The Comptroller & Auditor General of India (CAG) has conducted an audit on the implementation of schemes under the Universal Services Obligation (USO) Fund. Through this audit, CAG has concluded that the funds have been under utilised and misused in a number of cases.

CAG conducted tele-calling through village public telephones across seven circles on a random basis. In this exercise, it was observed that only about 50 per cent of the phones supported by the USO Fund were working. In another instance, it was found that the number of rural fixed-line telephones for which subsidy was sought by telecom operators far exceeded the actual number of households in the villages.

The audit has also emphasised that the fund is not being fully utilised. Compared to a total collection of Rs 585.79 billion, only Rs 179.47 billion has been disbursed by the Department of Telecommunications (DoT), which has defended this by stating that the Ministry of Finance has not approved several of its requests for higher allocation of funds.