E-rate for Beginners John Noran Schools and Libraries Division Universal Service Administrative...

E-rate for Beginners

John Noran

Schools and Libraries Division

Universal Service Administrative Company

Train-the-Trainer Workshop

September 27-29, 2004


School and Libraries Support Mechanism– Provides discounts to eligible schools and libraries

for Telecommunications Services, Internet Access, Internal Connections, and Basic Maintenance.

– Applicants can be schools, libraries, or consortia, but only eligible recipients of services can receive discounts.

– Applicants must apply for discounts each year.

– Funding is capped at $2.25 billion annually.

– From January 1, 1998 through September 7, 2004, more than $13.7 billion in funding commitments have been issued to eligible schools and libraries.

School and Libraries Support Mechanism– Provides discounts to eligible schools and libraries

for Telecommunications Services, Internet Access, Internal Connections, and Basic Maintenance.

– Applicants can be schools, libraries, or consortia, but only eligible recipients of services can receive discounts.

– Applicants must apply for discounts each year.

– Funding is capped at $2.25 billion annually.

– From January 1, 1998 through September 7, 2004, more than $13.7 billion in funding commitments have been issued to eligible schools and libraries.

OverviewOverview

2


History Schools and Libraries Support

Mechanism started providing discounts as of January 1, 1998

– Telecommunications Act of 1996• Congress directed the FCC to “establish

competitively neutral rules . . . to enhance, to the extent technically feasible and economically reasonable, access to advance telecommunications and information services for all public and non-profit elementary and secondary school classrooms . . . and libraries.”

First Report and Order (FCC 97-157) 3


Introduction

Vendor Assistance– NSI in New Jersey

• Application review — Program Integrity Assurance (PIA)

• Invoice review (PIA)

• Appeal process

• Program correspondence, including change and extension requests

– Pearson Government Solutions in Kansas• Client Service Bureau (call center)

• Forms processing

4


Eligibility

Eligible Entities– Schools

• Must meet the statutory definition of elementary or secondary school found in the No Child Left Behind Act of 2001.

• Must be a non-profit institutional day or residential school, including a public charter school, that provides elementary or secondary education, as determined under state law.

• Must not be operating as a for-profit business.

• Must not have an endowment exceeding $50 million.

5

Applicants


Eligibility

Eligible Entities– Schools (cont.)

• Pre-kindergarten, Adult Education, Juvenile Justice

– Must meet state definition of elementary or secondary education.

– Students and/or facilities may be eligible.

– SLD requests updated information from state departments of education every two years.

6

Applicants


Eligibility

Eligible Entities– Libraries

• Must meet the statutory definition of library or library consortium found in the Library Services and Technology Act (LSTA) of 1996.

• Must be eligible for assistance from a state library administrative agency under LSTA.

• Budget must be completely separate from any schools.

• Must not be operating as a for-profit business.

7

Applicants


Eligibility Service Providers

– Must file Form 498, Service Provider Information Form• Request a Service Provider Identification

Number (SPIN)

• Provide/update contact information.

– Must file Form 473, Service Provider Annual Certification Form, on an annual basis• Required for invoices to be paid.

8

Service Providers


– Providers of Telecommunications Services• Must contribute to the Universal Service Fund, if

applicable. • Must provide telecommunications services on a

common carriage basis to be a telecommunications carrier.

• To be a telecommunications carrier, the carrier must– (1) allow the customer to transmit information of its

own design and choosing, without change in the form or content of the information, and

– (2) provide that capability for a fee directly to the public, or to such classes of users as to be effectively available to the public (i.e., hold itself out to serve indifferently all potential users).

Service Providers Telecommunications Carrier


– Telecommunications Carriers• Must file Form 499A on an annual basis and

check at least one box on Line 227 and file Forms 499Q, if applicable.

• Must revise the Form 498 to reflect Form 499 Filer. I.D.

• SP must be designated eligible in SLD database.

– SP may not provide telecommunications services if it has not been designated as a telecommunications carrier.

