FW: Surcharge Audits

[ja...@911solutions.net]

 

 

From: Kimberly Culp <kc...@leta911.org>
Sent: Monday, March 1, 2021 11:21 AM
To: ja...@911solutions.net; Branson - DORA, Daryl <daryl....@state.co.us>
Subject: Surcharge Audits

 

 

1. Rule 2003(a)(VI): 

                        (a)        Any person may seek Commission action regarding any of the following matters through the filing of an appropriate petition:

                   . . .

(VI)        for approval of and funding of an audit of an originating service provider’s books and records regarding billing, collection, and remittance of emergency telephone charges, filed by a governing body or bodies as provided in rule 2152(g).

 

 

2. Dave Sankey, the State 911 Director in Nebraska, provided the last 3 attachments for my reference.  The PSC audited wireless remittance and Nebraska Universal Service Fund, funds which go to the state for distributions.   The PSC does not audit carrier’s wireline remittance, which is direct to local authorities.  Interestingly, the cost of audits are on the carriers (see page 4 of pdf entitled May 2020 Order Adopting Remittance Audit Policy at paragraph 6).  The carriers hire an independent third party (CPA firm) and use the “agreed-upon procedures in the Draft Report of Independent Public Accountants.”  Those appear to be what is on page 2 of the attachment titled “911 AUP & Remittance Sample Language for audits due.”  For ease, I paste the key sections of the agreed-upon procedures for records for periods after April 2019 are:

 

1. Obtain copies of the monthly Wireless 911 Carrier Remittance Worksheets for the audit period for the company, as filed by the company in the online remittance filing system.

Findings:

 

2. Verify the clerical accuracy of the Worksheets:

. . .

          B.   For worksheets filed for data periods April 2019 and after: The new online remittance filing system automatically calculates the remittance assessment due based on the current surcharge rate and lines reported as collected, therefore a verification of clerical accuracy is not required. However, if the company completes the monthly Wireless 911 Carrier Remittance Worksheets using an alternative method by using company reports that show the surcharge collected and calculates the line counts using the surcharge amounts; verify the clerical accuracy of the Worksheets by recalculating those lines using the applicable surcharge for the Worksheet data period, and note in findings this method was used.

Findings:

 

3. Trace and agree to applicable monthly data supporting records of the company:

. . .

B.  For worksheets filed for data periods April 2019 and after: Trace and agree all amounts reported for lines served and authorized adjustments to line counts, to the applicable monthly data supporting records of the company. If the company completes the monthly Wireless 911 Carrier Remittance Worksheets using an alternative method by using company reports that show the surcharge collected and calculates the lines served and authorized adjustments to line counts using the surcharge amounts; trace and agree amounts included in the Worksheets reflecting total assessment due to the monthly data supporting records of the company, and note in findings this method was used.

Findings:

4.    Include a table detailing the following information:

B.  For worksheets filed for data periods April 2019 and after:

1. Lines served, authorized adjustments to line counts and total assessment due figures as seen on the monthly Wireless 911 Carrier Remittance worksheets, obtained by you from the company in step 1 above.
2. Lines served, authorized adjustments to line counts and assessment due as found in the monthly financial statements or other supporting records of the company.
3. Calculated variance between the Wireless 911 Carrier Remittance worksheets obtained and the amounts provided in the company financial statements or other supporting records of the company, by month and total variance for the year.

Findings:

 

We were not engaged to perform an audit or an examination, the objective of which would be the expression of an opinion on the accuracy of the information provided in the Wireless 911 Carrier Remittance Worksheets containing data for the audit period.  Accordingly, we do not express such an opinion.   Had we been engaged to perform additional procedures, other matters might have come to our attention that would have been reported to you.

 

We attest that we are an independent, third-party auditing, accounting, Certified Public Accountant (CPA) firm. We have not been involved in handling the compilation, processing or submission of PSC financial reporting on the company's behalf. Further, we understand that an employee of the company being audited, a parent/child entity or an affiliate or subsidiary company is not considered an independent, third party.

 

This report is intended solely for the use of the Specified Users and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes.