Lifeline Program Update. Wednesday, April 19, 2017

Transcription

1 Lifeline Program Update Wednesday, April 19,

2 Housekeeping Audio is available through your computer s speakers The audience will remain on mute Enter questions at any time using the Questions box There is a large audience signed in today. We will accept as many questions as possible! If your audio or slides freeze, refresh the webinar Copy of the slide deck in the handouts section of webinar panel 2017 Universal Service Administrative Co. l Lifeline Program Webinar 2

3 About the Lifeline Program Webinar Discusses general topics about Lifeline Program audits, including: Lifeline program audits and processes Common audit findings and best practices To register for each session, visit and select Trainings & Outreach, then Lifeline Program Update Webinars 2017 Universal Service Administrative Co. l Lifeline Program Webinar 3

4 1. Announcements Agenda 2. Lifeline Program Audits Background & Purpose Process 3. Lessons Learned Common Audit Findings Best Practices 4. Quiz 5. Questions 2017 Universal Service Administrative Co. l Lifeline Program Webinar 4

5 ANNOUNCEMENTS Lifeline Program Webinar 2017 Universal Service Administrative Co. l Lifeline Program Webinar 5

6 Announcements Today s format: Presentation, interactive quizzes, questions from the audience Lifeline Program audits and Common Audit Finding information on our website has been updated Reminder! If you have customers with July anniversary dates, you must begin the rolling recertification process by ~April 27. Contact us if you need help with rolling recertification. FCC Form 481, the Carrier Annual Reporting Data Collection Form, is now available in E-File. Service providers can begin their filing, but cannot certify the filing until the form receives PRA approval. The form is due by July 1, Universal Service Administrative Co. l Lifeline Program Webinar 6

7 Background & Purpose Lifeline Program Audits 2017 Universal Service Administrative Co. l Lifeline Program Webinar 7

8 Lifeline Program Audits To ensure the highest level of program integrity, USAC conducts audits of service providers. The primary purpose of audits is to ensure compliance with Federal Communications Commission (FCC) rules and program requirements as well as to assist in program compliance. Audits can be randomly selected or targeted to include a wide variety of entities with regard to size and geographic location. Selection for an audit is not necessarily an indication that USAC believes problems exist. End Resolution is to help carriers be successful and compliant! 2017 Universal Service Administrative Co. l Lifeline Program Webinar 8

9 Who Conducts the Audits? Beneficiary and service providers audits may be performed by: USAC s internal audit staff (IAD), FCC Office of Inspector General, Offices of other federal agencies, or A firm under contract to USAC or the FCC A firm under contact to the ETC (e.g. Biennial audits) Please contact USAC s audit team if you have any concerns as to the proper identity of an individual contacting you regarding an audit Universal Service Administrative Co. l Lifeline Program Webinar 9

10 Background Audit Types 2017 Universal Service Administrative Co. l Lifeline Program Webinar 10

11 Audit Types USAC s Lifeline Program Integrity team supports service provider audits, which may be performed by USAC's internal audit staff, the FCC Office of Inspector General, offices of other federal agencies, or a firm under contract to USAC or the FCC. Audit examples include: Beneficiary and Contributor Audit Program (BCAP) Beneficiary and Contributor Audit Program - External (BCAPx) Payment Quality Assurance (PQA) Office of Inspector General (OIG) In addition to FCC and USAC audits, service providers meeting the criteria under (a) are required to conduct independent biennial audits and report the results to USAC and the FCC Universal Service Administrative Co. l Lifeline Program Webinar 11

12 Beneficiary and Contributors Audit Program (BCAP) The Beneficiary and Contributor Audit Program (BCAP) is designed to measure rates of program compliance among universal service beneficiaries and contributors. USAC utilizes audit approaches tailored to both the distinctive features of the participant's organization and the specific amounts of money being audited. Carried out by auditors trained in universal service contributor and program audit requirements, these audits serve to identify areas of non-compliance with program rules and amounts of recoverable funds. May be performed by USAC auditors or a firm contracted by USAC. The audits are designed and conducted so as not to impose undue demands in time or energy on program participants. USAC worked closely with the Federal Communications Commission (FCC) to develop and implement this program Universal Service Administrative Co. l Lifeline Program Webinar 12

