House Energy and Commerce Committee Chairman Frank Pallone, Jr. (D-NJ) released a Government Accountability Office (GAO) report Monday recommending that the FCC take additional action to prevent fraud and implement an anti-fraud strategy for the Universal Service Fund’s (USF) high-cost program. The USF provides $4.5 billion to carriers annually to support broadband service in high-cost areas.
Pallone said he sought the report more than two years ago after conducting his own investigation following several high-profile abuses of the program, specifically concerning rate-of-return carriers.
“The high-cost program provides federal funding that is integral to promoting broadband buildout in rural America,” said Pallone. He added the Commission needs to do more to protect the USF against waste, fraud and abuse.
The GAO report recommends the FCC should:
- Ensure that FCC’s Office of Managing Director follows the leading practices in GAO’s fraud risk framework related to a dedicated entity’s management of its anti-fraud activities, such as serving as the repository of knowledge on fraud risks and coordinating anti-fraud initiatives.
- Plan regular fraud-risk assessments tailored to the high-cost program and assess these risks to determine the program’s fraud risk profile, as provided in GAO’s fraud risk framework.
- Design and implement an anti-fraud strategy for the high-cost program with specific control activities, based upon the results of fraud-risk assessments and a corresponding fraud risk profile, as provided in GAO’s fraud risk framework.
- Assess the model-based support mechanism to determine the extent to which it produces reliable cost estimates.
- Consider whether to make use of the model-based support mechanism mandatory depending on the results of the assessment.
Click here to read the GAO report.
November 21, 2019