Documentation for E- Rate Audit Purposes

Documentation for E- Rate Audit Purposes Amber Prioleau E-Rate Manager/Network Technician

Overview • Rules and Regulations • Technology Plan • Filing Process • Audit Check List

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.

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

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

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

Purchased Year Eligible moving Year

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

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

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

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 interfaceis available for you to search the eligible services by keyword • New Eligible Products database is available for you to search for internal connections products

Eligible Services • Priority 1 • Telecommunications Services • Internet Access • Priority 2 • Internal Connections • Basic Maintenance on Internal Connections

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Discount Matrix If the % of students in your school that qualifies for the National School Lunch Program is...

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

Individual Schools Percentages District Percentage

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

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

Item 21 Attachment – Priority 1

Item 21 Attachment – Priority 2

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

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

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

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

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

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

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)

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

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

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

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

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

Invoicing / Form 472 This is an example of a spreadsheet demonstrating the Undiscounted and Discounted amount that should be reflected on the Form 472.

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

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

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

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

Documentation for E- Rate Audit Purposes