The Universal Service Administrative Company (USAC) and the Federal Communications Commission (FCC) routinely perform audits of beneficiaries of the Schools and Libraries Support Mechanism (the E-rate). The purpose of these audits is to ensure that beneficiaries and service providers receiving financial support under the Schools and Libraries Support Mechanism are complying with FCC rules and regulations.
Many of the audit sites are randomly selected, and the selection process is designed to provide a wide variety of entities with regard to applicant size, discount percentage, and geographic location. Selection for an audit is not necessarily an indication that USAC believes problems exist with your funding requests or commitments. Beneficiary audits may be performed by USAC internal audit staff, the FCC Office of Inspector General, or by a firm under contract to USAC or the FCC. Please feel free tocontact the USAC Internal Audit Department at (202) 776-0200 if you have any concern as to the proper identity of any individual contacting you regarding a review.
Typically a beneficiary will be contacted two to three weeks prior to the start of an audit to assure that the appropriate personnel and documentation will be available. The anticipated duration of an audit can vary depending on the quantity, size and dollar value of the applications involved. During the audit, SLD will gain an understanding of and document your administration of the E-rate and your technology plan. Therefore, it will be necessary that the applicable administrative and technology personnel be available during the first few days of the audit. The process will include, but will not be limited to, verifying compliance with the following requirements:
An approved technology plan exists, as certified.
The calculation of the discount percentage was performed accurately.
The beneficiary has the adequate resources, as certified, to make effective use of the discounted services for which funding has been approved.
Competitive bidding requirements were established and adhered to in accordance with program guidelines (if applicable). The applicant selected the most cost effective service provider (if applicable).
Services rendered were consistent with what was represented on the application.
The services for which discounts were approved were provided to the correct recipient and correct location.
The services obtained were used for the purposes for which funding was provided as certified on the application.
The applicant is in compliance with any other laws and regulations applicable to the service being funded.
The amounts submitted to USAC for disbursement were accurate and supported by appropriate documentation, such as vendor invoices and cancelled checks, and were for services
received within the proper funding period.
The audit is likely to include physical site verifications. We will coordinate with you to visit a selected number of schools and/or libraries to verify that the supported services exist, are
operational and are being used in accordance with requirements. The applicant will be provided the results of the audit prior to a report being issued and will have an opportunity to have their comments attached to the report. Being Prepared - FCC rules require the retention of application-related documents for a period of 5 years. The USAC auditors recommend that applicants have the following
documents for each funding commitment subject to audit:
Copies of all bids received (winning and losing)
Contracts for supported services
Documentation verifying date of receipt of equipment
Invoices for supported services
Technology Plans and letters certifying Technology Plans
Documentation supporting discount calculations
Policies and meeting notices regarding the application and the procurement process.
Verification of payment of applicant's portion of invoicing
Fixed asset records indication
Location of supported assets
The following is a check list of information that should be available for an audit of E-rate. This documentation should be retained for a minimum of 5 years. You should maintain the
information by year of application.
Copy of Form 470 (You can print this from the SLD website)
Copy of Form 470 certification that was mailed to SLD
Verification of Form 470 certification receipt
Copy of any RFP's issued in conjunction with the Form 470
Copy of Form 470 Receipt Notification Letter (Beginning with Year 4)
Copy of completed Form 471 (if filed manually) with signature (including student eligibility information, item 21 information/attachments)
Copy of Form 471 certification (if filed on-line)
Verification of receipt of Form 471 or certification at the SLD
Recept Acknowledgement Letter
Commitment Letter from the SLD
Documentation of any changes requested (to the Form 471) by the SLD
Any documentation for an item 25 check by the SLD
Copy of a completed Form 486
Verification of Form 486 receipt PROCUREMENT INFORMATION Documentation that shows bills or P. O.s for services, invoices for payment, vouchers or canceled check that was used in payment, etc
Documentation that proves that the actual discounts that were received for products and/or services were correctly applied
Inventory of tangible goods purchased with E-Rate funds (product identification, serial number, physical location of product)
FORM 472 (BEARs)
Copy of completed BEAR Form 472s with signatures
Verification of Form 472 receipt by the SLD
SLD letter of vendor payment
Photocopy of payments received
FORM 500 (if applicable)
Copy of completed Form 500 with signatures
Verification of Form 500 receipt by the SLD
SLD communication notes (i.e. PIA requests for support information, log of phone contacts with SLD, etc.)