E-rate/CTF Training for Year 2004 Version 4.0

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E-rate/CTF Training for Year 2004 Version 4.0

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The fund offers 20-90% discounts on telecommunications, Internet service, and ... Discounts ... The CPUC calculates discounts based on the date the application ... – PowerPoint PPT presentation

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Title: E-rate/CTF Training for Year 2004 Version 4.0


1
E-rate/CTF Training for Year 2004Version 4.0
  • California Department of Education E-rate/CTF
    Training Collaborative
  • October 2003

2
Workshop Objectives
  • Provide unbiased guidance to apply for E-rate and
    CTF telecommunication discounts.
  • Provide information about program changes.
  • Provide state, local, and vendor perspectives.
  • Provide information references.

3
E-rate and CTF Application Process
  • October 2003

4
What is E-rate?
  • E-rate (Education-rate) is a federal program,
    officially known as Universal Service Fund (USF),
    Schools and Libraries
  • The annual fund is 2.25 billion. It is
    administered by the Schools and Libraries
    Division (SLD).
  • The fund offers 20-90 discounts on
    telecommunications, Internet service, and
    internal connections.

5
What is CTF?
  • California Teleconnect Fund (CTF) is a state
    program administered by the California Public
    Utilities Commission (CPUC). The fund is now 55
    million annually.

6
California Teleconnect Fund (CTF) Program
  • A Program of the California Public Utilities
    Commission (CPUC)

7
Purpose of the CTF Program
  • The CTF offers 50 discounts on monthly recurring
    costs of telecommunications services to eligible
    entities.
  • Eligible entities
  • Schools and libraries
  • Hospitals and health clinics
  • Community Based Organizations
  • Consortia of eligible entities
  • Discounts
  • 50 below the rates (tariff or negotiated rate)
    charged to other businesses for the same services
    or their functional equivalents

8
How the CTF Is Funded
  • Funded by all end users of telecommunications
    services through a surcharge on their
    telecommunications bills

9
Services That Qualify for a CTF Discount
  • Measured business or its functional equivalent
  • Switched 56 or its functional equivalent
  • Integrated Services Digital Network (ISDN) or
    its functional equivalent
  • T-1
  • OC3-OC192

10
Charges/Taxes Eligible for CTF Discount
  • Monthly recurring charges
  • Company-specific surcharge/surcredit
  • CPUC user fee
  • Federal excise tax
  • 911 tax
  • Local/city Tax Variable
  • The taxes and surcharges or surcredits covered by
    the CTF Program are based only on the approved
    CTF discount amounts.

11
Charges Not Discounted by CTF
  • Nonrecurring charges (e.g., installation charge)
  • Usage charges

12
CTF Application Process
  • Applicant submits CTF application to CPUC with
    all required information (e.g., IRS tax-exempt
    statement)
  • New CTF application and instructions are
    available at
  • http//www.cpuc.ca.gov/static/industry/telco/publ
    icprograms/ctfapp.pdf

13
CTF Application Process
  • The CPUC calculates discounts based on the date
    the application is received by the CPUC.
  • Once the application is approved by the CPUC, it
    is not necessary to reapply for CTF discounts.
  • Applicants inform telecommunications providers of
    changes or additions to lines/services to receive
    CTF discounts for additional services.

14
Applying for E-rate
  • Forms 470, 471, and 486

15
E-rate
  • Eligible entities schools and libraries
  • Eligible services
  • Eligible uses new definition

16
Discount Percentages
  • Number of students eligible for National School
    Lunch Program
  • Rural and urban designation

17
Funding Priorities
  • Priority One Telecommunications and Internet
    access
  • Priority Two Internal connections

18
E-rate Application Steps
  • File Form 470 to request services.
  • Receive Form 470 acknowledgment letter.
  • File Form 471, Request for Funding.
  • Receipt Acknowledgement Letter (RAL) from SLD
  • SLD Review Form 471.
  • Review and correct Funding Commitment Decision
    Letter
  • File Form 486 (Aug 2003) and Form 486
    notification.
  • Receive discounts.
  • Modify funding requests on Form 500.
  • Reference http//www.sl.universalservice.org/appl
    icants/processflow.asp

19
Why File a Form 470?
  • Its required for competitive bidding and
    procurement of services.
  • It initiates the application process.
  • It describes the technology services being
    sought.

