More than 25 percent of funding commitments are not claimed, GAO says
Primary Topic Channel: eRate
About $5 billion of the estimated $19.5 billion in eRate funds committed to schools and libraries from 1998 to 2006 were never used, according to a recent report from the Government Accountability Office (GAO).
In some cases, funds were not claimed because the applicants' needs changed from the time they applied until it was time to file a Form 486, which releases the funding to applicants or their service providers. In other cases, the actual expenses that applicants incurred were less than the amount of funding they had applied for. Often, the sheer complexity of the program caused applicants or their service providers to leave money on the table.
Whatever the reason, more than 25 percent of the available eRate funding that was committed to applicants during the program's first nine years has not been disbursed.
Peter Kaplan, director of regulatory affairs for eRate consulting firm Funds for Learning LLC, called the trend "alarming."
"We certainly want schools to be able to use the funds when they get them," Kaplan said.
The percentage of applicants who used at least three-quarters of their eRate funding never exceeded 70 percent from 1998 to 2006, according to the GAO's analysis. The percentage of applicants who used none of their committed funding ranged from 10 percent to 20 percent each year during this period.
Cheryl Stepp, instructional technology supervisor for Florida's Osceola District Schools, said her district left some of its eRate money unclaimed in 2004, thanks to an unfortunate choice of a service provider.
"Our district did an RFP through the purchasing department for codecs for five schools," Stepp said, adding: "A company that was unfamiliar to the district, in another state, won the bid." Osceola submitted a Form 471 identifying that out-of-state company as its service provider.
But when it was time to claim funding for these services, "all attempts by every district department to make contact with this company were unsuccessful," Stepp said. "Unfortunately, the window of time [to claim the funds] expired."
In hindsight, Stepp said, Osceola should have filed a vendor change of request form with the Schools and Libraries Division of the Universal Service Administrative Co. (USAC), the agency that administers the eRate, before it was too late.
"Too much time was spent trying to deal with a deceptive company that must have gone under without notifying [its] prospective customers," she said, noting that the eRate funding approved for the codecs "went unclaimed, much to the misfortune of these five schools."
In 2003, the Federal Communications Commission (FCC) amended its eRate rules to allow for unused funding from prior years to be carried over for use in subsequent years. That practice began during the 2004 program year, when the agency carried forward $150 million in unused eRate funding from the 2001 program year for use in 2004.
More than 25 percent of funding commitments are not claimed, GAO says
Primary Topic Channel: eRate
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About $5 billion of the estimated $19.5 billion in eRate funds committed to schools and libraries from 1998 to 2006 were never used, according to a recent report from the Government Accountability Office (GAO).
In some cases, funds were not claimed because the applicants' needs changed from the time they applied until it was time to file a Form 486, which releases the funding to applicants or their service providers. In other cases, the actual expenses that applicants incurred were less than the amount of funding they had applied for. Often, the sheer complexity of the program caused applicants or their service providers to leave money on the table.
Whatever the reason, more than 25 percent of the available eRate funding that was committed to applicants during the program's first nine years has not been disbursed.
Peter Kaplan, director of regulatory affairs for eRate consulting firm Funds for Learning LLC, called the trend "alarming."
"We certainly want schools to be able to use the funds when they get them," Kaplan said.
The percentage of applicants who used at least three-quarters of their eRate funding never exceeded 70 percent from 1998 to 2006, according to the GAO's analysis. The percentage of applicants who used none of their committed funding ranged from 10 percent to 20 percent each year during this period.
Cheryl Stepp, instructional technology supervisor for Florida's Osceola District Schools, said her district left some of its eRate money unclaimed in 2004, thanks to an unfortunate choice of a service provider.
"Our district did an RFP through the purchasing department for codecs for five schools," Stepp said, adding: "A company that was unfamiliar to the district, in another state, won the bid." Osceola submitted a Form 471 identifying that out-of-state company as its service provider.
But when it was time to claim funding for these services, "all attempts by every district department to make contact with this company were unsuccessful," Stepp said. "Unfortunately, the window of time [to claim the funds] expired."
In hindsight, Stepp said, Osceola should have filed a vendor change of request form with the Schools and Libraries Division of the Universal Service Administrative Co. (USAC), the agency that administers the eRate, before it was too late.
"Too much time was spent trying to deal with a deceptive company that must have gone under without notifying [its] prospective customers," she said, noting that the eRate funding approved for the codecs "went unclaimed, much to the misfortune of these five schools."
In 2003, the Federal Communications Commission (FCC) amended its eRate rules to allow for unused funding from prior years to be carried over for use in subsequent years. That practice began during the 2004 program year, when the agency carried forward $150 million in unused eRate funding from the 2001 program year for use in 2004.