Since 1998, the Federal Communications Commission's (FCC) E-rate program has committed more than $13 billion to help schools and libraries acquire Internet and telecommunications services. Recently, however, allegations of fraud, waste, and abuse by some E-rate program participants have come to light. As steward of the program, FCC must ensure that participants use E-rate funds appropriately and that there is managerial and financial accountability surrounding the funds. GAO reviewed (1) the effect of the current structure of the E-rate program on FCC's management of the program, (2) FCC's development and use of E-rate performance goals and measures, and (3) the effectiveness of FCC's oversight mechanisms in managing the program.
Recommendations for Executive Action
|Federal Communications Commission||1. Given the critical importance of telecommunications technologies to schools and libraries, the Chairman of the Federal Communications Commission should direct FCC staff to conduct and document a comprehensive assessment to determine whether all necessary government accountability requirements, policies, and practices have been applied and are fully in place to protect the program and the funding. The assessment should include, but not be limited to (1) the implications of FCC's determination that the Universal Service Fund constitutes an appropriation by identifying the fiscal controls that apply and do not apply to the Universal Service Fund, including the collection, deposit, obligation, and disbursement of funds; and (2) an evaluation of the legal authority for the organizational structure for carrying out the E-rate program, including the relationship between FCC and USAC and their respective authorities and roles in implementing the E-rate program. Because of the complexities posed by FCC's arrangements with USAC and the questions that flow from these arrangements, FCC may want to request an advance decision from the Comptroller General under 31 U.S.C. 3529. Section 3529 provides the heads of agencies and certifying and disbursing officers of the government an opportunity to request decisions from the Comptroller General on matters of appropriations law in order to ensure compliance with fiscal law.|
|Federal Communications Commission||2. Given the critical importance of telecommunications technologies to schools and libraries, the Chairman of the Federal Communications Commission should direct FCC staff to establish performance goals and measures for the E-rate program that are consistent with the Government Performance and Results Act. FCC should use the resulting performance data to develop analyses of the actual impact of E-rate funding and to determine areas for improved program operations.|
|Federal Communications Commission||3. Given the critical importance of telecommunications technologies to schools and libraries, the Chairman of the Federal Communications Commission should direct FCC staff to develop a strategy for reducing the E-rate program's appeals backlog, including ensuring that adequate staffing resources are devoted to Erate appeals resolution.|