Correcting Form 498 and FCCRN Errors:
A few applicants have recently encountered problems in receiving BEAR payments as a result of inaccuracies in their on-file banking or tax records. It could be that the U.S. Treasury, now the source of E-rate invoice payments, is being a little more exacting in their procedures.
In one case, generating the somewhat ominous “PAYMENT WITHHELD DUE TO INVALID BANKING INFORMATION” email shown below, the problem was a missing leading zero in the bank routing number provided in the applicant’s Form 498. Once the problem was identified, this was easily fixed by updating the Form 498.
In another case, there was a mismatch between the applicant’s Federal Tax ID (“EIN”) and its listing in the applicant’s FCC Registration Number (“FCCRN”) database (due to a transposition of two digits). Similarly, this was easily fixed, once identified, by correcting the FCCRN data.
The trick, obviously, is to identify the problem causing the withholding of a payment. For specific help, we recommend calling the special USAC “Customer Operations” helpline (shown in the notice): 888-641-8722.
Update on Invoice RIDFs Actions:
Our newsletter of July 2nd reported on a few instances of applicants receiving Recovery of Improperly Distributed Funds Letters (“RIDFs”) indicating USAC’s intention of seeking the return of disbursed BEAR payments. We have now identified 40 affected applicants — and there are likely more.
The BEARs in question had been filed under explicit invoice extensions generated by USAC based on the FCC’s 2017 Jefferson-Madison decision (DA 17-526). Although the RIDFs state only that repayment is required as the result of an “FCC Directive,” it has become clear that USAC now believes it mistakenly identified some applicants qualifying for invoice deadline extension relief under the FCC order’s “similarly situated” language. Because of these errors — the exact nature of which USAC is loath to explain — USAC is now seeking a return of the funds.
Based on our analysis of the FRN invoicing history associated with the RIDFs we have reviewed, there have been several different “mistakes,” as now interpreted by USAC. The common point of contention is whether an applicant had originally filed a BEAR prior to July 1, 2016 (or by an earlier invoice deadline), but the BEAR was rejected because the associated service provider had not acknowledged it. Under the Jefferson-Madison decision, the FCC provided applicant relief only for timely-submitted, but unacknowledged, BEARs. USAC’s apparent contention is that it mistakenly extended relief to other applicants, not covered by the Jefferson-Madison decision, and that it must now rescind any related payments.
Applicants faced with these RIDFs should appeal, first to USAC and then, if necessary, to the FCC. We suggest that USAC appeals focus on the invoicing histories of the BEARs and on the problems encountered with obtaining service provider acknowledgments.
Should appeals ultimately need to be made to the FCC, an additional point to be made is that recovery of funds, properly committed, but paid under an erroneously applied invoice extension, “…may not be appropriate for violation of procedural rules codified to enhance operation of the e-rate program” (see FCC 04-190, ¶19).