A Government Accountability Report (GAO) study of five federal programs for fraud prevention measures and oversight found the Federal Communications Commission’s (FCC) Universal Service Program for Schools and Libraries, commonly known as E-Rate, to be the only one that met all nine requirements and leading practices to prevent fraud, waste and abuse.
Meanwhile, E-Rate opponents have often characterized the funding mechanism for discounted internet and telecommunications access in libraries, schools and until recently school buses as rampant with fraud. FCC in September voted 2-1 to revoke E-Rate eligibility for school bus Wi-Fi.
In addition to E-Rate, the GAO report released in December examined the policies and procedures of the Department of Commerce’s CHIPS for America Fund, the Environmental Protection Agency’s Greenhouse Gas Reduction Fund, the Department of Health and Human Services’ Health Center Program, and the Department of Energy’s Regional Clean Hydrogen Hubs.
The Universal Service Administrative Company (USAC) administers E-Rate under FCC oversight and conducts biannual fraud risk assessments. The GAO report found USAC has implemented an entity-wide antifraud strategy, which includes measures to prevent, detect and respond to fraud, as well as ongoing monitoring and evaluation of fraud risk management activities.
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GAO noted that E-Rate’s adherence to all nine requirements and leading practices, including maintaining risk profiles, documenting an antifraud strategy and conducting risk-based monitoring. Together, GAO said the requirements and leading practices set a high standard for other federal award programs. In fiscal year 2024, E-Rate obligated approximately $2.9 billion and disbursed $2.6 billion to help schools and libraries access affordable broadband services.
Michael Flood, founder of telecommunications consultant and strategist Alpine Frog, applauded what he called a “100-percent, A-plus score.”
“I would add that the E-Rate program is also widely recognized for continuously and consistently bringing down costs over its 30-year history due to a robust competitive bidding process and commitment to open data practices,” he commented. “E-Rate operates in an efficient and open market.”
The report also highlighted previous recommendations made by GAO to improve fraud risk management in FCC’s Affordable Connectivity Program (ACP). The FCC implemented all six recommendations, further strengthening its oversight capabilities.
While the report identified gaps in fraud prevention measures across other federal programs, it commended the FCC and E-Rate for their proactive approach to safeguarding taxpayer dollars and ensuring program integrity.
