The nation’s poorest schools would be eligible for up to $100 million in unspent eRate discounts to modernize their internet labs and computer hardware, under a bill now before Congress. The trouble is, no one can agree on whether these unspent funds actually exist

Rep. Gene Green, D-Texas, introduced the legislation, called the Children’s Access to Technology Act, because a recent report from the federal General Accounting Office (GAO) found schools were not completing all the necessary eRate paperwork. As a result, nearly $1.3 billion in committed funds for 1998 and 1999 have gone unspent, according to the GAO.

The bill would direct the Federal Communications Commission (FCC) to establish a lottery to distribute these allegedly unspent funds. Title I schools could win up to $25,000 in extra funds to update their internet and computer hardware.

“We cannot afford to lose any eRate funding at the end of the year simply because some schools are not following up with their funding,” Green said in a statement. “In these instances, the unspent funds can be allocated to truly needy schools that are struggling to improve the delivery of internet services to their students.”

In the GAO report, called “Schools and Libraries Program: Application and Invoice Review Procedures Need Strengthening,” lawmakers asked the GAO to investigate (a) the amount of eRate funding requested by applicants, (b) the amount of funds committed to them, and (c) the amount of committed funds schools have actually used.

Under the eRate, schools are required to submit a form outlining what telecommunications services they have implemented, so they can be reimbursed. SLD spokesman Mel Blackwell said although this final step is widely publicized, not all schools follow through with it.

Blackwell said the data cited in the GAO report is from a certain period of time and only represents “a snapshot” of the actual situation. For example, in Year One, $4.37 million was unspent, but SLD “rolled it into Year Two, so we didn’t have to collect it from the telecommunications companies in Year Two.”

Each year, the SLD gives the FCC a projection of the demand for eRate funds, so the agency can collect the money from telecommunications companies. By rolling the unspent funds over from year to year, SLD can reduce the amount of funds the FCC needs to collect from companies, Blackwell said.

“There weren’t any unused funds in Year One, [they all were] rolled into Year Two,” Blackwell said.

Carolyn Breedlove, a technology lobbyist for the National Education Association, agreed, saying the data used in the GAO report was collected at “inappropriate times” because it was collected one month before the program’s deadline.

As for Green’s bill, Breedlove speculates that his purpose is to start a discussion about some the problems surrounding the eRate.

“He has some legitimate questions, but I think they can be answered without this legislation,” Breedlove said. “He’s probably trying to get some discussion going and trying to get some answers.”

Blackwell said there probably won’t be any unspent funds in Year Four, either, considering this year’s demand for eRate funding is estimated at $5.787 billion—the highest ever—from 37,188 applications.

In fact, the SLD predicts it won’t be able to fund internal connections for the neediest schools—those eligible for 90-percent discounts—for the first time ever this year.

“It speaks to the need,” Breedlove said, adding that many schools ask for more eRate funding than what they expect to get, and some schools probably applied for the first time.

The GAO report also looked into whether eRate funds have been committed to products and services that are ineligible for support under the program’s rules, whether the program’s administrative costs are increasing, and how these costs compare with those of other federal programs.

“We found that SLD reviewers failed to identify other ineligible items, resulting in at least $6 million in funding errors,” the report said.

Since the eRate began, the SLD has continued to streamline the program and fix problems. Breedlove said it’s hard to standardize the criteria of what is and isn’t eligible, because human beings evaluate the applications.


Rep. Gene Green, D-Texas

Schools and Libraries Division

U.S. General Accounting Office