Funding Status
Wave 45 for FY 2010 will be released on Tuesday, April 5th, for $14.1 million. Cumulative funding for FY 2010 is currently $2.41 billion. Priority 2 funding is still being awarded at 81% and above, and denied at 79% and below.
Wave 83 for FY 2009 will be released on Wednesday, April 6th, for $11.2 million. Cumulative funding for FY 2009 is currently $2.79 billion.
E-Rate Updates and Reminders
Semi-Annual Audit Recovery Report:
Every six months, USAC submits a report to the FCC summarizing the status of all outstanding audit findings. The most recent Audit Recovery Report for the period ending February 28, 2011 covers a total of 1,878 audits for funding years 1998-2009. A few of the more interesting numbers, together with comparisons from last fall's semi-annual report, are as follows:
| |
As of 2/28/2011 |
Change |
| Number of audits included in report |
1,878 |
+ 1% |
| Total disbursed amount audited |
$2,897,618,724 |
+ 0% |
| |
|
|
| Amounts initially subject to recovery |
|
|
| Recovery to date |
28,219,894 |
+ 19% |
| Sent to FCC for recovery |
8,001,865 |
+ 9% |
| Remanded to USAC upon FCC appeal |
12,666,717 |
+ 62% |
| Approved USAC appeals |
66,859,486 |
+ 2120% |
| Balance in other recovery stages |
210,762,184 |
+ 110% |
| Total |
$ 326,510,145 |
+ 130% |
What this shows is that, although there has been very little new audit activity of late, a lot has been going on behind the scenes in the processing of earlier audits. There was only one new audit of FY 2009 disbursements; the few other additional audits appear to be holdovers from earlier rounds focusing on FYs 2005-2007. We expect the recent audit hiatus to end shortly with an announcement of a new round of audits later this year. It is expected that the new audits will be performance audits as opposed to the stricter compliance attestation audits of the last several years.
On the backend, however, USAC has been busy reviewing earlier approved audits to determine if the "improper payments" identified by the auditors were truly improper. The important point to note is that initial findings of fault in audits do not always lead to the recovery of funds; often these situations can be corrected by providing additional information as a part of the USAC appeal process or by favorable decisions on FCC appeals.
Guilty Plea in E-rate Conspiracy:
Another guilty plea in an E-rate case was widely reported last week. The following is a synopsis from PCWorld:
The former owner of an Illinois technology firm has pleaded guilty to providing bribes and kickbacks to school districts in exchange for networking contracts that were part of a U.S. government program designed to bring Internet services to schools and libraries in poor areas.
Tyrone Pipkin, a former co-owner of Global Networking Technologies in Illinois, pleaded guilty Monday in U.S. District Court for the Eastern District of Louisiana to participating in a conspiracy to defraud the U.S. Federal Communication Commission's E-Rate program, the U.S. Department of Justice said.
Pipkin, acting on behalf of his own company and Computer Training Associates, told schools that if they chose one of the two companies for E-Rate contracts, their matching fees required by the FCC would be waived, according to court documents. Pipkin and a co-owner at Global Networking Technologies also offered bribes to school officials and employees if they circumvented the required competitive bidding process required in the E-Rate program in favor of one of the two companies, the court documents said.
Pipkin also submitted E-Rate applications to the FCC containing forged signatures of school employees, according to court documents.
Another person involved in the conspiracy wrote bribe checks to employees at three Louisiana schools during 2004, court documents said. The three checks totaled $28,500, with one employee at St. Augustine High School in Louisiana receiving $20,000, court documents said.
Pipkin and the co-conspirators participated in the fraud from about December 2001 to September 2005, the DOJ said in a press release. The fraud affected 13 schools in Louisiana, Arkansas and Illinois, the DOJ said.
Pipkin and the co-owner at Global Networking Technologies received E-Rate payments of nearly $2.6 million between January 2003 and September 2005, court documents said.
Pipkin is charged with conspiracy, which carries a maximum penalty of five years in prison and a $250,000 fine, although the fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either amount is greater than the statutory maximum.
FCC: Federal Cupcake Commission?
A week ago Sunday, the New York Times picked up a story from last December and featured it on page one in an article entitled "The Arsenal of a Lobbyist: Hardball and Cupcakes." The key incident, as initially reported by Public Knowledge, a media and consumer advocacy group, was AT&T's delivery of 127 dozen fancy cupcakes to the FCC.
The story is an amusing post-script to the SLD's answer to a question on the January service provider call concerning the appropriateness under the new E-rate gift rules of a $60 gift basket to a school's staff. The SLD noted that gifts over the $20 individual limit must take into account the number of beneficiaries, and that the gifts should not be perceived as an attempt to influence the competitive bidding process.
In AT&T's case, the cupcake initiative is apparently an annual pre-Christmas event, but this time coincided with the Commission's first day of closed deliberations on Net Neutrality — clearly an important issue for AT&T. But at least AT&T was careful to document that the cupcakes, worth $3,703, were widely disbursed over 63 separate offices and departments.
The SLD's News Brief for April 1, 2011, discussed the use of the SLD's on-line Application Status Tool to check on the progress of FY 2011 applications as they progress through the review process from certification to funding decision. The major status designators were discussed in last week's newsletter.