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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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Rules and Regulations
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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Rules and Regulations
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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Rules and Regulations
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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Rules and Regulations
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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Rules and Regulations
“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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Rules and Regulations
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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Competitive Bidding / Form 470
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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Competitive Bidding / Form 470
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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Competitive Bidding / Form 470
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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Competitive Bidding / Form 470
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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Competitive Bidding / Form 470
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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Funding Request / Form 471
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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Funding Request / Form 471
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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Invoicing / Form 472
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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Invoicing / Form 472
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/