USF – Fails to collect levies; amounts owing to the USF increased 44% from $81.7 million (April 2012) to $117.8 million (March 2015)

The Universal Service Fund (USF) does not have formal policies and procedures in place to manage delinquencies. USF records showed that amounts owed to the Fund from universal service levy have increased from $81.7 million as at April 2012 to $117.8 million as at March 2015.

This represents a 44 per cent increase over the period. Nonetheless, during the same period, universal service levy collection increased by 48 per cent; with actual collections including both bad debt recoveries and amounts owed from previous years.

We observed that the delinquency levels (that is, amounts owing to USF in excess of 120 days past the due date) have been increasing steadily over the period moving from $24.8 million in April 2012 to $68.8 million as at March 2015; an increase of 178.1%. This delinquency level of $68.8 million as at March 2015 represents 58.4 per cent of the total owed to USF for universal service levy.

We found no evidence that the USF issued demand notices to the delinquent carriers to settle the amounts.
Whilst USF informed us that up to September 2015, they have collected $52.5 million of the delinquent amounts reported at March 2015, they have not implemented formal policies and procedures to govern the process.