GAO Testimony: Additional Action Needed to Address Significant Risks in FCC’s Lifeline Program

In May 2017, we published a report on Federal Communications Commission's oversight of Lifeline that identified steps FCC has taken in the last few years to enhance the integrity of the program and stated the weaknesses that remained. Specifically, this testimony discusses (1) the extent to which Lifeline demonstrates effective performance towards program goals; (2) steps FCC and Universal Service Administrative Company (USAC) have taken to improve financial controls in place for Lifeline and the USF, and any remaining weaknesses that might exist; (3) steps FCC and USAC have taken to improve subscriber eligibility verification, and any remaining weaknesses that might exist; and (4) steps FCC and USAC have taken to improve oversight of Lifeline providers, and any remaining weaknesses that might exist...

In conclusion, Lifeline’s large and diffuse administrative structure creates a complex internal control environment susceptible to significant risk of fraud, waste, and abuse. FCC’s and USAC’s limited oversight of important aspects of program operations further complicates the control environment—heightening program risk. We are encouraged by FCC’s recent steps to address weaknesses we identified, such as the 2016 order establishing a National Verifier, which, if implemented as planned, could further help to address weaknesses in the eligibility-determination process. We also plan to monitor the implementation status of the recommendations we made in May 2017.