The planned corrective actions with the largest impact include working with the FCC to establish a USF Competitive Bidding Portal to help ensure competitive bidding compliance for the Schools and Libraries Program. The Competitive Bidding Portal Request for Proposals (RFP) is currently under review with the FCC. However, the FCC must first also initiate a proposed rulemaking proceeding to seek public feedback for this portal with notice and comment prior to a rulemaking that will inform any necessary RFP changes and other requirements for the competitive bidding portal.

Universal Service Fund - Schools and Libraries has established a baseline.

The program's current year improper payment and unknown payment rate of 2.97 % has not been achieved with a balance of payment integrity risk and controls and does not represent the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is not the tolerable rate.

The Schools and Libraries Program has the internal controls, human capital, information systems, and other infrastructure it requires to reduce IPs to the targeted levels.

USAC management is performing a deep-dive analysis of its improper payments to more thoroughly understand their root causes and to identify corrective actions that will address the root causes. Through this analysis, USAC management is institutionalizing corrective actions as part of its program integrity efforts that will reduce future instances of improper payments.

Universal Service Fund - Schools and Libraries has established a baseline.

Every year USAC reviews the improper payment rates and determines the reduction targets based on 3 year performance in conjunction with the payment quality assurance (PQA) exceptions.

The program's current year improper payment and unknown payment rate of 3.73 % has not been achieved with a balance of payment integrity risk and controls and does not represent the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is not the tolerable rate.

The Schools and Libraries program has the internal controls, human capital, information systems, and other infrastructure it requires to reduce improper payments to the target levels.

The Schools and Libraries program team did not identify additional resources needed to improve the overall structure of the lifeline program in its most current budget submission. USAC continues to work with the Commission to determine the gaps in its overall requirements.

The top two causes for this year’s Improper Payments are related to competitive bidding and invoicing error issues . As corrective actions, the Schools and Libraries team is using data analytics to identify potential competitive bidding issues, including potential conflicts of interest, prior to issuing funding commitments. The team is also leveraging data analytics to improve competitive bidding training and enhance compliance by adding content regarding the minimum 28 day waiting period to select service providers, the factors for assessing responsive bids, and document retention.

The Schools and Libraries team is also adding additional preventative controls to proactively identify and prevent the types of invoicing errors identified in the PQA assessments from re-occurring in the future, and providing enhanced training regarding the invoicing process. To further address invoicing-related issues, USAC is transitioning the Schools and Libraries program invoicing from the current SL legacy systems to EPC, which is expected to help with identifying invoicing issues before disbursements are issued. The transition will occur between November 3 and 7, 2023.

The current improper payment rate of 1.59% is the lowest rate in the past eight years. From FY 2016 through FY 2022, the Schools and Libraries program’s improper payment rate fluctuated from 2.97% to 6.33%. When considering the overpayments within agency control, the Schools and Libraries program’s improper payment rate is under the 1.5% threshold.

Universal Service Fund - Schools and Libraries has established a baseline.

The reduction target is calculated using a three-year average of the improper payment rate. After the average has been established, we review to determine if there are variables that may affect the calculated average.

The program's current year improper payment and unknown payment rate of 1.59 % has been achieved with a balance of payment integrity risk and controls and represents the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is the tolerable rate.

The Schools and Libraries Program has reached its tolerable rate for improper payments because it has taken steps to address the root cause of any improper payments, which has successfully reduced the improper payment rate within the agency’s control to the threshold of 1.5%.

The Schools and Libraries program has the internal controls, human capital, information systems, and other infrastructure it requires to reduce improper payments to the target levels.

The Schools and Libraries program team did not identify additional resources needed to improve the overall structure of the program in its most current budget submission. USAC continues to work with the FCC to determine the gaps in its overall requirements.

The Schools and Libraries team is using data analytics to identify potential competitive bidding issues. Data analytics will be used to identify potential conflicts of interest, prior to issuing funding commitments. The team is also leveraging data analytics to improve competitive bidding training and enhance compliance by adding content regarding the minimum 28 day waiting period to select service providers, the factors for assessing responsive bids, and document retention. In addition, preventative controls have been added to proactively identify and prevent the types of invoicing errors identified in the PQA assessments from re-occurring in the future, and providing enhanced training regarding the invoicing process.

Schools and Libraries mitigation strategy to reduce the improper payments have proven to be successful. The results of the strategy are clear with the reduction of the improper payment rate to 1.27%, which is under the threshold of 1.50%.

The most impactful corrective actions are focused on comparing the invoiced amount against the payment amount prior to disbursement. The “Pre-Payment Review” is considered adequate, as it properly addresses invoicing compliance-related issues. The review process is set up as a proactive approach to mitigate future potential improper payments related to invoicing errors.

USAC, in conjunction with the FCC, has implemented an Improper Payment Analysis process. Through this process, USAC management performs an analysis of its improper payments to understand the root cause and to identify corrective actions to mitigate the issues. In collaboration with USAC management, USAC’s Fraud Risk Group has developed a process to evaluate common root causes of improper payments in an effort to identify the true root cause to determine if additional corrective action is needed.

During the Risk Management Council Meeting, management will continue to review the improper payments and prioritize the largest monetary impact findings accordingly. During the meetings, management has an opportunity to discuss effective improper payment mitigation strategies. USAC’s Fraud Risk Group has developed a process to evaluate common root causes of improper payments in an effort to identify the true root cause to determine if additional corrective action is needed. This process has enabled USAC management to institutionalize corrective actions as part of its program integrity efforts, which will prevent future instances of improper payments. USAC leadership is implementing a quarterly review process to discuss progress towards executing these corrective actions. The results of the strategy are clear with the reduction of the improper payment rate to 1.27%, which is under the threshold of 1.50%.

Universal Service Fund - Schools and Libraries has established a baseline.

The reduction target is, 1.20%, which is less than the current improper payment rate of 1.27%. USAC considered the average of the improper payment rates for the last three years to determine the improper payment rate reduction target.

The program's current year improper payment and unknown payment rate of 1.27 % has been achieved with a balance of payment integrity risk and controls and represents the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is the tolerable rate.

Schools and Libraries have taken the proper steps that led to reducing the improper payment below the statutory threshold. The program has reached a tolerable rate, which is below the threshold.

The Schools and Libraries program has the internal controls, human capital, information systems, and other infrastructure it requires to reduce improper payments to the target levels. USAC continues to evaluate to ensure the proper infrastructure is in place.

The Schools and Libraries program team did not identify additional resources needed to improve the overall structure of the program in its most current budget submission. USAC continues to work with the FCC to determine any gaps in its overall requirements.