[Federal Register Volume 68, Number 74 (Thursday, April 17, 2003)]
[Rules and Regulations]
[Pages 18906-18907]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-9406]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[CC Docket Nos. 96-45, 97-21; FCC 03-59]


Federal-State Joint Board on Universal Service; Changes to the 
Board of Directors of the National Exchange Carrier Association, Inc.

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission amends its rules to extend 
the filing deadline by which the independent auditor hired by the 
Universal Service Administrative Company (USAC) must submit its draft 
audit report to the Wireline Competition Bureau (formerly known as the 
Common Carrier Bureau). At USAC's request, we extend the filing 
deadline from 60 days to 105 days after the end of the audit period.

DATES: Effective May 19, 2003.

FOR FURTHER INFORMATION CONTACT: Katherine Tofigh, Attorney or Sharon 
Webber, Deputy Division Chief, Wireline Competition Bureau, 
Telecommunications Access Policy Division, (202) 418-7400.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
in CC Docket Nos. 96-45 and 97-21; FCC 03-59, released on March 26, 
2003. The full text of this document is available for public inspection 
during regular business hours in the FCC Reference Center, Room CY-
A257, 445 Twelfth Street, SW., Washington, DC 20554.
    1. In this Order, we amend Sec.  54.717(f) of the Commission's 
rules to extend the filing deadline by which the independent auditor 
hired by the

[[Page 18907]]

Universal Service Administrative Company (USAC) must submit its draft 
audit report to the Wireline Competition Bureau (formerly known as the 
Common Carrier Bureau). At USAC's request, we extend the filing 
deadline from 60 days to 105 days after the end of the audit period.
    2. Under Sec.  54.717 of the Commission's rules, USAC is required 
to designate an independent auditor to examine its operations and books 
of account to determine, among other things, whether USAC is properly 
administering the universal service support mechanisms to prevent 
fraud, waste, and abuse. The independent auditor is required to submit 
a draft audit report to the Wireline Competition Bureau audit staff 
within 60 days after the end of the audit period. Because USAC's fiscal 
year is the calendar year, the draft audit report is due by March 1.
    3. USAC seeks a permanent waiver of this requirement or, in the 
alternative, a rule change that would allow the independent auditor to 
file the draft audit report on or before April 15 instead of March 1. 
USAC explains that because it closes its books in early February and 
its parent, the National Exchange Carrier Association (NECA), does not 
close its books until mid-February, the 60-day deadline leaves the 
independent auditor only two weeks to complete its draft audit report. 
Specifically, USAC asserts that meeting the March 1 deadline is 
extremely difficult because it provides the independent auditor with 
just two weeks to complete six financial audits and five program 
reviews. As a result of this short timeframe, it has been difficult for 
the independent auditor to meet the deadline during the last five 
years.
    4. We amend Sec.  54.717(f) of the Commission's rules to require 
submission of the independent auditor's draft audit report within 105 
days after the end of the audit period. We are persuaded that the time 
frame specified in the existing rule does not provide adequate time for 
the independent auditor to complete its draft audit report. Since this 
rule's inception, the independent auditor has had difficulty meeting 
the deadline every year. In fact, USAC has received extensions on 
behalf of the independent auditor for the 1998, 2000, 2001, and 2002 
annual audits. A permanent change of this deadline therefore is 
warranted. We are persuaded that no harm will result by providing the 
independent auditor an additional 45 days to submit the draft audit 
report. We find that the change in the audit deadline still gives 
sufficient time for the Wireline Competition Bureau audit staff and the 
independent auditor to review the draft audit report and comply with 
the other provisions of Sec.  54.717 of the Commission's rules.
    5. It is ordered that, pursuant to sections 1, 4, and 254 of the 
Communications Act of 1934, as amended, the rule set forth herein is 
adopted to allow submission of the draft audit report within 105 
calendar days after the end of the audit period.
    6. It is furthered ordered that section 54.717(f) of the 
Commission's rules is amended as set forth, effective May 19, 2003.

List of Subjects 47 CFR Part 54

    Reporting and recordkeeping requirements, Telecommunications, 
Telephone.

    Federal Communications Commission:
William F. Caton,
Deputy Secretary.

Final Rule

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For the reasons discussed in the preamble, the Federal Communications 
Commission amends 47 CFR part 54 as follows:

PART 54--UNIVERSAL SERVICE

Subpart H--Administration

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1. The authority citations continue to read as follows:

    Authority: 47 U.S.C. 1, 4(i), 201, 205, 214, and 254 unless 
otherwise noted.

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2. Amend Sec.  54.717 by revising paragraph (f) to read as follows:


Sec.  54.717  Audits of the Administrator.

* * * * *
    (f) Within 105 calendar days after the end of the audit period, but 
prior to discussing the audit findings with the Administrator, the 
independent auditor shall be instructed by the Administrator to submit 
a draft of the audit report to the Wireline Competition Bureau Audit 
Staff.
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[FR Doc. 03-9406 Filed 4-16-03; 8:45 am]
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