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Thursday, October 30, 2008

Wasteful audits

I was reading the USAC Board Meeting notes from E-Rate Central's E-Rate Service Provider Forum, and there were some interesting audit notes.

The audit reports approved this week were 44 audits covering $18 million. They had a "monetary effect" of $893,000. I think that means they found $839,000 in overpayments. That would be good news. It would mean an error rate of 2%. If we can keep that up, we'll make the IPIA threshold of 2.5%, which would mean fewer audits in the future.

Here's what else jumped out at me: those audits cost $4 million. That's over $90,000 per audit, over 40% of the amount audited, and more than 4 times the amount recovered. In other words, the fund lost over $3 million on those audits.

I'd rather see the $3 million spent simplifying the program.

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