20
Form 470 - Items to Consider
  • Calculate your E-rate discount.
  • Choose an E-rate application strategy.
  • Design an education technology plan.
  • Identify your non-discounted costs
  • File online by applying for user ID and PIN .
  • Applicant PIN Request System https//slpin.univers
    alservice.org/SL_PIN/NECAServlet.jrun?hszActionST
    ARThszCommandREQUESTszUserTypeSLD

21
Online Form 470
  • Apply online at http//www.sl.universalservice.org
    /menu.asp.
  • Select either the Form 470 PDF or
  • Form 470 Interview.
  • Print each page of the application as you
    complete it online before selecting "Next" to
    move to a new screen.

22
Form 470 - Blocks 1 and 2
  • Complete all requested information in Blocks 1
    and 2.
  • Print and file the screen that displays the
    application number. You will need to refer to
    the application number later. Read Form 470
    instructions and directions on the form.

23
Form 470 Block 3
  • Technology assessment of services being sought
    What kind of other technology is to support the
    effective use of E-rate equipment?

24
Form 470 Block 4
  • Identifies recipients of services eligible
    entities.
  • Identify billed entities and ineligible entities.
  • This information is required to help service
    providers understand the scope and location(s) of
    the services being sought.

25
Form 470 Block 5
  • Certifies that discounts are for eligible
    schools/libraries.
  • Certifies the technology plan.
  • Certifies eligible purposes, no resale or
    transfer
  • Secures access to necessary resources

26
Form 470 Follow-up
  • Work with potential vendors to estimate costs for
    Form 471.
  • Keep copies of all responses to Form 470 and bids
    considered.
  • Develop and keep documentation of the process for
    selecting a specific vendor (price is the most
    heavily weighted factor in the decision).
  • Select the most cost-effective provider.

27
Form 470 Reminders
  • Procurement must be competitive and follow the
    rules.
  • Excessive vendor involvement is not allowed.
  • Form 470 cannot be completed by a service
    provider.

28
Form 471 Request for Discounts
  • Form 471 must be preceded by the filing and
    posting of a Form 470 for at least 28 days.
  • Online, filing is easier and more accurate.
  • File individual Form 471 for Priority 1 and
    Priority 2 discounts.
  • Need to submit item 21 attachments after filing
    online.

29
Form 471 Guidelines
  • Wait 28 days before signing up for services.
  • Note contract extensions and contract expiration
    dates.
  • Note the E-rate funding escape clause.
  • Include product or service upgrades/substitutions
    in contract.
  • Separate internal connections/wiring portions of
    contracts for highest discount schools.
  • Make sure procurement complies with local and
    state procurement rules.

30
Form 471 Blocks 1 and 2
  • Block 1 is to provide information on the billed
    entity
  • Contact information, billed entity number
  • Summer contact information
  • Block 2 is used to indicate changes to the
    contract information. Contact SLD Help.

31
Form 471 Block 4
  • Discount calculations
  • See http//www.sl.universalservice.org/reference/
    Discount.asp
  • Maximize discounts by counting the number of
    students eligible for free and reduced price
    lunches.
  • Use Form 471 instructions and SLD references for
    calculating discounts.
  • Review alternative mechanisms for calculating
    discounts.
  • See http//www.sl.universalservice.org/reference
    /alt.asp

32
Form 471 Block 5
  • Document the services ordered.
  • Create a separate Block 5 worksheet for each
  • Service provider
  • Contract
  • Category of service (telecommunications,
    Internet, internal connections)
  • Establishing Form 470
  • Separate out ineligible services.

33
Form 471 Block 6
  • Use Block 6 to certify form 471.
  • Submit online if you have a PIN. Attach a copy
    of the online confirmation page and attach that
    to the top of the item 21 attachment(s).
  • Justify duplicative services in item 21.

34
Form 471 Item 21 Attachments
  • Label clearly to identify the correct Form 471.
  • List services/items requested (quantity,
    description, cost, type of cost, narrative).
  • Separate ineligible services/items.
  • Attach quote or bill from the vendor (phone
    bills).
  • Document nonduplicative services.

35
Form 471 Submission
  • Was Form 471 signed after contract?
  • Was Form 471 signed by an authorized person?
  • Is the applicant prepared to prove that they had
    the money in the bank?
  • Tips to handle the program Integrity Assurance
    teams questions
  • Make sure you know what it is asking.
  • Dont answer more than you were asked.
  • Retain PIA responses for audit purposes.