Service Providers Telecommunications Carrier


Eligibility Eligible Services

– Priority 1• Telecommunications Services

– local and long distance

– wireline and wireless

– voice, data, video

• Internet Access

– Priority 2• Internal Connections (switches, hubs, routers, wiring)

• Basic Maintenance on Internal Connections

– Priority 1 funded first, then Priority 2 funded beginning with neediest applicants (90%, 89%, 88%, etc.)

11


Eligibility Eligible Services

– Eligible Services List• Lists services by category

(Telecommunications Services, Internet Access, Internal Connections, and Miscellaneous)

– Services which are conditionally eligible

– Ineligible services

• Available on SLD web site

12


Calculating Discounts Discount Calculation

– National School Lunch Program (NSLP)• Individual schools — start with the percentage

of students eligible for NSLP for their school• School districts — start with the NSLP

percentages of individual schools in the district, calculate weighted average of all schools

• Libraries — start with the percentage of students eligible for NSLP for the school district in which the library is located

• Consortia — calculate simple average of discounts of members

– Urban or rural status of county in which school or library is located (from web site)

13

Applicants


Calculating Discounts• Points to Remember:

All discount calculations will involvepercentage of students eligible for NSLP in a

school or school districtdetermination of Urban/Rural statusdiscount from Discount Matrix.

Applicant with members or subunits must calculate an average of those membersSchool district – individual schoolsLibrary system – library outlets/branchesConsortium – eligible member entities

14

Applicants


Application Process• Technology Plan – What is my plan?• Form 470 – What services do I want?• Form 471 – What services did I order?• Form 486 – When did services start?• Form 472 or Form 474 – How do I

receive reimbursements or discounts?

Online filing/certification available for most forms

15

Applicants


Application Process• Form 498 – What is my SPIN?• Form 499A for Telecom Carriers – What is

my responsibility to the Universal Service Fund?

• Form 473 – What am I required to do before receiving payment on an invoice?

• Form 472 or Form 474 – How do I submit invoices to USAC?

Online filing available for most forms Online service provider certification under

consideration16

Service Providers


Technology Planning• Technology Plans

• Not required for basic local, cellular, PCS, and/or long distance phone service and/or voice mail

• Must be written before Form 470 filing• Must be approved by an SLD-certified approver

before Form 486 filing or start of services, whichever is earlier

• Must cover five areas:• Goals / Strategies for using technology• Professional development• Needs assessment• Sufficient budget• Evaluation process 17

Applicants


Service providers may offer NEUTRAL technical assistance.

Service providers may not act as technology plan approvers.

Technology PlanningService Providers


Form 470

• Form 470• Opens a competitive bidding process

• Applicant responsible for ensuring an open, fair process and selecting the most cost-effective provider of the desired services

• Must wait 28 days after POSTING of Form 470 to select service provider, sign contract, and sign and submit Form 471

• Can be filed once for multi-year contracts, but 470 and RFP must indicate intent to sign multi-year contract with extensions

• Make RFP available or list specific service/function and quantity/capacity 19

Applicants


Form 470• Competitive Bidding

• Request for Proposal (RFP)• Not required under the FCC Rules, but a good idea

• Must comply with local and state procurement laws

• Describes your project scope, location, other requirements in detail

• Competition• Goal is to have as many bidders as possible• Promotes better service and lower prices

• Fair and open process• All bidders treated the same, no advance knowledge of

RFP information• No secrets in the process, all bidders know what is

required of them20

Applicants


Competitive Bidding Process

Service providers must remain NEUTRAL at all times.

Service providers may not interfere with applicant’s affirmative duty to conduct a fair and open bid process.

Service providers may not exert undue influence over an applicant.

Service Providers


Competitive Bidding Process

• Obligation to Pay Non-discount Share• Applicants are required to pay their share

of the cost (the “non-discount” portion or share) — cannot be donated, forgiven or ignored.

• Service providers cannot waive or credit the applicant’s share.

• Offers to reduce price must be incorporated into the “total pre-discount amount.”

• Service provider must bill the applicant for non-discount share of services.

