We attended the Audit Committee meeting at USAC’s quarterly business meeting this morning. While much of the discussion concerned internal controls USAC has in place to oversee its functions, the business update portion of the meeting gave us a snapshot into contributor and beneficiary audit activity at USAC. The presentation gave us some insight into a likely increased amount of activity over the next few months.
Members of the House Subcommittee on Communications and Technology (Committee) issued a letter late last week requesting that the Government Accountability Office (GAO) conduct an audit of the FCC’s Enforcement Bureau (Bureau). The audit would focus exclusively on the Bureau and address its backlog of consumer complaints, its output and performance metrics and recent management decisions. Among the primary concerns for the Committee is the Bureau’s continued use of the number and monetary value of enforcement actions as the metrics to determine the success of its enforcement efforts.
The Government Accountability Office (GAO) recently released a study of the FCC’s e-rate program controls. The GAO study recommended that the FCC conduct a "robust risk assessment" of its e-rate program and revise the internal control structure of the program. What caught our eye, however, was the commentary on USAC’s e-rate beneficiary audits.
The GAO criticized USAC’s beneficiary audits as lacking documented and approved policies and procedures. As a result, "[USAC] management may not have the assurance that control activities are appropriate and properly applied." It specifically criticized USAC for not using information gathered from the audits to assess and modify the e-rate program’s internal controls. As an example, the GAO noted that of 64 beneficiaries that were audited multiple times over a three year period, 56 percent of the beneficiaries (36 of 64) had the same audit finding in multiple years.
The full GAO report is available here.