31, 2009. During this time, the OIG focused intensively on investigations, audits, and Universal Service Fund oversight. Within the report, they indicate that their concerns continue to increase about improper payments to E-rate beneficiaries.

According to the Office of Management and Budget (OMB) an "erroneous payment is defined under the IPIA to be:

"any payment that should not have been made or that was made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements. Incorrect amounts are overpayments and underpayments (including inappropriate denial of payment or service). An improper payment includes any payment that was made to an ineligible recipient or for an ineligible service, duplicate payments, payments for services not received, and payments that are for the incorrect amount. In addition, when an agency's review is unable to discern whether a payment was proper as a result of insufficient or lack of documentation, this payment must also be considered an error."

The IPIA defines significant erroneous payments as annual erroneous payments in a program that exceeds 2.5% of the program s annual payments and $10 million.

The OIG and USAC hired 12 public accounting firms to conduct 260 audits targeting E-rate applicants and they have all been recently approved by the USAC Board. The potential for recovery is $17,301,019. The OIG estimated improper payment rate for the E-rate program is 13.5% and further explains that USAC needs to take better control of their internal processes to guard against this.

The report identifies the 260 E-rate applicants in Round 2 and the potential for recovery.

The OIG Report can be viewed here.

Recent FFL Blogs About Audits

Where s the Fraud

'Auditcations'-Why Are E-rate Audits Taking So Long?



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