In USAC's continuing efforts to ensure carriers are successful at implementing FCC rules and program requirements, we have put together a list of some of the problem areas identified during audits and Payment Quality Assurance (PQA) reviews.
For more information about the audit process, review the BCAP page of our website, which includes a checklist for carriers of documentation to maintain for audit purposes. Using all of this information will help to expedite the audit process and should reduce or eliminate audit findings in the future. Also, please visit our 2015 & 2016 Lifeline Orders page to stay informed about Lifeline Program rule changes.
For each common audit finding, we have outlined a description of the finding, and some ways to prevent a finding like this in the future. We've also, where possible, provided some examples.
Lifeline Program non-compliance is most often caused by an inadequate knowledge or familiarity of program rules. In addition, carrier's internal procedures are often insufficient to support program compliance.
Lifeline carriers must report the correct number of subscribers on the Form 555 based on adequate documentation which must be retained to support the number of subscribers reported.
Every effort should be made to implement an adequate system for collecting, reporting, and monitoring data to report the correct number of subscribers on the Form 555 as required by the rules. See Annual Certifications by Eligible Telecommunications Carriers (Section 54.416(b)).
***Best Practice Tool - Carriers can report their recertification results using this template as a data collection tool during their audit.
The carrier did not accurately report the number of subscribers who de-enrolled from Lifeline prior to the ETC's attempt to recertify continued eligibility either directly, through the use of a third-party administrator (such as USAC), by a state administrator, or by access to a state eligibility database.
The number reported in Block D should include all subscribers who are de-enrolled for any reason prior to recertification, including those subscribers that discontinued Lifeline service with the ETC by their own initiative and also those the ETC de-enrolled from Lifeline, e.g. for non-usage, including those subscribers who were re-enrolled at a later time. If no subscribers were de-enrolled from Lifeline prior to the recertification attempt, the ETC should enter zero in Block D.
The carrier did not report the correct number of Lifeline subscribers the ETC contacted directly to obtain recertification of eligibility.
If the eligibility of any subscriber was reviewed and confirmed by the ETC's access to a state or federal database, those subscribers would be recorded in blocks K/L.
If the eligibility of any subscriber was performed by a state agency, 3rd party administrator or USAC, those subscribers would be recorded in blocks K/L.
If the eligibility of any subscriber was performed by the ETC's direct contact (i.e. mailing letters and recertification form), those subscribers would be recorded in blocks F thru J.
Similarly, if an ETC elects USAC to conduct recertification on its behalf, but then recertifies any subscribers directly during the established recertification period, those subscribers should be recorded in Block F through J as appropriate and not in Blocks K and L.
The carrier did not report the correct number of Lifeline subscribers that responded to the ETC's request to recertify their eligibility for Lifeline.
If the subscriber responded and submitted successful recertification, that data should be recorded in Block G. Enter zero (0) if the ETC relied solely on methods other than direct contact with subscribers (e.g., consulting a state database or relying on a Lifeline administrator) to recertify eligibility, or if no subscriber responded.
Please remember Block A is a subset of Block G. Blocks G and H should equal Block F.
Lifeline carriers must maintain records to document compliance with all FCC and state requirements governing the Lifeline and Tribal Link Up programs, and carriers must provide documentation to the FCC or administrator upon request. Note that the FCC recently revised eligibility documentation rules. For more information on these changes, please visit our 2015 Lifeline Order and 2016 Lifeline Modernization Order web page.
Carriers should save a copy of the detailed documentation they rely upon to prepare the summary data for their Lifeline Program filings. For example, carriers should retain a copy of the summary of subscriber counts used when filing their FCC Form 497 and FCC Form 555 filings. Carriers should also prepare and retain a copy of the detailed subscriber listing that contains all relevant information for each subscriber and verify this information when filing the summary data to ensure that it agrees to the detailed data. Carriers should retain this detail for the required documentation retention period.
The carrier did not obtain or maintain the subscriber's certification/recertification documentation.
The initial certification documentation, as well as recertification documentation, for all subscribers, should be retained for as long as the subscriber receives a Lifeline Program benefit from the carrier, plus three full calendar years after the subscriber discontinues their Lifeline Program service. See Recordkeeping Requirements (Section 54.417) and Eligibility Certification Form (Section 54.410(d)(2)).