22

Both


FORM 470– Service providers may offer basic information,

such as timelines and deadlines.– Service provider or its consultant may not

complete the 470.– Service provider or its consultant may not sign the

Form 470.– Service provider or its consultant may not file the

Form 470. – Service providers may not prepare the RFP.– Service providers may contribute information on

technical issues.

Competitive Bidding ProcessService Providers


Form 470• Points to Remember:

Competitive bidding process must be open and fair.

List services sought in correct category of service (Form 471 must match).

Retain worksheets, bid evaluation criteria, winning AND LOSING bids.

Form 470 must be certified by close of Form 471 application filing window.

Filing online speeds processing and reduces errors. 24

Applicants


Form 470

• Form 470 Receipt Notification Letter (RNL)• Cover page of important reminders and deadlines

• Notifies applicant that Form 470 has been posted to the SLD web site

• System will generate RNL for Forms 470 filed online after form is submitted but before it is certified.

• Form MUST be certified before close of Form 471 application filing window.

• Contains Allowable Vendor Selection / Contract Award Date

25

Applicants


Form 471• Form 471

• Provides specific information on services, service providers selected, and contracts

• Provides discount calculation information• Must be filed for each funding year• Must be postmarked on or before the last

day of the Form 471 application filing window

• Applicant certifies compliance with rules, which include securing access to resources to make effective use of discounts. 26

Applicants


Form 471

• Points to Remember:WAIT AT LEAST 28 DAYS from the posting of

the Form 470 beforeselecting a service providersigning a contractsigning and submitting a completed Form 471.

File separate Forms 471 for Priority 1 and Priority 2 services.

Remove ineligible costs and document or estimate eligible costs carefully (30% Rule).

Filing online speeds processing and reduces errors.27

Applicants


Service providers should always provide correct SPINs and contact information.

Service providers are encouraged to provide guidance to the applicant on its services and functionality during the application process.

Service Providers Form 471

•Points to Remember:


Service providers are encouraged to assist with providing information for the Item 21 attachment for their services.– Clear level of detail on the Item 21

attachment may advance the processing of the invoice.

• An example of such detail would be the inclusion of the item (model #), quantity, and unit cost.



Applicants will not receive support for contracts that provide only a single price for a package that bundles both eligible and ineligible services together. – Service provider and applicant should work together

to create pricing terms in the contract that separate eligible services from ineligible services.

Service providers are also encouraged to assist in providing applicant with billing account numbers and contract numbers.



Form 471

• Form 471 Receipt Acknowledgment Letter (RAL)• Cover page of important reminders and

deadlines• Provides confirmation of certain

information entered from Form 471• Data entry errors may be corrected by

submitting a copy of the RAL with the specific errors lined out and the correct information supplied — three-week deadline.

• Funding request reductions may also be submitted before funding commitment. 31

Applicants


Contract Requirements

FCC Rules require applicant to sign a contract prior to the filing of a completed Form 471. 47 C.F.R. §54.504(c).

Fifth Report and Order requires both the applicant and service provider to sign the contract prior to the filing of a Form 471.– This rule does not apply to tariffed or month-to-

month services.– Verbal agreements are not acceptable.– Quotes are not acceptable.

Both


Service provider and applicant must comply with state contract law.

Service provider and applicant must comply with state and local procurement laws.

Contract RequirementsBoth


Applicant must provide signed and dated contracts for reviews and audits.– Applicant must be prepared to prove its

contract meets the requirements of state contract law.

Applicant certifies that it has signed a contract on its Form 486.

Contract RequirementsBoth


Contract Requirements

Service provider is required to permit the applicant prior to the submission of the Form 471 to choose the Method of Payment — BEAR v. SPI — for discounted services.– FCC Second Report and Order encourages the

applicant and service provider to work together to determine the method of payment.

– FCC Second Report and Order encourages including the method of payment in the contract.

Both


Contract Issues

Know your legal rights. SLD does not intervene in disputes

that are contract-based rather than program-rule based.– Contract disputes should be brought

before local and state courts, not the SLD or the FCC.

