Audits frustrate e-Rate applicants

Opinions about the management of the federal e-Rate program have improved over the last year, a new survey suggests. But applicants continue to be frustrated by audits, and they’d like to see more transparency in the program.

e-Rate consulting firm Funds for Learning (FFL) released the results of its second annual survey of e-Rate participants June 29. The e-Rate provides $2.25 billion in telecommunications discounts for eligible schools and libraries each year, but keeping track of the program’s many rules and deadlines can pose a challenge to applicants.

Nearly 73 percent of those surveyed who expressed an opinion about the e-Rate’s management gave program administrators a favorable review–up from 65 percent last year. Those who strongly agreed that the e-Rate is well managed increased from 14 percent to 20 percent in the same period, while those who strongly disagreed with this statement dropped from 10 percent to 7 percent.

Four out of five applicants said the e-Rate is meeting its goal of connecting schools and libraries to the internet, and 71 percent said their organization has more classrooms online as a result of the program–up from 59 percent last year. But applicants continue to say the Two-in-Five Rule–which limits a school or library’s receipt of funding for internal connections to twice in a five-year period–is not having its intended effect, which is to allow this funding to reach a greater number of entities.

In last year’s survey, applicants regarded the Bishop Perry Order–a rule change from 2006 that allowed them to make corrections to specific items on their applications, if minor errors are discovered–as the most positive change to the e-Rate program in recent years. This year, however, applicants weren’t quite so enamored with the order. The percentage of respondents who believed Bishop Perry would bring no change to the e-Rate program was 36 percent, up from 25 percent last year.

One applicant noted that even though the Bishop Perry Order allows applicants to correct clerical errors, there is still a "steep price" to pay in terms of the amount of time it takes to see the mistakes rectified. "The ‘reality’ of the Bishop Perry Order may be setting in, making applicants realize that it can’t solve every mistake or error in the e-Rate process," FFL wrote in its survey report.

To guard against potential waste, fraud, and abuse, the Schools and Libraries Division (SLD) of the Universal Service Administrative Co., the agency that administers the e-Rate, conducts numerous audits of program participants. The comments concerning audits in FFL’s survey indicated that most applicants find the audit process arduous and draining on their time and resources. While audits might be a necessary evil, most applicants said the process could be streamlined.

Applicants overwhelmingly agreed that the staff conducting the audits did so in a professional manner. But only 60 percent said they believed those doing the auditing were knowledgeable about the e-Rate’s rules and regulations.

Also, just one in three applicants agreed that the amount of work it takes to respond to an audit is reasonable. One often-cited criticism of the audit process is the amount of time that auditors spend on site. "Auditors can spend up to four weeks, and sometimes longer, at an applicant’s location to perform the field work portion of the review," FFL noted. "Two commenters indicated that the on-site portion of the audit could have been completed within a few days."

Others questioned the need for such an extensive audit when every aspect of the e-Rate process is already closely reviewed, FFL said, while still others complained they’ve been waiting over a year to learn that their audit review is final.


FFL survey

2008 survey (conducted with eSchool News)