36
Form 471 Receipt Acknowledgement Letter (RAL)
  • Correct data entry errors.
  • Provide or correct applicants contact
    information.
  • Correct (not change) a Service Provider
    Identification Number (SPIN).
  • Reduce, cancel, or split a Funding Request Number
    (FRN).
  • Submit corrections, if any, within 3 weeks after
    date on RAL

37
Form 500
  • Modify funding requests Cancel or reduce the
    FRN.
  • Modify service dates See SLD guidance on
    changing service dates and contract expiration
    dates.

38
Keep Copies
  • All form submissions and proof of submission
  • All bids, awards, contracts, assumptions,
    decisions, budgets, tech plan certifications
  • All communications with the SLD (e-mail may be
    used for documentation)
  • Documents should be kept for 5 years, and
    organized by funding year.

39
Actions to Take After Receiving the FCDL
  • Actions to Take After Receiving FCDL

40
Overview
  • File a Form 486 by the deadline or else lose
    discounts.
  • Communicate all necessary information to service
    providers.
  • Document all new work done during funding year.
  • Track discounts OR file a Billed Entity Applicant
    Reimbursement (BEAR Form 472)

41
Form 486
  • Why file
  • When to submit (dont miss the deadline)
  • Ways to submit
  • tips

42
Form 486 Why File
  • No discounts until the Form 486 is filed
  • To alert SLD that services are being provided
  • To certify that your technology plan is approved
  • To certify compliance with the Childrens
    Internet Protection Act (CIPA) compliance

43
Form 486 Submission
  • Submit Form 486 within 120 days of FCDL date or
    start of service, whichever is later.
  • Submit Form 486 on paper or online.

44
Form 486 Tips
  • File on time or else you will lose some funding.
  • Make sure your technology plan is approved by the
    start of service.
  • CIPA compliance has not changed for school
    districts.
  • Libraries are now required to comply with CIPA
    (see http//sl.universalservice.org/whatsnew/2003/
    082003.asp082003).

45
Steps to Take After Receipt of FCDL
  • Provide necessary information service providers
  • - Existing Services which FRN will fund
    discounts and at what percent eligibility
  • - New services which FRN funds the project and
    timeline for project (may change due to date
    of FCDL)
  • - Service substitution or SPIN changes (complete
    paperwork earlier in the FY)

46
Steps to Take After Receipt of FCDL
  • Document all new work performed during funding
    year
  • All lines and circuits installed and the date of
    installation
  • Dates of lines and circuits disconnected, if any
  • Every piece of equipment installed or moved
    (Documentation is necessary in case of an audit
    in the future)

47
Steps to Take After Receipt of FCDL
  • Track discounts OR file BEAR Form 472
  • Discuss with each service provider whether
    discounts will appear on bills or BEAR Form 472
    will be needed.
  • Work with service provider to understand where
    discounts appear on the bills.
  • If BEAR Form 472 is needed, pay bill in full and
    then follow the process at http//www.sl.univers
    alservice.org/form/default.aspapplicants

48
California Procurement Options
  • California Department of General Services

49
Purchase Options
  • Purchase from a single vendor
  • Can integrate multiple technologies
  • Purchase from multiple vendors
  • Potentially wider variety of choices
  • Make consortia arrangements
  • Leverage buying power of multiple entities
  • Purchase through State of California contracts
  • - CMAS, CALNET

50
Masters/State Contracts
  • Information technology services
  • Bid-based contracts
  • Competitive products, services, agencies, and
    prices
  • No order limit for local agencies

51
Eligible Services Available through State
Contracts
  • Telecommunications services
  • Internet access services (many suppliers)
  • Internal connections

52
Contract Agreement Number
  • Give resulting E-rate contract local contract
    agreement number (for CALNET, use locally defined
    number).
  • Contract agreement number and state contract
    number need to be included on purchase order.

53
Contract Term
  • Issue date - Date agreement signed (must be
    before the Form 471 application deadline for the
    funding year)
  • End date - Use last date of the funding year to
    allow for delays (for telecommunications and
    Internet access June 30th and for nonrecurring
    services September 30th).
  • http//www.sl.universalservice.org/reference/Servi
    ceDeliveryDeadlines.asp

54
Contract Considerations
  • Verify current status of small business, Disabled
    Veteran Business Enterprise (DVBE), and
    contractor license certifications
  • Verify that products/services are on the contract
    (ask for pages from the contract). Make sure that
    the state contract contains all required products
    and services.

