Performance Audit of the Universal Service 

Fund, Rural Healthcare, Telecommunications 

Program at New River Valley Community 

Service for FY 2019 and FY 2020

Report Number

23-AUD-02-01

February 28, 2024 
2 

OIG Highlights

What We Audited

The Office of Inspector General conducted a performance audit of New River Community 

Service (NRVCS), a Rural HealthCare Program (RHC) beneficiary. Our objective for this audit 

was to determine whether NRVCS complied with Title 47 Code of Federal Regulations 

§54.601-§54.606 and §54.619-§54.633 for funding years (FYs) 2019 and 2020. We reviewed 

internal controls applicable to the procedures tested to determine whether those controls were

adequate and effective for safeguarding the RHC program. Specifically, we reviewed internal 

controls related to: 

• eligibility of site and entity requirements; 

• competitive bidding requirements; 

• eligibility of service and equipment; 

• rate calculations; 

• requests for funding; and 

• invoicing. 

What We Found

NRVCS complied with RHC program laws, rules and regulations. Specifically, NRVCS 

complied with the program rules related to: 

• eligibility of site and entity requirements; 

• competitive bidding requirements; 

• eligibility of service and equipment; 

• rate calculations; 

• requests for funding; and 

• invoicing. 
3 

Table of Contents

Background ......................................................................................................................................4

Objective, Scope, And Methodology ...............................................................................................5

Audit Results....................................................................................................................................6

Other Matter.....................................................................................................................................6

APPENDIX A: Objective, Scope, and Methodology ......................................................................8

APPENDIX B: New River Valley CS FY 2019 and 2020 Site Locations by Funding Request 

Number ............................................................................................................................................9

APPENDIX C: Glossary Of Terms ...............................................................................................11
4 

Background

The Rural HealthCare (RHC) Program provides funding to eligible healthcare providers (HCPs) 

for telecommunications and broadband services necessary for the provision of healthcare. 

Eligible HCPs include: (1) post-secondary educational institutions offering healthcare

instruction, teaching hospitals, and medical schools; (2) community health centers or health 

centers providing healthcare to migrants; (3) local health departments or agencies; (4) 

community mental health centers; (5) not-for-profit hospitals; (6) rural health clinics; (7) skilled 

nursing facilities (as defined in 42 U.S.C. § 1395i–3(a) (a)) and (8) consortium of healthcare 

providers consisting of one or more entities falling into the first seven categories. In addition, 

eligible HCPs must be non-profit or public. The goal of the program is to improve the quality of 

healthcare available to patients in rural communities by ensuring that eligible HCPs have access 

to telecommunications and broadband services. 

Telecommunication Program 

The Telecommunications (Telecom) Program, established in 1997, is an RHC Program that 

subsidizes the difference between urban and rural rates for telecommunications services. Under 

the Telecommunications Program, eligible rural HCPs can obtain rates on telecommunications 

services in rural areas that are reasonably comparable to rates charged for similar services in 

corresponding urban areas.  USAC, Rural Healthcare Division (RHCD), is the fund administrator 

for the RHC Program. 

New River Valley Community Services 

New River Valley Community Services (NRVCS), established in 1969, is the public HCP of 

behavioral health services to residents of New River Valley, Virginia. NRVCS offers

community-based programs for both children and adults living with mental illness, 

developmental disabilities, and/or substance use disorders. NRVCS is part of a state-wide system 

of Community Services Boards which serve residents throughout the Commonwealth of 

Virginia. Specifically, NRVCS serves the counties of Floyd, Giles, Montgomery, Pulaski, and 

the City of Radford. NRVCS has been receiving RHC program funding since 2014. See 

Appendix B for the list of NRVCS site locations. 
5 

Objective, Scope, And Methodology

The objective of this audit was to determine whether NRVCS complied with Title 47 Code of 

Federal Regulations (C.F.R.) §54.601-§54.606 and §54.619-§54.633. Additionally, we evaluated 

compliance with FCC rules and orders for rural healthcare providers relevant to our audit 

objective. Specifically, we determined compliance with:

• eligibility of site and entity requirements; 

• competitive bidding requirements;

• eligibility of service and equipment; 

• rate calculations; 

• requests for funding; and

• invoicing.

We reviewed an individual RHC Telecom Program beneficiary, NRVCS, HCP #34285, within 

the state of Virginia. Specifically, we focused on funding years1 (FYs) 2019 and 2020. The RHC 

Program funding for the period covered by our audit was capped at $593,782,000 in FY 2019 

and $604,759,306 in FY 2020. NRVCS received RHC Telecommunication committed funds 

totaling $1,288,493 in FY 2019 and $977,958 in FY 2020. USAC disbursed the total committed 

funds to support NRVCS behavioral health service locations that were identified by funding 

request numbers (FRNs). USAC funded a total of 35 FRNs, 18 in FY 2019 and 17 in FY 2020. 

