Performance Audit of the Universal Service Fund, 

Rural Healthcare, Telecommunications Program at Mt. 

Rogers Community Services for

FY 2019 and FY 2020

Report Number

23-AUD-02-02

February 28, 2024 
2 

OIG Highlights

What We Audited 

The Office of Inspector General conducted a performance audit of Mount (Mt.) Rogers 

Community Services (CS), a Rural Healthcare (RHC) beneficiary. Our objective for this audit 

was to determine whether Mt. Rogers CS complied with Title 47 Code of Federal Regulations 

(C.F.R.) §54.601- §54.606 and §54.619-§54.633, for funding years (FY) 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: 

Mt. Rogers CS complied with RHC program laws, rules and regulations. Mt. Rogers CS 

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.
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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: Mt. Rogers CS FY 2019 and 2020 .................................................................................................. 9

RHC Funded Sites..................................................................................................................................................... 9

APPENDIX C: Glossary Of Terms........................................................................................................................ 10
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Background

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

for telecommunications and broadband services necessary for the provisions 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 section 395i–3(a) of title 42 and (8) consortium of HCP 

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. 

Mt. Rogers CS

Mt. Rogers CS provides mental health, developmental disability, and substance use services. Mt. 

Rogers CS provides crisis management, counseling and psychiatry, prevention and wellness, and 

developmental disability services. They also provide transportation, residential, case 

management, job training services for the developmentally disabled and group home services for 

their patients. Mt. Rogers CS has numerous locations in Bland, Carroll, Grayson, Smyth, and 

Wythe Counties, as well as the City of Galax, all in rural southwestern Virginia. Mt. Rogers CS 

has been receiving RHC funding since 2015. Additional details on Mt. Rogers CS sites are 

provided in Appendix B of the report. 
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Objective, Scope, And Methodology

The objective of this audit is to determine whether Mt. Rogers CS 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, Mt. Rogers CS, HCP #37943, 

within the state of Virginia. Specifically, we focused on funding years1 (FY) 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. Mt. Rogers CS received RHC telecommunication committed 

funds, totaling $824,159.04 in FY 2019 and $699,185.52 in FY 2020. USAC disbursed the total

committed funds to support Mt. Rogers CS telecommunications and broadband support that were 

identified by funding request numbers (FRN). USAC funded a total of 38 FRNs, 19 in FY 2019 

and 19 in FY 2020. See Appendix B for the list of locations funded during FYs 2019 and 2020. 

Table 1. Mt. Rogers CS (HCP# 37943) RHC Funding Requests and Invoices FY 2019-2020

Funding Year Total Committed 

Amount

Total Number of 

FRNs

Total Number of 

Invoices

Total Authorized 

Disbursed Amount

2019 $824,159.04 19 228 $824,159.04

2020 $699,185.52 19 229D $699,185.52

During this audit, the OIG audit team met with FCC, USAC, and Mt. Rogers CS personnel. 

Additionally, the audit team conducted a site visit to Mt. Rogers CS in Wytheville, Virginia to 

conduct walkthroughs with Mt. Rogers CS personnel and review documentation related to the 

beneficiary participation in the RHC 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 our finding and conclusion.

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

this report. 

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

Mt. Rogers CS complied with RHC program laws, rules and regulations. Mt. Rogers CS 

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 Mt. Rogers CS complied with the RHC Program rules, we identified one “Other 

Matter” that did not rise to the level of a reportable finding. 

Other Matter

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 inter needs. According to 47 C.F.R. Section 

54.603(b), to facilitate fair and open competitive bidding, USAC is required to post the details 

requested in the FCC Form 465 to 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.”
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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. 
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APPENDIX A: Objective, Scope, and Methodology

The objective of this performance audit is to determine whether Mt. Rogers 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 HCP 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 Mt. Rogers CS in Wytheville, VA and the surrounding areas 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 documentation related to the FY 2019 and 2020 FRNs. 

• 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 Mt. Rogers CS 

location. 

• Conducted a site visit at Mt. Rogers CS 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. 
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APPENDIX B: Mt. Rogers CS FY 2019 and 2020

RHC Funded Sites

Carroll Center

Twin County Industrial and Developmental Center (IDC)

Tremough Center Community Extended Care 

E.W. Cline Jr. Building 

PACT Team

PATH Crisis Stabilization Unit

Smyth Crisis Care Center

Riverchase (Smyth Youth and Family Services)

Fernwood Center

Wythe House 

Evergreen 

Wythe Bland IDC

Rhea B. Lawrence Recovery Center

Carroll House

Friendship House

Smyth IDC

Grayson Youth & Family Services

Galax Youth and Family Prevention Services
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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 - The entity receiving universal service support. For the Rural Healthcare Program,

this entity would be a rural hospital or clinic, mental health facility, consortium or other eligible 

entity that files for program support. 

Code of Federal Regulations (C.F.R.) – The Code of Federal Regulations (C.F.R.) is the 

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

executive departments and agencies of the Federal Government. The RHC rules are contained 

within the C.F.R.. 

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) - Number assigned to each request for funding made by 

applicants.

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 that provides funding to eligible HCP

for telecommunications and broadband services necessary for the provisions of healthcare in 

rural areas.

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

universal service support fund programs, to include the RHC Program. 
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