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E-Rate Overview, Update, and Key Issues Lower Hudson RIC

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Presentation on theme: "E-Rate Overview, Update, and Key Issues Lower Hudson RIC"— Presentation transcript:

1 E-Rate Overview, Update, and Key Issues Lower Hudson RIC
November 3, 2004 11/1/04

2 Workshop Agenda Brief overview of E-rate program
What’s new for FY 2005 Review of new Form 470 and Form 471 Selected topics Basic maintenance WANs Compliance issues LHRIC consortium issues

3 General Framework 20-90% discounts on three types of services:
Telecommunications Internet Access Internal Connections (Networking) Annual applications for funding Annual cap of $2.25 billion – plus roll-over Priority 1: Telecom and Internet Access – Full funding Priority 2: Internal Connections – Allocated funding Basic SLD overview

4 Eligible Services Telecommunications Internet access (not content)
Basic telephone (local, long distance, and mobile) Advanced telecom (Centrex, T-1, WANs, etc.) Internet access (not content) Internal Connections Network wiring Servers, routers, hubs, switches PBXs and key systems

5 E-Rate Opportunities and Issues
Important source of technology funding (FY 1998 – 2004) $13.1 billion nationwide – $1.9 billion for NYS Time-consuming, bureaucratic, and confusing program Forms 470, 471, 472, 479, 486, and 500 Service eligibility and discount rate issues Long lead time, competitive bidding procedures Strict application review process Additional procedures for consortiums Program may not be for everyone Funding freeze status

6 Basic E-Rate Cycle Pre-Commitment
Form Describes services required (fall) - Posted on SLD Web site Form Calculates allowable discount rate (winter) - Requests funding for specific services - Requires billing or contract documentation PIA - Detailed SLD review of applications (spring/summer) - Often requires additional documentation

7 Funding Alternatives (throughout year)
Basic E-Rate Cycle Post-Commitment Form Confirms use of approved services (summer) - Certifies tech plan and CIPA compliance - Appeals and SPIN Changes as required Funding Alternatives (throughout year) SPI - Service provider discounts bills (Form 474) - Schools pay only undiscounted amount BEAR - Discounts reimbursed after the fact (Form 472) - Based on actual bills paid

8 Critical Deadline Issues
Form 470 (Allowable Contract Date) 28 days after SLD posting Form 471 Filing window closes 2/4/2004 PIA or invoice review inquiries 7 day response cycle Tech plan and CIPA compliance Service start date (usually July 1) Form 486 120 days after service start or FCDL (often October 29) Service delivery June 30 or September 30 (unless extended) Invoices (BEARs or SPIs) 120 days after last day of service or 486 notification (often October 28) Appeals (SLD or FCC) 60 days after decision

9 Benefits of Filing Online
Available for Form 470, Form 471, and Form 486 Provides check on field information Direct entry or interview mode Important: Must use electronic signature or mail signed certification page to SLD

10 What’s New for FY 2005 Increased focus on waste, fraud, and abuse
New compliance rules and procedures 1000 site visits All new forms New formats Revised and expanded certifications Clarified rules on technology plans and budgets New “2 in 5” rule on Internal Connections Contracts and LOA requirements “NCES” Codes and FCC Registration Numbers

11 Site Visits: Purpose “Robust after the fact physical site review to help curb waste, fraud, and abuse.” Evaluate procurement process Review deployment results “Enhanced outreach to the school and library community.” Identify new outreach requirements Identify “best practices”

12 Site Visits: Process Random selection based on recent invoices
Applicant notification 1-2 weeks before visit SLD will provide list of documentation required Visits will be “short and focused” Target is one-day review Key “audit” issues Competitive procurement practices Applicant invoicing Equipment installation and use Other resources

13 New “2 in 5” Rule for IC Internal Connections funding is available only for two years of any five year period FY 2005 is the first year Limitation is on an individual entity/site basis Restriction excludes basic maintenance Maintenance becomes a new category of service Leasing is NOT excluded Planning considerations Shared services count for all included entities Any amount counts for the year — 1¢ or $1 million

14 Contracts and LOAs Contracts must be signed and dated by both parties
Quotes are not sufficient without covering contract letter Multi-year tariffs may be treated as contracts Letters of Agencies (“LOAs”) required before filing For consultants and consortium members Should be service specific Should not be for longer than a two year period

