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Sunday, December 07, 2008

Audit tsunami?

Well, the FCC's Office of the Inspector General (OIG) has released its latest Semiannual Report, and the news is not good.

There's the usual smattering of significant fraud cases. None of the stories had enough detail to be really interesting, though.

But the really bad news is that the Round 2 IPIA audits for E-Rate have again found more than 2.5% of payments were improper. So here comes Round 3.

How big will this wave of audits be? The report doesn't give a number, but the OIG is definitely ramping up for a bigger effort by hiring more people, so I think we can expect more audits. On the other hand, Round 3 will cover all four USF programs, whereas Round 2 only covered E-Rate and High Cost. So I'm betting on 315 audits for the E-Rate program. Anyone else care to hazard a guess?

When will the Round 3 tsunami hit? The OIG has already selected the lucky recipients, though the report doesn't say when we'll all get the good news. It does say USAC is currently contracting for Round 3. So my speculation is that USAC wraps up the contracts by the end of the year, and the bad news goes out in January. Let's hope they are sensitive enough this year not to have the audit responses due at the end of the filing window.

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