Schools and Libraries Could Lose Millions of Dollars in Approved E-rate Discounts If They Miss Deadlines To: CoSN Members
From: Funds For Learning, LLC
Date: October 27, 2003
Re: Failure to meet late October payment paperwork dates could jeopardize approved funding, Funds For Learning(R) analysis warns Technology and Learning 2 Conference, Anaheim, CA (October 22, 2003) -- Cash-starved schools and libraries could face the loss of millions of dollars worth of approved E-rate discounts if they fail to follow up with the required payment paperwork by two fast-approaching deadlines, according to an analysis prepared by the E-rate consulting firm Funds For Learning(R). The Funds For Learning analysis showed that as of October 1, 2003, schools and libraries whose discounts were approved before the start of the 2003 funding year on July 1 had not yet taken the first step required to make use of up to $208 million in approved discounts for telecommunications services and Internet access. Assuming the applicants were using these services when the funding year began, they would face an October 29, 2003, deadline to notify the program administrators that the services had started. Schools -- or their vendors -- may also be failing to complete the necessary paperwork specifying the precise discounts payments they are owed. As of October 1, $1.285 billion in approved commitments for the 2002 funding year had not yet been disbursed, according to Funds For Learning. Up to $54 million of that amount includes commitments for telecommunications services and Internet access that are likely to be subject to an October 28, 2003, deadline for processing invoices for recurring services delivered during the 2002 funding year, which ended June 30, 2003. Those commitments could be jeopardized if the invoicing paperwork is not processed in time. The Funds For Learning analysis also found that as of October 1, applicants had still not used $626 million worth of approved commitments for the 2001 funding year -- eight months after the deadline for processing invoices on most approved commitments for that year. This figure will become more significant in the coming application cycle because the Federal Communications Commission has, for the first time, authorized the "roll-over" of unspent funds to support the requests of schools and libraries. In August, the Universal Service Administrative Company told the FCC that it projected it would have $420 million available to roll over for the 2004 funding year, for which applicants are about to begin submitting applications. That could boost the size of the available E-rate funding pot well beyond the $2.25 billion that the SLD has previously been authorized to disburse. In addition to its annual filing window deadline -- recently set for February 4, 2004, for the 2004 funding year -- the E-rate program now has a more complicated series of variable deadlines for processing the Form 486 and related invoices. Approved E-rate discounts can be used only when a school or library has actually purchased the services for which it sought discounts. Applicants are required to file the Form 486 to notify the Schools and Libraries Division (SLD) that services have started and the SLD can begin to process discount payments. Under E-rate program rules, an applicant must file the form within 120 days of the date of the funding commitment letter or the date services started, whichever date is later. The deadline is tied to the requirements of the Children's Internet Protection Act (CIPA), but is now required for all funding commitments, whether or not the services are subject to CIPA compliance. The Funds For Learning analysis found that as of October 1, 2003, the SLD had not yet processed a Form 486 for just over $208 million worth of discounts on Funding Year 2003 telecommunications services and Internet access for which applicants were approved before July 1. Many of these Priority One services are traditional phone services or Internet access services that applicants are already receiving. If these services started at the beginning of the funding year on July 1, 2003, the Form 486 would have to be postmarked by October. 29, 2003. (Applicants who received their funding commitments after July 1 were not included in the Funds For Learning total.) If an applicant is late in filing the form, the SLD is required to move the permissible service start date forward. An applicant can then lose access to some of the discounts, depending on how long it delays. Service Provider Invoice forms or Billed Entity Applicant Reimbursement (BEAR) forms detailing the precise amount that should be disbursed must be postmarked by 120 days after the installation deadline for the type of services involved, or the date of the Form 486 approval letter, whichever is later. In general, the deadline for submitting invoices for most telecommunications services and Internet access is October 28 following the end of the funding year, and January 28 in the case of one-time expenses, such as most internal connections projects. "These sliding deadlines are very difficult for applicants to manage and one reason there is a gap between the total commitments that are approved and those that are disbursed," said Orin Heend, president of Funds For Learning. "Those applicants that miss these deadlines can lose access to discounts they were counting on. To the extent that schools may have built the discounts into their budgets, this can exacerbate their financial problems." About Funds For Learning(R) Funds For Learning, LLC, (www.fundsforlearning.com) is an educational technology consulting firm with offices in Arlington, VA, and Edmond, OK. It has focused its consulting practice on the E-rate program since the program started in 1997, and provides services and products to meet the needs of E-rate applicants and vendors. It also tracks other sources of potential funding for educational technology. For more information contact: Sara Fitzgerald
Funds For Learning
703/351-5070
[EMAIL PROTECTED]
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