13 Payment Quality Assurance (PQA) Program The Payment Quality Assurance (PQA) Program allows USAC to provide the Federal Communications Commission (FCC) with information about improper payments to program beneficiaries, as required by the Improper Payments Information Act of 2002 (IPIA), amended by the Improper Payments Elimination and Recovery Act of 2010 (IPERA) and the Improper Payments Elimination and Recovery Improvement Act (IPERIA) of Under this program, USAC assesses specific payments made to select beneficiaries in the High Cost (Connect America Fund), Lifeline, and Schools and Libraries (E- Rate) programs to determine if these payments were made in accordance with FCC rules. Using results of these assessments, USAC calculates estimates of improper payment rates and provides this information to the FCC. Pursuant to FCC rules, participation in the PQA Program is compulsory for any universal service beneficiaries selected for assessment Universal Service Administrative Co. l Lifeline Program Webinar 13

14 Independent Biennial Audits In the 2012 Lifeline Reform Order, the Commission directed the Wireline Competition Bureau, in conjunction with the Office of Managing Director (OMD), to develop standard procedures for independent biennial audits. Biennial Audit Plan Focuses on an ETC s corporate-wide compliance rather than an ETC s performance on a specific month(s) in a particular study area. The audits will focus on a company s overall compliance with the Lifeline rules and assess whether the company has internal controls necessary to comply with the Lifeline rules. The Biennial Audit Plan also calls for sample testing in limited instances, to ensure that such policies, procedures, and methods are being appropriately implemented. Example: When an ETC has an automated system to verify initial and ongoing eligibility, the audit should focus on whether the methods and procedures of such automated systems are appropriately structured to ensure compliance with Lifeline program rules and requirements Universal Service Administrative Co. l Lifeline Program Webinar 14

15 Independent Biennial Audits (cont d) Applies to every eligible telecommunications carrier (ETC) providing Lifeline services and receiving $5 million or more annually from the Lifeline program The audits are performed as agreed-upon procedures (AUP) attestations USAC IAD trains independent auditors to ensure that the audits are performed in accordance with the Audit Plan The audits must be performed once every two years ETCs are required to hire an independent audit firm to assess their overall compliance with the Lifeline program s rules and requirements and internal controls regarding these requirements. 30 carriers were selected in the most recent Lifeline Biennial Audit Plan 2017 Universal Service Administrative Co. l Lifeline Program Webinar 15

16 Office of Inspector General (OIG) Audits The FCC OIG auditors perform these audits to determine compliance with FCC rules based on their authority under the Inspector General Act of The audit is not intended as a substitute for any agency regulatory compliance review or regulatory compliance audit Universal Service Administrative Co. l Lifeline Program Webinar 16

17 Audit Process Planning Testing Reporting Audit Announcement Entrance Conference Beneficiary Data Received Documentation Review Beneficiary Inquiries Sample Selection [if applicable] Site Visit [if applicable] Draft Findings/Other Matters Exit Conference Audit Survey Final Audit Report 2017 Universal Service Administrative Co. l Lifeline Program Webinar 17

18 Audit Process - Planning An announcement letter is sent detailing the purpose and scope of the audit, and identifying the personnel who will be performing the audit, making a request for pertinent documentation, and stating the date upon which the documentation is due. Typically, a service provider will be contacted by USAC two to three weeks prior to the start of an audit to assure that the appropriate personnel and documentation will be available. The time required to produce documents will vary, depending on the volume, complexity, and accessibility of documents requested. The anticipated duration of an audit can also vary depending on the size and dollar value of the support involved Universal Service Administrative Co. l Lifeline Program Webinar 18

19 Audit Process - Testing A checklist of general requirements is available on our website. BCAP Checklist PQA Checklist USAC obtains documentation to support different elements for each program. The materials requested can include the following: Documentation to support: Number of subscribers reported on the FCC Form 497 Amounts reported on the FCC Form 497 Service provider eligibility to receive Lifeline Program support Subscriber eligibility to receive Lifeline Program support Lifeline Program support passed through to subscribers Subscriber listing Initial Lifeline subscriber enrollment forms and recertification forms Initial Eligibility documentation One-per-household worksheets, if applicable Adequacy of advertising efforts 2017 Universal Service Administrative Co. l Lifeline Program Webinar 19

