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Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Rules and Regulations
address document retention, the Commission finds it prudent in its effort to combat waste, fraud, and abuse to require program recipients to retain all documentation related to their requests for funding reimbursement for actual expenses incurred. Recipients must retain the documentation for a period of 10 years after the date the final disbursement payment is received from the Reimbursement Program. The retained documentation will assist the Commission with any subsequent investigations should an issue of waste, fraud, and abuse arise following the completion of the removal, replacement, and disposal process. A 10-year period of time for retaining documentation is consistent with the Commissions retention requirement for both the ERate program and the broadcast incentive auction reimbursement program and coincides with the 10-year statute of limitations under the False Claims Act.
178. Audits, Reviews, and Field Investigations. In the 2019 Supply Chain Further Notice the Commission proposed subjecting program recipients to periodic compliance audits and other inquiries, including investigations as appropriate, to ensure compliance with the Commissions rules and orders. The Commission did not receive any comments on this issue. The Commission now directs OMD, or a third-party identified by OMD, to prepare a system to audit Reimbursement Program recipients to ensure compliance with the Commissions rules. Consistent with the Commissions experience regarding the USF, the Commission finds that audits are the most effective way to determine compliance with the Commissions rule requirements. To facilitate audits and field investigations, the Commission requires Reimbursement Program recipients to provide consent to allow vendors or contractors used by the recipient to release confidential information to the auditor, reviewer, or other representative. Recipients must also allow any representative appointed by the Commission to enter the premises of the recipient to conduct compliance inspections.
179. Enforcement. In the 2020 Supply Chain Second Further Notice, the Commission sought comment on implementing the enforcement measures contained in section 7 of the Secure Networks Act. The Commission received only one comment, from CCA, on the issue. As provided for in the statute, a violation of the Secure Networks Act or a regulation adopted pursuant to this statute shall constitute a violation of the Communications Act.

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As such, the Commissions authority to impose fines and forfeitures pursuant to section 503 of the Communications Act and 1.80 of the Commissions rules, 47
CFR 1.80, will apply equally to violations of the Secure Networks Act and Commission regulation adopted pursuant to the Secure Networks Act.
Potential violators are not limited to Reimbursement Program recipients but could also include consultants, vendors and contractors that assist entities participating in Reimbursement Program. In addition, as directed by the Secure Networks Act and consistent with the Commissions proposal in the 2020 Supply Chain Second Further Notice and the Secure Networks Act the Commission requires Reimbursement Program recipients found in violation of its rules or the commitments made by the recipient in the application for the reimbursement to repay funds disbursed via the Reimbursement Program. Prior to requiring repayment, WCB will send notice of the violation to the alleged violator and give the alleged violator 180 days to cure the violation as required by the Secure Networks Act.
In addition to taking steps necessary to address a non-compliant situation, curing a violation may simply involve a response showing that a violation has been cured. The cure period will provide alleged violators with ample time to resolve issues of noncompliance before the Commission proceeds with taking further enforcement action.
180. Section 7c of the Secure Networks Act requires the Commission to take immediate action to recover all reimbursement funds awarded to a recipient if the recipient is required to repay funding due to a violation. CCA
urged the Commission to include in its enforcement procedures a reasonable opportunity for carriers to cure before repayment or other penalty action is triggered. The statute already provides program participants a 180-day period to cure violations prior to initiating repayment actions, and so the Commission finds going beyond what is already required unnecessary.
Accordingly, consistent with the Commissions proposals in the 2020
Supply Chain Second Further Notice, it will initiate a repayment action by sending a request for repayment to the recipient immediately following the expiration of the opportunity to cure if the recipient fails to respond to the notice of violation, indicating the violation is cured. If the alleged violator does respond to the notice but is ultimately determined by the Commission not to have cured the
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violation, the Commission will then request repayment following that determination.
181. The Commission directs the Enforcement Bureau EB to take all steps necessary to initiate enforcement actions against Reimbursement Program violators and to recover any outstanding repayment amounts once a violation of the Reimbursement Program is referred by WCB to EB. Participants found to violate the Commissions rules will also be referred to all appropriate law enforcement agencies or officials for further action under applicable criminal and civil laws. Any person or entity that violates the Reimbursement Program rules will also be banned from further participation in the section 4
reimbursement program, and the person or entity may also be barred from participating in other Commission programs, including Universal Service support programs.
182. Section 4d1 of the Secure Networks Act requires the Commission to develop a list of suggested replacements Replacement List for the equipment and services being removed, replaced, and destroyed. Specifically, Congress directed the Replacement List to include both physical and virtual communications equipment, application and management software, and services or categories of replacements of both physical and virtual communications equipment, application and management software. The list of suggested replacements must also be technology neutral and may not advantage the use of reimbursement funds for capital expenditures over operational expenditures. The Commission sought comment on how to develop the Replacement List in April 2020.
183. Consistent with the Commissions statutory obligation, it establishes, and will publish on its website, a Replacement List that will identify the categories of suggested replacements of real and virtual hardware and software equipment and services to guide of providers removing covered communications equipment from their networks. The Commission agrees with commenters that the Secure Networks Act provides the Commission with the flexibility to choose either to create a list of suggested replacements or categories of replacements. The Commission also agrees that the Replacement List should include categories of replacements rather than try to identify suggested replacements, because, as commenters assert, creating a list of suggested replacements would have negative consequences, such as the Commission being seen as picking
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