Goto Section: 54.419 | 54.422 | Table of Contents
Revised as of January 16, 2020
Goto Year:2019 |
§ 54.420 Low income program audits.
Link to an amendment published at 84 FR 71329 , Dec. 27, 2019.
(a) Independent audit requirements for eligible telecommunications
carriers. Companies that receive $5 million or more annually in the
aggregate, on a holding company basis, in Lifeline reimbursements must
obtain a third party biennial audit of their compliance with the rules
in this subpart. Such engagements shall be agreed upon performance
attestations to assess the company's overall compliance with rules and
the company's internal controls regarding these regulatory
(1) For purposes of the $5 million threshold, a holding company
consists of operating companies and affiliates, as that term is defined
in section 3(2) of the Communications Act of 1934, as amended, that are
eligible telecommunications carriers.
(2) The initial audit must be completed one year after the Commission
issues a standardized audit plan outlining the scope of the engagement
and the extent of compliance testing to be performed by third-party
auditors and shall be conducted every two years thereafter, unless
directed otherwise by the Commission. The following minimum
requirements shall apply:
(i) The audit must be conducted by a licensed certified public
accounting firm that is independent of the carrier.
(ii) The engagement shall be conducted consistent with government
accounting standards (GAGAS).
(3) The certified public accounting firm shall submit to the Commission
any rule interpretations necessary to complete the biennial audit, and
the Administrator shall notify all firms subject to the biennial audit
requirement of such requests. The audit issue will be noted, but not
held as a negative finding, in future audit reports for all carriers
subject to this requirement unless and until guidance has been provided
by the Commission.
(4) Within 60 days after completion of the audit work, but prior to
finalization of the report, the third party auditor shall submit a
draft of the audit report to the Commission and the Administrator, who
shall be deemed authorized users of such reports. Finalized audit
reports must be provided to the Commission, the Administrator, and
relevant states and Tribal governments within 30 days of the issuance
of the final audit report. The reports will not be considered or deemed
(5) Delegated authority. The Wireline Competition Bureau and the Office
of Managing Director have delegated authority to perform the functions
specified in paragraphs (a)(2) and (a)(3) of this section.
(b) Audit requirements for new eligible telecommunications carriers.
After a company is designated for the first time in any state or
territory, the Administrator will audit that new eligible
telecommunications carrier to assess its overall compliance with the
rules in this subpart and the company's internal controls regarding
these regulatory requirements. This audit should be conducted within
the carrier's first twelve months of seeking federal low-income
Universal Service Fund support, unless otherwise determined by the
Office of Managing Director.
[ 77 FR 12974 , Mar. 2, 2012, as amended at 77 FR 38534 , June 28, 2012;
81 FR 33094 , May 24, 2016]
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Goto Section: 54.419 | 54.422
Goto Year: 2019 |
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