On April 2, 2014, the Federal Communications Commission’s (FCC) Wireline Competition Bureau released the Lifeline Biennial Audit Plan, which establishes a uniform set of audit procedures by which certain Lifeline service providers must be reviewed.
The audit requirements apply to eligible telecommunications carriers (ETC) that provide Lifeline services and receive at least $5 million annually from the low-income program. The FCC made clear that the $5 million dollar threshold is to be determined on a holding company basis, aggregating all operating companies and affiliates. Each ETC that meets this requirement must hire an independent audit firm to perform an audit of the ETC’s compliance with Lifeline’s rules once every two years. The audit must follow the guidelines put forth in the Biennial Audit Plan.
“The audit requirements apply to eligible telecommunications carriers (ETC) that provide Lifeline services and receive at least $5 million annually from the low-income program.”
The Biennial Audit Plan places the focus of the audit on the ETC’s company-wide compliance, asking auditors to assess whether the ETC has the sufficient controls and policies in place to comply with Lifeline rules. In some instances, the plan also calls for sample testing to ensure all policies are being properly implemented.
After the audit is complete, auditors must submit a draft report on the audit — upon which the ETC may comment — to the FCC and the Universal Service Administrative Company (USAC). Final reports must then be provided to the FCC, USAC, and relevant state and Tribal governments. Note that final reports are not considered confidential.
For a list of the ETCs subject to the first biennial audit covering the 2013 calendar year, with final reports due by April 2, 2015, please see Attachment 2 of the FCC’s notice. The complete Biennial Audit Plan can be found in Attachment 3.