Summary

In 1993, Congress directed the Federal Communications Commission (FCC) to begin recouping the costs of its regulatory activities from the telecommunications industry. In fiscal year 1998, more than 70 percent of FCC's $222-million budget was offset by the regulatory fees it collected. This report reviews FCC's controls for ensuring that required regulatory and applications fees are paid and provides information on the extent to which FCC is collecting monetary penalties resulting from enforcement actions. GAO found that FCC does not know if it is collecting all of its required fees. Regarding regulatory fees, FCC relies on the telecommunications industry to voluntarily make payments.

GAO noted that: (1) FCC does not know if it is collecting all its required fees; (2) in the case of regulatory fees, FCC relies heavily on the telecommunications industry to comply voluntarily with its fee payment schedule because it does not have a system in place to ensure that all appropriate fees are being paid; (3) FCC does not have sufficient information to: (a) identify all the entities that should pay regulatory fees; and (b) determine whether these entities have paid the full amounts required; (4) in addition, FCC's fee collection database is not linked to its licensing databases, making it difficult for FCC to perform routine automated checks on whether all licensees have paid their regulatory fees; (5) nevertheless, FCC has the capability to undertake substantive oversight efforts using the information it does have; (6) in 1998, it used available information to check on regulatory fee collection for radio stations, identifying over 800 stations that did not pay required fees and collecting nearly $600,000 in past-due fees and late payment penalties; (7) however, this type of special effort is not routinely done by FCC bureaus; (8) regarding application fees, GAO's examination of a random sample of applications processed by five FCC bureaus found that four of the bureaus did not have adequate documentation that fees were paid in many cases; (9) FCC's Office of Inspector General also has evaluated FCC's fee collection database and reported that FCC could not provide supporting documentation for almost half of the transactions selected for review; (10) both FCC's Office of Managing Director and Office of Inspector General have initiatives under way aimed at improving the fee collection processes; (11) these actions are in early stages, however; (12) FCC reported to the Department of the Treasury that, at the end of fiscal year 1998, it had an uncollected balance of about $15 million in civil monetary penalties; (13) GAO found that the FCC's reports to the Treasury contain errors and are therefore not reliable; (14) as a result, GAO cannot reach any conclusions about the effectiveness of FCC's collection of civil monetary penalties; (15) data problems aside, FCC officials maintain that it is difficult to predict how much of the outstanding balance of proposed or assessed penalties ultimately will be collected because most of the penalties listed in the Treasury report are not yet legally enforceable debts; and (16) on the basis of experience from prior years, these officials estimate that about 75 percent of the outstanding proposed or assessed penalties will remain uncollected.