News of the Week

Wave 21 of Funding Year 2002 will be released on Monday, January 27, 2003. Total funding in this Wave is approximately $44 million for 140 applications. The cumulative total for FY 2002 is now $1.72 billion for over 28,260 applications. [Comparable totals for New York State are $303 million for over 1,675 applications.]

For additional information on the status of FY 2002 funding see the article below reporting on the quarterly USAC Schools and Libraries Committee meeting this week.

SLD FY 2003 Guidance for Applicants with Pending FY 2002 Applications

The deadline for filing Form 471 applications for FY 2003 is February 6, less than two weeks away. With FY 2002 funding waves being released every two weeks, Wave 21 will thus be the last of this year's commitments to be issued before the February 6 deadline. At this stage, approximately 25% of FY 2002 funding has yet to be awarded. This means that a significant number of applicants will need to file applications for FY 2003 before knowing what funding they will receive for FY 2002.

For applicants waiting to hear about FY 2002 funding for recurring services, such as telecommunications and Internet access, there is little to do but wait. However, applicants with plans hinging on pending requests for discounts on non-recurring services, such as for the purchase and installation of Internal Connections equipment, must decide whether to reapply for the same or similar services in their FY 2003 applications.

The SLD addressed this quandary in a Web site announcement this week indicating that it will permit applicants to file FY 2003 applications conditioned upon future FY 2002 funding decisions. The instructions advise applicants to describe their situations in the Item 21 Attachments with statements such as "This funding request is filed assuming that a similar request for FY 2002, FRN # _________, is not approved" or conceivably "is approved."

As FY 2002 requests are subsequently approved or denied, it behooves applicants to cancel what would otherwise be duplicative FRNs. The SLD notice indicates that applicants in these situations should contact the Client Service Bureau (888-203-8100) for cancellation instructions.

Two related points are worth noting:

(1) The normal service receipt deadline for using non-recurring service funding for FY 2002 is September 30, 2003. For applicants awarded funding on or after March 1, however, this deadline is automatically extended another year until September 30, 2004. For applicants funded between now and March 1, there is growing precedent for approving waivers on the service deadline to the same September 2004 date.

(2) Applicants who are concerned that their FY 2002 applications are still pending because of issues of eligibility or choice of vendors may wish to consider alternative approaches or suppliers for their FY 2003 applications rather than simply replicating last year's requests.

Reports on SLD Developments

On January 22, the Schools and Libraries Committee of the Universal Service Administrative Company ("USAC"), which serves as the governing board of the SLD, held its quarterly meeting. Funds For Learning, an educational technology consulting firm, attended the meeting and released several reports on developments that were discussed. Three significant items are summarized below. (Please note that these reports do not constitute formal minutes of the meeting. In our opinion, however, they do reflect the observations of an experienced E-rate firm.)

(1) The SLD told the committee members that it still had 2,581 FY 2002 applications from 900 applicants left to process (apparently as of Wave 20). It has set a goal of completing the review of all these remaining applications by March 10.

(2) Beginning next quarter, FCC rules permit unused E-rate funds to be rolled over as additional funding, over and beyond the $2.25 billion annual funding level. Up to now, such unused funds were used to reduce Universal Service Fund collections from the telecommunications carriers. The SLD reported that its current estimate of unused funds will be $370 million and that is awaiting FCC guidance on whether these additional funds can be used to meet FY 2003 demand.

(3) The SLD reported on plans to strengthen its program enforcement efforts by more than doubling the staff of its Selective Review team with an increased budget (including travel funds for on-site visits). The SLD also reported that six recent audits had found violations that would lead to the cancellation of $1.6 million (including the recovery of $1.1 million in previously disbursed funds).

Last Reminder: Invoice Deadline for FY 1999 and FY 2001 Non-Recurring Services

January 28th is the final deadline for filing invoices (BEAR reimbursements or supplier invoices) for non-recurring services that had to be utilized by September 30, 2002, including installations funded in FY 2001 or in the out-of-the-window period for FY 1999. Associated invoices postmarked after this deadline will not be processed and funding will be lost. Remember that BEAR forms must be acknowledged by suppliers before they can be submitted to the SLD.

The best way to check to determine if one or more invoices have been filed and approved for a specific FRN is by using the SLD's powerful Data Retrieval Tool available at Open Data Search. The tool permits a user to create a database query by funding year, state, type of service or applicant, discount level, SPIN, funding amount, application number, and/or FRN. Upon request, the system will then generate a customized tab-delimited data file that can be downloaded and imported into an Excel worksheet or other spreadsheet program.

For checking invoice approvals, the two most important fields to compare are the "Total Amount Committed to the Applicant by the SLD" and the "Amount Authorized for Disbursement." If the service has been used, but the data tool shows no, or a relatively small, amount authorized for disbursement, an invoice probably needs to be filed quickly.

The only exceptions to this deadline are those FRNs for which the invoice dates have been extended. Exceptions can be checked by using the "FRN Extension Status" table available in the "Apply Online" section of the SLD Web site.