55
Contract Considerations
  • Consider the E-rate funding cycle
  • Stipulate in purchase order that award is
    contingent upon full, anticipated E-rate funding.
  • Require that prices for change orders be at or
    below the purchase order rates (not to exceed the
    state contract rates).

56
Contract Considerations
  • Communicate with supplier up front regarding
    eligibility for a project discount.
  • Specify functional equivalent substitution if
    products become outdated between application date
    and actual date of delivery.
  • Note that procurement could result in multiple
    contracts.
  • Separate E-rate eligible and noneligible items
  • Ensure accurate tracking of discounts.

57
CMAS Considerations
  • Asking for CMAS-only vendors is allowed, but you
    must still have a competitive procurement process
    and evaluate multiple CMAS vendors.
  • Multiple CMAS responses allows price comparisons
    and competitive bidding to take place.

58
Contracts Documentation
  • Be prepared to provide legal opinion to prove
    such documentation constitutes a contract
    pursuant to California Public Contract Code.
  • Quotes are not considered contracts according to
    SLD rules.

59
Program Topics
  • Vendor Involvement
  • Managing Phone Bills
  • Reviews and Audits
  • Program Updates
  • Strategies

60
What Vendors Can Do and May Not Do in the E-rate
Program
  • California Department of Education E-rate/CTF
    Training Collaborative
  • October 2003

61
Vendor Involvement
  • What the vendor can do to help you
  • What the vendor may not do to help you
  • Waive the nondiscounted cost.
  • Give proper assistance in Form 470 process.
  • Assist applicants customers with tech plans.
  • Give proper assistance in Form 471 process.
  • Inappropriate roles for service providers

62
Vendor Selection
  • The applicant has a duty to conduct a fair,
    open, and competitive procurement process that
    seeks the most cost-effective solution to its
    technology needs. Price must be the most
    important factor under consideration but should
    not be the only consideration.

63
Vendor Qualifications
  • Vendor/service providers (SPs) experience
  • Ability of SP to meet deadlines
  • Proximity of SP to work site
  • Quality of work and ability to manage the project
  • Ability to provide necessary maintenance and help
  • Prior E-rate experience

64
Appropriate Role of Vendor/Service Provider
  • Before submission of the Form 470, service
    providers should
  • Understand the requirements of the E-rate
    technology plan requirements
  • Understand the E-rate program rules,
    requirements, and timelines.
  • Offer unbiased technical assistance that does not
    have an undue influence on the applicants
    ability to follow the open, fair competitive
    bidding process.

65
Appropriate Role of Vendor/Service Provider
  • Before submission of the Form 470 (Continued)
  • Provide assistance within guidelines of the
    E-rate program.
  • Provide input ONLY on development of the Request
    for Proposal (RFP).
  • Wait 28 days before signing contract with
    vendor/service provider.

66
Appropriate Role of Vendor/Service Provider
  • After submission of the Form 470
  • Provide information on products and services
    being offered.
  • Assist the applicant in the creation of the Form
    471 item 21 attachment documentation.
  • Provide a quote or a bill and a copy of the
    contract.
  • Provide quantity, product/service description,
    unit cost, extended pre-discount cost.
  • Visit the site if all bidders are allowed to do
    so.

67
Appropriate Role of Vendor/Service Provider
After the FCDL
  • Assist with service substitution information and
    SPIN change requests (if required).
  • Provide easy-to-understand account information.
  • Review billing arrangements with applicant
    (discounts or reimbursements).
  • Provide current information on SPIN numbers and
    legal names.
  • Remind applicants of deadlines and timelines.
  • Encourage compliance with program rules.

68
Service Providers May Not
  • Complete or sign applicants Form 470 and Form
    471.
  • Serve as the contact or evaluator on Form 470.
  • Serve as a technology plan approver.
  • Prepare an applicants Request for Proposal
    (RFP).
  • Enter into a contract prior to the required
    28-day waiting period.
  • Provide Alternative Funding grants or
    foundations as payment applicants undiscounted
    portion of the service providers bid. See
    http//www.sl.universalservice.org/reference/frees
    ervices.asp
  • Make determinations on product or service
    eligibility.

