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"Schools and Li­braries (with an es­ti­mat­ed er­ro­neous pay­ment rate of 13.8%) and High Cost Pro­grams (with an es­ti­mat­ed er­ro­neous pay­ment rate of 23.3%) will again sub­stan­tial­ly ex­ceed, by an even wider mar­gin, the IP­IA “at risk” thresh­olds ... as­sess­ments of es­ti­mat­ed er­ro­neous pay­ments ex­ceed bil­lions of dol­lars."

Here's the relevant section of the Office of Inspector General Semi-Annual Report to Congress from 2009 from which the article title and excerpt above are drawn.

Briefly, the re­sults from those au­dits strong­ly in­di­cat­ed that the High Cost, School and Li­braries, and Low In­come pro­grams are “at risk” as that term is de­fined by the IP­IA. Re­sults of the at­tes­ta­tion en­gage­ments of USF con­trib­utor au­dits in­di­cate sub­stan­tial room for im­prove­ment in the man­age­ment of that pro­gram, as well.

As a re­sult of the in­for­ma­tion pro­vid­ed from the Round 1 au­dits, we pro­ceed­ed to per­form a sec­ond round of at­tes­ta­tion en­gage­ments in a sec­ond round of au­dits, Round 2, but on­ly for two USF pro­gram fund­ing cat­egories: High Cost and Schools and Li­braries. Based on strat­ified ran­dom sta­tis­ti­cal sam­pling, 260 Schools and Li­braries Pro­gram and 390 High Cost Pro­gram ben­efi­cia­ries were se­lect­ed for at­tes­ta­tion en­gage­ments. These at­tes­ta­tion au­dit ac­tiv­ities were per­formed by 12 pub­lic ac­count­ing (au­dit) firms un­der con­tract to US­AC with over­sight by the OIG. As of March 31, 2009, 110 au­dits of High Cost com­pa­nies and 200 au­dits of School and Li­brary ben­efi­cia­ries have been com­plet­ed and ap­proved by US­AC’s Board of Di­rec­tors (sum­ma­ry da­ta con­cern­ing these au­dits that were re­port­ed by US­AC’s au­di­tors may be found in Ta­ble 1, in­fra). All es­ti­mat­ed er­ro­neous pay­ment da­ta re­sults from the sec­ond round of at­tes­ta­tion en­gage­ments have been de­liv­ered by the au­dit firms as well.

Our pre­lim­inary sta­tis­ti­cal anal­ysis of im­prop­er pay­ments has in­di­cat­ed that Schools and Li­braries (with an es­ti­mat­ed er­ro­neous pay­ment rate of 13.8%) and High Cost Pro­grams (with an es­ti­mat­ed er­ro­neous pay­ment rate of 23.3%) will again sub­stan­tial­ly ex­ceed, by an even wider mar­gin, the IP­IA “at risk” thresh­olds and that those pro­grams should con­tin­ue to be con­sid­ered “at risk.” This in turn, re­sult­ed in the de­vel­op­ment of an­oth­er strat­ified sta­tis­ti­cal sam­ple of ben­efi­cia­ries in the Schools and Li­braries and High Cost Pro­grams based on the sig­nif­icant­ly high­er es­ti­mat­ed er­ro­neous pay­ment rates from Round 2.

Those re­sults con­firmed the need for a third round, Round 3, of at­tes­ta­tion en­gage­ments to de­ter­mine whether any of the mea­sures that had been tak­en by the FCC and US­AC had, in fact, re­duced the es­ti­mat­ed er­ro­neous pay­ment rates in those two USF pro­grams (which, in the case of the Schools and Li­braries Pro­gram, ex­ceeds the IP­IA lim­it of 2.5 per­cent by a fac­tor of 5 and, in the case of the High Cost Fund Pro­gram, ex­ceeds the IP­IA lim­it by a fac­tor of 9). US­AC has con­tract­ed for at­tes­ta­tion en­gage­ment ser­vices to con­duct the third round of at­tes­ta­tion en­gage­ments of these pro­grams.

The re­sults from Round 1 and the pre­lim­inary re­sults from Round 2 at­tes­ta­tion en­gage­ments have not less­ened our con­cern about the pos­si­bil­ities for fraud, waste, and abuse in the Com­mis­sion’s USF pro­grams as ad­min­is­tered by US­AC. In fact, our con­cerns about the Uni­ver­sal Ser­vice Fund (USF) over­sight op­er­ations of these pro­grams, based up­on the ev­idence be­fore us, has in­creased as as­sess­ments of es­ti­mat­ed er­ro­neous pay­ments ex­ceed bil­lions of dol­lars.