20 BCAP Audit Process - Reporting A USAC audit may identify conditions that are categorized as an audit finding or an other matter. An audit finding is a condition that shows evidence of noncompliance with FCC rules and orders set forth primarily in 47 Code of Federal Regulations (C.F.R.), as well as other program requirements (collectively, the Rules). An "other matter" is a condition that does not necessarily constitute a Rule violation, but warrants the attention of the auditee and USAC management. The audit findings and "other matters" will contain background information, the audit step performed, the condition noted, and the basis for the condition noted. After the audit is completed, an exit conference will be held with the auditee to review the results of the audit and the next steps of the process Universal Service Administrative Co. l Lifeline Program Webinar 20

21 BCAP Audit Process - Reporting (cont d) The auditee will be given an opportunity to provide a response to the audit findings and "other matters" (if any) within five business days unless advised otherwise by the auditor. USAC management will review the auditee's response, and will prepare a response to address the conditions and note corrective actions, as necessary. Both the auditee and USAC management responses will be incorporated into the draft audit report. Once finalized, both the auditee and the FCC will receive copies of the final audit report. The final audit report may be made available to the public upon request Universal Service Administrative Co. l Lifeline Program Webinar 21

22 Audit Follow-Ups In some cases, USAC will use audit follow-up procedures defined by the Office of Management and Budget (OMB) to recover funds that are identified as improper payments. A unique case number assigned by USAC is also included in the letter for you to associate all documents and communications related to the assessment. Staff are available by phone to assist participants with understanding and fulfilling program requirements Universal Service Administrative Co. l Lifeline Program Webinar 22

23 Quick Quiz! 23

24 Top Common Audit Findings Lessons Learned/Best Practices 2017 Universal Service Administrative Co. l Lifeline Program Webinar 24

25 Common Audit Findings Completed audits are assessed to determine the root cause for each audit findings. Non-compliance with Lifeline rules is most often caused by inadequate knowledge of or unfamiliarity with program rules. Carrier's internal procedures are often insufficient to support program compliance. With adequate policies and procedures, and preparation and proper documentation throughout the year, audit findings can be minimized! In USAC's continuing efforts to ensure carriers are successful at implementing FCC rules and program requirements, we have put together a list of some of the problem areas identified during audits and Payment Quality Assurance ( PQA) reviews on our website Universal Service Administrative Co. l Lifeline Program Webinar 25

26 Top 5 Monetary Common Audit Findings 1. Lack of or Inadequate Documentation 2. Duplicate Address (same subscriber and/or multiple services) 3. Inaccurate Form 497 Reporting 4. Improper Certification and/or Recertification Documentation Disclosure 5. Improper Lifeline Discount Amount 2017 Universal Service Administrative Co. l Lifeline Program Webinar 26

27 FINDING: Lack of/missing or Inadequate Documentation Lifeline carriers must maintain records to document compliance with all FCC and state requirements governing the Lifeline and Tribal Link Up programs, and Must provide documentation to the FCC or administrator upon request and Are recommended to save a copy of the detailed documentation when preparing the summary data for their Lifeline Program filings For example, carriers should retain a copy of the summary of subscriber counts used when filing their FCC Form 497 and FCC Form 555 filings Carriers should also prepare and retain a copy of the detailed subscriber listing that contains all relevant information for each subscriber and verify this information when filing the summary data to ensure that it agrees to the detailed data. Then the detailed data is saved and readily available in the event of an audit or review. This detailed documentation should be retained for the duration of the documentation retention period. Carriers that relinquish their ETC designations should still retain documentation for the required period. **Note that the FCC recently revised eligibility documentation rules. For more information on these changes, please visit our 2015 and 2016 Lifeline Modernization Order web page Universal Service Administrative Co. l Lifeline Program Webinar 27

