Funding Status
The agenda for this Monday's quarterly meeting of the Schools & Libraries Committee of the USAC Board includes consideration of the FY 2012 Form 471 filing window. Earlier, but informal, indications were that the window might open in early January and close in mid-March 2012.
Wave 19 for FY 2011 will be released on Wednesday, October 26th. Cumulative funding for FY 2011 is currently $1.13 billion. Priority 2 funding is being provided at the 90% level.
Wave 72 for FY 2010 will also be released on Wednesday, October 26th. Cumulative funding for FY 2010 is $2.82 billion. Priority 2 funding is being provided at all discount levels.
Ministerial and Clerical Errors Update
This is the fourth in a series of articles covering the major topics presented in the SLD's fall applicant training workshops. The SLD's PowerPoint slides on ministerial and clerical ("M&C") errors and the other key topics are available online. This article is a follow up to an earlier newsletter (September 19, 2011) issued just prior to the start of the SLD's fall training workshops.
The definition and procedural treatment of "ministerial and clerical" errors has been in a state of flux since last spring. The key issue deals with the corrections an applicant can make to a Form 471 application between the date it is submitted and the date of the Funding Commitment Decision Letter ("FCDL").
Background:
In mid-April, the FCC issued an Order (FCC 11-60) extending the deadline for making certain corrections to existing Form 471 applications during the PIA review process. Previously, at least technically, corrections for "ministerial and clerical" errors had been permitted only during the 20-day RAL period early in the SLD's application review cycle. As a practical matter, however, the SLD had been quite flexible in allowing a variety of corrections/changes throughout the PIA review process.
In one sense, the new Order appeared to condone this practice by formally permitting corrections any time during the review process up until the funding commitment is issued. A stated purpose of the Order was to avoid unnecessary appeals to the FCC that would otherwise be required — and typically granted.
Unfortunately, the basic text of the FCC's Order defines "ministerial and clerical" errors quite narrowly. It notes that such errors "include only the kinds of errors that a typist might make when entering data from one list to another, such as mistyping a number, using the wrong name or phone number, failing to enter an item from the source list onto the application, or making an arithmetic error." Taken literally, as PIA did during the early months of FY 2011 application review, this meant far less leniency for correcting errors and more detailed requests for documentation as to the cause of those errors.
SLD Training Update:
The most important point to recognize when reviewing the SLD's training slides on correctable M&C errors is that while there are a number of types of errors that may be correctable, actual changes can be made only if the errors are deemed "ministerial and clerical."
The SLD's slides categorize the types of errors as follows:
Allowable corrections:
- Correct citation such as:
- FCC Form 470 number
- Discount percent
- Urban/rural status
- Contract number
- Billing account number/multiple billing account numbers
- Block 4 worksheet entries
- Update or change contact person and/or consultant information
- Correct errors to dollar figures on an FRN
- Add or remove entities accidentally omitted or included in a Block 4
- Provide accidentally omitted FRNs
- Correct amount budgeted for ineligible services
- Make corrective SPIN change (for data entry error or company merger/acquisition)
Conditional corrections:
- Change contract award date/expiration date
- Correct consortium LOA such as:
- Supplemental documentation if dated on or before Form 471 certification postmark date
- Missing or unspecified LOA service timeframe
- Lack of detail regarding service provided
- Missing consortium members
Unallowable corrections:
- Operational SPIN change (permitted only after FCDL is issued)
If a potential correction is of an allowable type, the next two questions become:
- Does the error to be corrected meet the definition of a "ministerial and clerical" error?
- How must an applicant document that a "ministerial and clerical" error did in fact occur?
