|E-Rate Central News for the Week
|January 17, 2005
|The E-Rate Central News for the Week is prepared by E-Rate Central. E-Rate
Central specializes in providing consulting, compliance, and forms processing
services to E-rate applicants and service providers. To learn more about our
services, please contact us by phone (516-832-2880) or
|SLD Issues a FY 2005 Application
The SLD's annual application instruction letter was faxed or mailed to
applicants last week. A copy of the letter is available on the SLD Web site
Field Letter). The letter provides an excellent summary of the
requirements for technology planning, competitive bidding, and FY 2005
application procedures. Please note the following points, most of which should
be a review:
The initial version of the letter contained an error on an important date. The
last possible day for filing a Form 470 is January 20 (not January 21). The SLD
has corrected its Web site and is resending earlier letters to applicants.
Competitive bids must be accepted and be fairly evaluated (with price being the
most important factor). Copies of all bids received and all bid evaluation
material should be retained. A sample bid assessment matrix is available on the
E-Rate Central Web site (see
Any applicant choosing a supplier from a state Multiple Award Schedule, listing
a number of qualified vendors, must be prepared to show that its choice was the
most cost-effective. Often, this requires the assessment of "mini bids" from
more than one supplier.
A formal Request for Proposal ("RFP") must be accompanied by a corresponding
Form 470 referencing that RFP. Both the Form 470 and the RFP must be available
to potential bidders for at least 28 days.
Except for tariffed or certain month-to-month services, all E-rate services
must be provided under contracts that were executed before the associated Form
471s were filed. Valid E-rate contracts must be signed and dated by both
parties. If a state recognizes Purchase Orders ("POs") as contracts, those POs
must also be signed and dated by both parties, and must be effective for the
associated funding year.
Technology plans must be written before Form 470s are filed. The plans must
cover the funding year in question and must contain all five required elements.
Formal plan approval is not required until the start of service date.
If an E-rate form is signed by someone other than an employee of the applicant,
the authorization of that person should be reflected in a specific Letter of
|FCC Reverses SLD Procedure for
Denying Requests for Unsubstantiated Charges
|The FCC released an important appeal decision last
week in which it overturned a procedure that the SLD has been using for more
than two years whereby it would treat "unsubstantiated" funding requests the
same as "ineligible requests" when applying the "30% Rule."
If, for example, an applicant filed a telephone funding request assuming
$500/mo. in charges but, when asked for supporting bills, could only produce
$300 worth, the SLD would deny the request because more than 30% of the
original request was unsubstantiated.
The FCC's decision indicated that the 30% Rule should apply only to strictly
ineligible requests. Unsubstantiated requests should be reduced, but not
This was a major test case, first filed in June 2003. Since that time, the SLD
had continued to apply the 30% unsubstantiated rule, but had been holding
related appeals pending FCC action. There are approximately 400 such appeals
outstanding at the SLD, and a few others at the FCC. We would now expect the
SLD to approve those appeals.
The SLD has reportedly already changed its PIA review procedures to reflect the
FCC's position. However, applicants who have already been denied based on the
old rule, and who didn't appeal, are out of luck. Applicants who were denied on
the basis unsubstantiated charges in FY 2005 waves 10 and 11 still have time to
appeal, and should do so.
The entire decision is available at
Iroquois West Decision. The critical paragraph in the decision reads:
"We find that SLD's actions go beyond the appropriate application of the 30
percent benchmark. We understand SLD's rationale for applying the 30 percent
policy to unsubstantiated amounts for eligible services – to create incentives
for applicants to request only those amounts that they can justify as
reasonable estimates of the costs of eligible services. The 30 percent policy,
however, applies to requests for ineligible services, not for unsubstantiated
amounts of eligible services. Such an application goes beyond the scope of the
30 percent policy as drafted. Applicants must be aware, however, that if
funding requests are submitted in amounts that go beyond what they can
substantiate, their funding requests will be reduced to the amount that is
substantiated. Accordingly, we remand this case and direct SLD to grant the
commitment request ... in accordance with this order, unless SLD identifies
other grounds for denial."
|Entity Numbers, NCES Codes, and
FCC Registration Numbers
|The new requirements for NCES Codes and FCC
Registration Numbers ("FCC RNs") are causing some confusion. The following
information may be helpful.
E-Rate Entity Numbers:
Since FY 1999, each school and library has been required to be identified by a
SLD-assigned Entity Number (and each applicant by a Billed Entity Number).
Beginning last year, applicants were also required to obtain Entity Numbers for
their Non-Instructional Facilities ("NIFs") such as separate administrative
buildings or bus garages. For Form 471 application purposes, each facility is
listed on a Block 4 Discount Calculation Worksheet.
If you need a new Entity Number for a new facility - often a NIF - call the
SLD's Client Service Bureau (888-203-8100).
"NCES" stands for National Center for Education Statistics, the primary federal
entity, organized under the U.S. Department of Education, charged with
collecting and analyzing education data in the U.S. NCES Codes are provided for
public school districts, individual public schools, and private schools. The
codes for private schools are sometimes referred to as PSS (Private School
Universe Survey) Codes. The equivalent codes for libraries are called FSCS
(Federal-State Cooperative System) Codes. As a class, for E-rate purposes, we
refer to all these codes as "NCES Codes."