69
Service Providers May Not
  • Interfere with or hinder the competitive bidding
    process. See http//www.sl.universalservice.org/d
    ata/ppt/2003/Service20Provider20Issues.ppt
  • Offer to waive the nondiscounted portion of the
    bill for which the applicant is responsible.
  • Provide the answers to the Selective Review
    Information Requests on behalf of the applicant.

70
Consequences for Violation of Program Rules
  • Denial of funding
  • Cancellation or adjustment of funding
  • Audit or other investigation
  • Criminal investigation

71
County Office of Education (COE) as a Service
Provider
  • The SLD views intermediate service agencies, such
    as county offices of education, that provide
    services to be the same as any other vendor.
    COEs must must follow the same rules.

72
Managing Phone Bills
  • October 2003

73
Managing Phone Bills
  • Summary billing
  • Applying for nondiscounted costs
  • Summary billing and your E-rate Form 471
  • What to do before requesting summary bills
  • What to expect from summary bills
  • Other phone bill management strategies

74
Summary Billing Preparation
  • Check to see if your carrier has summary billing.
  • Get a list of all telecommunication lines.
  • Decide how you want the bill to be organized.
  • Convert all billed telephone numbers and working
    telephone numbers to the same billing cycle.
  • Determine level of detail (eligible/ineligible,
    by site, voice/data, etc.).

75
Summary Bills
  • Summary pages
  • Detail pages for each billed telephone number and
    working telephone number
  • Tracking costs for filing your Form 471
  • -Makes Item 21 attachments easier
  • -Separates ineligible numbers
  • -Lists E-rate discounts

76
Phone Bill Strategies
  • Always pay current charges.
  • Request a check for credits accumulated.
  • Build an E-rate process tracking system.
  • Use summary billing to track your discounts.

77
Review and Audit Readiness
  • Documenting Compliance with E-rate Program Rules

78
Documentation for Audits and Reviews
  • Program Integrity Assurance (PIA) reviews
  • Selective reviews
  • Audits

79
Minimum Processing Standards
  • Correct form.
  • Complete applicant information.
  • Complete submission of form.
  • File online to ensure you have met minimum
    processing standards.

80
PIA Reviews
  • The PIA team checks for eligibility of entity.
  • The PIA team checks for eligibility of service.
  • The PIA team verifies discount rate calculation.
  • Applicant should be aware of timelines to
    respond to the PIA team.

81
Selective Reviews - Item 25
  • Preparing for Selective Reviews
  • October 2003

82
Selective Reviews
  • They are used by the SLD to verify
  • Competitive bidding and vendor selection
  • Form 471 item 25 certification, Can you use and
    support the product and services requested?
  • Ability to pay for nondiscounted costs
  • Technology plan
  • They are conducted at the billed entity level.

83
Tips on Selective Reviews
  • Provide the requested information in 14 days.
  • Request an extension of time if necessary.
  • Document the approval of the extension (date, SLD
    contact, extension date).
  • Fax or e-mail requested information to SLD.
  • Contact PIA representative to establish a
    relationship.

84
Competitive Bidding Vendor Selection
  • Provide RFP or reason for not providing an RFP.
  • Keep all bid responses, not just the one
    selected.
  • Document how you selected the vendor and keep the
    documentation. Remember cost must be the
    heaviest weighted factor, but there can be other
    factors.

85
Item 25 Certification
  • Documentation of your ability to pay for your
    share of E-rate discounts
  • Estimates of non-E-rate hardware, software,
    professional development, retrofitting, and
    maintenance investments that are necessary to
    make effective use of the E-rate discounts
  • Technology plan review
  • Estimate of the technology level of all schools
    or libraries in your organization after the
    receipt of E-rate discounts

86
Preparing for Audits
87
Purpose of E-rate Audits
  • To protect the program from waste, fraud, and
    abuse
  • To ensure the program accomplishes its mission of
    affordable telecommunications and information
    services for all eligible schools and libraries
  • To help the program meet its mission in the most
    effective and efficient manner possible

88
What Auditors Look for
  • Inadequate competitive procurement process
  • Ineligible services being funded
  • Lack of resources to support effective use of
    E-rate-funded equipment
  • Unauthorized equipment substitutions with
    increased costs and decreased functionality
  • Incorrect discount calculations
  • Implemented evaluations as indicated in your
    technology plan
  • Location of E-rate-funded equipment

