FCC Inspector General Reverses Universal Service Fund Low Income Program Decision - Broadcasting & Cable

FCC Inspector General Reverses Universal Service Fund Low Income Program Decision

Program will be audited for potential waste, fraud and abuse
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The FCC Inspector General Tuesday reversed a decision that some $1.6 billion in Universal Service Fund payments to the Low Income Program in 2006-2008 were "100% erroneous."

That December 2008 decision by the Inspector General under then Chairman Kevin Martin put the entire low-income fund "at risk" under Office of Management and Budget accounting standards, the IG's office had said at the time.

On Tuesday, the IG withdrew that decision and said the program would be audited for potential waste, fraud and abuse.

Acting Inspector General David Hunt pointed out that the previous IG determination had been based on the fact that source documentation could not be supplied to verify the amounts handed out and based on interpretation of OMB guidance.

But since that December report, he points out, the Universal Service administrative company has responded to that Inspector General finding. Given that the Inspector General did not conduct an audit or "other structured examination," Hunt said his office had decided to withdraw that finding that the payment was totally off.

"Universal Service programs play a vital role in connecting Americans across the country to our nation's communications networks," said FCC Chairman Julius Genachowski. "It is essential that the Commission guard vigilantly against waste, fraud, and abuse of this critical resource. In this pursuit, the FCC must use an auditing process that is fair, efficient, and applies sound methodology...I look forward to carefully reviewing these results and procedures and intend to ensure that the FCC maintains a rigorous accounting methodology moving forward."

Genachwoski has made getting more and better data a key theme of his early days atop the commission.

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