I M P O R T A N T

One Week To Go for Tech Plan Re-Approvals

One Week To Go for Tech Plan Re-Approvals

PY4 applicants, whose original E-rate technology plan approvals expire at the end of this month (after the normal three-year cycle), have only one more week to get their plans re-approved in time for the start of the fourth funding year.

Although applicants will not have to formally certify that they have approved plans until funding is awarded and they file their Form 486s, E-rate rules specify that discounts (other than for basic telephone service) can be provided only for services received under approved technology plans. Applicants waiting for PY4 funding, and intending to apply for discounts retroactively from July 1, should be covered by plans that have been approved on or before that date. If approval is not received until later, only subsequent services can be discounted.

Example:

Suppose an applicant with 60% discount rate filed a PY4 application last January requesting E-rate funding for ongoing T-1 service at a pre-discount rate of $1,000 per month. Assuming the request is ultimately approved, the applicant will receive a funding commitment for $7,200 (60% of the annual $12,000 cost). If the applicant's technology plan is not approved until August 1, however, the applicant should not file for discount reimbursement for the month of July. The one-month approval delay effectively costs the applicant $600 (60% of July's $1,000 cost).

If, as in the above example, the technology plan has not been approved for the full funding year, the applicant must exercise care in filing a Form 486 that certifies that a plan has been approved for services received. Planning ahead, here are two filing suggestions:

• A Form 486 should be filed indicating a Funding Year Service Start Date (Item 7, Column F) that is no earlier than the plan approval date (e.g., 08/01/2001).
• A Form 500 should be filed reducing the funding proportionally (e.g., from $7,200 to $6,600 to eliminate one month's worth of discounts).