89
Potential Consequences of Selective Reviews and
Investigations
  • Denial of funding commitment
  • Rejection of invoices
  • Commitment adjustment
  • Audits
  • Reimburse E-rate
  • Civil lawsuit
  • Subpoena
  • State or local prosecution
  • Recovery under the Federal Debt Collection Act
  • FCC enforcement action
  • Civil false claims action
  • Criminal action

90
Audit Findings
  • Asset or inventory tracking documents missing or
    not complete
  • Competitive bidding violations
  • Invoice documentation, SP invoice/bills
  • Disbursement
  • Tech plan and evaluation
  • National School Lunch Program data documentation
    not available

91
Be Prepared for the Auditors
  • Rules require records to be kept for five years.
  • Keep e-mail, notes, memos, FCC Form instructions,
    eligibility list, etc.
  • Audit is based on the rules in place at the time
    your application was processed.
  • Be responsive to auditors
  • Make it as easy as possible for them,
  • but dont be afraid to question their requests
    and/or decisions.
  • Turn to experts, reputable vendors, and
    third-party consultants

92
Document Testing
  • Free and reduced-price lunch surveys
  • Technology plan
  • Budget documents
  • Original RFP and bidders list
  • All bids, selection criteria, and reasons for bid
    selection
  • Original contracts
  • Purchase orders
  • Original invoices
  • Shipment receipt information
  • Inventory records
  • Canceled checks and payment dates
  • Item 21 attachments

93
Contract Review
  • Test all contracts.
  • Are you in compliance with state and local
    regulations?
  • Did you really conduct a competitive bid?
  • Can you demonstrate how you chose the winner?
  • Is the contract consistent with Form 470?
  • Do contract dates correspond to Form 471?

94
Signing Contracts
  • Applicant must have contract, PO, or other
    binding agreement.
  • Applicant may want to make contract contingent on
    receiving funding.
  • Dont sign before allowable contract date (No
    agreement to purchase, no P.O., etc.)
  • Funds will cover services delivered only during
    the funding year (e.g., July 2004 - Sept. 2005
    for YR 7).

95
Signing Contracts (Continued)
  • Be careful that contract language doesnt cause
    problems down the road.
  • The term functional equivalent allows for
    easier product/service substitutions later.
  • Specify responsibilities of applicant and
    vendors
  • Form 486 submission
  • Payments and invoicing of its portion
  • Eligible services/locations
  • Make sure original contract language specifies
    the terms of renewal.

96
Free Services
  • The value of all price reductions, promotional
    offers, and "free" products or services must be
    deducted from the prediscount cost of services
    indicated in funding requests.
  • Costs, trade-in allowances, and discounts must be
    fairly and appropriately derived.
  • A proportionate cost allocation is required
    between eligible and ineligible components.

97
Invoices and Payments
  • Vendor must invoice applicant before invoicing
    SLD.
  • Applicants must pay their nondiscount share
  • Invoices must clearly show what services are
    being delivered (and where).
  • Applicant verifies that discounts are applied
    properly
  • Applicant credits or adjustments must also be
    applied to SLD.

98
Changing a Service Provider
  • The change is subject to deadline.
  • The process is easier than it once was.
  • Applicant can get out of old contract.
  • Applicant has informed original vendor.
  • State and local procurement regulations allow the
    change.
  • The change will be reviewed by auditors.

99
Service Substitution
  • New product(s) must have the same functionality
  • Same medium (e.g., voice, data, video), same
    category
  • Service substitution must be permitted under
    procurement rules.
  • Substitutes must not cost more than the original
    product/service, or the applicant must pay any
    increase.

100
Service Substitution (Continued)
  • The substitute must not include greater
    percentage of ineligible services.
  • The substitute must be in line with Form 470 and
    RFP, if any.
  • The substitute will be reviewed by auditors.

101
Possible Penalties/Recoveries
  • Potentially several millions of dollars may be
    recovered, based on Andersen and Office of
    Inspector General audit work
  • Potential consequences
  • Recovery of any and all funds paid from either
    the beneficiary or the service provider
  • Suspension and/or debarment from the program for
    either beneficiaries or service providers

102
Transition to Investigation
  • Intentional fraud, waste, and abuse uncovered by
    audit will result in an investigation. Possible
    investigative issues
  • Procurement irregularities
  • Billing for goods and services not provided
    (false claims)
  • Ineligible items being funded
  • Misappropriation of assets
  • Beneficiaries not paying the undiscounted costs
  • Misrepresentations on forms/certifications (false
    statements)

103
Audit Reminders
  • Audits are easier if you make them part of your
    E-rate application process.
  • Document your access to resources to pay for
    nondiscounted costs to make effective use of
    E-rated services and equipment.
  • Keep E-rate documentation by funding year.
  • Review SLD audit references on the Web.

