Closer Look: Unutilized FY2011 Priority 1 Funding
In funding year 2011, applicants were awarded $1,946,474,027 for Priority One services. Of that amount, they utilized $1,550,269,080, leaving 20% of the money, $396,204,947, unused, to be rolled over for use in future funding years.
- 30% of these rollover funds are related to FRNs that were entirely unutilized (i.e. zero utilization)
- 16% of these rollover funds are related to FRNs that were severely underutilized (i.e. less than 25% utilization)
The discount threshold for Priority 2 funding requests in FY2011 was set at 88%; had those unused Priority 1 funding commitments been available, the discount threshold for Priority 2 could have been lowered to 84%.
Numerous factors can affect utilization rates, including the date of the funding commitment decision letter. However, in this case, 78% of the zero-utilization FRNs, representing $93,094,953, were awarded during the funding year.
Current E-rate rules provide no incentive or penalty for applicants who do not use their funding commitments.