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Dear Applicants: Don’t Forget The Form 486

The SLD, and rightly so, spends much of their annual trainings on the competitive bidding, procurement and application process tied to the Form 470 and Form 471, as that is where most of the more serious compliance issues typically occur. However, it is unfortunate, that literally tens of millions of committed dollars go unused each year because of missed payment deadlines and a lack of understanding of the process once a Funding Commitment Decision Letter (FCDL) is issued.

The lack of understanding of the payment process affects both applicants as well as service providers. Several things need to happen and happen in a certain order for stakeholders to get their E-rate reimbursements and not have their funding reduced. Once a FCDL is issued and the project or service has started, the applicant must submit their Form 486. The Form 486 alerts the SLD that services have started, that the applicant is CIPA compliant and has an approved technology plan. A Form 486 must be postmarked within 120 days after services have started or 120 days of the Funding Commitment Decision Letter, whichever is later. If the Form 486 does not meet these deadlines, the funding may get reduced.

There are 1,135 applicants in FY2010 and 1,116 in FY2009 who received a FCDL for their Priority One services before January 1, 2011 which was nearly 120 days ago. Priority one services typically start on July 1 and once the Form 486 gets submitted and processed, these committed dollars will likely get reduced because the applicant was delayed in filing their Form 486.

FY 2009 and FY 2010 Priority One Form 486 Deadline Warnings

There are 207 applicants in FY2010 and 281 in FY2009 who received a FCDL for their Priority Two services before January 1, 2011 which is nearly 120 days ago. It is more difficult to know for sure when an internal connections project gets underway, but the analysis does indicate there potentially could be a problem if the service has already begun and the Form 486 has not yet been submitted.

FY 2009 and FY 2010 Priority Two Form 486 Deadline Warnings

FFL will continue to release regular analysis on this and other deadlines and trends that are critical to understand the E-rate program.

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