Documentation for E- Rate Audit Purposes

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Documentation for E- Rate Audit Purposes

Amber Prioleau

E-Rate Manager/Network Technician

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Overview

Rules and Regulations Technology Plan Filing Process Audit Check List

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Rules and Regulations

Documentation must be retained for five years after the last date services are delivered

Keep these documents with E-Rate files Create a folder for all requested services Create subfolders for all forms and

additional documents such as worksheets, contracts, invoices, etc.

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Types of documents to retain include: Technology plan and approval letter All competitive bid documents (winning and

losing) Signed and dated purchase orders along

with minutes approving purchase order, if applicable

Signed and dated contracts

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Service Provider bills Invoice of services/products and locations Delivery/installation dates

See the FCC Fifth Report and Order for a detailed list

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Equipment Transfers Equipment can be transferred three years

after purchase After the three year period, the equipment

may be transferred to another eligible entity Exception to the three year transfer

prohibition: permanent or temporary closing of the eligible entity

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Eligible moving Year

Purchased Year

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Equipment cannot be transferred with or without consideration of money or any other thing of value

See the FCC Third Report and Order for details on this process

All entities must maintain asset and inventory records for five years

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“Two Out of Five Rule” for Internal Connections Starting in Funding Year 2005, eligible

entities will only be eligible to receive support for Internal Connections in two out of every five funding years

All entities on a Block 4 worksheet that received a positive commitment for Internal Connections are counted as taking one of the two allowable years

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Applicants and service providers must sign and date a contract before filing a Form 471 This rule does not apply to non-contracted

tariffed or month-to-month services Verbal agreements and quotes are not

acceptable Purchase orders are acceptable if in

accordance with state and local procurement laws and state contract laws

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Eligible Services

Only certain products and services, used in certain ways, are eligible

Review the eligible services list released before each funding year A searchable interface is available for

you to search the eligible services by keyword

New Eligible Products database is available for you to search for internal connections products

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Eligible Services

Priority 1 Telecommunications Services Internet Access

Priority 2 Internal Connections Basic Maintenance on Internal

Connections

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Eligible Services

Cost allocation: If a product or service has both eligible and ineligible components, funding must be requested only for the eligible portion

Trained Staff: Must have trained personnel, qualified to operate any eligible equipment See Technology Planning and FCC Fifth

Report and Order

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Eligible Entity

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

Pre-kindergarten, Adult Education, and Juvenile Justice students/facilities may be eligible

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Eligible Entity

Non-Instructional facilities are eligible only for Priority 1 services. Examples of non-instructional facilities include, but are not limited to, administrative buildings, school bus barns and garages, cafeteria offices and facilities associated with athletic activities

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Technology Plan

Must cover the services being requested Not required for basic telephone service

Must be written before filing the Form 470 Must cover all months of service Must be approved by a certified approver

prior to the service start date or filing the Form 486, whichever is later

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Technology Plan

Must cover five specific components: Goals / Strategies for using technology Professional development Needs assessment Sufficient budget Evaluation process

Must show a summary of the technology environment and a high-level network diagram

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Technology Plan

Keep a copy of the technology plan and approval letter

Keep a copy of the budget Keep a list of person(s) that helped

develop the technology plan Keep notes on meetings held in

preparation of the technology plan and sign-in sheets

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Filing Process

Five parts to the application filing process Competitive Bidding / Form 470 Funding Requests / Form 471 Starting Services / Form 486 Invoicing / Form 472 Adjustment / Form 500

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Competitive Bidding / Form 470

Should align with Technology Plan Provide as much detail as possible so

bidders can respond If a Request for Proposals (RFP) is used,

list where it can be found or a contact person

List possibility of a multi-year contract and/or a contract with voluntary extensions, if applicable

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Service Providers may not help with the competitive bidding process

Service Providers may not provide funding for applicant’s undiscounted portion

Service Providers may not waive applicant’s undiscounted portion

Service Providers may not provide hidden incentives, such as free ineligible services

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All bidders must be treated the same Goal is to have as many bidders as

possible Promotes lower prices which should be the

primary factor when evaluating Must be posted on SLD web site for 28

days before awarding a Service Provider If an RFP is used, it must also be posted

for 28 days

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Certify the Form 470 before the Form 471 filing window closes

