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					    E-rate/CTF Training
       for Year 2004
          Version 4.0


               California Department of
               Education E-rate/CTF Training
               Collaborative

               October 2003




1
    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.



2
    E-rate and CTF Application Process




                    October 2003




3
    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.
4
    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.




5
    California Teleconnect Fund
           (CTF) Program



        A Program of the California Public Utilities Commission
                                                        (CPUC)




6
    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
7
    How the CTF Is Funded

       Funded by all end users of
        telecommunications services through a
        surcharge on their telecommunications bills




8
    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


9
     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.
10
     Charges Not Discounted by CTF

     • Nonrecurring charges (e.g., installation
       charge)
     • Usage charges




11
      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/public+programs/ctf+app.pdf




12
     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.
13
     Applying for E-rate



                   Forms 470, 471, and 486




14
     E-rate

        Eligible entities: schools and libraries
        Eligible services
        Eligible uses – new definition




15
     Discount Percentages

        Number of students eligible for National
         School Lunch Program
        Rural and urban designation




16
     Funding Priorities

        Priority One – Telecommunications and
         Internet access
        Priority Two – Internal connections




17
         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/applicants/processflow.asp
18
     Why File a Form 470?

        It’s required for competitive bidding and
         procurement of services.
        It initiates the application process.
        It describes the technology services being
         sought.




19
     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.universalservice.org/SL_PIN/NECAServl
         et.jrun?hszAction=START&hszCommand=REQUES
         T&szUserType=SLD


20
     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.


21
     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.



22
     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?




23
     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.



24
     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



25
     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.
26
     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.




27
     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.


28
     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.
29
     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.



30
     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


31
     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.
32
     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.



33
     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.

34
     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
         team’s questions:
           – Make sure you know what it is asking.
           – Don’t answer more than you were asked.
           – Retain PIA responses for audit purposes.


35
     Form 471 Receipt
     Acknowledgement Letter (RAL)

        Correct data entry errors.
        Provide or correct applicant’s 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


36
     Form 500

        Modify funding requests – Cancel or reduce
         the FRN.
        Modify service dates – See SLD guidance on
         changing service dates and contract
         expiration dates.




37
     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.


38
     Actions to Take After Receiving
                the FCDL



                Actions to Take After Receiving FCDL




39
     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)
40
     Form 486


      •   Why file
      •   When to submit (don’t miss the deadline)
      •   Ways to submit
      •   tips




41
     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 Children’s
         Internet Protection Act (CIPA) compliance



42
     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.




43
     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.asp#082003).




44
     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)




45
     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)
46
     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.universalservice.org/form/default.asp#applicants


47
     California Procurement
             Options



             California Department of General Services




48
     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
49
     Masters/State Contracts

     • Information technology services
     • Bid-based contracts
     • Competitive products, services, agencies,
       and prices
     • No order limit for local agencies




50
     Eligible Services Available through
        State Contracts

     •   Telecommunications services
     •   Internet access services (many suppliers)
     •   Internal connections




51
     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.




52
     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/ServiceDeliveryDeadlines.asp




53
     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.


54
     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).




55
     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.
56
     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.


57
     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.




58
     Program Topics

           Vendor Involvement
           Managing Phone Bills
           Reviews and Audits
           Program Updates
           Strategies




59
     What Vendors Can Do and
      May Not Do in the E-rate
             Program
                  California Department of
                  Education E-rate/CTF Training
                  Collaborative

                  October 2003




60
     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

61
     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.



62
     Vendor Qualifications

        Vendor/service provider’s (SP’s) 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
63
     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
       applicant’s ability to follow the open, fair
       competitive bidding process.
64
     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.
65
     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.
66
     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.
67
     Service Providers May Not

        Complete or sign applicant’s Form 470 and Form 471.
        Serve as the contact or evaluator on Form 470.
        Serve as a technology plan approver.
        Prepare an applicant’s Request for Proposal (RFP).
        Enter into a contract prior to the required 28-day waiting
         period.
        Provide “Alternative Funding” grants or foundations as
         payment applicant’s undiscounted portion of the service
         provider’s bid. See
         http://www.sl.universalservice.org/reference/freeservices.asp
        Make determinations on product or service eligibility.

68
     Service Providers May Not

        Interfere with or hinder the competitive
         bidding process. See
         http://www.sl.universalservice.org/data/ppt/2003/Service%20Provider
         %20Issues.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.
69
     Consequences for Violation of
     Program Rules

        Denial of funding
        Cancellation or adjustment of funding
        Audit or other investigation
        Criminal investigation




70
     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.




71
     Managing Phone Bills




              October 2003




72
     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


73
     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.).



74
     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

75
     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.




76
     Review and Audit Readiness

                 Documenting
                 Compliance with E-rate
                 Program Rules




77
     Documentation for Audits and Reviews

        Program Integrity Assurance (PIA) reviews
        Selective reviews
        Audits




78
     Minimum Processing Standards

        Correct form.
        Complete applicant information.
        Complete submission of form.
        File online to ensure you have met minimum
         processing standards.




79
     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.



80
     Selective Reviews - Item 25

                   Preparing for Selective
                   Reviews

                   October 2003




81
     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.


82
     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.

83
     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.

84
     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

85
     Preparing for Audits




86
            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

87
     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


88
     Potential Consequences of
     Selective Reviews and
     Investigations

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

90
     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 don’t be afraid to question their requests
             and/or decisions.
        Turn to experts, reputable vendors, and third-party
         consultants

91
     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


92
     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?

93
     Signing Contracts

        Applicant must have contract, PO, or other binding
         agreement.
        Applicant may want to make contract contingent on
         receiving funding.
        Don’t 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).



94
     Signing Contracts (Continued)

        Be careful that contract language doesn’t 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.

95
     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.



96
     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.



97
     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.


98
     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.



99
      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.




100
      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

101
      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
102            statements)
      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.


103
      Year 2004 E-rate Program
              Updates


       Program Changes, New Eligible and Ineligible
             Services, New Interpretations of Rules




104
      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

105
      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

106
      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




107
      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.

108
      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.


109
      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?


110
      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

111
      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


112
      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




113
      Telecommunications
      Discount Strategies




114
      Year 2004 Strategies

         Improve your district’s 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.




115
      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/opendatasearch/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
116
      Web References

         Schools and Libraries Division
          www.sl.universalservice.org
         California Department of Education
          www.cde.ca.gov/ls/et/ft/eratemain.asp
         E-rate Central
          www.e-ratecentral.org




117
      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/eratemain.asp
         Your county office of education and the
          California Technology Assistance Project can
          help with E-rate too.

118

				
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Description: Discounts on Phone Bill document sample