State powerless to audit prepaid cell phone companies

In the two years and four months since Georgia started collecting 911 fees for prepaid cell phones, none of the companies that are supposed to be paying the fees has been audited or forced to pay up.

The state still collects millions from the fees — more than $15.5 million so far — but some companies operating in Georgia may not be paying at all. State officials simply don’t know.

That’s because there’s no money budgeted for enforcement or audits, according to the Georgia Department of Community Affairs, which collects the $1.50 monthly fee on prepaid cell phones.

“We have no administrative money to pursue any sort of collection processes or to even determine who might need to be audited or to do any audits,” said Mike Bush, the DCA’s office research director.

Any attempt to estimate an amount not being collected would be “a wild guess,” Bush said.

But the Association County Commissioners of Georgia, which represents county governments on state issues, worked with the cellular industry and compiled a list of companies doing business in Georgia. Because of the way networks such as AT&T and Verizon work with other companies to sell prepaid cellular minutes, that list is complicated. But there are significantly more entities on that list than the state’s payment records show.

“There’s a lot of corporations that they’re not collecting from,” said Clint Mueller, the ACCG’s legislative director. “We don’t know how much (money) is getting left on the table.”

Bush said the ACCG’s list appears to be “fairly comprehensive,” but he has no way of knowing for sure. He said the department shares ACCG’s concern, also voiced by the Georgia Municipal Association, that money may be “slipping through the cracks.”

These fees were written into law in 2007 to close a loophole. Land-line and cell-phone users with contracts already paid a monthly fee to help fund local 911 operations, but those with prepaid phones did not.

And with no address attached to a prepaid phone, there was no good way to let local county and city governments collect fees on the phones directly.

So the DCA was given power to collect the 911 fees, which were supposed to go into a pot that local 911 operations could tap for grants. That hasn’t happened, and instead the state has used the money to help fund its normal budget, which funds all sorts of state functions, such as public education and the Georgia State Patrol.

The process is “flawed,” said state Rep. John Lunsford, who sponsored the initial legislation to start charging 911 fees on prepaid cell phones.

“I think we need better accounting and we need to put some teeth in the laws,” said Lunsford, R-McDonough. “What I’d like to actually see is criminal penalties for failure to pay.

“This is real money that actually belongs to the local taxpayers,” Lunsford said.

To contact writer Travis Fain, call 744-4213.