Both


State Master Contracts

If the state filed a Form 470, then the applicant may cite the state’s Form 470 on its Form 471.– The applicant is required to follow the applicable

provisions of the state master contract and local and state procurement laws.

– No separate bidding documents or contracts are required by the applicant citing the state’s Form 470, other than what is required by the state master contract and local and state procurement laws.

– The signed state master contract between the state and service providers meets the FCC signed contract requirement.

Both



If the applicant files a Form 470 and considers a state master contract as one of the bids:– The applicant is required to comply with all

competitive bidding requirements. If the applicant selects the state master

contract: – The applicant is required to follow the applicable

provisions of the state master contract and local and state procurement laws.

– The signed state master contract between the state and vendors meets the FCC signed contract requirement.

Both



Purchase orders or other state master contract requirements for applicants– If a state master contract requires the

issuance of purchase orders or contains other binding requirements for applicants, the applicants must follow the applicable dates set forth in the state master contract.

– For example, if a state master contract requires the applicant to issue a purchase order by July 1, then the applicant is required to meet that deadline.

Both


Application Review

• Review of Applications• Review by PIA, which may include:

Competitive bidding processContractsDiscount calculationSufficient budgetEstablishing Form 470Technology Plan

40

Applicants


Application Review

• Points to Remember:Provide information requested by

reviewers (PIA) promptly.If desirable, work with your state coordinator

to comply with information requests.Ask for more time if you need it.

Retain documentation.Review Request for Selective Review

Information fax to understand what information might be requested.

41

Applicants


Funding Commitments

Commitments vs. Disbursements

– $2.25 billion cap for each funding year.

– SLD may commit more that $2.25 billion for a funding year if unused funds from previous funding years have been rolled over to that year.

42


Funding Commitments• Funding Commitment Decision Letter

• Cover page of important reminders and deadlines

• FCDL reports status of individual funding requests:FundedNot FundedAs Yet Unfunded (Internal Connections)

Service provider does not receive this statusCanceled

• May receive more than one FCDL43

Both


Funding Commitments

• Points to Remember:Check all entries on the FCDL carefully to

make sure there are no data entry errors.Applicants use the information on the

FCDL to prepare the Form 486.

44

Both


Form 486

• Form 486• Notification that services have started and the SLD

can pay invoices

• Certifies that Tech Plan (if required) has been approved.

• If Tech Plan has not been approved by SLD-certified approver, the application is subject to denial and invoices will not be paid.

• Certifies status under Children’s Internet Protection Act (CIPA).

• Lead members of consortia may be required to collect CIPA certifications from consortium members on a separate form (Form 479). 45

Applicants


Form 486Form 486 Deadline

Form 486 must be postmarked no later than• 120 days after the Service Start Date featured on

the Form 486 OR• 120 days after the date of the Funding

Commitment Decision Letter

whichever is later.• If Form 486 is postmarked later than the

above deadline, the date 120 days before the Form 486 postmark date will become the start date for discounted services and funding may be reduced. 46

Both


Form 486

• Form 486 Notification Letter• Cover page of important reminders and

deadlines. • Provides confirmation that a Form 486 has

been successfully data entered.• SLD will accept invoices from applicants

and service providers once the Form 486 is successfully processed.

47

Both


Service Delivery Deadlines• Recurring Services

• June 30 of funding year

• Non-recurring Services • September 30 following the close of the funding

year• Deadline automatically extended to September 30

of the following year for FCDLs, service substitution approvals, and SPIN change approvals dated on or after March 1 of the funding year.

• Applicants can also request extension for specific reasons involving difficulties with delivery of services by service provider.

• See web site for further information. 48

Both


Form 473• Form 473 – Service Provider Annual

Certification (SPAC) Form• Service providers are required to file on an

annual basis.• SLD will only pay invoices for a funding

year if a SPAC is on file for that funding year.

• SPACs are required for both BEARs and SPIs.

• SPIN Search Tool on SLD web site lists funding years for which a SPAC is on file.