15 “NCES” Codes and FRNs ID codes required on FY 2005 Form 471
NCES Codes for public schools FSCS Codes for libraries PSS Codes for private schools No guidance yet for separate administrative sites (“NIFs”) FCC Registration Numbers required for all entities Required under the Debt Collection Improvement Act Needed for implementation of FCC “red light” rule Not used on FY 2005 forms, but technically required by 11/1/04 At least one/applicant; maybe one/site Awaiting further SLD/FCC guidance

16 What’s New for FY 2005, cont. Form color for FY 2005 is BLUE
Ms. Smith has retired

17 Form 470: Purpose Identifies applicant Describes services needed
Must wait 28 days after filing Select vendors and sign contracts File Form 471

18 New on Form 470 Service descriptions required for RFP
BEAR/SPI preferences New basic maintenance category New certifications Authorized person’s employer identification Relaxed minimum process standards for paper filings

19 Form 470: Block 2 Examples

20 Item 20: Tech Plan Must have a plan before filing
EETT or five components Covering the year Covering all types of E-rate services Including budget: revenues and expenses Must have an approved plan before services start Generally by July 1, 2005 Approval good for up to three years

21 Item 21: Procurement Services must be competitively bid
Form 470 posted for at least 28 days Selection must be cost-effective Price must be primary factor Records must be kept for five years

22 Bid Assessment Matrix

23 Item 22: Purpose Services must be for educational purposes
Restrictions on resale or transfer “Free services” prohibition to assure applicant pays non-discounted amount

24 Item 23: Resources Must have supporting resources
Computer hardware and software Training Maintenance Electrical capacity Dollar amount must be quantified In Selective Reviews In Form 471 Certification

25 Other Certifications Item 19: Eligible Entities
Item 24: Authorization to order and file Item 25: Compliance with FCC, state, and local procurement rules Item 26: Penalty acknowledgment

26 An important and complex form
Form 471: Purpose Calculation of discount rate(s) Requests specific discount on each tariffed, monthly, and contract service Separates eligible from ineligible costs An important and complex form

27 New on Form 471 Simplified service impact blocks
Single Block 4 discount worksheet Different columns and sections used for different applicants “NCES” Code requirement Special check boxes for special schools and alternative measures New check boxes on Block 5 requests New certifications Authorized person’s employer identification Relaxed minimum process standards for paper filings

28 Block 4: Discount Rates Based on need
Poverty Defined by National School Lunch Program Location Rural vs. Urban All flow from individual school data School districts use weighted average of school discounts Libraries use aggregate school district data

29 % of Students Eligible for
Discount Percentages % of Students Eligible for School Lunch Program Discounts

30 NYSED Web Site for School NSLP Enrollment Data
Features: Search feature for individual school or group Data available on month-by-month basis Pro forma enrollment numbers for Provision II schools Note: Must use with Internet Explorer, not Netscape

31

32 Participation vs. Eligibility: Alternative Measures
Comparable measures (milk/breakfast programs, Medicaid/public housing data) Sibling searches Survey (can extrapolate from 50% response rate) Feeder system not approved Note: SLD reviews using state lunch program participation data, so document all higher eligibility data

33 New on Block 5 New Priority 2 category for maintenance
Special check boxes for: Duplicate funding requests (requires prior year FRN) Non-contract services Master contracts Multi-year contract continuation (requires prior year FRN) Multiple billing accounts (requires attachment)

34 Item 21 Attachments Required to describe and document actual services requested on Block 5 Types of documentation Copy of contract Vendor quote or bill Applicant-provided description Eligible Products database may provide Item 21 attachment

35 SLD Telecommunications Example

36 470-Type Certifications Item 24: Eligible entities
Item 26: Technology plans Item 27: Competitive bidding Item 28: Procurement rules Item 29: Educational purpose Item 32: Record retention Item 33: Authorization Item 34: Penalty acknowledgment

37 Item 25: Resources Must have supporting resources
Computer hardware and software Training Maintenance Electrical capacity Requires budgeted amount for these resources Special “killer” check box for vendor funding See related certification in Item 37

38 Item 30: Compliance Catch-all for overall program compliance
Signed contracts for all services Except tariff and MTM Certification penalty acknowledgment

39 Other Certifications - Particularly important for consortiums
Item 31: Eligible Entities - Particularly important for consortiums Item 35: Eligibility allocation Item 36: Compliance with “2 in 5” rule Item 37: Non-discount payments

40 Selected Topics Basic Maintenance WANs Compliance Issues

41 Basic Maintenance What is “basic” maintenance? Generally eligible:
“Without the maintenance, the connection would not function and serve its intended purpose with the degree of reliability ordinarily provided in the marketplace.” Generally eligible: Repair and upkeep of eligible hardware Wire and cable maintenance Basic technical support Configuration changes.

