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A Letter from SLD President Kate Moore on Year 2 and Program Integrity Activities

As promised to you last week, there follows below an update on SLD activitiesApril 20, 2000


Dear Colleagues:

As promised to you last week, there follows below an update on SLD activities relating to Funding Year Two and Funding Year One. I have also included some vital information about program integrity and you.


Year Two Payments Made

To date, SLD has authorized for disbursement $499 million for the funding year ending June 30, 2000, for commitments thus far totaling $1.958 billion.

So, with the year over in two and a half months, we have disbursed about a quarter of the funds committed.

We need your help. While many of you may not have started your E-rate projects, others of you are well in progress. Of the amount not disbursed, $433 million is associated with commitments where recipients have not filed the Year 2 Form 486. No reimbursements or discounts can be paid unless the applicant has filed this form! Please check to make sure that your organization has taken this vital step so payments may be made for your discounts, and end-of-year processing is not slowed down.

Year Two Appeals

As of April 18, we have issued 1,187 decision letters responding to appeals. Our plan is to respond to the remaining 1,112 by early May. We also plan to begin committing funds to meritorious appeals in May. I apologize to those of you who have not heard from us yet. We are working hard to make sure your appeal is thoroughly reviewed, and you should be hearing from us soon. Funds are set aside to provide for any meritorious appeals we receive.

Year 2 Out-of-Window Applications

The Year Two filing period is now over; applications for funding will be addressed after the waves of Year 3 commitment letters have been issued. We are, however, acknowledging the receipt of your applications, even though processing has yet to begin. SLD received 974 applications during the 30-day filing period ending March 31, 2000. These requests total about $242 million and are in addition to the 2,351applications filed from April 7, 1999 through March 1, 2000, requesting about $128 million.

Year 1 Payments


As of March 31, USAC disbursed $ 1.387 billion of the $1.732 billion committed to applicants. After accounting for administrative expenses and commitments with FCC waivers, about $448 million will not be disbursed, subject to appeals pending with the FCC.

Program Integrity Assurance Update


The Schools and Libraries Division continues to be vigorous in the commitment to providing for program integrity. Compliance with program rules is a responsibility shared by applicants and the SLD alike.

In particular, I want to remind all clients of the importance of certain program components:

The importance of an open and fair competitive bidding process; The requirement to certify in Item 25 on the Form 471 that the schools and libraries represented by the applicant "have secured access to all of the resources necessary to make effective use of the services purchased as well as to pay the discounted charges for eligible services." Competitive Bidding. Some vendors may seek to pre-empt the competitive requirements by working so closely with applicants in the Form 470 process that the applicant's selection of that very vendor for services eligible for discounts becomes a foregone conclusion. This is in direct contravention of an open, fair, competitive bidding process. Our Program Integrity Assurance Staff are on alert to detect such instances.

In fact, we are removing from our Form 470 "search" area certain forms where the service provider has signed the "Description of Services Requested and Certification Form." These submissions violate the requirements detailed in the form instructions, which state, "The entity that will negotiate with potential service providers should complete Form 470."

Funding requests based on such Forms 470 will be denied.

Access to Resources. Item 25 on the Form 471 requires the applicant to certify that the schools and libraries it represents "have secured access" to the resources necessary to use the discounted services effectively. The use of the past tense in this certification is important; if access to resources is highly contingent, improbable, or at a level insufficient to support your request then you are not in a position to certify that you have secured such access. Remember, as the applicant, it is your name associated with the certification.

SLD has in the past denied applications where evidence that resources had been secured was lacking. We will continue to examine this certification very carefully.

Other PIA News. SLD's Program Integrity Alert hotline, launched in June 1999, continues to be a useful tool for detecting indications of waste, fraud, or abuse. As a result of phone calls coming in to this line, several investigations are under way. As a reminder, if you want to reportanonymously what you believe is a misuse of program funds or violation of rules, call 888-203-8100, and tell the operator, "This is a code Nine call." Details of the procedures can be found on this site in the June 1999 What's New Archive.

SLD has launched its audit of beneficiaries, which will continue into the spring and summer. We have selected an initial list of entities to be visited by our auditors, Arthur Andersen. The list features diversity: recipients of large and small commitments; public and private schools; school districts; libraries; consortia; and urban and rural entities. I will be in touch with each entity selected for the audit as the audit date approaches.

The goal of the audit is to evaluate whether the selected beneficiaries are complying with program rules.

SLD itself continues to be audited by the General Accounting Office (GAO), which is reviewing our files to test our administration of the program. This audit has been undertaken at the request of the U.S. Senate Appropriations Committee. We are cooperating with GAO, working on a daily basis to honor their requests for information. We are not certain about when they will issue a report, but when they do so, we will let you know about it.

Remember, our PIA staff may be calling you soon regarding your Year 3 funding request. We will be seeking your prompt assistance. Our requests for quick turnaround reflect only that we want to complete the Year 3 commitments well before the Funding Year begins. I ask for your patience and understanding.

In closing, thank you for the incredible work you are doing to bring advanced technologies into schools and libraries for the benefit of all learners. Thank you also for your ongoing feedback on our performance. We are striving for continuous improvement.


Kate L. Moore


Schools and Libraries Division

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