49

Service Providers


Invoices

• Invoices — Form 472 or Form 474• BEAR (Billed Entity Applicant Reimbursement)

Form 472 is filed by the applicant and certified by the service provider after the applicant receives services and pays for the services in full.

OR

• SPI (Service Provider Invoice) Form 474 is filed by the service provider after providing services and billing the applicant for its non-discount share.

50

Both


Invoices

• Points to Remember:Invoices cannot be used to request SPIN

changes or service substitutions.Invoices are reviewed for program

compliance – respond promptly to requests for information.

Service providers are required to reimburse the applicant within 20 days after RECEIPT of the funds from SLD.

51

Both


InvoicesInvoice Deadlines

Invoices must be postmarked no later than• 120 days after the last date to receive service OR• 120 days after the date of the Form 486

Notification Letter

whichever is later.• If an invoice is postmarked later than the

above deadline, payment will be denied.• Extensions of invoice deadlines may be

requested under certain conditions.• See web site for details.

52

Both


Invoices• BEAR Notification Letter

• Cover page of important reminders and deadlines

• Provides confirmation that a Form 472 (BEAR) has been successfully data entered.

• Indicates what amounts are being paid and reason for reductions/denials.

• SPI Electronic Notification – Invoice Status Report• Service provider can receive an electronic

notification. 53

Both


SPIN Changes

Corrective SPIN Change – to correct data entry errors or where the applicant used the wrong SPIN for the service provider selected

Global SPIN Changes – mergers or acquisitions in whole or in part– Considered a Corrective SPIN change

Operational SPIN Change – only available after receipt of FCDL

See web site for more guidance.

Both


Operational SPIN Changes

For changes to a new service provider Applicant must make three certifications:

– Change allowed under local procurement laws

– Change allowed under terms of contract

– Original service provider notified of intent to change

Can NOT be used for telecommunications services if new SPIN is not a telecommunications carrier

Both


Document Retention

Remember 5-year retention requirement for all documents.

Good recordkeeping is ESSENTIAL. Keep copies of EVERYTHING. Keep these documents with E-rate files,

or copies, if accounting department keeps its own files.

56

Both


Document Retention Types of records to retain include:

– Competitive bid documents• RFPs, bids, quotes, proposals, etc.

– Signed contracts– Service provider bills to customers

• Detail of services/products and locations• Indicate entity(ies) receiving service/products• Delivery/installation dates

– Applicant payments• Cancelled checks• Service credits for any reason 57

Both


Appeals• Decisions of the SLD can be appealed to the

SLD or to the FCC.• Generally, appeal first to the SLD.• Can appeal to the FCC if SLD does not grant the

appeal.

• Can be filed electronically or on paper.• Must be received or postmarked within 60

days of the SLD decision.• See Appeals Procedure in Reference Area for

specific guidance.• Requests for waivers of rules must be filed

with the FCC. 58

Both


Audits• Why do we do audits?

• To provide data regarding program rule compliance.

• To identify areas needing education and outreach.

• To clarify program rules that must be strengthened to prevent waste, fraud and abuse.

• To enforce accountability for program rule compliance.

• To deter noncompliance.59

Both


Audits• Who performs audits?

• USAC Internal Audit• Independent auditors engaged by either

USAC or the FCC• FCC Office of Inspector General• Other agencies

60

Both


Audits• What documents do auditors need?

• Budget / financial statements• Technology Plan and approval letter• Documentation of competitive bidding

process• Documentation of discount level claimed• Copies of contracts and contract extensions• Copies of service provider bills, cancelled

checks, BEAR Forms, BEAR checks, and other supporting documentation

• Asset inventories or registers61

Both


Assistance

• SLD main page of USAC web site• www.sl.universalservice.org

• Client Service Bureau• Use the “Submit a Question” link on the

web site• Fax toll-free at 1-888-276-8736• Telephone toll-free at 1-888-203-8100

• Read the form instructions62

Both


http://www.sl.universalservice.org


http://universalservice.webex.com

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