Schools and Libraries’ Use of E-rate Discounts Still Lags as Administrative Review Picks Up
At a time of tighter budgets for education technology, schools and libraries are still lagging in their use of E-rate discounts that have been approved for them, according to a recently completed review by Funds For Learning.
As of Feb. 27, 2004, the Funds For Learning review found that the Universal Service Administrative Company (USAC) had disbursed only 57.9 percent of funding commitments that had been approved for funding year 2002, which officially ended on Sept. 30, 2003.
More specifically, Funds For Learning found:
• Telecommunications Services: USAC had disbursed 63.2 percent of approved 2002 funding commitments, four months after invoices for most services were due. By comparison, in 1998, applicants made use of 75.1 percent of these commitments. So far, USAC has disbursed only 8.8 percent of approved commitments for the 2003 funding year, which started on July 1, 2003.
• Internet Access: USAC had disbursed 64.8 percent of the approved 2002 funding commitments, four months after invoices for most services were due. By comparison, in 1998, applicants made use of 71 percent of these commitments. So far, USAC has disbursed only 15.2 percent of approved commitments in this category for the 2003 funding year.
• Internal Connections: USAC had disbursed 52.4 percent of the approved 2002 funding commitments. In normal circumstances, most of these invoices would have been due by Jan. 28, 2003. However, because many applicants’ 2002 funding commitments were delayed, they will have additional time in which to complete their projects. By comparison, in 1998, applicants made use of 88.3 percent of their commitments. So far, USAC has disbursed only 8 percent of approved commitments in this category for the 2003 funding year.
“There are many reasons why this ‘disbursement gap’ persists,” said Funds For Learning President Orin Heend. “Schools sometimes find they cannot pursue the projects that they thought they could. Schools may have requested more than they ultimately needed for variable bills such as those for telephone services. It’s also easy for schools to lose track of their E-rate discounts and the paperwork that must be completed for the payments to be disbursed.”
But, Heend said, applicants and vendors are also being subjected to a more intensive review at the invoicing stage, requiring applicants to pay greater attention to the payment processes, even when their service providers are discounting their bills.
The Funds For Learning review found wide differences among states in how quickly their applicants had used their discounts. For instance, as of Feb 27, applicants in Kentucky, Michigan, Hawaii and the District of Columbia had made use of less than 45 percent of their approved discounts for 2002, while Alaska, North Dakota, Wisconsin, Colorado, Montana, Louisiana, Georgia, Nebraska, New Hampshire and Kansas had made use of more than 71 percent of their approved discounts. (Nationwide, the figure was 57.9 percent.)
For 2003, more than 30 percent of the approved discounts for North Dakota and Alaska had been disbursed, while in 15 states, fewer than 7 percent of the discounts had been disbursed. (Nationwide, the average was 9.2 percent.)
Because of a new Federal Communications Commission policy, funds that are not disbursed will be rolled over into the overall E-rate funding pool for future years. The Schools and Libraries Division will have an additional $420 million available to commit as it finishes reviewing applications for the 2003 funding year.
Funds For Learning has created a tool, called E-rate Manager, that is made available for free to school and library applicants and to state coordinators to help them monitor their approved commitments. For more information, go to: www.eratemanager.com.
Funds For Learning recently used E-rate Manager to help state E-rate leaders identify applicants who might have forgotten to certify their Form 470 application during the E-rate application season that just ended. Every year, some schools and libraries miss out on receiving discounts because they failed to follow through with this simple step. Funds For Learning created reports for state leaders so they could easily identify applicants whose Form 470 applications had not yet been certified and send them a reminder notice as the filing deadline approached.