42 Basic Maintenance, cont.
NOT eligible: On-site technical support i.e., contractor duty station is at the applicant site When off-site technical support can provide basic maintenance on an as-needed basis Help Desks Providing a comprehensive level of support beyond basic maintenance, even if only for eligible components

43 Basic Maintenance, cont.
NOT eligible, cont.: 24-hour network monitoring Network management Technical support contracts that are more than basic maintenance.

44 Basic Maintenance, cont.
Question #1: Eligible or Ineligible? Hardware maintenance contract (“break/fix”) for 40 routers, 200 network switches, 50 eligible file servers, and internal network cabling. Answer: Eligible as basic maintenance if: Components are all eligible Services are cost effective Agreement provides make, model, and location

45 Basic Maintenance, cont.
Question #2: Eligible or Ineligible? Technical support described as “basic maintenance” that provides break/fix, configuration changes, and network monitoring and management. Answer: Ineligible A funding request for these services would be denied in full because the services go beyond basic maintenance as defined by the FCC. The ineligible components are network monitoring and management.

46 Technical Services Conditionally eligible Technical Services:
Design & Engineering Installation Project Management Training To be eligible, services must be: Basic Necessary for installation and initial configuration Coincident with (occurring at the same time) Part of the same contract or bid as the related products and services

47 WANs and On-Premise Equipment
WAN eligibility requirements Service of a telecommunications carrier (with a “Y”) Not purchased (or equivalent) Installation charges >$500K amortized WAN eligibility issues Exclusive use (non-rural) Dark fiber systems Internet allocation On-premise equipment

48 WANs and On-Premise Equipment, cont.
On-premise equipment is Priority 2, unless: Integral component of Telecom/Internet service Provided by same vendor Maintained by same vendor Ownership will remain with vendor Installation < 67% of total charges Used only for eligible Priority 1 service Independent of applicant’s internal network Non-exclusive usage

49 Program Compliance Issues
Greater focus on “waste, fraud, and abuse” PIA scrutiny, including selective reviews Audits by SLD, FCC, and contractors Vendor investigations by SLD, FCC, DOJ, etc. Consequences for applicants and vendors Denied or reduced funding Delayed funding decisions Retroactive commitments (“COMAD”) Criminal indictments

50 Applicant Reviews Increasing review of all E-rate forms
Data entry of mailed applications Problem resolution review Minimum processing standards issues Program Integrity Assurance (“PIA”) Requests for supporting documentation Seven day response cycles Selective (or Item 25) Reviews On-site audits

51 Selective Reviews Special PIA review team Areas of concern
Typically initiated with 14 page fax of questions and instructions. Sample available at: Target criteria: “Large” requests or suspected vendor problems Areas of concern Technology plans Budget to cover all needed resources (see Form 471 Item 25) Competitive procurement (bids and evaluations) Consultants Contracts

52 On-site “Beneficiary” Audits
In-depth, on-site audits USAC staff or FCC’s OIG staff Professional outside auditors (e.g. KPMG) Approximately full on-site audits this year 1000 site “visits” Target criteria: Random (with weighted probabilities) or suspected problems Areas of concern Technology plans – Supporting resources Discount rate – Invoices Competitive procurement – Equipment verification

53 Required Recordkeeping
Technology plan and approval letter Application documentation NSLP data Budget for Item 25 resources Backup for Item 21 attachments PIA submissions All forms and attachments Bids and evaluations (incl. losing bids or “no” bids) Contracts Delivery, testing, and asset inventory records Invoices and proof of payment

54 SLD Help Web: Help lines: (General) (Fax questions) universalservice.org NYS Help Web: Weekly news (via ) Help lines -- Fax: e-ratecentral.com OGS:


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