What the FCC didn't tell us about the USF audit

[Commentary] The Federal Communications Commission audited a large sample of Universal Service Fund (USF) recipients -- 390 out of 1751 -- and projected the total estimated overpayment for all fund recipients based on estimated overpayments for 384 of the audited companies. Eighty-five of the companies audited, or 22%, had the full value of the money they received from the USF deemed an erroneous payment -- not because the entire amount was deemed to be incorrect but rather, as the FCC explains in the report, because of insufficient documentation. The FCC notes that auditors were following guidelines established by the Office of Management and Budget -- and while those may be great guidelines for how to conduct an audit, it creates a distorted picture when a snapshot of mid-term audit progress is used to make broader generalizations. Added together and projected to the entire base of fund recipients, the 85 companies whose payments were completely rejected in the initial estimate account for 83% -- or about $803 million--of the estimated overpayment. The FCC must know that a large part of that amount eventually will be deemed legitimate, and I would argue that it was more than a little audacious to issue a news release using the bloated initial estimates to extrapolate the $970 million overpayment.