The carrier did not collect and record the last four digits of the subscriber's Social Security Number and/or the subscriber's date of birth.
Every effort should be made to implement sufficient procedures and processes to collect and retain adequate records to document the collection of all subscriber information required by the rules. See Recordkeeping Requirements (Section 54.417) and (Section 54.410(d)(2)) Eligibility Certification Form.
Carriers omitted qualification criteria or included ineligible qualification criteria on eligibility documents and Lifeline Program publicity materials. See Consumer Qualification for Lifeline (Section 54.409).
The carrier's certification forms used the incorrect Federal Poverty Guideline year or dollar amount to determine household incomes at or below 135% of the federal poverty level.
Carriers should have policies and procedures in place to ensure subscriber certification forms are updated to adhere to the subscriber qualification criteria established by the rules. Federal Poverty Guidelines (FPG) are released annually by the Department of Health and Human Services. Each year, USAC provides an updated FPG breakdown on our website. See Consumer Qualification for Lifeline (Section 54.409(a)(1)).
Carriers must obtain continued eligibility certifications from subscribers once in the calendar year. Recertification is complete when a carrier has de-enrolled all non-responding and ineligible subscribers by the recertification deadline, and when all necessary updates to NLAD have been made within one business day of de-enrollment. Recertification is considered incomplete until the carrier has de-enrolled all non-responding or ineligible subscribers and updated NLAD accordingly. See De-enrollment for Failure to Re-certify (Section 54.405(e)(4)) and the National Lifeline Accountability Database (Section 54.404(b)(10)).
The carrier's recertification requests that were sent to its subscribers were dated June 7 and stated that the subscribers must respond to the recertification requests by July 10 to continue receiving the Lifeline-supported service, which was more than 30 days after the date of the recertification requests.
Carriers must have policies and procedures in place to (1) inform subscribers using clear, easily understood language, that failure to respond to the recertification request within 30 days of the date of the request will trigger de-enrollment from the Lifeline Program and (2) de-enroll non-responding subscribers within five business days of expiration of the 30-day deadline. See De-enrollment for Failure to Recertify (Section 54.405(e)(4)).
Subscribers failed to respond to their carrier within their 30-day recertification window, but were not de-enrolled from NLAD within five business days thereafter.
The recertification process must be completed by the recertification deadline; this includes making any necessary updates to NLAD within one business day thereafter. Subscribers are allowed 30 days to respond to the carrier's recertification attempt(s). If the subscriber does not respond within 30 days or responds they are ineligible by the end of the 30 day period, he or she must be de-enrolled from the Lifeline Program, as well as from NLAD within five business days. See Annual Eligibility Re-Certification Process (Section 54.410(f)), De-enrollment for Failure to Re-certify (Section 54.405(4)), and the National Lifeline Accountability Database (Section 54.404(b)(10)).
The carrier did not use a required state eligibility database to confirm the continued eligibility of subscribers.
Carriers should review their state-mandated requirements in addition to requirements established by the FCC. Some states require carriers to confirm Lifeline Program subscribers' continued eligibility via the state's eligibility database. For those states, carriers should have policies and procedures in place to ensure they confirm all subscribers' continued eligibility through the state eligibility database for those subscribers who qualify for Lifeline Program support based on qualifying programs included in the database.
Lifeline Program carriers are required to include the appropriate disclosures on all of their advertising materials describing the service and publicize the availability of Lifeline service in a manner reasonably designed to reach those likely to qualify for the service.
Carrier did not include the appropriate disclosures on its advertising materials.
Carriers should review outreach and marketing materials periodically to ensure they contain all the required language and disclosure contained in the rules. For the purposes of this section, the term "materials describing the service" includes all print, audio, video, and web materials used to describe or enroll in the Lifeline service offering, including application and certification forms (Section 54.405(c), FCC 12-11, Paragraph 275).
In easily understood language, all advertising materials describing the Lifeline service must state that Lifeline is:
The following statement would encompass all of the required language in an easy-to-understand manner:
"Lifeline is a service offered as part of a government assistance program and is available only to eligible consumers that qualify through their participation in other government programs or through income. It is a non-transferrable service and limited to one benefit per household".