See Appendix B for the list of FRNs by FY. 

Table 1. NRVCS (HCP#34285) RHC Funding and Invoices for FY 2019-2020 

Funding Year Total Committed 

Amount

Total Number of 

FRNs

Total Number of 

Invoices

Total Authorized 

Disbursed Amount

2019 $1,288,493.06 18 212 $1,288,493.06

2020 $977,958.12 17 204 $977,958.12

During this audit, the OIG audit team met with FCC, USAC, and NRVCS personnel. 

Additionally, the audit team conducted a site visit to NRVCS in Pulaski, Virginia, to conduct 

walkthroughs with NRVCS personnel and review documentation related to the beneficiary 

participation in the RHC, Telecom program. We conducted this performance audit in accordance 

with generally accepted government auditing standards. Those standards require that we plan and 

perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that the evidence obtained 

provides a reasonable basis for the finding and conclusion. 

Additional details on the audit objectives, scope and methodology are provided in 

Appendix A of this report.

1 1 RHC program funding years are July 1 through June 30 of the respective year.
6 

Audit Results

NRVCS complied with RHC program laws, rules and regulations. Specifically, NRVCS 

complied with the program rules related to: 

• eligibility of site and entity requirements; 

• competitive bidding requirements; 

• eligibility of service and equipment; 

• rate calculations; 

• requests for funding; and

• invoicing.

Although NRVCS complied with the RHC Program rules, we identified one “Other Matter” that 

did not rise to the level of a reportable finding. 

Other Matter

FCC Form 465 Did Not Include Details on Service Needs

During FY 2019 and FY 2020 FCC Forms 465 did not include a requirement to capture details 

describing the eligible HCP telecommunications and internet needs. According to 47 C.F.R., 

Section 54.603(b) (2015), to facilitate fair and open competitive bidding, USAC is required to 

post the details requested in the FCC Form 465 on its website. During FY 2019 and FY 2020, 

USAC RHCD accepted and posted FCC Form 465s that did not include service details. Box 292

is the designated place for HCPs to list request details such as bandwidth and how services will 

be used. USAC determined that HCPs were not including details for fair and open competitive 

bidding, so between FY 2018 through FY 2020, USAC discontinued Box 29 and instead required 

HCPs to include specific details, such as usage level and capacity in Block 5 of FCC Form 465. 

However, we found that the information captured in Block 5 did not include all of the details 

needed for fair and open competitive bidding. Specifically, the updated Block 5 did not capture 

bandwidth needs, which assist with fair and open competition. In order to ensure that all 

potential bidders have access to the same information, all details on service needs should be 

included on the FCC Form 465. 

Not submitting and posting adequate details compromises fair and open competition because all 

bidders do not have access to the same information. 

This condition relates to FY 2019 and 2020. Since then, FCC has issued Promoting Telehealth in 

Rural America, WC Docket No. 17-310, Report and Order released August 20, 2019, requiring 

2 FCC Form 465, Box 29 states, “Please describe the eligible health care provider’s telecommunications and/or internet needs, so that providers 

may bid to provide services. The description should describe whether video or store and forward consultations will be used, whether large image 

files or X-rays will be transmitted, the quality of connection needed, or other relevant considerations.”
7 

HCP to submit details—including bandwidth—about the specific services they desire. As of FY 

2021, RHCD requires HCP to submit details—including bandwidth—about the specific services 

they desire on the FCC Form 465, in Block 5. 

Since the condition identified has been addressed with the order issued in FY 2021, FCC OIG is 

not issuing a finding or recommendation. 
8 

APPENDIX A: Objective, Scope, and Methodology

The objective of this performance audit was to determine whether New River Valley CS 

complied with Title 47 C.F.R. §54.601-§54.606 and §54.619-§54.633. Additionally, we 

evaluated compliance with FCC rules and orders for rural healthcare providers relevant to our 

audit objective. Specifically, we determined compliance with:

• eligibility of site and entity requirements; 

• competitive bidding requirements; 

• eligibility of service and equipment; 

• rate calculations; 

• requests for funding; and

• invoicing.

The scope of our audit included funding years 2019 and 2020 RHC, Telecom Program. We 

performed our fieldwork at New River Valley CS in Pulaski, Virginia, and at the FCC 

Headquarters in Washington, DC. 

We conducted this performance audit in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions 

based on our audit objectives. We believe that the evidence obtained provides a reasonable 

basis for our audit results and conclusions.

To accomplish our audit objectives, we performed audit procedures as deemed

appropriate, including the following: 

• Reviewed federal laws, regulations, and guidance applicable to the RHC program. 

• Requested and reviewed policies and procedures developed and implemented for the 

RHC Program, Telecom Program application eligibility review process. 

