The GAO, which is Congress’s investigative arm, found that the FCC lacks performance goals to measure the program’s success, that the commission has been slow to respond to the findings of audits of e-rate beneficiaries, and that there is a large backlog of appeals from applicants. The report also criticizes the FCC for delegating too much responsibility to the Universal Service Administrative Company, the independent body that administers the program.
The report said these problems “create barriers to enforcement, uncertainty about what the program’s requirements really are, and questions about the soundness of the program’s structure and accountability amid recent cases of fraud, waste, and abuse.” The auditors called for the FCC to determine which federal accountability requirements apply to the e-rate, establish meaningful performance goals and measures, and to steps to reduce its backlog of appeals.
The GAO presented the findings March 16 to the House Energy and Commerce Committee, which has been investigating the program. “The mismanagement of the e-rate program seems to know few bounds,” said the committee’s chairman, Rep. Joe Barton (R-Tex.), who plans to introduce legislation to overhaul the program. “Unscrupulous vendors have fleeced the program while underserved communities and telephone customers are paying the price. The FCC, these merchants, and certain schools all must share in the blame for this disgrace.”
In a written response, the FCC acknowledged that the e-rate program “continues to experience operational and management challenges,” but said it has taken recent steps during the past year to improve oversight, with other measures planned, the Associated Press reported March 16.
Posted March 18, 2005.