Major New E-rate Audits Underway
Message Posted March 5, 2008

The Federal Communications Commission's Office of Inspector General (OIG) has initiated a sweeping new round of audits which began in January and which is estimated to cover at least 300 applicants nationwide.  The audits are random but applicants receiving more funding are more heavily weighted in the selection process.  In Pennsylvania, five entities that we know of have either already undergone or are undergoing audits with many more expected throughout the year.  If you are notified that you are being audited, please let me know right away.

Applicants are being notified via an audit notification letter, requiring the applicant to submit very detailed and extensive information to the auditing firm within two weeks (there are multiple firms that have been contracted to perform these audits).  At the same time the auditors provide their date of arrival for a multi-week, on-site visit which usually occurs about two weeks after the notification letter is issued.  The on-site portion of the audit will begin with a kick-off meeting and end with an exit meeting at which time they will present the applicant with their "findings," if any.  Should any audit findings be made, the applicant will then have 2 weeks to prepare a management response to challenge those findings.  USAC will then review the audit report and the applicant's response and decide if any funding was incorrectly disbursed and should be collected.

The scope of these audits and the information being collected is voluminous.  Attached is a copy of a recent audit notification letter (28 pages) and I encourage you to review it so you can see how much and what information they are requiring be submitted.

However, based on reports by some auditees, some auditors are citing applicants for rule violation, which have never been program rules or requirements.  For example: 

* The technology plan, for an applicant applying for discounts on Centrex service, must specifically mention Centrex training as a component of professional development.

* An applicant must retain Internet filtering incident reports for five years.

* An applicant must obtain and/or retain copies of invoices submitted to USAC by the service providers (i.e., SPIs) on discounted services, and should reconcile these invoices monthly.

* Item 21 Attachments must include an exhaustive list of every service component or billing line item.

Any bizarre interpretations of the rules should be reported to me immediately as the State E-rate Coordinators Alliance is compiling a list and will address it with USAC and the OIG's office. 

Again, please let me know if you are notified that you are receiving an audit or if you have any questions related to these audits.

-- Julie

717-730-7133 - o
717-730-9060 - f
jtschell@comcast.net
www.e-ratepa.org
Penn*link