Applicants are reporting an uptick in the number of reimbursement (BEAR) forms that are denied or only partially reimbursed (i.e. “short paid”). Unfortunately, USAC provides very little information to applicants about its payment processing decisions. Frequently the explanation provided in the BEAR Notification Letter (BNL) provides only a limited statement (10 words or less), leaving applicants puzzled by the decision and wondering what to appeal, if anything.
When a BEAR form is submitted for reimbursement, it is often subject to additional review and scrutiny by USAC before a payment is processed. USAC will check the invoices for accuracy and match them to the corresponding FCC Form 471 application and PIA information. USAC may reach out to the applicant and ask for invoice copies or for a list of items removed by the applicant prior to invoice submission. In some cases, USAC will conduct a Payment Quality Assurance (PQA) review which is a mini-audit of sorts.
Site names appear to be a frequent source of USAC’s decision to withhold payments. A school site might be listed on a Form 471 discount calculation worksheet as “Brown Elementary”; however, the telephone company’s invoice might list “Brown School”. Although the addresses are the same, USAC may choose to deny payment because the names do not match precisely. In other circumstances, a site’s address in the USAC database might vary slightly from a vendor’s invoice. For example: 233 W Edmonton Lane versus 232 W Edmonton Lane. (In this real world example, the school building has different doors with slightly different street addresses).
Brown Elementary ≠ Brown School = Denied
233 W. Edmonton Lane ≠ 232 W. Edmonton Lane = Denied
Sometimes USAC is even aware of the discrepancy but cannot account for the change in their system. In one case, a District updated a school name and address with USAC through the CSB. USAC processed the requested site changes to the Block 4 of the 471 application; however, USAC did not update the Item 21 detail line on the same Form 471 application. The invoice reviewer could not match the name of the school on the invoice to the Item 21 detail and the payment was denied.
Almost all of these situations involve a USAC invoice reviewer corresponding with an applicant, requesting copies of invoices and asking for certifications; yet, they do not take the opportunity to ask the applicant to help match any perceived site discrepancies. Instead, the invoice is simply denied or short paid. This would only be an annoyance if it were not for the fact that USAC’s invoice payment decisions lack meaningful detail. For these scenarios, when the applicant’s payment is withheld, the USAC payment decision letter looks like this:
Not only is it difficult for an applicant to judge what went wrong with their reimbursement, they also have to worry about the deadline for appealing the BEAR decision, resubmitting an invoice and/or requesting an invoice deadline extension. The later of these being particularly stressful given the FCC’s recent “no leniency” approach to applicant payments.
Some of this may be the result of FCC-imposed efficiency goals. It is good to pay applicants as quickly as possible, but the desire for speedy payments should not outweigh the need for correct payments by USAC. Schools and libraries work hard to receive their E-rate discounts and funds should never be withheld without good reason or due process. For this reason, I propose that the FCC require the following from USAC:
- Invoice reviewers should be required to reach out to applicants and vendors in much the same way as they do during Form 471 application reviews.
- Applicants and vendors should be able to check the status of any pending payment, including the need for additional information, much like checking the status of a pending 471 application.
- Payment notifications should include adequate descriptions of the decision to reduce or deny a payment such that the applicant or vendor will exclude the item from future submissions and/or be adequately equipped to prepare an appeal letter.