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FCC Office of Inspector General Overstates Initial Erroneous Payment Rate Determinations

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 April 1, 2009 to September 30, 2009.  During this time, the OIG focused intensively on investigations, audits, and Universal Service Fund oversight.

The report states that “…several initial [Universal Service Fund] erroneous payments rate determinations made by the OIG now appear to be overstated by varying amounts…” 

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 reported that their initial analysis in September 2009 that the High Cost Universal Service Program had an high erroneous payment rate of 16.56 percent now appears to be closer to 2.74 percent.  The OIG reported in December 2008 that the Schools and Libraries Universal Service Program had an erroneous payment rate of 13.8 percent and are now reporting that they will soon release an analysis revising downward their initial findings.  The OIG is re-evaluating their results and will have further comment soon. 

The OIG has been auditing the work of the USAC Schools and Libraries Committee as well and the audit results are expected to be finalized soon. 

The full OIG Six Month Report can be viewed here.

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