For E-rate purposes, the definition of a "ministerial and clerical" error appears to have become more flexible over the past month or two. At a minimum, the SLD's training slides acknowledge a footnote to the FCC's April Order that provided other M&C examples that an applicant may make, including:
…entering the wrong FCC Form 470 number, wrong billed entity number, or wrong billed entity number/worksheet number on their FCC Form 471; entering the wrong name or service provider identification number (SPIN); entering the wrong expiration date for a contract; erroneously characterizing the purchase and installation of equipment as a recurring service; making a calculation error; entering the monthly charge as the annual charge; entering the discounted annual price rather than the pre-discount annual price; entering the amount that a service provider was mistakenly temporarily charging rather than the contracted monthly rate; miscalculating its discount rate; failing to separately list a building where equipment was to be located; failing to enter a request for telecommunications service that was clearly indicated on its item 21 attachment; basing its block 5 funding requests on the wrong FCC Form 471 block 4 worksheet; selecting the wrong term or service; selecting the wrong category of service in its FCC Form 471; making a typographical error in recording the cost of ineligible equipment in response to a USAC request for additional data; failing to follow the correct procedure for modifying its FCC Form 471; mistakenly providing the wrong documentation concerning a purchase; and describing the service it purchased as for its entire district when it was only intended to serve a single elementary school.
Regardless of how a "ministerial and clerical" error is ultimately defined — which may take still more FCC appeals — PIA may continue to require supporting documentation. One SLD training slide provides a rather detailed list of examples, but it appears that the burden of proof is easing a bit.
The bottom line is that applicants cannot simply add services or increase funding requests at will and/or because conditions/needs change after their application has been filed, but corrections can often be made for mistakes uncovered after the application window has closed.
E-Rate Updates and Reminders
Suspension and Debarment of CMS Internet President:
The FCC issued a Notice of Suspension and Initiation of Debarment Proceedings last week to Mr. Jeremy Sheets, president and co-owner of CMS Internet LLC. Mr. Sheets has pled guilty and has been sentenced to 15 months in jail for E-rate fraud. The list of infractions contained in the Notice is instructive, if only to illustrate a wide range of violations.
For a six-year period beginning in December 2001, as president and co-owner of CMS Internet LLC ("CMS") you induced two prospective school district applicants in Western Michigan to hire CMS as their E-Rate vendor by (1) falsely representing to the applicants that they could participate in the program at no cost to them; (2) compensating the school districts for their E-Rate expenses with either purported "donations" or "leasing payments" that were calculated to coincide with the amount of each school's non-discounted share of E-Rate expenses; and (3) submitting materially false and fraudulent applications to order ineligible and undisclosed goods and services that were paid for out of overcharges to the E-Rate program. In further violation of the E-Rate rules, you gave gifts to a school district employee that included a wide screen television and entertainment system, which you paid for through overcharges to the E-Rate program.
Furthermore, in responding to an audit conducted in 2006 by the Universal Service Administration Company ("USAC"), you transmitted by electronic mail fraudulent invoices that falsely stated a school district applicant had paid its share of E-Rate program expenses during 2006-2007. In addition, you failed to disclose that E-Rate funding was used to purchase ineligible goods and services. Finally, you obstructed a 2007 federal grand jury investigation by instructing a CMS employee to testify falsely before the grand jury about receiving gifts, and to destroy E-Rate program records and remove the hard drives located on that employee's work and home computer in exchange for new computer hard drives. Your scheme caused the E-Rate program to suffer an estimated loss between $30,000 and $70,000.
SLD Fall Training Status:
The first five of the SLD's fall training workshops have been conducted. The agenda and slides for the SLD's 2011 training are available online. Subsequent workshops are being held regionally on the following schedule:
October 27 New Orleans, LA
November 1 Los Angeles, CA
November 8 Orlando, FL
Applicants seeking other E-rate training opportunities should check for state-sponsored E-rate workshops. Contact information for State E-rate Coordinators may be found on the State Information pages of the E-Rate Central Web site. Other sources of basic E-rate training include the two Webinars conducted by E-Rate Central earlier this year which are available online at http://www.webjunction.org/techplan-erate.
Schools and Libraries News Brief dated October 21 – Entity Numbers, cont.
Last week's SLD News Brief for October 21, 2011, continues a discussion of entity numbers begun in the SLD's previous News Brief for October 14, 2011. Part two deals with:
- Buildings located on the same campus (which may or may not require a separate entity number)
- School or library buildings under construction (and how to calculate discount rates)
- Non-instructional facilities (and how to calculate discount rates)