Recently, Funds For Learning posted an article specific to Applicant audits. Today, we take a look at what happens during a Service Provider E-rate audit. On January 30, 2017 USAC Schools and Libraries Committee approved a couple of Service Provider audits. Here are the SLD Internal Audit Division (IAD) procedures obtained from one of the approved audits:
A. Eligibility Process
IAD obtained an understanding of the Service Provider’s processes and internal controls governing its participation in the Schools and Libraries Program (SLP). Specifically, IAD used inquiry of the Service Provider and the selected Beneficiaries and examined documentation to determine whether controls exist to determine whether services were eligible, delivered, and installed in accordance with the Rules. IAD used inquiry and examined documentation to determine whether the Service Provider assisted with the completion of the selected Beneficiaries’ FCC Form 470. IAD also reviewed the Service Provider’s FCC Forms 473 and 498 to determine whether the forms were complete and accurate.
IAD obtained an understanding of the Service Provider’s processes and internal controls governing its participation in the Schools and Libraries Program (SLP). Specifically, IAD used inquiry of the Service Provider and the selected Beneficiaries and examined documentation to determine whether controls exist to determine whether services were eligible, delivered, and installed in accordance with the Rules. IAD used inquiry and examined documentation to determine whether the Service Provider assisted with the completion of the selected Beneficiaries’ FCC Form 470. IAD also reviewed the Service Provider’s FCC Forms 473 and 498 to determine whether the forms were complete and accurate.
B. Competitive Bid Process
IAD used inquiry and examined documentation to determine whether the Service Provider participated in or appeared to have influenced the selected Beneficiaries’ competitive bidding process. IAD reviewed the Service Provider’s contracts with the selected Beneficiaries to determine whether the contracts were properly executed. IAD evaluated the services requested and purchased to determine whether the Service Provider provided the services requested in the selected Beneficiaries’ FCC Form 471.
IAD used inquiry and examined documentation to determine whether the Service Provider participated in or appeared to have influenced the selected Beneficiaries’ competitive bidding process. IAD reviewed the Service Provider’s contracts with the selected Beneficiaries to determine whether the contracts were properly executed. IAD evaluated the services requested and purchased to determine whether the Service Provider provided the services requested in the selected Beneficiaries’ FCC Form 471.
C. Billing Process
IAD reviewed the FCC Form 474 Service Provider Invoices (SPIs) for which payment was disbursed by SLP to determine whether the services identified on the SPIs, and corresponding service provider bills, were consistent with the terms and specifications of the Service Provider’s contracts and eligible in accordance with the Schools and Libraries Program Eligible Services List. IAD also examined documentation to determine whether the Service Provider charged the selected Beneficiaries the lowest corresponding price charged for similar services to nonresidential customers similarly situated to the selected Beneficiaries. In addition, IAD examined documentation to determine whether the Service Provider billed the selected Beneficiaries for the non-discounted portion of eligible services purchased with universal service discounts and did not provide rebates, including free services or products.
IAD reviewed the FCC Form 474 Service Provider Invoices (SPIs) for which payment was disbursed by SLP to determine whether the services identified on the SPIs, and corresponding service provider bills, were consistent with the terms and specifications of the Service Provider’s contracts and eligible in accordance with the Schools and Libraries Program Eligible Services List. IAD also examined documentation to determine whether the Service Provider charged the selected Beneficiaries the lowest corresponding price charged for similar services to nonresidential customers similarly situated to the selected Beneficiaries. In addition, IAD examined documentation to determine whether the Service Provider billed the selected Beneficiaries for the non-discounted portion of eligible services purchased with universal service discounts and did not provide rebates, including free services or products.
D. Reimbursement Process
IAD obtained and examined the SPIs submitted for reimbursement for the services delivered to the selected Beneficiaries and performed procedures to determine whether SLP was invoiced properly. Specifically, IAD reviewed service provider bills associated with the SPIs for services provided to the selected Beneficiaries. IAD determined whether the Service Provider issued credits on the service provider bills to the selected Beneficiaries or whether the Service Provider remitted a check to the selected Beneficiaries within 20 days after receipt of the reimbursement payment from SLP.
IAD obtained and examined the SPIs submitted for reimbursement for the services delivered to the selected Beneficiaries and performed procedures to determine whether SLP was invoiced properly. Specifically, IAD reviewed service provider bills associated with the SPIs for services provided to the selected Beneficiaries. IAD determined whether the Service Provider issued credits on the service provider bills to the selected Beneficiaries or whether the Service Provider remitted a check to the selected Beneficiaries within 20 days after receipt of the reimbursement payment from SLP.
