The E-rate program has played, and continues to play, a major role in the development and support of telecommunications, Internet access, and other technology services for the K-12 educational community. As many technology directors and business managers know, E-rate is a valuable – and, in many cases, mission critical – source of technology funding.
However, there is a dark side to E-rate. As the program has matured, it has become increasingly complex. It is now disturbingly easy to run afoul of rules and procedures, to lose a year of funding, or in some cases to be asked to return funds disbursed in earlier years. Since E-rate funds are needed, not only for new projects, but for the support of ongoing programs, the importance of proper E-rate planning and execution cannot be overstated.
Ten Rules for E-Rate Success
While there is a peak of activity in January, just prior to the filing of the next year’s applications, there is something to do all the rest of the year – even during the summer vacation period.
We see too many applicants go to a lot of trouble to file for and obtain E-rate commitments only to lose the actual discounts because they forget the equally critical follow up steps to make sure discounts are actually received. Attention must be paid to E-rate year round.
Most changes are posted as they arise on the Schools and Libraries Division’s (“SLD”) Website (www.sl.universalservice.org) as Important Notices and Headlines, but others may be reflected only in new language in site’s Reference Area. Applicants, who have not made Internet access and e-mail a part of their working life, will find it very difficult to keep up. Here are three suggestions for keeping current:
• Visit the SLD’s Web site at least once weekly.
• If available, subscribe to your state’s E-rate e-mail listserv. E-Rate Central maintains a free weekly E-rate newsletter for applicants in states that don’t have their own listserv (sign up for the E-rate newsletter).
• Again, if available, attend the E-rate training sessions held in many states each fall in preparation for the next application cycle.
Applicants filing online, however, should be aware that only those with pre-established electronic signature capability can actually “sign” a form online. All others will have to print out the certification pages, sign and date them, and mail them to the SLD. Forms submitted without electronic certifications will not be deemed complete until the signed and dated certification pages are received by the SLD. In addition, applicants filing Form 471s online have to submit Item 21 attachments separately (these can be e-mailed, faxed, or mailed to the SLD).
The safest course of action is to always check for, and use, the latest version. One way to do this is to print new versions of the forms directly from the SLD Web site.
Form versions will be particularly important this coming year because most forms are being modified to incorporate new and stronger certification language. Once released, we expect that they will immediately supplant the earlier versions.
Here are the most important deadlines:
• A Form 470 must be posted at least 28 days before the selection of vendors, the signing of contracts, and the signing and filing of a Form 471.
• A Form 471 must be filed within a defined application window, usually announced in October. For the last few years, the application window has run from early November to early February. Unless the FCC waives some of its rules, the window may be delayed this year.
• The Form 486 must be filed within 120 days of the issuance of a Funding Commitment Decision Letter or the Service Start Date, whichever is later. For many, but not all applicants, this deadline is October 29th.
• Form 472 (BEAR) forms must generally be filed within 120 days of the Last Date of Service, normally October 28th for recurring services and January 28th for non-recurring services.
• Appeals must be filed within 60 days of the decision being questioned.
Inquiries can come from either Kansas or New Jersey. The Kansas inquiries are made by Problem Resolution, the group responsible for data entering forms submitted by mail. Generally, these are simple inquiries that can be handled quickly.
The New Jersey inquiries are made by Program Integrity Assurance (“PIA”) and are of more substance. Approval, modification or denial of funding can result from PIA decisions, so these inquiries (often requests for additional service information or certifications) must be handled with particular care. Our advice is to work cooperatively with the reviewers. If an inquiry is complicated or will require additional time to respond to, the reviewer can often provide clarification or time extensions.
• Although technology plans do not have to be formally approved until the start of the funding year, the rules require applicants to base their funding requests on pre-existing plans that cover all services requested and that demonstrate adequate budget resources.
• Services funded by E-rate must be cost-effective and must be competitively bid in a fair and open manner.
• Applicants must be able to demonstrate that price is the most important factor in their bid analysis and vendor selection procedures.
The FCC strengthened its rules this year requiring applicants and vendors to maintain records for at least five years. The retention requirements are quite detailed, going well beyond simply keeping copies of E-rate forms. Documentation is required for discount rate calculations, technology plans and budgets, RFPs, all records related to winning and losing bids, inventory, etc. Failure to produce these records can lead, and already has led, to formal actions to recover E-rate funds.
• For answers to specific questions, the first place to turn is to the SLD. Questions can be submitted by phone (888-203-8100), by fax (888-276-8736), or by using the Submit a Question feature on the SLD Web site.
• Most states have State E-rate Coordinators which are available to help their school and library applicants (see State Information).
• Many vendors are quite knowledgeable about E-rate, but vendors must be used with the utmost of care. Any vendor involvement in the E-rate process prior to the awarding of bids is highly suspect. The burden of proof is on the applicant and vendor to show how such E-rate support did not unfairly prejudice the bidding process. Once a contract is awarded, however, vendors can be quite helpful in preparing Form 471 Item 21 attachments and in supporting subsequent invoicing activities.
• We are seeing, both in our own business and more broadly, a growing trend to use independent E-rate consultants either to assist on or oversee particular aspects of the E-rate process, or to take over primary responsibility for forms processing (much like a good tax preparer works with its clients). Applicants choosing this approach, however, should make sure that the consultants are truly independent. For E-rate purposes, a consultant with a stake in a particular vendor’s business success has a potential conflict of interest which will be looked at closely by the SLD.
While increasingly complex, the program is worth the effort. We wish you every success in the coming funding year.