Form 498 Filing Update:
Effective July 1, 2016, all BEAR reimbursement payments are being made directly to applicants (rather than through the service providers). In order to accomplish these electronic payments, an applicant must have filed — and USAC must have approved — a Form 498. This is a two-step process.
- The applicant must file and certify a Form 498 online through EPC.
- Before approving a Form 498, USAC will request confirming bank account information, such as a blank voided check for that account. Depending upon applicant response time, the USAC approval process is currently taking two weeks or more.
The only applicants not required to file Form 498s are those relying solely on discounted vendor invoices. All others must eventually file Form 498s. Remembering that the invoice deadline for filing BEARs for recurring FY 2015 services is October 28th, applicants requiring Form 498s should have already begun the process.
Unfortunately, this does not seem to be the case. USAC released a Form 498 status report to State E-Rate Coordinators last week (to be used for outreach purposes) showing that only 22% of FY 2015 applicants nationwide currently have approved Form 498s on file. We suspect that percentage needs to be 80% or more — and soon.
If an applicant is not sure about the status of their Form 498 approval, we recommend the following:
- Begin the online BEAR filing process by completing the BEAR Invoice System Login.
- Note that this login requires a PIN. If you don’t have a PIN, one can be requested from USAC’s Client Service Bureau (888-203-8100). Count on a lead time of at least two weeks. This estimated lead time underscores the importance of starting now if you have not already done so.
- Once logged in, go to “New BEAR Form,” as if to start a BEAR.
If a Form 498 has been approved for this Billed Entity Number (“BEN”), the Form 498 ID number will be displayed in that field. If the field is blank, more work — either by the applicant or USAC — is needed to get a Form 498 filed, certified, confirmed, and approved.
September’s FRN Status Tool:
USAC alerted several E-rate user groups last week that a new database of FY 2016 funding information would be available later in September. In its initial implementation, the new database — designated the “FRN Status Tool” — will mirror much of USAC’s current Data Retrieval Tool (“DRT”), the mainstay source of funding data for FY 2015 and earlier years. One key data field in the new tool will provide approval status of applicant Form 486s for FY 2016. Additional FRN Status Tool data fields (not available in the existing DRT) are expected to be added later in the year.
The Last of the Good Samaritans:
One potential problem faced by applicants, fortunately infrequently, is the inability to obtain BEAR reimbursements for a previously approved funding request when their service provider has subsequently gone out of business. Prior to July 1, 2016, when BEAR payments had to flow through service providers, the solution was to enlist the assistance of another service provider — a “Good Samaritan” — to act as the middleman for any BEAR reimbursements.
However, as of July 1st this year, all BEAR payments are made directly from USAC to the applicants. Since BEAR payments no longer flow through the service providers, there is no longer a need for Good Samaritans. This is good news — perhaps to all but religious scholars bemoaning the loss of a biblical reference in E-rate procedures.
The bad news is that an applicant, dealing with an out-of-business supplier, is still not home free. Current FCC rules on the direct payment of a BEAR still require the associated service provider to have filed a SPAC (Service Provider Annual Certification – Form 473) for that funding year. If the service provider hadn’t filed that SPAC before going out of business, it may be impossible to get them to do it now. Without the SPAC on file, USAC cannot process the BEAR payment. USAC’s current advice, in such a situation, is to file a waiver request with the FCC. Hopefully, the FCC will ultimately give USAC the authority to make a BEAR payment in this situation if USAC can confirm that the service provider is no longer in business.