In FY2017, Category 2 budget-related issues account for more than one-fourth of all C2 denials in FY2017. This is up significantly from FY2015 and FY2016.
Current USAC procedures requires an applicant to remove items and/or adjust unit costs to reduce the E-rate eligible cost of a Category 2 project so that the funding request(s) equals no more than the remaining budget cap for each school or library site. This is making the application review process far more difficult and leading to many unnecessary funding denials.

Funds For Learning submitted comments to the FCC on February 16, 2018, outlining these concerns and calling upon the FCC to change this procedure immediately. A listing of all FY2017 Category 2 budget-related denials, as of February 6, 2017, was included in the FCC filing and can be viewed here.