The estimated cost of seeking recovery of improperly disbursed un...

in response to the FCC request to provide the Wireline Bureau and the Office of Managing Dir. “sufficient information regarding the administrative costs of seeking recovery of improperly disbursed funds so that a de minimis amount can be determined.” In its Fifth Report & Order, the Commission concluded that “it does not serve the public interest to seek to recover funds associated with statutory or rule violations when the administrative costs of seeking recovery outweigh the dollars subject to recovery.” The Commission told the USAC not to seek recovery of “de minimis” amounts and asked it for analysis. USAC submitted its response to that request Jan. 13, asking for a confidential treatment of the entire document. But the filing slipped onto the FCC website. USAC said in the analysis that the estimated cost of $300 consisted of 2 components: (1) Schools & Libraries Div. (SLD) processing. USAC said the estimated cost for SLD processing was $260 per occurrence. It said SLD processing included issuing commitment adjustment letters or recovery of improperly disbursed funds letters; issuing demand payment letters; preparing referral packages for the Office of Managing Dir.; labor costs related to processing returned funds; general labor costs and appeal processing costs. USAC said the average work time required to complete those activities was 168 min. and the hourly rate for performing those tasks $94.42. The cost per recovery is estimated at $258.78. (2) USAC Financial Operations processing. USAC said the estimated cost for such processing was $40 per occurrence. It said the Financial Operations processing included processing returned funds; accounting activities; Debt Collection Act referral activities and other administrative labor costs. USAC said the average cost for Financial Operations to process one recovery was estimated at $40.42, with the per unit mailing costs being estimated at $1.58 and the per unit general labor costs at $38.84 per occurrence. USAC also proposed that once the de minimis standard is set it should be carried out this way: (1) “The de minimis will be applied at the billed entity level per occurrence.” (2) “If the amount of the Commitment Adjustment or Recovery is equal to or less than the de minimis standard, then USAC will not pursue the Commitment Adjustment or Recovery.” (3) “If the Commitment Adjustment or Recovery is greater than the de minimis standard, then USAC will process the Commitment Adjustment or Recovery.” (4) “USAC will not seek recovery of funds already disbursed if the amount to be recovered is equal or less than $300.” USAC also noted that, based on informal guidance from the FCC, it currently didn’t seek recoveries of less than $100 per billed entity per occurrence, which represented less than 1% of recoveries to date. It said about 7% of recoveries currently sought were $100-$500. USAC said it was important that the FCC keep the filing confidential because “the Commission will likely use this information to determine USAC’s internal triggers for seeking recovery of funds.” It said public release of that information would “disclose these anticipated internal triggers which would compromise USAC’s ability to protect the Universal Service Fund from waste, fraud and abuse.” USAC said the document also included “some minimal vendor pricing information.” USAC noted that the information provided in the filing wasn’t available to the public at the time.