Common Findings: Rural Health Care Program
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Audit Findings
Relevant FCC Rules
- 47 CFR § 54.602(a)
- 47 CFR § 54.627(d)
- 47 CFR § 54.627(c)(3)
Description of Finding
Healthcare providers (HCPs) submitted invoices to the RHC program that contained one or more errors. These included:
- Charges for ineligible services or equipment,
- Charges for services or equipment not delivered or rendered,
- Billed amounts that exceeded service provider invoices, and
- Charges associated with ineligible locations.
Program rules require that invoiced amounts reflect only eligible services and equipment, align with the approved funding commitment, and be based on accurate and complete billing information. Charges for ineligible locations or unsupported services may result in recovery of funds.
Relevant FCC Rule
- 47 CFR § 54.617(d)
Description of Finding
The HCP did not properly allocate costs between eligible and ineligible entities or components. Findings included:
- Failure to prorate costs between eligible and ineligible sites based on objective usage criteria,
- Inclusion of ineligible components in shared services or equipment funding requests,
- Lack of a written cost allocation methodology, and
- Absence of a written agreement documenting cost-sharing arrangements with ineligible entities.
FCC rules require that only the eligible portion of shared costs may be supported by the RHC program. Cost allocation must be objective, reasonable, and clearly documented.
Relevant FCC Rules
- 47 CFR § 54.612(e)
- 47 CFR § 54.616
Description of Finding
The HCP improperly requested upfront support under the Healthcare Connect Fund. Issues included:
- Requests made by individual applicants (upfront payments are only available to consortia),
- Requests for services with less than 1.5 Mbps (symmetrical) bandwidth, and
- Requests exceeding the $50,000 average per eligible site without proration over at least three years.
Upfront payments must be for eligible non-recurring costs (excluding standard installation fees), and only consortium applicants may seek this support. Requests must be well-documented and properly allocated.
Relevant FCC Rules
- 47 CFR § 54.631(a)
- 47 CFR § 54.631(b)
- 47 CFR § 54.631(b)(1)(iii)
Description of Finding
The HCP failed to retain sufficient documentation to demonstrate compliance. Specific issues included:
- Records not retained for the required five-year period after the last date of service,
- Missing documentation related to competitive bidding, eligibility, or cost allocation,
- Incomplete or inconsistent records that prevented verification.
FCC rules require all program participants to maintain comprehensive records for at least five years. This includes documentation related to funding requests, service delivery, competitive bidding, and cost-sharing.
Relevant FCC Rule
- 47 CFR § 54.604 (effective funding year (FY) 2024)
Description of Finding
The HCP did not contribute its required share of the service cost, known as the urban rate, under the Telecommunications Program. Specifically:
- The HCP received RHC program support for an eligible service,
- But failed to pay the required portion equal to the urban rate,
- Resulting in noncompliance with updated cost-sharing requirements.
The urban rate is based on the highest publicly available or tariffed rate for a functionally similar service within a city of 50,000 or more people in the HCP’s state. HCPs must pay this portion directly to the service provider; the RHC program covers the difference between the rural and urban rates.
Relevant FCC Rule
- 47 CFR § 54.607 (a)(b)
Description of Finding
The service provider did not correctly report the rural rate on the FCC Form 466 or did not use a correct method to properly establish the rural rate.
Relevant FCC Rule
- 47 CFR § 54.627(d)
Description of Finding
The service provider billed USAC and was reimbursed for the services, but the services were not fully delivered and/or utilized.
Relevant FCC Rule
- 47 CFR § 54.627(d)
Description of Finding
The service provider/beneficiary received reimbursement for services that are not eligible for the RHC program.