[Erate] E Rate Central News for the Week of June 5th, 2006

Tue Jun 6 12:40:47 PDT 2006

E-Rate Central News for the Week of June 5, 2006

*	FY 2006 and FY 2005 Funding Status
*	New PIA Pattern Analysis Procedures
*	OIG Update on Beneficiary Audit Status

The E-Rate Central News for the Week is prepared by E-Rate Central.
E-Rate Central specializes in providing consulting, compliance, and
forms processing services to E-rate applicants and service providers.
To learn more about our services, please contact us by phone
(516-832-2880) or by e-mail <mailto:services at e-ratecentral.com>
(services at e-ratecentral.com).  Additional E-rate information is located
on the E-Rate Central Web site <http://www.e-ratecentral.com>
(http://www.e-ratecentral.com).

FY 2006 and FY 2005 Funding Status

Wave 6 for FY 2006 is scheduled to be released on June 6th for
approximately $22 million, again only for Priority 1 applications.
Cumulative national FY 2006 funding is now almost $345 million.

Wave 50 for FY 2005 will be released on June 7th.  It is expected that
the Internal Connections funding threshold will drop another percentage
point at that time to 85%.  The wave will therefore include Priority 2
FRNs at the 85% level that had been previously listed "As Yet Unfunded."

New PIA Pattern Analysis Procedures

The SLD is revising its Program Integrity Assurance ("PIA") application
review procedures to reflect the two key FCC appeal decisions released
two weeks ago (see the E-Rate Central News for the Week of May 22, 2006
at
http://www.e-ratecentral.com/archive/News/News2006/weekly_news_2006_0522
.asp#b3).

One interesting change reported by several applicants last week reflects
the additional investigation that the SLD is undertaking when it finds
similarities in the language or format of submissions by a group of
applicants who all requested funding for the same service provider.  In
the past, the SLD had denied applications based on this type of "pattern
analysis" under the assumption that such similarities implied undue
vendor involvement in those applicants' procurement processes.  The FCC
essentially decided that the SLD had jumped to a conclusion and that it
had  "...never attempted to ascertain the reason for similar
applications prior to denying funding based on its 'pattern analysis'
procedure or obtain additional information to determine whether the
applicant violated the competitive bidding rules" (for the full appeal
decision go to
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-55A1.doc).

Although the SLD is still using pattern analysis to identify potential
procurement problems, it is now clear that PIA is following the FCC's
admonition to gather further information before concluding whether or
not there are really problems.  Depending upon what and where
similarities are found, the following types of questions are being
asked:

Form 470 Similarity Questions

1.	Provide the name, title, and employer of the individual who
filled out and submitted the Form 470.  If a service provider assisted
in filling out and/or submitting the Form 470, please provide all
contact information and describe the assistance.
2.	Explain the process used to determine the types of services
required.  Provide documentation, if available, to support this response
(e.g., needs assessment, memorandums, etc.).
3.	If not an employee, provide the name and organization who
participated in determining the types of services needed.  Explain how
they became involved in the process and their level of involvement in
the competitive bidding procurement process.
4.	Provide the specific location from which the Form 470 was filed.
a.	If the Form 470 was submitted online from the same IP address as
the applicant's service provider, please explain and document the reason
for the IP address match.
b.	When the Form 470 was filed, what company was providing Internet
access?  Was this company used to file the Form 470?  If not, which ISP
was used to file the Form 470?

Technology Plan Similarity Questions

1.	Your technology plan has similar/identical language and format
as other billed entity plans.  Explain these similarities.  Provide
documentation, if available, to support this response (e.g., needs
assessment, memorandums, etc.).
2.	Provide the name, title and employer of the individual who
prepared the technology plan.  If assistance was provided, indicate who
provided the assistance, how they became involved in the process, and
their level of involvement.

