Understanding Beneficiary Audits
The primary purposes of audits are to ensure compliance with FCC rules and program requirements and to assist in the prevention and detection of waste, fraud, and abuse.
When selected for an audit, the auditee’s designated contact person will be contacted by a member of the USAC Internal Audit Division. In addition, an announcement letter will be sent to the applicant, with copies sent to all affected service providers, detailing the purpose and scope of the audit, identifying the personnel who will be performing the audit, making a request for pertinent data, and stating the date upon which the data is due.
How beneficiaries can help
- Provide requested documentation in a timely manner
- Ask questions to ensure that you are providing adequate documentation
- Maintain documentation, for five years, for data submitted to USAC
Measures service providers can take to minimize audit findings and to assist applicants
- Provide sufficient detail on bills Include items such as Funding Request Number (FRN), specific details of the items purchased such as serial numbers, quantity, product descriptions, product delivery information
- On bills, indicate the total amount due less amounts paid by or to be paid by USAC. (“Pre-Discount Amount”).
- Indicate payment terms of the net amount of the bill
- Separate eligible items from ineligible items
Best practice is to generate separate bills for eligible and ineligible items to reduce risk of the applicant or Service Provider including an ineligible item on a BEAR or SPI.
- Complete BEAR or SPI by using one line per customer bill.
- Document, Document, Document.
At the conclusion of the audit, USAC’s Internal Audit Division management will review the audit file to ensure the workpapers are properly documented and the conclusions reached are properly supported. For any exceptions noted, a Detail Exception Worksheet (DEW) will be prepared and sent to the auditee’ for review. It will contain background information, the audit step performed, the exception noted as well as the basis for which the exception is noted (e.g., FCC rule).
The auditee is given an opportunity to provide a response to explain their agreement/disagreement with the exception noted. USAC’s Schools and Libraries management will review the exception as well as the auditee’s response and may contact the applicant or service provider for more information. USAC will prepare a response to address the exception including any corrective action as necessary.
Both the auditee and management responses will be incorporated into the draft report and submitted to the USAC Board of Directors to be deemed final. The USAC Board of Directors may request USAC management to reassess any aspect of the report prior to the report becoming final. Once finalized, both the auditee and the FCC will receive copies of the audit report. The final report may be made available to the public upon request.
To better assist you, USAC has posted the following documents on this website.
- Audits of Beneficiaries Fact Sheet: a description of the purpose of these audits and some of the documentation that may be requested.
- Beneficiary Audits – Auditors’ Observations: a list of the most common auditors’ observations from the audits conducted for Funding Years 2002 and 2003 and the Improper Payments Information Act (IPIA) audits conducted for Funding Years 2002 through 2007.
- Demonstrating Compliance with Program Rules: a list of practices identified during beneficiary audits as important. USAC urges beneficiaries to incorporate these practices.
If you have any questions, please contact USAC’s Internal Audit Division via e-mail.