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2020 ANNUAL REPORT MISSION Ensuring That All People in the United States Have Access to Quality, Affordable Connectivity Services

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2020 ANNUAL REPORT MISSION Ensuring That All People in the United States Have Access to Quality, Affordable Connectivity Services AVAILABLE FOR PUBLIC USE 2020 ANNUAL REPORT MISSION Ensuring that all people in the United States have access to quality, affordable connectivity services. TABLE OF CONTENTS Message from Board Chair ....................................................... 1 2020 Year in Review .................................................................. 2 2021 Vision ................................................................................ 4 USF Programs and Disbursements ......................................... 5 Statement of Operations and Expense Trends ...................... 6 Combating Waste, Fraud, and Abuse ...................................... 7 2020 in Numbers....................................................................... 8 E-rate Program .......................................................................... 9 High Cost Program ................................................................ 11 Lifeline Program .....................................................................13 Rural Health Care Program ....................................................15 USAC Contractors Receiving Greater Than $1 Million .........17 Report of Independent Auditors ...........................................18 USAC Board of Directors ........................................................19 Quarterly Receipts and Outlays ............................................20 700 12th Street NW | Suite 900 | Washington, DC 20005 | www.usac.org Monthly Receipts and Outlays ..............................................21 The Universal Service Administrative Company (USAC) is an independent, not-for-profit corporation designated by the Federal Communications Commission (FCC) as the administrator of the Universal Service Fund (USF). UNIVERSAL SERVICE ADMINISTRATIVE COMPANY MESSAGE FROM THE BOARD CHAIR 2020: A number traditionally synonymous with excellent vision will now forever remind us of our response to a global pandemic. As a result, our mission to provide telecommunications services to families, medical facilities, schools, libraries, and Tribal communities became more critical than ever this year. Fortunately, great effort and dedication can overcome great challenge. For every roadblock, there is hope. Proof can be found in the compassion, kindness, and effort of those that rose to new heights to fulfill the USAC mission. Words cannot fully express the Board’s appreciation for the time and sacrifice made by the USAC staff and management. USAC’s dedication to keeping America connected tested our efforts as an organization, but we met the challenge. The Board is also grateful to the Federal Communications Commission and its staff for their remarkable efforts in responding to the pandemic. Their policies recognized the unique nature of the pandemic and strengthened communal support. Finally, we would like to thank the vendors that continued to support USAC. These contractors are part of the broader USAC family, and our success depended upon their commitment to our mission. Joe Gillan Joeseph Gillan Chair Universal Service Administrative Company, Washington, DC UNIVERSAL SERVICE ADMINISTRATIVE COMPANY 2020 ANNUAL REPORT | 1 2020 YEAR IN REVIEW Building on the momentum created in 2019, the The E-rate program issued funding commitments for into practice. USAC updated systems, extended Universal Service Administrative Company (USAC) more than half of applications received during the deadlines for service providers and program embarked on 2020 ready to take on an aggressive funding window in the first wave. participants, temporarily waived or changed agenda of Universal Service Fund (USF) initiatives. application requirements, and opened additional This annual report details the work of all four USF Responding to the COVID-19 Pandemic funding windows to help connect individuals and programs; a few highlights are outlined here. In March, the COVID-19 pandemic began. It became communities to the resources, information, and immediately clear that USAC’s work would become services they needed during the pandemic. To The High Cost program introduced High Cost even more critical, given the increased need for USF support the rollout of the Coronavirus Aid, Relief, performance measures testing and began the support to help address the needs of Americans who and Economic Security (CARES) Act, USAC processed process of mapping 5G coverage for the 5G for Rural were working and learning remotely. USAC quickly 2,702 FCC Forms 460 to determine the eligibility of America Fund. developed a strategy to protect its employees’ healthcare facilities seeking funds from the COVID-19 