104
Year 2004 E-rate Program Updates
  • Program Changes, New Eligible and Ineligible
    Services, New Interpretations of Rules

105
Program Changes
  • Unused funds rollover more funds?
  • Appeals deadline 60 days
  • Technology plans more specific, written by the
    date the Form 470 is submitted
  • Legally binding contracts quotes not acceptable
  • 30 rule ineligible and unsubstantiated
  • Duplicative services need to justify

106
New Eligible Services
  • Definition of educational purpose on the
    premise
  • Voice mail in any category
  • Wireless same as wireline
  • Firewalls servers or service
  • Alarm lines but not 911 or E911 (yet)
  • Web hosting but not Web site development
  • File servers firewall servers

107
New Ineligible Services
  • Dark fiber vs. lit fiber
  • VoIP Voice-over IP as a service
  • UPS/battery backup limits
  • Maintenance - limited to basic, no managed
    network services

108
Definition of Educational Purpose
  • . . . in the case of schools, activities that
    are integral, immediate, and proximate to the
    education of students, or in the case of
    libraries, integral, immediate, and proximate to
    the provision of library services to library
    patrons, qualify as educational purposes under
    this program. Presume that activities on school
    or library property meet this standard.

109
Duplicative Services
  • Deliver the same function to the same population
    in the same location during the same period of
    time.
  • Duplicative is considered excess capacity, and
    redundant needs should be justified (e.g., system
    reliability).
  • Justify on Form 471, item 21.

110
Technology Plan
  • Technology plan must be written by Form 470
    submission.
  • Technology plan must be approved by Form 486
    submission.
  • Did you correctly characterize your technology
    inventory?
  • Does your technology plan actually match what you
    are doing?
  • Are all the E-rate services/products addressed in
    the technology plan?

111
What Does All This Mean?
  • More eligible services, more E-rate funds
  • Procurements by the rules
  • More specific technology plans, written by Form
    470
  • Budget documentation
  • Documentation to show effective use
  • Alignment of Form 470, tech plans, budgets
  • More reviews and audits

112
Top Reasons for Denial
  • 30 ineligible services
  • Excessive vendor involvement
  • Documentation not provided to SLD within
    timeframe requested
  • Ineligible service provider or ineligible entity
  • No Form 470 reference
  • No contract when Form 471 filed
  • Payment of nondiscounted costs
  • Violation 28-day rule

113
Looking Forward
  • Possible new FCC initiatives
  • Limits to internal connections requests
  • Guidance on transferability of equipment
  • Eligibility of 911 and E911 lines
  • New Notice of Proposed Rule Making this fall

114
Telecommunications Discount Strategies
115
Year 2004 Strategies
  • Improve your districts count of students
    eligible for the free reduce-price lunch
    program.
  • Understand rules regarding vendor involvement.
  • File one Form 471 for Priority One and one Form
    471 for Priority Two requests.
  • Understand your phone bills and use summary
    billing.

116
Year 2004 Strategies - Continued
  • Document, Document, Document
  • Use a stacking strategy to apply for E-rate and
    CTF discounts.
  • Data retrieval tool and E-rate manager tool
  • http//www.sl.universalservice.org/funding/opendat
    asearch/search1.asp
  • http//eratemanager.com/
  • Add new eligible services on Form 470.
  • Do not use the term VoIP on your Form 470 for
    telecommunication services.
  • For some applicants a consortia might work.
  • See http//www.sl.universalservice.org/reference/
    costaloc.asp

117
Web References
  • Schools and Libraries Division www.sl.universalser
    vice.org
  • California Department of Education
    www.cde.ca.gov/ls/et/ft/eratemain.asp
  • E-rate Central
  • www.e-ratecentral.org

118
Thank you
  • Access to training materials and E-rate
    references is available at www.cde.ca.gov/ls/et/ft
    /eratemain.asp
  • Sign up on the CDE E-rate listserv to get regular
    E-rate updates. See www.cde.ca.gov/ls/et/ft/erate
    main.asp
  • Your county office of education and the
    California Technology Assistance Project can help
    with E-rate too.
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