E-Rate Central News for the Week
November 30, 2009
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. To learn more about our services, please contact us by phone (516-832-2887) or through our Contact Us Web form. Additional E-rate information is located on the E-Rate Central Web site.
FY 2008 and FY 2009 Funding Status
Wave 30 for FY 2009 is scheduled for release on December 2nd for $154 million. This brings cumulative FY 2009 funding to $1.59 billion. As of this wave, the funding threshold for Priority 2 funding has been lowered to 80% (with denials at 54% and below). Our current expectation is that the final threshold for FY 2009 will be in the 71-79% range.
Wave 74 for FY 2008 will be released on December 3rd for $103 million. This raises total FY 2008 funding to $2.45 billion. This wave includes Priority 2 funding at 87% - the final funding threshold for the year. Although the E-rate cap for FY 2008 was augmented by $600 million in roll-over funds, this is unfortunately the highest Priority 2 threshold percentage in the program's history.
Invoicing and Funds Disbursements - Part 1
This is the time of the year when applicants and service providers need to confirm that all recurring services for FY 2008 were properly invoiced and that payments have been (or are about to be) received. The actual deadline for submitting invoices to USAC for FY 2008 recurring services was October 28, 2009. Many of these invoices have already been processed and authorized for disbursement; others should be processed shortly. As this occurs, the SLD's Data Retrieval Tool ("DRT") is updated to show authorized disbursements on an FRN-by-FRN basis. This information needs to be carefully reviewed to make sure that:
- Invoices were submitted for all FRNs used
- All invoices submitted to USAC were approved
- Payments were actually received
In most cases, the invoice submission, approval, and payment process works smoothly. In instances that it does not, it behooves both applicants and service providers to identify and correct the problems. This is the first in a series of articles dealing with invoice and disbursement reviews, including the identification and correction of payment problems. Topics to be covered include:
- Service provider vs. applicant invoices
- Tracking invoice submission and approval
- Zero disbursement
- 100% disbursement
- Authorized disbursement vs. payment
- Distribution of consortium payments
Service provider vs. applicant invoices:
An applicant can receive E-rate discounts for approved services in either of the following two ways:
- A service provider can provide discounts directly on the applicant's bill. For example, if an applicant with a 60% discount uses $1,000 of service, the service provider may invoice the applicant for the non-discounted amount of $400 and then invoice USAC for the $600 amount of the discount. This process utilizes a Form 474 Service Provider Invoice ("SPI").
- Alternatively, the applicant can pay the full amount of the service and then invoice USAC retroactively for the discount. Using the same example as above. The applicant would first pay the full $1,000 to the service provider and then file for a $600 reimbursement. This process utilizes a Form 472 Billed Entity Applicant Reimbursement ("BEAR").
While each approach has its advantages and disadvantages, it is critical that one process or the other be used. An applicant should not assume that its service providers are discounting their bills. Additionally, even if a service provider is discounting its service, we strongly recommend that an applicant confirm that the discounted amounts are correct.
Tracking invoice submission and approval:
Although the SLD's DRT can be used to check invoice status, a much easier way is to use E-Rate Central's Funding Quick Search tool. This tool is located in the upper left-hand corner of our State Information page. Simply enter the Billed Entity Number ("BEN") and click "Search." Note the following:
- The opening Web page provides a summary of an applicant's complete E-rate funding history since 1998. It shows total funding requested, committed, and disbursed for each year. For an overview of the applicant's actual E-rate funds usage, focus on the last three columns showing total disbursements, remaining (or unused) balance, and percentage utilization. As will be discussed in future articles, utilization percentages in the 85-95% range - but not necessarily 100% - suggest effective E-rate usage.
- To drill down to an individual funding year, click that year. This shows the same type of commitment and usage data on an FRN-by-FRN basis.
- To drill down to details on an individual funding request, click that FRN. One critical data field for invoicing purposes is the Payment Mode. One of the following modes may be indicated:
BEAR The applicant has submitted one or more BEARs requesting discount reimbursement(s) on this FRN.
SPI The service provider is presumably discounting services on this FRN, and has already invoiced USAC.
NOT SET Neither the applicant nor the service provider has invoiced USAC for discounts on this FRN.
Note: If the BEAR or SPI mode has been set, but the Disbursed Amount field shows $0.00, the associated invoice was apparently rejected. This subject will be covered as a part of the "zero disbursement" discussion in the next article in this series.
E-Rate Updates and Reminders
Form 486 deadlines:
The regular deadlines for filing Form 486s for funding awarded in FY 2009 Waves 1-14 have now passed. Applicants who missed these deadlines will shortly receive Urgent Reminder Letters giving them additional grace periods to file without penalties.
December deadlines for applicants funded in later waves are as follows:
| Wave |
FCDL Date |
Form 486 Deadline |
| 15 |
08/04/09 |
12/02/09 |
| 16 |
08/11/09 |
12/09/09 |
| 17 |
08/18/09 |
12/16/09 |
| 18 |
08/26/09 |
12/24/09 |
SLD News Brief:
The SLD did not release a regular News Brief for the week of Thanksgiving, but did publish a special News Brief Update to announce the lowering of Priority 2 funding thresholds for FY 2008 and FY 2009 (as discussed above). Regular SLD News Briefs will resume this Friday.
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