E-Rate Program Challenged as FCC Proposes Hurricane Relief

Critics of the E-rate program are preaching caution as the FCC plans to make $132 million from the fund available to rebuild the educational technology capacity of schools hit by Hurricanes Katrina and Rita. They first want to see audit reports from the FCC Inspector General and to examine sources of fraud in the E-rate program. “The audits and investigations performed to date indicated a high level of risk for misused funds in the E-rate program,” said FCC Inspector Gen. Walker Feaster. He said lack of clarity in the program’s rules prompt “inadvertent errors and deliberate waste” in the bidding process used to purchase E-rate goods and services. The program’s weaknesses could be compounded by overworked school and library administrators trying to rebuild schools quickly, he said. “I fear these rule waivers or exemptions will be taken advantage of by unscrupulous E-rate service providers that federal criminal investigations have turned up time and again.” Feaster was referring to the FCC’s decision in September to temporarily suspend some filing and recordkeeping requirements related to E-rate funding. Feaster’s office has completed 158 audits of beneficiaries of E-rate funds, of which 34% were found to be improper. Recoveries in those cases would yield $18 million, he said. The office is providing “audit support” to another 26 investigations and is monitoring 13 other investigations. So far, $30 million has been recovered in criminal prosecutions for E-rate fraud. One major area of concern is the program’s reliance of “self-certification” by participants, he said. While the $2.5 billion program deserves expanded oversight, he said, “we have not had the resources to establish an effective oversight program.”
[SOURCE: Communications Daily 10/7, AUTHOR: Anne Veigle]
(Not available online)