28 FINDING: Lack of/missing or Inadequate Documentation (cont d) Additional example finding: If a carrier cannot provide a certification, this is an example of lack of documentation (where the documentation is missing entirely). If the carrier can provide a portion of the certification, but system limitations prevent the carrier from providing the entire certification, this is an example of inadequate documentation (where the documentation was incomplete or insufficient) Universal Service Administrative Co. l Lifeline Program Webinar 28

29 FINDING: Duplicate Address (same subscriber and/or multiple services) This finding occurs when the carrier does not have an adequate process in place to prevent it from providing more than one Lifeline service per household and claiming these subscribers on the FCC Form 497. Lifeline carriers must provide only one Lifeline benefit to eligible subscribers, claim subscribers only once on the FCC Form 497, and maintain documentation to demonstrate compliance with the one per household rule. 47 C.F.R (g) Duplicative support: Duplicative support exists when a Lifeline subscriber is receiving two or more Lifeline services concurrently or two or more subscribers in a household are receiving Lifeline services or Tribal Link Up support concurrently Universal Service Administrative Co. l Lifeline Program Webinar 29

30 FINDING: Inaccurate FCC Form 497 Reporting Example: Carrier claimed subscribers for reimbursement on the FCC Form 497 who were disconnected prior to the FCC Form 497 data period, and thus, did not receive Lifeline service for that period. The Service Provider must report the correct number of subscribers on the FCC Form 497 based on the number of actual qualifying Lifeline subscribers it serves. Best Practice: Compare the NLAD and FCC Form 497 counts prior to submitting the Form 497 data 2017 Universal Service Administrative Co. l Lifeline Program Webinar 30

31 Quick Quiz! 31

32 FINDING: Improper Certification and/or Recertification Documentation Disclosure Example: The carrier did not include all required disclosures on the subscriber certification or recertification forms. Lifeline Program rules provide a list of certifications and disclosures that carriers must include on their subscriber certification and re-certification forms. Common Error: Failure to include both the disclosures in 47 C.F.R (d)(1)(i) and 47 C.F.R ( d)(3)(vii). The carrier may not rely on the use of one disclosure in place of the other. willfully making false statements to obtain the benefit can result in fines, imprisonment, de-enrollment or being barred from the program ( (d)(1)(i)) The subscriber acknowledges that providing false or fraudulent information to receive Lifeline benefits is punishable by law (47 C.F.R (d)(3)(vii)) Best Practice: List out each required certification and disclosure near verbatim as possible to the Rules to prevent any misinterpretations and potential non-compliance Universal Service Administrative Co. l Lifeline Program Webinar 32

33 FINDING: Improper Certification and/or Recertification Documentation Disclosure (cont d) Carriers are permitted to use their own phrasing, as long as the substance of each required disclosure and certification is conveyed using language that is clear and easily understood. Carriers must include the following required certification and disclosures in (d)(1)(i)-(vi): Lifeline is a federal benefit and that willfully making false statements to obtain the benefit can result in fines, imprisonment, de-enrollment or being barred from the program; Only one Lifeline service is available per household; A household is defined, for purposes of the Lifeline program, as any individual or group of individuals who live together at the same address and share income and expenses; A household is not permitted to receive Lifeline benefits from multiple providers; Violation of the one-per-household limitation constitutes a violation of the Commission's rules and will result in the subscriber's de-enrollment from the program; and Lifeline is a non-transferable benefit and the subscriber may not transfer his or her benefit to any other person Universal Service Administrative Co. l Lifeline Program Webinar 33

