Demonstrating Compliance with Program Rules

The Universal Service Administrative Company conducts audits of beneficiaries under the Schools & Libraries Support Mechanism, as well as beneficiaries under other Universal Service Support Mechanisms. In the Schools and Libraries case, "beneficiaries" can be recipients of service, Form 470 applicants, or Billed Entities; they may assume more than one of these roles during the course of the application process. The following practices have been identified during these beneficiary audits as being important for: (1) successful completion of the application process, (2) compliance with program rules during the period of service delivery and invoicing, and (3) the ability to demonstrate compliance with program rules in a beneficiary audit.

The Schools and Libraries Division urges beneficiaries to incorporate these practices in their participation in the Schools and Libraries Support Mechanism.

1. Establish a Technology Plan using staff expertise or an outside technology expert. Update the plan on an ongoing basis. The Plan should include, but not be limited to, the following:

• Clear goals and a realistic strategy for achieving those goals
• A professional development strategy to ensure that staff know how to use these new technologies to improve education or library services
• An assessment of the telecommunication services, hardware, software, and other services that will be needed to improve education or library services
• A detailed budget which supports the Plan and features the acquisition and maintenance of equipment, staff training and other needs addressed in the Plan
• Methods for evaluating the progress of the Plan and for making changes or corrections to the strategy outlined in the original Plan in response to new developments and opportunities, including a description of the approval process for such changes and corrections.

2. Designate a specific individual to be responsible for oversight of the E-rate application process in order to take accountability and responsibility to ensure that it is accurate and that the equipment and services are eligible for funding. Ideally, this person should also be the contact person listed on forms filed with SLD.
3. Maintain a file of the Form 470 and Form 471 applications. This file should include, but not be limited to, the following:

• A copy of the Form 470 application
• A copy of the Form 471 application
• Request For Proposal, if applicable
• Copies of all bids
• Documentation on the award process and the rationale for the bid award
• Copies of all related contracts
• Copies of all service provider invoices
• Copy of the board resolution for any contract award

4. Maintain a log of all communications with SLD. This includes communication between SLD and any contact person who is not the responsible individual. Each entry should include the name of the person who placed the call, the time of the call, the name of the person who responded, and the substance of the communication.
5. Maintain an updated list or file of the status of all work, in order to monitor both the progress of the project and the expenditure of approved funds related to the project.
6. Maintain and update detailed asset registers (including make, model, serial number, and location) for all sites to facilitate the tracking of equipment purchased with E-rate funds. In addition, diagrams that clearly show how equipment is actually connected and used should become part of the registers if those diagrams are available.
7. If the applicant seeks reimbursement via the Form 472, review and approve the form to ensure that the work has been completed, that the service provider’s bill has been paid in full, and that the reimbursement amount requested is correct.
8. Alternatively, if not filing Forms 472 for reimbursement, review the Quarterly Disbursement Report provided by the Schools and Libraries Division to ensure any payments to service providers are consistent with work actually performed and discounts provided on bills received.
9. Maintain a file for each Form 472 (BEAR) submitted to SLD. This file should contain a completed copy of the Form (including the signature of the Service Provider) and all supporting documentation.
10. Maintain a spreadsheet which tracks either the Form 472 (BEAR) requests for reimbursement or the discounts (in the form of discounts on bills, checks, or credits) provided by the Service Provider to ensure the committed amount on the FRN(s) has not been exceeded.
11. Verify — either through an approved internal process or by an independent third party: that all work has been completed and that all equipment is operating properly.

USAC has created a suggested Compliance Documentation Checklist that applicants can use to track their collection of documentation about the process of applying for, using, and invoicing of Schools and Libraries discounts.