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Tuesday, June 17, 2008

Unfunding mandate

Well, it must be Audit Report Day, because another audit just crossed my desk. Unfortunately, this applicant was not an On-Tech client, so they had a couple of "findings" (for those who have the good fortune of never failing an audit, a "finding" means a material deficiency has been found). I'm not going to go into details, but one of the findings surprised me a bit.

The applicant apparently took over 90 days to pay a bill, and the auditor thought that meant the applicant should give back all the money from that FRN.

Based on how long it takes my clients to pay me, I've got to think that a lot of schools and libraries don't make that 90-day deadline every time. I remember looking at this once, and the average time for clients to pay me was like 135 days. Since then I think it's gotten better. The current recordholder? 550 days and counting.

Hmmm, I wonder if we could get the FCC to mandate that applicants pay their E-Rate consultants within 90 days....

1 comment:

  1. Anonymous9:20 AM

    You have the 5th Report and Order to thank for that one. See paragraph 24:

    Failure to Pay Non-discounted Share. We conclude that all funds disbursed should be recovered for any funding requests in which the beneficiary failed to pay its non-discounted share. While our rules do not set forth a specific timeframe for determining when a beneficiary has failed to pay its
    non-discounted share, we conclude that a reasonable timeframe is 90 days after delivery of service.
    Allowing schools and libraries to delay for an extended time their payment for services would subvert the intent of our rule that the beneficiary must pay, at a minimum, ten percent of the cost of supported services. We believe, based on USAC's experience to date as Administrator, that a relatively short period – comparable to what occurs in commercial settings – should be established in which beneficiaries are expected to pay their non-discounted share after completion of delivery of service. In other contexts, companies refer payment matters to collection agencies if a customer fails to pay after several requests for payment. Accordingly, we clarify prospectively that a failure to pay more than 90 days after completion of service (which is roughly equivalent to three monthly billing cycles) presumptively violates our rule
    that the beneficiary must pay its share. For purposes of resolving any outstanding issues relating to audits conducted prior to the issuance of this clarification, we direct USAC to determine whether full payment had been made as of the time the audit report was finalized. If any amounts remained outstanding at the conclusion of the audit work, that constitutes a rule violation warranting recovery of all amounts disbursed. Information on payment of the non-discounted share shall be sought from the beneficiary.