Delays snag schools’ eRate plans

With the filing window for the 2005 eRate program quickly approaching, many state eRate coordinators and school district leaders are frustrated by a bureaucratic morass that is once again bogging down their ability to plan for the new program year.

Just don’t expect them to complain too loudly in public. Given the flood of negative publicity surrounding the eRate lately and the efforts of some in Congress to scuttle the program, eRate stakeholders are afraid to voice their concerns about the latest program glitches for fear of further jeopardizing the $2.25 billion-a-year initiative.

At a time when schools normally would begin assessing their telecommunications needs, finalizing their plans, and preparing a Form 470 request for services, school leaders acknowledge they can do little to prepare for the upcoming cycle until several key administrative issues are resolved.

For one thing, the Schools and Libraries Division (SLD) of the Universal Service Administrative Co. (USAC), the agency that administers the eRate, stopped issuing funding commitment letters for the 2004 program year on Aug. 3 so USAC could adopt government accounting standards by Oct.1.

The switchover was ordered by the Federal Communications Commission (FCC), which oversees USAC and the eRate, to bring USAC’s finances in accord with its own. But the delay leaves some $3.28 billion in 2004 requests still hanging in the balance with the 2005 application period expected to begin in November, according to calculations by the eRate consulting firm Funds for Learning LLC.

Not knowing the status of their 2004 applications makes it extremely difficult for school leaders to plan for their 2005 needs.

Funds for Learning further estimates that some $437 million in 2003 applications also await a decision from the SLD, even though the 2004 program year began July 1.

“Virginia applicants who are far behind in funding are extremely frustrated by these additional delays,” said Greg Weisiger, Virginia’s state eRate coordinator.

Adding to the confusion for school leaders are a number of new rule changes that take effect in 2005. At press time, state eRate coordinators were still awaiting guidance from the SLD on these issues so they could share the details with their local districts.

USAC stopped issuing funding commitments for 2003 and 2004 applications, as well as any appeals, during the transition to a new accounting system because the change might impact USAC’s budget authority, according to the SLD.

“It’s all held up until we figure this out,” SLD spokesman Mel Blackwell said. “We’re looking at [whether] those changes will have any impact on when and how we issue funds.”

Because USAC is included in the FCC’s annual financial statements, the change is expected to streamline audits of the FCC. For future audits, both agencies will have the same accounting structure.

“How we account for our funds would come in line with how the FCC accounts for things,” Blackwell said. “When it comes time for the FCC to get audited, it’ll just make [the process] easier.”

Although the SLD stopped sending out funding commitments, SLD reviewers continued to process applications. “When it comes time to send them out again, we’re just going to have a bigger wave,” Blackwell said.

Mary Kusler, a legislative specialist for the American Association of School Administrators (AASA), thinks the SLD’s change to a new accounting system is a good thing, despite the additional delays it has caused.

“Hell, if the accounting system is better and they can keep track of the money better, then who cares?” Kusler said. “I just think it’s not really a big deal. Accounting systems go down all the time.”

But those on the front lines tell a different story.

In Alaska, “50 percent of the school districts had not been funded from last year. And now I’m talking about applying for next year,” said Della Matthis, Alaska’s state eRate coordinator. “So many of my districts don’t know if they are going to be funded.”

Alaska’s Southeast Island School District, for example, has some of its schools built on log rafts that follow the loggers’ migration to educate their children. The district had a plane to fly teachers and school officials around but lost so much funding that officials couldn’t afford the plane. The district did secure a grant to provide distance learning, but without its eRate funding, it won’t have the necessary bandwidth.

“There are people who are really frantic,” Matthis said.

New rules released Aug. 13 in the FCC’s “Fifth Report and Order,” intended to shield the eRate from further waste, fraud, and abuse, have raised more questions for program applicants–and it appears that state eRate coordinators won’t be able to answer them until the end of September, after they have attended the SLD’s annual training.

“We’re early in the stage for looking ahead to next year,” said Sara Fitzgerald, vice president of communications at Funds for Learning. “The SLD is still getting guidance from the FCC on this newest order.”

eRate coordinators say they’ve gotten into the habit of asking applicants in their state to hold off on preparing for the eRate until after this meeting, because there have been so many significant changes each year.

“I encourage my applicants not to do anything until I go to that training in September,” Matthis said. “There are so many changes that there’s no point in doing anything until I get back.”

While the “Fifth Report and Order” brought more changes to the eRate program, Matthis said applicants are still reeling from the more stringent technology-plan requirements issued last year. The Fifth Order adds yet another requirement to the mix, specifying that technology plans also must include a budget analysis. Matthis says she has been trying to decipher what the FCC means by budget analysis. “They prefer to leave it open, but that’s where our applicants get into trouble,” she said.

The new five-year document retention rule is another significant rule change. The FCC is requiring applicants to be able to produce all documentation for a period of five years, starting with Funding Year 2004. “If you can’t do it, it could result in your loss of funding,” Fitzgerald said.

“The document retention is going to be a major, major [burden] for my tiny libraries run by volunteers,” Matthis said. “When I start telling them about a document, it might be more than they can do.”

Additionally, the FCC is now authorized to recover money from a school district when the agency believes the district had wrongly acquired or used the funds. “Schools need to understand what they are requesting and why. There used to be this feeling of, ‘Oh well–the vendor told me to do it.’ That’s not going to wash anymore,” Fitzgerald said.

The 2005 funding year is also the first time the “two in five years” rule takes effect. Essentially, this means applicants can only apply twice within a five-year period to receive funding for internal connections–the wiring, routers, switches, and file servers necessary to bring connectivity into classrooms.

Last year, applicants faced many of these same challenges before the start of the 2004 application period. The SLD was behind on issuing funding commitments for 2003, and several late rule changes had applicants confused. (See “eSN Exclusive: eRate delays vex educators,” news/showStory.cfm?ArticleID=4801.)

This year, as scrutiny of the eRate has intensified, so too has the flood of negative publicity that has accompanied eRate abuses in places such as Atlanta, Puerto Rico, and Chicago. Some eRate insiders suggest that school and education leaders aren’t as vocal about the delays this year because they understand the need for stricter program accountability. And if you read between the lines, applicants also might be worried about looking a gift horse in the mouth, given the program’s somewhat shaky status.

“It’s not impacting our applicants. I’ve talked to some people and they are just waiting. We are always used to waiting,” said Gary Rawson, Mississippi’s eRate coordinator and chairman of the State eRate Coordinator Alliance (SECA), which is sponsored by the Council of Chief State School Officers.

“It’s just the nature of the program,” Rawson said. “Everybody understands that. We have to balance accountability with simplicity.”

See these related links:

Schools and Libraries Division

Federal Communications Commission

FCC’s Fifth Report and Order

Funds for Learning LLC

American Association of School Administrators

Council of Chief State School Officers

eSchool News Staff

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