34 FINDING: Improper Certification and/or Recertification Documentation Disclosure (cont d) Carriers enrolling or recertifying subscribers shall require each subscriber to initial his or her acknowledgement of each of the certifications in (d)(3)(i) through (viii) individually and under penalty of perjury: 1. The subscriber meets the income-based or program-based eligibility criteria for receiving Lifeline, provided in ; 2. The subscriber will notify the carrier within 30 days if for any reason he or she no longer satisfies the criteria for receiving Lifeline including, as relevant, if the subscriber no longer meets the income-based or program-based criteria for receiving Lifeline support, the subscriber is receiving more than one Lifeline benefit, or another member of the subscriber's household is receiving a Lifeline benefit. 3. If the subscriber is seeking to qualify for Lifeline as an eligible resident of Tribal lands, he or she lives on Tribal lands, as defined in (e); 4. If the subscriber moves to a new address, he or she will provide that new address to the eligible telecommunications carrier within 30 days; 5. The subscriber's household will receive only one Lifeline service and, to the best of his or her knowledge, the subscriber's household is not already receiving a Lifeline service; 6. The information contained in the subscriber's certification form is true and correct to the best of his or her knowledge, 7. The subscriber acknowledges that providing false or fraudulent information to receive Lifeline benefits is punishable by law; and 8. The subscriber acknowledges that the subscriber may be required to re-certify his or her continued eligibility for Lifeline at any time, and the subscriber's failure to re-certify as to his or her continued eligibility will result in de-enrollment and the termination of the subscriber's Lifeline benefits pursuant to (e)(4) Universal Service Administrative Co. l Lifeline Program Webinar 34

35 FINDING: Improper Lifeline Discount Amount Example: The carrier claimed support for some Tribal subscribers receiving Lifeline voice service in an amount greater than the basic voice plan cost. Best Practice: For subscribers receiving Lifeline voice service, the carrier should only claim a reimbursement amount on the FCC Form 497 that is equal to the amount of the basic voice plan before the optional features of texting and data are added to the subscriber's service plan Universal Service Administrative Co. l Lifeline Program Webinar 35

36 Additional Common Audit Findings Lessons Learned/Best Practices 2017 Universal Service Administrative Co. l Lifeline Program Webinar 36

37 Additional Common Audit Findings Improper Qualification Criteria: Scenario: Carriers either omitted qualification criteria or included ineligible qualification criteria on eligibility documentation and Lifeline publicity materials. Best Practice: Carriers must ensure subscriber certification forms are updated to adhere to the subscriber qualification criteria established by the rules. Federal Poverty Guidelines (FPG) are released annually by the Department of Health and Human Services. Each year, USAC provides an updated FPG breakdown on our website. Best Practice: If you list any one eligible qualification criteria, you must list all on your advertising materials Note: Listing qualification criteria on advertising materials is not a requirement 2017 Universal Service Administrative Co. l Lifeline Program Webinar 37

38 Additional Common Audit Findings Inaccurate FCC Form 555 Reporting: Carriers must report the correct number of subscribers on the FCC Form 555 based on adequate documentation, which must be retained to support the number of subscribers reported. Best Practice: A recertification results reporting template is provided on our website as a data collection tool that can be used to complete the FCC Form 555 and provided during the audit Universal Service Administrative Co. l Lifeline Program Webinar 38

39 Additional Common Audit Findings (cont d) Improper Advertising Materials: Carriers are required to publicize the availability of Lifeline service in a manner reasonably designed to reach those likely to qualify for the service. Example: The carrier used a social media web page as their sole form of Lifeline Program advertising outreach. Carriers are reminded that the Internet cannot be relied on as a sole or primary means of Lifeline Program advertisements. The FCC has not directed specific outreach procedures, but carriers should supplement online-only advertising by using in-store print media, direct mail, event marketing, or other methods that reach potential subscribers in their service area Universal Service Administrative Co. l Lifeline Program Webinar 39

40 Audit Findings Steps to minimize audit findings: Document, document, document! Retain appropriate and adequate documentation to support filings, eligibility requirements, data, etc. FCC rules require service providers to maintain records to document compliance with Lifeline program rules for at least three years. Get organized Organize your documentation and filings in a logical manner so that transition of responsibilities is seamless. Provide sufficient detail on all bills or invoices, and communications with subscribers. Review data reported for accuracy prior to submitting it to USAC. Check the specifics! Ask questions about documentation or data or program requirements. Use USAC as a resource throughout the year. Report data in a timely manner Universal Service Administrative Co. l Lifeline Program Webinar 40

41 Quick Quiz!

42 Quick Quiz!

43 Questions?

44 Lifeline Program Webinar Thank you for joining us! Sign up for Lifeline Program updates and upcoming events Visit usac.org/li and click subscribe in the upper-right corner Need help? Contact us! Recertification Page on our website General: Recertification: NLAD: or call (877) Universal Service Administrative Co. l Lifeline Program Webinar 44

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