Barton Drills FCC, USAC on E-rate Fraud, Suggests Program Needs Restructuring

• Published in: Telecommunications Reports 2004-10, Vol.70 (19), p.3
• Main Author: Boles, Margaret
• Format: Article
• Language: English
• Subjects: Congressional hearings; Federal funding; Fraud; Funding; Libraries; Reimbursement; School boards; School districts; Schools; Universal service
• ISSN: 0163-9854

Mr. [Jeffrey Carlisle] said the bureau is planning to make a recommendation to the full Commission within a month or so "to lower the discount rate that's currently applied, which would have the effect of requiring school districts ... to put more of their money up front in order to qualify for funding." He explained that this change, coupled with the requirement for certain of those recipients to conduct independent audits, would also help to curb waste, fraud, and abuse. Mr. Carlisle said the Commission is working hard and fast to tackle problems with the E-rate program. "We're doing the best we can with what we've got." Mr. [H. Walker Feaster III] said the IG's office agreed "that there's been a series of horror stories" that have come out of the E-rate program investigations. "Movement [to improve oversight] has been in the right direction but, from our perspective, it hasn't been fast enough," he said. He added, however, that to completely suspend funding would be a "very radical" decision for someone to make. "Schools are very dependent upon the money to maintain connections to the Internet and to get new connections," he said. "By tightening up the procedures as has happened in the past and will hopefully happen in the future, you'll see less horror stories." Rep. [Joe Barton] therefore questioned whether it was necessary to make available the $2.25 billion a year allotted to the E-rate program. "I guarantee you that as long as money is available, people are going to ask for it," he said. If the funding was dropped to $1 billion and the rules were altered, end users would adjust to that level effectively. "We're basically on an honor system here," Rep. Barton said. "We've spent $8 billion [since the program's inception] and there's a real question about how much of that has been effectively utilized."