NCES Codes were used to identify entities in the first E-rate funding year, and
are being reintroduced this year at the behest of the DOE. Applicants can
search for codes in the Online Data section of the NCES Web site (see
The SLD will pre-populate NCES fields in the online Form 471 whenever possible.
Generally, public schools use 12 digit school codes made up of 2 digit state
codes, 5 digit district codes, and individual 5 digit school codes. Private
schools use 8 character codes, either all numeric or beginning with 1-2
letters. Libraries use 6 or 9 character codes, starting with two character
state abbreviations followed by 4 digit system codes, and sometimes by 3 digit
NCES Codes for newer schools and libraries may not be available. The most recent
comprehensive data is from 2002-2003. New codes are assigned by NCES based on
information provided from the state education and/or library departments, but
the process is a bit lengthy.
Non-instructional facilities do not have NCES Codes. When listing a NIF on Block
4 of a Form 471, either online or on paper, the NCES field should be left
blank. It can also be left blank for schools and libraries listings if no code
has yet been assigned (or an online applicant has trouble having a code
FCC Registration Numbers:
Beginning this year, all entities listed on a Block 4 are required to have FCC
RNs, even though the current version of the Form 471 does not have fields for
these numbers. Presumably, the FCC RNs will be required by the time an
application is reviewed. This means that applicants should not delay filing
their Form 471s if FCC RNs have not been obtained, but that they should start
obtaining them as soon as possible.
FCC RNs must be obtained online, either through the SLD or FCC Web sites. Each
has its advantages and disadvantages.
To obtain FCC RNs through the SLD site, go to
FCC Registration Number. The SLD offers an option to request numbers
either individually or by uploading a file listing multiples entities. Requests
processed through the SLD are forwarded to the FCC which, in turn, will send
the FCC RN assignments back to the SLD. The advantage of this process is that
the SLD will have the FCC RNs in its database and will not have to ask the
applicants for the information. The disadvantage is that the process takes
time. Requests made before February 25 (the last day on which the SLD will
accept requests) are scheduled to be processed by mid-March.
The file upload process on the SLD site will be the most convenient for larger
applicants, but its use requires some care. The file must be prepared according
to a specific record layout. (Note: Excel can be used to prepare the data, but
the Excel file must be saved in CSV format for submission.) Applicants using
this process need to know that:
The required "BEN" field is meant to refer to each entity's own Entity Number,
not to the applicant's Billed Entity Number; and
The address information should relate to the contact person who will be sent
the FCC RN assignments. Thus, in a multi-record file, the BEN field will be
different for each record, but the contact information will likely be the same.
To obtain FCC RNs through the FCC site, go to
CORES System. Numbers obtained from the FCC must be requested on a
one-by-one basis, but are assigned on the spot. Applicants using this process
should know that:
The information requested and/or required in the FCC application process does
not precisely match the information required by the SLD. It requires a Business
Type and Subtype (which for public school districts can be "State or Local
Agency" and "State or Local Commission," respectively), and includes an
Organization field (such as the district name). Some of the contact information
(including an actual name) required in the SLD's format, is optional for the
Each FCC RN must be associated with a federal tax identification number ("EIN"
for a business entity). A public school district will typically have only a
single EIN. When applying for multiple FCC RNs, the FCC system will post two
warnings each time a new FCC RN requested is associated with an existing EIN.
These warnings can, and must, be overridden to obtain multiple FCC RNs.
The FCC registration system does not require E-Rate Entity Numbers, nor does it
report FCC RN assignments back to the SLD. FCC RNs obtained through the FCC
process will eventually have to be reported to the SLD, either as an attachment
to a Form 471 or during the PIA review process.
|SLD Site Audits Beginning This
|Last fall, the SLD announced plans to conduct 1,000
on-site applicant "visits" this year to check on the success of its outreach
program and to make spot checks on selected invoices. We noted, at the time,
that these visits should be treated seriously as mini-audits.
In November, the SLD awarded a consulting contract to BearingPoint, Inc. to
conduct these audits, and indicated that they would begin in January. The first
group of applicants selected for visits are now being notified. Based on
reports of early notifications and trial visits, several points should be
Applicants do not have a lot of flexibility on the scheduling. A typical call
announcing a visit specifies a date, then asks, "Would 8:00 or 8:30 a.m. be
most convenient?" If the date selected is truly inconvenient for an applicant,
we expect it can be changed, but don't expect an extended postponement (e.g.,
until after the Form 471 deadline).
The SLD hopes that any visit can be completed in one day. The focus of each
visit is supposed to be to check on one invoice (or, perhaps, one set of
invoices). Expect the auditor(s) to ask for competitive bid and assessment
documentation, the associated contract, proof of applicant payment, and an
inventory record. The actual installation will need to be confirmed.
Checks will also be made on the availability of supporting resources (as per
Item 25 certifications). Teachers and staff may be questioned as to how the
equipment is being used and on staff development.
There is nothing wrong with serving tea, but these are not social visits.
Negative reports can lead to more in depth audits and/or repayment demands. If
information is requested that cannot immediately be provided, offer to provide
it later. Document everything - questions and answers.
Applicants using consultants to help them with the E-rate process should have
those consultants help them prepare for these visits and should have them
present for the visits themselves.
|Disclaimer: This newsletter may contain unofficial information on
prospective E-rate developments and/or may reflect our own interpretations of
E-rate practices and regulations. Such information is provided for planning and
guidance purposes only. It is not meant, in any way, to supplant official
announcements and instructions provided by either the SLD or the FCC.