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Being in Audit Limbo

Numerous blog entries have been posted about the audit process, the amount of resources USAC and the FCC have spent conducting audits, and how school districts must absorb the costs associated with responding to an E-rate audit.  The FCC Office of Inspector General recently released a report to Congress that highlights 66 E-rate applicants whose audits were conducted between August 2004 and 2008 but are still not closed.  The possible amount of recovery is over $14 million, however, the FCC has suspended their initial findings until “…completion of E-rate program policy reviews by the Commission and conclusion of a Commissions proceeding seeking comment from program participants on appropriate follow-up measures…”

Not only is it an incredible hardship for school districts to find money in their budgets to repay the Universal Service Fund for a non-compliance issue, but many of these 66 applicants probably have no idea they may still be “on the hook” as years have gone by.  It is critical that the FCC alert these 66 applicants on the status of their audits immediately in order for them to plan for any contingencies surrounding the closure of the audit.   Congress has recognized that Universal Service audits have become increasingly burdensome on E-rate beneficiaries and is expecting a report within the next two months on how the FCC has re-evaluated their audit process.  The FCC should take the length of audits into serious consideration, as it is unreasonable for a school district to be in “audit limbo” for literally years as the FCC ponders a decision.

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