Common Findings: Supply Chain
Some of the most common problem areas identified in supply chain audits are as follows:
Audit Findings
Relevant FCC Rule:
- 47 CFR § 54.9
- 47 CFR § 54.10
Description of Finding:
Covered equipment that was purchased before the effective date of the supply chain rules and before the designation of the covered companies was maintained with USF support after the supply chain rules went into effect.
Supply Chain rules prohibit the use of universal service support to purchase, obtain, maintain, improve, modify, or otherwise support any equipment or services produced or provided by any company posing a national security threat to the integrity of communications networks or the communications supply chain.
The rules also prohibit the use of federal subsidies made available through a program administered by the FCC (that provides funds to be used for the capital expenditures necessary for the provision of advanced communications service) to:
- Purchase, rent, lease, or otherwise obtain any covered communications equipment or service; or
- Maintain any covered communications equipment or service previously purchased, rented, leased, or otherwise obtained.
Relevant FCC Rule:
- 47 CFR § 54.320
Description of Finding
Covered equipment that was purchased before the effective date of the supply chain rules and before the designation of the covered companies was maintained with USF support after the supply chain rules went into effect.
Program rules mandate that all program participants retain all records required to demonstrate to auditors that the support received was consistent with the relevant program rules. This documentation must be maintained for at least 10 years (for High Cost and E-Rate) and five years (for Rural Health Care) from receiving funding. All such documents shall be made available upon request to the FCC and any of its bureaus or offices, USAC, and their respective auditors.