Selective Review Response Similarity Questions

1.	Selective Review responses include a certification that they
were prepared by the applicant.  Applicant's responses were similar to
other billed entity responses (in some cases with identical wording).
Explain these similarities.  Provide documentation, if available, to
support this response.
2.	Provide the name, title and employer of the individual who
prepared the SRIR response and the process used to respond.  If
assistance was provided, indicate who provided the assistance, how they
became involved in the process, and their level of involvement.

Special Compliance Review Similarity Questions

1.	Was a consultant used for any purpose or activity related to the
application?  If so:
a.	Was the consultant involved in:
i.	Developing the technology plan
ii.	Creating and/or filing the Form 470
iii.	Developing RFP(s)
iv.	Evaluating vendor responses
v.	Selecting vendors
vi.	Preparing the Form 471 and/or Item 21 attachments
b.	List and describe any other involvement of the consultant
2.	Is the applicant affiliated with any other schools or groups of
schools?  If yes, please list them.  More specifically, what is the
relationship, if any, between your school and each of the following
other schools (presumably ones for which the SLD found similarities)?

If only as a check on their own procurement practices, all applicants
should review these issues and/or questions so as to better understand
the SLD's concerns with applicant procurement practices and how its
review procedures are evolving.

OIG Update on Beneficiary Audit Status

Last week, the FCC released its Semiannual Report to Congress of the
FCC's Office of Inspector General (OIG) covering the period ending March
31, 2006 (see http://www.fcc.gov/oig/DOC-265713A1.pdf).  As in previous
OIG Reports under former Inspector General Walker Feaster (who retired
on January 3rd), the new Acting Inspector General, Kent Nilsson,
reiterated the need for additional audit and investigative resources so
that the OIG could conduct its own audits and provide adequate support
to investigations of potential waste, fraud, and abuse in Universal
Service Fund programs - especially E-rate.

The new Report, however, provides more information on the resources
requested and on the status of the previously announced initiative to
establish a three-way contract under which the OIG, USAC, and USAC
contractors would conduct USF audits of all four programs (High Cost,
Low Income, Rural Healthcare, and Schools and Libraries) to meet the
requirements of the Improper Payments Improvement Act of 2002.  In
particular:

1.	FCC Chairman Kevin Martin has requested that OIG be given 12
additional full-time-equivalents and up to $20.5 million through USF
funds in the Fiscal Year 2007 budget submission.  That request is
pending before Congress.
2.	The initial selections of audit program vendors were approved by
the USAC Board of Directors in April 2005, but the FCC's General Counsel
later identified problems with the vendor selection process.  As a
result, it has been decided to re-bid the procurement.
3.	As of the end of April 2006, a statistician from George Mason
University was under contract with USAC to develop an optimal sampling
design for each of the four USF programs and a sampling design to
determine whether contributors are being properly charged.  Once these
sampling methodologies are finalized, multiple new RFPs will be issued
so that each audit firm will be able to bid upon clearly defined
auditing tasks.
4.	The OIG expects that all RFPs will be released during the third
quarter of Fiscal Year 2006 (that is, during the period April to June
2006).

Once the new bids are completed and the audit vendors get to work, there
will be a significant increase in the number of beneficiary audits
conducted on recipients of E-rate funds.  Based on the history of this
effort, however, it is not likely that this will occur before next year
or perhaps well into next year.

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Disclaimer: This newsletter may contain unofficial information on
prospective E-rate developments and/or may reflect E-Rate Central's own
interpretations of E-rate practices and regulations. Such information is
provided for planning and guidance purposes only. It is not meant, in
any way, to supplant official announcements and instructions provided by
either the SLD or the FCC.

Sabrina Ganoe
Oregon Department of Education 
Office of Assessment and Information Services 
255 Capitol St. N.E. 
Salem, Oregon 97310 
(503) 947-5858 
(503) 378-5156 fax 
sabrina.ganoe at state.or.us 
Messages to & from this e-mail address may be made available to the
public under Oregon Law

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