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SLD Issues Warning on Non-Discounted Portion of Price

The Schools and Libraries Division March 19 cautioned E-rate applicants that its Program Integrity Assurance team would be reviewing applications to determine whether applicants were already prepared to pay the non-discounted portion of the price of the products and services for which they were seeking E-rate support.

A posting to the SLD Web site noted that "some service providers and consultants offer to locate private grants" to cover the non-discounted amount or to "waive the non-discount portion." The SLD said that that was not permissible. In the case of grant applications, it said schools and libraries must secure access to the necessary funds before submitting their Form 471 applications. It also noted that Federal Communications Commission regulations require that "necessary funding" be "budgeted and approved." The SLD staff submits some applications to a so-called "Item 25 review" in which the applicant must demonstrate that it has budgeted funds for the non-discount portion of the price. Further information on this policy is available at

The SLD also said that any special service provider discounts and promotional offers must be taken into account when the applicant provides the "pre-discount" price on its application. (In other words, an applicant that is eligible for a 90 percent discount rate cannot work out an agreement with a provider through which the provider will agree to charge it only 90 percent of the cost so that the applicant will not have to pay anything.) The SLD said that if a Form 471 includes a funding request for which the value of such price reductions have not already been deducted, it will deny the request.

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