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In This Week's Issue
» Funding Status Update
» “CEO” Becomes “CEP”
» E-Rate Updates and Reminders
» Schools and Libraries News Brief dated December 13 – Form 470 Process, cont.

E-Rate Central News for the Week
December 16, 2013

Introduction

The E-Rate Central News for the Week is prepared by E-Rate Central. E-Rate Central specializes in providing consulting, compliance, and forms processing services to E-rate applicants. To learn more about our services, please contact us by phone (516-801-7804), fax (516-801-7814), or through our Contact Us Web form. Additional E-rate information is located on the E-Rate Central Web site.

Funding Status

The SLD has announced that the FY 2014 application window will open Thursday, January 9, 2014, at noon EST, and will close on Wednesday, March 26, 2014 at 11:59 p.m. EDT.  We assume that this window period anticipates the approval and online implementation of the revised Form 471.

Wave 31 for FY 2013 will be released on Wednesday, December 18, 2013, for $66.1 million.  Funding is currently being provided for Priority 1 services only.  Cumulative funding for FY 2013 will be $1.58 billion.

A small Wave 72 for FY 2012 will be released on Thursday, December 19, 2013, for $312 thousand for only three applicants.  Priority 2 funding is being provided at 90%, and is being denied at 89% and below.  Cumulative funding for FY 2012 will be $2.81 billion.

“CEO” Becomes “CEP”

For several years now, the U.S, Department of Agriculture (“USDA”) has been phasing in a new program, initially known as the Community Eligibility Option (“CEO”), to provide free meals for students.  New York schools became eligible to use the program during the second year of the trial, the 2012-2013 school year.  Beginning with the 2014-2015 school year, all qualifying schools nationwide will be eligible to use what will now be called the Community Eligibility Provision (“CEP”).  New schools deciding to join the CEP program as of the next school year must do so by April 1, 2014.  A good summary of CEP is available from the Food Research and Action Center.

We discussed CEO, and its E-rate implications, over a year ago in our newsletter of August 6, 2012, but a review is in order.  In summary:

  1. CEP is an extension of the direct certification process by which students from high-poverty families, identified by their participation in state support programs (e.g., SNAP or TANF), are automatically deemed eligible for free or reduced-price lunches without completing the standard NSLP applications.  Indeed, under USDA rules, CEP schools are prohibited from collecting NSLP applications.
  2. A school is eligible to use CEP if 40% or more of its students are direct certification eligible, and if the school is willing to provide free breakfasts and lunches for all students.  The election to use CEP can be made on a school-by-school basis, hence a given district may have both CEP and non-CEP schools.
  3. For expense purposes, free meal reimbursements are calculated using the formula 1.6 times the direct certification eligibility percentage.  For example, a school with 50% direct certification would receive reimbursements at the 80% level.  The 1.6x multiplier is an estimated correction factor recognizing that the direct certification process does not identify all eligible students.
  4. The current problem from an E-rate perspective is that neither USAC nor the FCC recognizes the 1.6x multiplier for discount rate purposes.  As an interim measure, applicants must use historic NSLP data from the most recent pre-CEP school year.  A longer-term E-rate solution is being addressed in the pending E-Rate 2.0 NPRM proceeding, and will hopefully be resolved before the start of the FY 2015 E-rate application cycle when there will be CEP schools nationwide.

CEP schools in New York, therefore, are using outdated NSLP data from as early as 2011-2012.  NSLP data provided in New York’s online Child Nutrition Management System is misleading.  If a CEP school is getting 100% reimbursement, as many are, the CNMS database is showing that 100% of its students qualify for free lunches.  Most likely, this is an incorrect eligible student count for E-rate.  An alternative source of CEP student eligibility is provided in an online spreadsheet of New York CEO Schools and Discount Rate Data for FY 2014.  (See additional CEP information on NYSED Procedures and E-Rate Implications.)  Two points should be noted about the New York CEP data, namely:

    1. The NSLP data shown was derived from the CEP schools’ FY 2012 or FY 2013 E-rate applications.  In some cases, this historic data may not have been validated during PIA review at the time it was collected and posted.  Applicants are responsible for using the most accurate data available.
    2. In a few cases, highlighted in yellow in the table, we were unable to verify entity numbers and previous filing information.  We encourage CEP schools to contact us with updated information as necessary.

USDA’s Food and Nutrition Service is currently soliciting comments on rules to amend and/or codify certain provisions of the CEP program.  Comments are due January 3, 2014.  We expect that the State E-Rate Coordinators’ Alliance (“SECA”) will submit comments later this week urging discussions between the USDA and the FCC to help resolve the differences in student eligibility percentage calculations for CEP schools.

E-Rate Updates and Reminders

Form 486 Deadlines:

Typically, a Form 486 must be filed no later than 120 days from FCDL issuance or the start of service, whichever is later.  Assuming services started July 1, 2013, the deadlines for early FY 2013 funding waves 1-13 have already passed (although USAC will be giving a grace period to late filers).  The upcoming Form 486 deadlines for the remainder of the year and for early 2014 are:

                      Wave 14                12/19/2013
                      Wave 15                12/26/2013
                      Wave 16                01/03/2014
                      Wave 17                01/19/2014
                      Wave 18                01/16/2014
                      Wave 19                01/23/2014
                      Wave 20                01/30/2014

Schools and Libraries News Brief Dated December 13 – Form 470 Process, cont.

The SLD News Brief for December 13, 2013, continues the discussion of the Form 470 process begun in the preceding issue.  The News Brief article covers the following topics:

  • Posting for Priority 1 services
  • Compliance with both state or local and E-rate requirements
  • Possible need for requests for proposals (“RFPs”), or equivalent
  • Requirement to cite bona fide requests
  • Cautions on specifying manufacturer or brand names
  • Breaking existing contracts
  • Restrictions imposed by state or local laws or regulation, reasons for disqualification, and other bid information

Possibly the most important point covered by Friday’s News Brief was the warning that the SLD’s definition of an “RFP” is quite broad, and that any such “RFP” must be duly referenced in an applicant’s Form 470.  Specifically, the SLD noted:
The FCC Form 470 and RFP must contain sufficient information to enable prospective bidders to formulate bids. If the FCC Form 470 describes in broad terms the services for which the applicant is seeking bids and the applicant also provides additional supplementary documents, those documents could be considered an RFP if they contain the detailed information necessary for the formulation of responsive bids. The applicant should consider checking the box indicating that an RFP is available if such documents are provided.

In other words:  The purpose of the Form 470 process is to provide service providers with sufficient information to prepare and submit responsive proposals to an applicant for the desired services.  If the information provided in the Form 470 itself is not sufficient, and the applicant is providing additional information for potential bidders, that information may be considered an RFP for E-rate purposes, and its availability should be noted by checking the “RFP” box (or boxes) in the Form 470.

Disclaimer: This newsletter may contain unofficial information on prospective E-rate developments and/or may reflect our own interpretations of E-rate practices and regulations. Such information is provided for planning and guidance purposes only. It is not meant, in any way, to supplant official announcements and instructions provided by either the SLD or the FCC.