Please ensure Javascript is enabled for purposes of website accessibility

What Were They Thinking? Seeing the Forest For the Trees

For the most part I think the majority of E-rate stakeholders would agree that audits are an integral part of any government subsidized benefit program.  I would venture to say that some E-rate stakeholders might even agree that despite some of the hiccups and chinks, the E-rate audit process works relatively smoothly.  However, one has to wonder “what were they thinking” in the following examples.  

“Going Rogue or Just Going Wrong?”

In this example of “audit-foolery,” the third-party audit team asked the school district beneficiary to provide a complete explanation of the educational purpose for each piece of Internal Connections equipment purchased with E-rate dollars for the funding year being audited.  The applicant was asked to provide an educational purpose for switches and supervisory engines and transceiver modules, oh my!  This, frankly, reeks of rudimentary investigation a la “the foot bone is connected to the leg bone; the leg bone is connected to the hip bone.”  How does one provide an intelligent explanation of the educational purpose of a power supply without sounding facetious?  And how can the FCC defend the amount of money being spent on audits when third-party auditors are asking applicants to devote valuable time and staff resources to answering such ridiculous questions.  As I’ve stated before, I’m a proponent of accountability and regulation, but this smacks of waste, a violation of a principle tenet of E-rate.

“Will that be Prix-Fixe or A la Carte?”

As we all know E-rate has A LOT of rules and regulations.  E-rate also has its own terms of art, subtle nuances and every other facet of a large government entitlement program.  Even for seasoned E-rate stakeholder veterans, E-rate is never mastered.  So, when “newbies” are initially exposed to the program there is a learning curve.  However, third-party audit teams who have limited to no exposure to E-rate should at the very least understand the concept of the procurement process.  Now grant it, every E-rate beneficiary has its own internal protocol for the channels in which goods/services are procured and it is not expected that these audit teams know the inner workings of such processes.  But due diligence would dictate that auditors should understand how CERTAIN services are obtained.  

This next example involves a school district beneficiary being asked to provide an explanation as to why certain cell phone users have surpassed the maximum minute/text usage.  The reality is that applicants should instruct their users that cell phone plans may come with usage caps and to be mindful of those constraints.  The other reality is that it is virtually impossible for applicants, particularly large school districts, to tailor a customized plan for each user.  It is a fact that there will be instances in which a user may exceed their allotted minutes for the month.  Provided there isn’t a flagrant abuse of cell phone use for purposes other than work, there is no inherent fraud in these overages.  Asking an applicant to explain line-by-line every single instance of an overage on a one-thousand plus page cell phone bill is absurd and does not further the overall intent of USAC audits to begin with, which it to root out waste, fraud and abuse.  The packages being sold to school district and library applicants usually come in two varieties, much like dining at a fine restaurant, prix-fixe or a la carte.  The overwhelming majority of these plans are more cost-effective when the applicant chooses a standard plan for all their users.  The a la carte approach to purchasing cellular services is more often than not significantly more expensive. 

Again I implore, we all implore, the FCC to spend those audit dollars in investigating substantive claims.  If you can’t find the forest for the trees, then you’re lost.

question icon

We’re here to help!

Our mission is to provide high-quality consulting and support services for the needs of E-rate program participants. We consult with applicants to help them understand, effectively utilize, and maintain compliance with E-rate rules and regulations. We help prepare and submit paperwork, and interact with program administrators on our clients’ behalf.

Request a Consultation