The carrier used a social media web page as its sole form of Lifeline Program advertising outreach.
Lifeline providers are required to publicize the availability of Lifeline service in a manner reasonably designed to reach those likely to qualify for the service. The FCC has not directed specific outreach procedures, but has stated that the Internet should not be relied on as a sole or primary means of Lifeline Program advertisements. Carriers should supplement any Internet Lifeline outreach with in-store print media, direct mail, event marketing, or other methods that are reasonably designed to reach potential Lifeline subscribers in their service area. See 2004 Lifeline Order Paragraphs 44-49 for FCC outreach guidelines.
Lifeline Program rules provide a list of required certifications and disclosures. Carriers must include these required disclosures on subscriber certification and re-certification forms.
The carrier did not include all required disclosures on their subscriber certification forms.
Carriers should implement policies and procedures to ensure their forms adhere to the disclosure requirements established by the program rules, including obtaining all of the required certifications from subscribers. For example, certification forms must remind subscribers that only one Lifeline Program service is available per household. See Eligibility Certification Form (Section 54.410(d)(1)).
Certification forms must include the following information:
Lifeline Program rules provide a list of certifications and disclosures that carriers must include on both their subscriber certification and re-certification forms. Carriers are permitted to use their own phrasing, as long as the substance of each required disclosure and certification is conveyed using language that is clear and easily understood.
List out each required certification and disclosure near verbatim as possible to the Lifeline rules to prevent any misinterpretations and potential for non-compliance. Carriers should also implement policies and procedures to ensure their forms adhere to the disclosure requirements established by the program rules, including obtaining all of the required certifications from subscribers. See Eligibility Certification Form (Section 54.410(d)(3)).
Carriers may also review this sample recertification form for the list of required certifications.
Lifeline carriers must report the correct number of subscribers on the FCC Form 497 based on the number of actual qualifying Lifeline subscribers it serves and retain adequate documentation to support the number of subscribers reported. Carriers may not claim ineligible subscribers for reimbursement on the FCC Form 497.
Lifeline carriers inadvertently over-report subscribers for reimbursement on their FCC Form 497, or claim subscribers who no longer qualify or should have been de-enrolled from the program.
Compare the NLAD and FCC Form 497 subscriber counts prior to submitting the FCC Form 497 data. Also, maintain active subscriber listings to substantiate all subscribers claimed on the FCC Form 497, as required by the Lifeline Program rules. The auditor will ask for subscriber listings to substantiate amounts claimed on the FCC Form 497. (See 47 C.F.R. § 54.407(a))
Lifeline carriers cannot claim support on their subscriber listing and/or FCC Form 497 more than once for the same subscriber. Carriers must ensure they provide only one Lifeline service per household and claim subscribers only once. The carrier did not have adequate processes in place to prevent providing more than one Lifeline benefit per household and claiming these subscribers on the FCC Form 497.
The same subscriber addresses and/or telephone numbers was listed more than once on the carrier's subscriber listing.
Carriers review their subscriber listing and remove any duplicate subscribers, addresses, and telephone numbers prior to submitting their FCC Form 497 to USAC for reimbursement.
For Duplicate Address: Service providers should use the Lifeline Household Worksheet (also known as the Independent Economic Household (IEH) Worksheet) to determine if the household is eligible. When providing household worksheets to subscribers, the communication must comply with the requirements of Section 54.405(e)(1) –de-enrollment generally– of the Lifeline Program Rules. If the subscriber completing the one-per-household worksheet is found to be eligible, service providers should note that IEH worksheets is the one on file for this subscriber in the subscriber listing.
For Duplicate Phone Numbers: Service providers should prevent duplicate telephone numbers as each subscriber should have their own unique phone number. This scenario may occur if a subscriber is not removed from the subscriber listing immediately upon de-enrollment.
The carrier may compare the subscriber listing and NLAD subscriber snapshot before submission and keep NLAD up-to-date. Also, the carrier should maintain active subscriber listings to substantiate all subscribers claimed on the FCC Form 497, as required by the Lifeline Program rules. Auditors will ask for subscriber listings to substantiate amounts claimed on the FCC Form 497. (See 47 C.F.R., Sections 54.400(g), 54.407(a)), and 54.409(c)).