USAC recently announced its new Payment Quality Assurance Program or PQA. The PQA program will allow USAC to conduct off-site “paper audits” to determine whether or not any improper payments have been made under the E-rate program. The PQA stems from the Improper Payments Act of 2002 (IPIA). Under this program USAC is charged with assessing payments made to beneficiaries from all four USF programs.
Recipients of a PQA will need to submit detailed documentation within 10 days of receipt of the PQA. According to USAC, the materials that can be requested include:
– Any document indicating the beneficiary’s eligibility status
– Technology Plan Approval Letter
– Service Provider bills
– Letter of Agency
USAC will select a random number of applicants for each PQA cycle, much like on-site audits. Participation in the PQA is compulsory and is a condition of receiving funding. The results of these PQA assessments would be made available to the applicant and the FCC within 90 days, which in total makes this process about four months long. Definitely more efficacious than the time it takes for external auditors to return their findings.
Na Na Na Na, Na Na Na Na, Hey, Hey, Hey Goodbye?
USAC claims that the PQA program is designed to “require minimal effort by participants and involve no on-site work by USAC.” Wonder if they read the Auditcations blog?! Ninety-nine point nine percent of the previous on-site audits required participants to submit documentation prior to the arrival of the auditors anyway. On-site audits have always been a financial and resource drain on not only the applicant but USAC as well.
It seems that USAC has finally realized that most of the legwork for audits didn’t need to involve the physical presence of the auditors. However, what does concern me is whether this PQA program is creating a multi-level audit system. I would argue that the E-rate program is already one big auditing program. Participants are required to provide documentation, undergo PIA, and at times be selected for a SRIR, audit and now a PQA? I truly hope that the intention of USAC is to reduce the often times burdensome compliance related “checks and balances” associated with the E-rate program.
I sincerely hope that these PQA’s do not result in on-site audits. Granted, I don’t think this is the final elimination of on-site audits. There will always be exceptions to the rule. There will always be instances in which an auditor will want to physically view a particular piece of equipment. However, if these PQA’s are just being used as a jumping off point for on-site audits then USAC is just adding yet another layer to the compliance cake.
I must say though that in all fairness I applaud USAC for realizing that the audit costs to the agency were creating significant budgetary issues. I also applaud USAC for envisaging that much of the audit based work is done by submitting documentation without the need for the auditor to be present. I would like to however offer up my two cents and advance a plea that this doesn’t create just another compliance hoop that applicants must jump through. The hoops that participants must jump through are already alit with fire and about the size of a needle head, so more scrutiny in an already scrutinized program seems excessive.
So hopefully, this is the beginning of the end of “auditcations.”