• Requested the universe of funding year 2019 and 2020 FRNs to conduct a sample. 

• Reviewed submitted FCC Forms 465, “Description of Services Requested & 

Certification Form” and FCC Form 466, “Funding Request & Certification Form” for 

accuracy of services requested agrees with the funding year requests. 

• Reviewed invoices associated with all FRNs for funding years 2019 and 2020 for the 

NRVCS location. 

• Conducted a site visit at NRVCS to conduct interviews and review onsite 

documentation and to verify eligibility of sites that received RHC program funding. 

• Conducted meetings with FCC and USAC management to gain an understanding of 

the program operations and identify key controls in place, related to the Telecom 

Program. 
9 

APPENDIX B: New River Valley CS FY 2019 and 

2020 Site Locations by Funding Request Number

Table 2. Funding Year 2019 NRVCS (HCP#34285) Site Locations by FRN

Funding Year FRNs NRVCS Site Locations

2019 1964677 University City Blvd, Blacksburg, VA

2019 1964677 Wenonah Ave, Pearisburg, VA

2019 1964694 Hatcher Dr, Dublin, VA

2019 1964819 Warden Ct, Fairlawn, VA

2019 1964707 and 19647651 University City Blvd, Blacksburg, VA

2019 1964779 Corporate Dr, Radford, VA

2019 1964786 Second Street, Radford VA

2019 1964788 West Main Steet, Radford, VA

2019 1964790 Tara Lane, Radford, VA

2019 1964799 Main Street, Radford VA

2019 1964819 Warden Ct, Fairlawn, VA

2019 1964735 Main Steet, Radford, VA

2019 1964821 Washinton Ave, Pulaski, VA

2019 1964828 Washinton Ave, Pulaski, VA

2019 1965109 Main Street, Pulaski, VA

2019 1965056 Broad Street, Dublin VA

2019 1965374 Main Street, Pulaski, VA

Table 3. Funding Year 2020 NRVCS (HCP#34285) Site Locations by FRN 

Funding Year FRNs

NRVCS Site Locations

2020 20816371 Main Street, Pulaski, VA

2020 20850461 Main Street, Radford, VA

2020 20851141 University City Blvd, Blacksburg, VA

2020 20851311 University City Blvd, Blacksburg, VA

2020 20851351 Main Street, Radford, VA

2020 20851391 Wenonah Drive, Pearisburg, VA

2020 20851441 Hatcher Dr., Dublin, VA

2020 20851481 Main Street, Radford, VA

2020 20851531 10th Steet, Radford, VA

2020 20851561 Corporate Dr., Radford, VA

2020 20851611 Second Street, Radford VA

2020 20851651 West Main Steet, Radford, VA

2020 20851681 Tara Lane, Radford, VA

2020 20851711 Warden Court, Radford, VA

2020 20851741 Webbs Mill Road North, Floyd VA
10 

2020 20851771 Broad Street, Dublin VA

2020 20851811 Washington Ave, Pulaski, VA
11 

APPENDIX C: Glossary Of Terms

Applicant – The entity applying for universal service support. In the Schools and Libraries 

Program the entity is a school, library, consortium, or other eligible entity that files program 

forms. 

Beneficiary – is an entity that benefits from the Universal Service Fund RHC Program.

Code of Federal Regulations (C.F.R.) – is the official legal print publication containing the 

codification of the general and permanent rules published in the Federal Register by the 

departments and agencies of the Federal Government.

FCC Form 465, “Description of Services” – This form is completed by the beneficiary and 

submitted to USAC to request services related to the RHC Program. The form is also posted to 

USAC’s website for competitive bidding.

FCC Form 466, “Funding Request and Certifications Form” – This form is used by the HCP 

to submit a request for funding.

Funding Request Number (FRN) – a line item detail and cost associated with the eligible and 

ineligible products and services requested 

Funding Year (FY) – The calendar year for which funding takes place for the RHC Program. 

The Funding Year occurs from July 1 to June 30 the following year. 

Healthcare Provider (HCP) – Any post-secondary educational institution offering healthcare 

instruction, including a teaching hospital or medical school; community health center or health 

center providing healthcare to migrants; local health department or agency; community mental 

health center; not-for-profit hospital; rural health clinic; skilled nursing facility; or a consortium 

of healthcare providers consisting of one or more entities. 

Rural Healthcare (RHC) Program – The RHC program provides funding to eligible healthcare 

providers (HCP) to reduce the cost of telehealth broadband and telecom services. RHC has two 

primary programs: the Healthcare Connect Fund (HCF) Program and the Telecommunications 

(Telecom) Program. 

Universal Service Administration Company (USAC) – The administrator of the universal 

service support fund programs, to include the RHC Program.
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