Print a copy of the Form 470 for your records along with the certifications Pay close attention to the allowable

contract award date. Do not award the bid before this date

Save any correspondence held with Service Providers during the bid process

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Select a Service Provider after 28 days Create a bid evaluation with price as the

primary factor Construct a contract for both the applicant

and Service Provider to sign Save all worksheets, bid evaluation

criteria, and winning and losing bid documentation

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Notify all bidders of the winning bid with an email or letter

Retain the 470 Receipt Notification Letter (RNL) Contains the Allowable Vendor Selection /

Contract Date At all times save a copy of all supporting

documentation

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Calculating Discounts

Discounts are calculated using the percentage of students eligible for National School Lunch Program (NSLP) and the Urban or Rural status of the county in which your school is located The NSLP numbers used should be from

October or the most current month before filing the Form 471

This information is used in the Discount Matrix

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INCOME Measured by % of students eligible

for the National School Lunch Program

URBAN LOCATION Discount

RURAL LOCATION Discount

...and you are in an URBAN

area, your discount will

be...

...and you are in a RURAL area, your

discount will be...

Less than 1% 20% 25%

1% to 19% 40% 50%

20% to 34% 50% 60%

35% to 49% 60% 70%

50% to 74% 80% 80%

75% to 100% 90% 90%

Discount Matrix

If the % of students in your school that qualifies for the

National School Lunch Program is...

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Calculating Discount

Individual Schools Take the percentage of students eligible

for NSLP for each school Determine Urban/Rural status Find discount on Discount Matrix

School district Find the weighted average of all schools

and divide by the total number of students

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Individual Schools Percentages

District Percentage

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Calculating Discount

Non-instructional facilities carry the discount percentage of the district if there are no classrooms in the building

Keep all documentation you have on how the discount percentages were generated

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Item 21 Attachment

Should consist of at least these three components: Description of services Line items detailing the requested products or

services Any additional information, if needed, such as

equipment location

An online system is available for creating and submitting Item 21 Attachments, or you may create your own

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Item 21 Attachment – Priority 1

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Item 21 Attachment – Priority 2

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Item 21 Attachment

Service Providers may assist in the Item 21 process

Must match funding request in Block 5 of the Form 471

Must be sent along with the Form 471 30% rule – Cannot have 30% or more of

the requested dollar amount for ineligible products or services. If so, the entire request will be denied

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Funding Request / Form 471

Provides information on requested services, awarded Service Providers, discount calculations, and contracts Make sure you have the correct service

provider identification number (SPIN) Make sure the contract award date is not

before the allowable contract date Includes certifications of compliance Includes one or more funding requests

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Must be filed online or postmarked on or before the close of the Form 471 application filing window

Print a copy of the Form 471 along with the Certification Page for record keeping

If you are submitting on paper, you must submit a worksheet with all the schools in the district documenting the weighted average discount. Label the worksheet “All Schools in the School District.” Keep a copy

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Check the Form 471 Receipt Acknowledgment Letter (RAL) for data entry errors Data entry errors must be corrected within

three weeks of receiving the 471 RAL by using the RAL and the Block 4 worksheets

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Application Review

Applications are reviewed by Program Integrity Assurance (PIA) for compliance with program rules

Provide information to PIA promptly Normal allotted time is fifteen days Ask for more time if needed

Service Providers may assist in answering questions regarding products and services

Retain all documents during USAC review of the Form 471 and attachments

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Funding Commitment Decision Letter (FCDL)

Reports status of individual funding requests May receive more than one FCDL

Check the FCDL to make sure there are no data entry errors

Use the information on the FCDL to complete the Form 486

File with other notification letters

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Starting Services / Form 486

Notifies USAC that services have started and invoices can be paid

Certifies that Technology Plan meets program requirements

Certifies the status under Children's Internet Protection Act (CIPA)

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Children’s Internet Protection Act (CIPA) A policy of Internet safety must be

enforced in order to be eligible for discounts

Requirements include: Technology Protection Measure Internet Safety Policy Public Notice and Hearing

