The Federal Communications Commission Office of Inspector General (OIG) has issued an initial statistical analysis of data obtained from the latest round of E-rate audits. The report finds that the E-rate program continues to be 'at risk' for erroneous or improper disbursements of discounts on services provided to applicants.
Within the report, the OIG provides additional information about its selection process. For the "Round 2" audits, 260 applicants were selected for examination. The vast majority of those selected (229 of the 260) received disbursements of greater than $100,000 from the period of July 1, 2006 through June 30, 2007. All applicants that received more than $10 million in disbursements during this time were audited. All other applicants were randomly selected within a tiered system based on amount of disbursement.
The report estimates that the total amount of erroneous payments made to all E-rate applicants to be $232.7 million, or 13.8% of all disbursements made during the period examined. The report cites inadequate auditee process and/or polices and procedures; inadequate documentation; disregard for FCC rules; and weak internal controls as some of the primary reasons behind these erroneous payments.