health while committing to operational efficiency. Telehealth Program. The Lifeline program completed its Lifeline National USAC transitioned to remote work across the Eligibility Verifier (National Verifier) launch in all 56 organization, allowing employees to stay safe and Supporting USAC’s Mission states and territories by incorporating the National remain committed to USAC’s mission. Keeping staff Our mission remained at the forefront for USAC. Lifeline Accountability Database (NLAD) “opt-out” connected while remote became a top priority — to While managing changes related to COVID-19, states — California, Oregon, and Texas — into the accomplish this, USAC’s leadership hosted town halls USAC continued doing its business-as-usual work system. to speak directly to employees, instituted weekly — faithfully administering the USF programs, outreach to the organization, and provided tools and enabling the success of USAC program participants, The Rural Health Care program implemented the resources to bridge the distance between remote and increasing the efficiency and accuracy of Federal Communication Commission’s (FCC) reform workers. USAC systems. This required USAC to hire 100 new order, including the roll out of the rates database. employees. Our human resources team shined The program also built the Connected Care system, At the same time, the FCC enacted a series of through the massive task of recruiting, interviewing, which will support the pilot program. COVID-19 relief orders, which USAC swiftly put and onboarding new team members remotely. Our UNIVERSAL SERVICE ADMINISTRATIVE COMPANY 2020 ANNUAL REPORT | 2 2020 YEAR IN REVIEW IT team met with new employees to prepare them Delivering Efficiencies and Embarking on purchase or maintain equipment from companies to work remotely. When USAC needed shorter term New Initiatives that pose a national security threat to the integrity of or specialized support, the organization brought In 2020, USAC remained vigilant in its efforts to communications networks or the communications in contractor resources. This staffing push allowed manage administration costs responsibly. Successful supply chain. USAC to maintain a high level of service across the oversight of the organization’s business process organization. outsourcing (BPO) vendors yielded costs of $11.81 Conclusion million less than anticipated. Reducing our reliance Throughout the year, the organization delivered Sustaining Our Infrastructure on IT contractors helped USAC maintain financial results while mitigating the risks posed by waste, USAC’s IT infrastructure met the challenge of the efficiencies while delivering quality work. fraud, and abuse. Incorporating a program-based all-remote workforce while maintaining Federal fraud risk assessment that uses a Government Information Security Modernization Act (FISMA) USAC started a number of enterprise initiatives that Accountability Office (GAO) framework provided security and 508 accessibility compliance. As it will transform our operations for years to come. The increased transparency and the ability to identify became clear that USAC would need to do more Enterprise Resource Planning (ERP) process sought risks in real time. In 2020, USAC rose to the challenge to sustain full-time telework, the IT and IT security proposals for a systems integrator, taking USAC one of a mercurial year, producing high-quality work in teams worked tirelessly to load test our systems, step closer to the ultimate goal of transforming and difficult circumstances. review security protocols, and transition staff to modernizing USAC’s financial processes and systems. laptop computers. By late March, USAC was fully Building an adaptive IT environment will increase remote, supporting more than 500 remote log ins program flexibility and allow our systems to respond each day. The IT service desk team helped USAC’s to changes more efficiently. teams adjust to virtual meetings, supported secure document management, and managed countless Working with the FCC, USAC began implementing the requests. order “Protecting Against National Security Threats to the Communications Supply Chain Through FCC Radha Sekar Chief Executive Officer Programs,” which prohibits spending USF monies to Universal Service Administrative Company, Washington, DC UNIVERSAL SERVICE ADMINISTRATIVE COMPANY 2020 ANNUAL REPORT | 3 2021 VISION Looking to 2021, USAC anticipates In 2021, USAC will support congressional Building on its past work, USAC will another year shaped by the COVID-19 efforts to bridge the digital divide by ensure the continuous maintenance pandemic. We will remain firmly focused working with the FCC to administer of the Federal Information Security on protecting the health and safety of programs created and funded in the Modernization Act (FISMA) requirements our staff, while maintaining excellence 2021 Consolidated Appropriations Act. and will continue to meet
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