Retain a copy of the minutes and the date of the public hearing regarding the Internet Safety Policy

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Starting Services / Form 486

Best to file Form 486 as soon as you receive an approved FCDL

Must be filed online or postmarked no later than 120 days after the Service Start Date OR 120 days after the date of the FCDL,

whichever is later

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Form 486 Notification Letter

Confirms that a Form 486 has been accepted

Reports Service Start Date and Adjusted Start Date and Commitment Decision, if relevant

Invoices will be accepted by USAC once the Form 486 is certified

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Invoicing / Form 472 or 474

BEAR (Billed Entity Applicant Reimbursement) Form 472 is filed by the applicant seeking reimbursement for bills paid in full

SPI (Service Provider Invoice) Form 474 is filed by the Service Provider after billing the applicant the discounted price

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Invoicing / Form 472

Use the information from your FCDL to help complete the Form 472

Verify that you have specified the correct information - SPIN, funding request number (FRN), calculations, etc.

Make sure your Service Provider has signed the last page before submitting

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This is an example of a spreadsheet demonstrating the Undiscounted and Discounted amount that should be reflected on the Form 472.

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Be able to verify date of receipt of equipment / services (packing slip, etc.)

Retain all purchase orders, invoices, and cancelled checks to verify payments

Retain documentation of receipts and deposits for BEAR invoices

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Invoicing / Form 472 or 474

Must be filed online or postmarked no later than 120 days after the last date to receive

service OR 120 days after the date of the 486NL,

whichever is later Payment will be denied if the invoice is

late An extension on invoicing may be

requested under certain conditions

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BEAR Notification Letter

Provides confirmation that a Form 472 has been successfully processed

Specifies the amount being paid and/or reasons for reductions and denials

Specifies the time frame in which you should receive a check from your Service Provider

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Adjustment / Form 500

Form 500 – Adjustment to Funding Commitment and Modification to Receipt of Service Form Change service start date Change contract expiration date Cancel funding request number (FRN) Reduce funding request number (FRN)

If there is unused money for an FRN, use the Form 500 to return unused funds

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Audit Checklist Auditors need documentation on:

Budget / financial statements Technology Plan and approval letter Competitive bidding process Discount level claimed Contracts and contract extensions Copies of Service Provider bills, cancelled

checks, BEAR Forms, BEAR checks, and supporting documentation

Asset inventories

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Audit Checklist

Have available: Person who manages the bidding and

award process Person who prepares E-Rate invoices Person who writes checks, makes

deposits, and reconciles the bank account Person knowledgeable about the network

and the location of equipment

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Audit Checklist

Maintain an inventory of E-Rate equipment that includes make, model, serial number, physical location, date installed, FRN, customer bill reference number(s), pre-discount cost, non-discount portion, and reference number (e.g., check number) of the payment of the non-discount portion Inventory database and E-Rate database

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Inventory Database

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Inventory Database

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E-Rate Database

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E-Rate Database

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E-Rate Database

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E-Rate Database

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E-Rate Database

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Find Answers to your Questions

School and Libraries Divisions (SLD) website: http://www.universalservice.org/sl/

Client Service Bureau: Submit a Question link Phone: 1-888-203-8100 Fax: 1-888-276-8736

Document any responses from SLD

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References Audits of Beneficiaries Fact Sheet

http://www.universalservice.org/sl/about/audits/audit-fact-sheet.aspx

Eligible Products Database https://slpin.universalservice.org/mfpin/

EPDPublic/PublicInterface/Search.aspx FCC Fifth Report and Order

http://www.universalservice.org/sl/about/document-retention-requirements/default.aspx

FCC Third Report and Order http://www.universalservice.org/sl/about/

changes-corrections/transfers-equipment.aspx

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References Item 21 Attachment

http://www.sl.universalservice.org/menu.asp

Schools and Libraries Tip Sheets http://www.universalservice.org/sl/about/tip-

sheets.aspx

Searchable Interface http://form498.universalservice.org/esl/

eslSearch.aspx

USAC Training Presentations http://www.universalservice.org/sl/about/training-

presentations/

Documents

Documentation for E- Rate Audit Purposes