A state audit of a program to help fund Internet access for schools, libraries and hospitals found several examples of inadequate documentation and review of applications to the $24 million fund.
Reimbursements from the Oklahoma Universal Service Fund’s special universal services program have tripled in the last five years, mostly from companies providing broadband Internet for telemedicine to not-for-profit healthcare providers. Money for the fund comes from fees added to telephone customer bills.
“If funding resources are not used in an appropriate manner, the availability of funds to other entities may be reduced or an increase in fees may be assessed on telecommunication service users,” said the review by State Auditor and Inspector Gary Jones.
The audit was requested by the Oklahoma Corporation Commission, which operates the public utility division that administers the fund. Brandy Wreath, the division’s director, said staff agreed with the auditor’s findings and had already begun making changes.
“It took 10 years to break, and we can’t fix it overnight,” said Wreath, who took over the division in 2012. “The audit report validated what we had found. It made us feel good we were on the right track, and it made us feel good we were going to have support to continue fixing the things that we were already on top of.”
The audit said the public utility division increased accountability and reduced risk by hiring additional staff and taking a closer look at applications from healthcare applicants. A review of the files showed 5 percent didn’t have adequate supporting documentation to ensure eligibility.
Wreath said the public utility division had concerns not-for-profit healthcare providers were being sold too much bandwidth for their telemedicine needs.
The division’s review of 407 healthcare providers last year led to 90 telemedicine lines not being recertified. Another 144 lines were approved with reduced bandwidth, while 173 were recertified at the same level of service.
The audit said there was not a complete list of schools and libraries receiving special universal services from the Oklahoma Universal Service Fund. Wreath said a new third-party fund manager has been hired and will be responsible for collecting that information for inclusion in a new case management and document processing system called Iron Data.
“It will actually give us a database robust enough to handle the thousands of pieces of information we need to have that,” Wreath said.
Policies, staffing bolstered
Schools and libraries will begin a recertification process by March, Wreath said. Under the program, schools and libraries are entitled to one free broadband line per building. The reimbursement to telecom providers stays in place unless the school’s needs change. As recently as 2009, the public utility division had just one person assigned to oversee the special universal services program.
“As a result, the amount of time and resources devoted to validating the actual number of buildings that were internet accessible was limited and performing an annual redetermination was not feasible,” the audit said.
To keep up with applications and recertifications, the public utility division increased the number of staff assigned to telecom issues to 12 people, up from five in 2010.
“This is a lot of money,” Wreath said. “It’s very important, and it takes people to do it. We have a premier staff that I would put against any other state or any company. We feel confident when they walk in a room, they know what they’re talking about, they can’t be snowed, and they’re going to work together.”
At the Corporation Commission’s request, Jones’ office now has two full-time auditors embedded with the agency for risk assessment and to monitor internal controls. That reflects the commission’s expanded role of administering programs such as the Oklahoma Universal Service Fund and other regulatory programs with large amounts of pass-through money.
The special universal services program made up three-fourths of the reimbursements from the $32.5 million Oklahoma Universal Service Fund in fiscal year 2013, which ended June 30. The Lifeline program for low-income households and the primary universal service program for basic phone service also receive money from the Oklahoma Universal Service Fund.
The Oklahoma Universal Service Fund is a state companion program to the federal Universal Service Fund, which also comes from fees tacked onto telephone customer bills.