1. Program Compliance Catriona Ayer and Ray Mendiola Train-the-Trainer Workshop September 27-29, 2004 Schools & Libraries Division

2. Slide #2Schools and Libraries Division Selective Reviews uSelective Review Information Request is available in the Reference Area. Review it to make sure that you could answer the questions posed. uCovers your entire BEN. If we find applications with other Block 1 entities that are part of your BEN and that do not meet the definition of a BEN, we will incorporate them into the selective review. uFocuses on Item 25 certification and competitive bidding process.

3. Slide #3Schools and Libraries Division Budgetary Resources uMust be able to show that you had the money to pay for your non-discount share when you filed your Form 471. uGrants must be secured at the time of filing. uService provider cannot provide the applicant’s share either directly or indirectly.

4. Slide #4Schools and Libraries Division Physical Resources uHardware n Applicants must be able to show that they have computers (or funds to pay for them) to connect to the network connections being requested.

5. Slide #5Schools and Libraries Division Physical Resources uHardware (cont.) n Applicants must have reasonable plans to fully utilize all internal connections for which they are requesting discounts. uFor example, applicants should have reasonable plans to use all of the network drops within two years of installation and it should be a priority in the subsequent years to purchase the computers needed to fully utilize the drops. n Applicants must show that they have the necessary (ineligible) hardware to fully use the requested services – such as printers, phone sets, etc.

6. Slide #6Schools and Libraries Division More Necessary Resources uSoftware n Applicants must be able to show that they have software on hand (or the funds to pay for it) to run on the computers to meet the goals of the technology plan. uProfessional Development n Are the teachers and library staff trained on how to use the equipment being sought? The complexity of the training should mirror the complexity of the services requested, percent of classrooms with access, and be based on the technology plans.

7. Slide #7Schools and Libraries Division More Necessary Resources uElectrical capacity n Applicants must be able to demonstrate that there is sufficient electrical capacity to run the computer and/or telecommunications network. uMaintenance of ineligible equipment n Applicants must be able to show that they have resources in place to maintain end user equipment.

8. Slide #8Schools and Libraries Division Obligation to Pay uAll applicants will pay at least 10%. uApplicants must show that they had “money in the bank” and/or grant already received or fundraising completed at time of filing. uAbility to pay cannot be contingent on outside action such as the approval of a grant application. uFailure to pay more than 90 days after completion of service presumptively violates the rule that the beneficiary must pay its share (per the Fifth Report and Order).

9. Slide #9Schools and Libraries Division Help in Paying? uDonations from outside sources must be secured at time of filing. uApplicant cannot get direct or indirect “grant” from service providers or their foundations to pay the non-discount share.

10. Slide #10Schools and Libraries Division Deferred Payment Plans uApplicants are required to pay their share at the same time that USAC pays the discounted amount. n Service Provider certifies that the invoices they submit are for services that “have been billed to service provider’s customers.” n Therefore, deferred payment plans that allow the applicant to pay after USAC has paid will jeopardize a funding request.

11. Slide #11Schools and Libraries Division Budget Documentation uIf we ask for the applicant’s budget, the applicant must: n Provide both Revenues AND Expenses. n Be prepared to explain deficits and how they won’t impact E-rate discounted services. n If there are unforeseen budget reductions later in the year, be able to show that the application was filed in good faith. uIf alternative budget documents are provided, such as a Board resolution, then that resolution should be signed/approved before the filing of the 471.

12. Slide #12Schools and Libraries Division Resource Deficiency Advisory uPossible outcome of the Selective Review uExplains which areas we believe are deficient uApplicants should carefully consider their level of investment in those areas. PIA may follow up in subsequent years regarding their necessary resources.

13. Slide #13Schools and Libraries Division Whistleblower Hotline uUSAC maintains a national Hotline in an effort to curb waste, fraud and abuse. uHotline accepts information on possible rule violations. uCallers can remain anonymous if they wish. uInvestigated by Special Investigations Function

14. Slide #14Schools and Libraries Division Special Investigations uCase studies n Charter school shuffle n Sometimes they’re NOT guilty

15. Slide #15Schools and Libraries Division Charter School Shuffle u38 BENs; all private charter schools; all but two in one East Coast City uSpecial Investigations looks at possible competitive bidding violations and budget issues uAll BENs have same Service Provider uAll have very large dollar requests for Internal Connections

16. Slide #16Schools and Libraries Division Charter School Shuffle (cont.) uUltimately, all denied for budget issues: When contacted by Special Investigations, they wanted to cancel FRNs or reduce them to levels that could be supported by their budget (e.g., reduce $600,000 FRN to $60,000)

17. Slide #17Schools and Libraries Division Sometimes They’re NOT Guilty uSpecial Investigations receives LONG list of allegations regarding vendor selection (bid-rigging) against a School District and one particular employee. uDue Diligence requires that a Site Investigation be conducted. uSpecial Investigations interviews EVERYONE associated with the selection of the winning bidders. uSuperintendent informs Investigators that the District has conducted its own internal investigation.

18. Slide #18Schools and Libraries Division Sometimes… (cont.) uContracted investigators found all allegations to be without merit uSpecial Investigations also finds no merit to the allegations it received uSpecial Investigations clears the District’s applications to proceed through normal PIA process

19. Slide #19Schools and Libraries Division QUESTIONS