Tuesday, March 12, 2013

Legislative Audit Bureau's Universal Service Fund Audits

Presented in 5 parts
  • Outline of introduction to the 2011 Legislative Audit Bureau financial audit of Universal Service Fund
  • Excerpts from "Management's Discussion and Analysis",  2011 audit
  • Financial Audits and Performance Audits
  • WSTA request to Gov. Walker for USF performance audit
  • Links to previous USF financial audits

An outline of the introduction to the most recent financial audit of the Universal Service Fund.  (Links to the previous 10 financial audits are found at the end of this post.)

Universal Service Fund (USF) Programs (FY2008-09)
  • Telecommunications providers fund the USF through assessments that they are permitted to recover from consumers.
  • In FY 2009-10, the USF provided $41.8 million in funding for 13 programs operated by 4 state agencies.
  • As shown in the pie graph below, 78.9% of expenditures fund 2 programs
  • The USF has replaced GPR (general purpose revenue) as the funding source for Aid to Public Library Systems.
    • Partial funding beginning in FY2003-04
    • Sole funding source by FY2008-09
  • Other USF funded programs (FY2008-09)

Program Funding and Fund Balance
  • Cell phone service providers began contributing to the USF in 2009.
  • Provider assessment revenues increased 73.0 percent from FY 2008-09 to FY 2009-10
  • The USF’s Fund Balance increased from $0.5 million as of June 30, 2009, to $8.8 million as of June 30, 2010

Fiscal Management Issue
  • We estimate that the USF has paid DOA at least $4.3 million in excess fees that were subsequently lapsed to the General Fund.

Other related issues
  • DOA has chosen not to accept $23.0 million in federal ARRA funding to improve the broadband capacity of the BadgerNet Converged Network.

Excerpts from "Management's Discussion and Analysis" of the Legislative Audit Bureau's most recent financial audit of the Universal Service Fund.

  • 89 percent of total assessed revenues for FY 2009-10
  • 80 percent of total assessed revenues for FY 2008-09
  • 81 percent of total assessed revenues for FY 2007-08 
were intended for five programs the PSC does not manage  (WSTA red flag)
  • Educational Telecommunications Access Program (DOA)
  • Aid to Public Library Systems (DPI)
  • BadgerLink (DPI)
  • Newsline for the Blind (DPI)
  • Library Service Contracts (DPI),

The remaining revenues were used to support seven PSC-operated programs:

USF appropriations increased by
  • 6.2 percent from FY 2007-08 to FY 2008-09 and increased by 
  • 1.0 percent from FY 2008-09 to FY 2009-10. 
This increase was due to the increased appropriations for DPI programs.

Next financial audit already in the hopper.  In compliance with s. 13.94 (1s), the next financial audit, covering the financial statements for fiscal years 2010-11 and 2011-12, is currently taking place.

Legislative Audit Bureau (LAB):  
Financial Audits and Performance Audits

The following slides contain information from the Legislative Audit Bureau's website.

WSTA Request to Gov. Walker for USF Performance Audit

In a January 30, 2013, letter to Governor Walker, Wisconsin CALLS and the Wisconsin State Telecommunications Association requests that a provision be included in the 2013-15 budget to require the Legislative Audit Bureau to annually conduct a financial and performance audit of at least one non-PSC, USF-funded program.  [There's that red flag again.]

As far as I can tell, a Universal Service Fund audit has never been performed by the Legislative Audit Bureau.

Governor Walker included this request in his 2011-13 executive budget, but it was deleted by the Joint Committee on Finance as a non-fiscal policy item..  (See page 583.)

Governor Walker did not include this provision in his 2013-15 executive budget,   Perhaps he's planning to take a different approach this time around.

Stay tuned.  And stayed tuned-in.

In the meantime, you might want to familiarize yourself with the members of the Joint Legislative Audit Committee.

Previous Legislative Audit Bureau reports on the Universal Service Fund
November 2009 (financial)
September 2008 (financial)
August 2007 (financial)
May 2006 (financial)
September 2005 (financial)
September 2004 (financial)
July 2003 (financial)
August 2002 (financial)
December 2000 (financial)
October 1998 (financial)

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