Program Compliance Catriona Ayer and Ray Mendiola

1. Program ComplianceCatriona Ayer and Ray Mendiola Train-the-Trainer Workshop September 27-29, 2004 Schools & Libraries Division

2. Selective Reviews • Selective Review Information Request is available in the Reference Area. Review it to make sure that you could answer the questions posed. • Covers your entire BEN. If we find applications with other Block 1 entities that are part of your BEN and that do not meet the definition of a BEN, we will incorporate them into the selective review. • Focuses on Item 25 certification and competitive bidding process.

3. Budgetary Resources • Must be able to show that you had the money to pay for your non-discount share when you filed your Form 471. • Grants must be secured at the time of filing. • Service provider cannot provide the applicant’s share either directly or indirectly.

4. Physical Resources • Hardware • Applicants must be able to show that they have computers (or funds to pay for them) to connect to the network connections being requested.

5. Physical Resources • Hardware (cont.) • Applicants must have reasonable plans to fully utilize all internal connections for which they are requesting discounts. • For example, applicants should have reasonable plans to use all of the network drops within two years of installation and it should be a priority in the subsequent years to purchase the computers needed to fully utilize the drops. • Applicants must show that they have the necessary (ineligible) hardware to fully use the requested services – such as printers, phone sets, etc.

6. More Necessary Resources • Software • Applicants must be able to show that they have software on hand (or the funds to pay for it) to run on the computers to meet the goals of the technology plan. • Professional Development • Are the teachers and library staff trained on how to use the equipment being sought? The complexity of the training should mirror the complexity of the services requested, percent of classrooms with access, and be based on the technology plans.

7. More Necessary Resources • Electrical capacity • Applicants must be able to demonstrate that there is sufficient electrical capacity to run the computer and/or telecommunications network. • Maintenance of ineligible equipment • Applicants must be able to show that they have resources in place to maintain end user equipment.

8. Obligation to Pay • All applicants will pay at least 10%. • Applicants must show that they had “money in the bank” and/or grant already received or fundraising completed at time of filing. • Ability to pay cannot be contingent on outside action such as the approval of a grant application. • Failure to pay more than 90 days after completion of service presumptively violates the rule that the beneficiary must pay its share (per the Fifth Report and Order).

9. Help in Paying? • Donations from outside sources must be secured at time of filing. • Applicant cannot get direct or indirect “grant” from service providers or their foundations to pay the non-discount share.

10. Deferred Payment Plans • Applicants are required to pay their share at the same time that USAC pays the discounted amount. • Service Provider certifies that the invoices they submit are for services that “have been billed to service provider’s customers.” • Therefore, deferred payment plans that allow the applicant to pay after USAC has paid will jeopardize a funding request.

11. Budget Documentation • If we ask for the applicant’s budget, the applicant must: • Provide both Revenues AND Expenses. • Be prepared to explain deficits and how they won’t impact E-rate discounted services. • If there are unforeseen budget reductions later in the year, be able to show that the application was filed in good faith. • If alternative budget documents are provided, such as a Board resolution, then that resolution should be signed/approved before the filing of the 471.

12. Resource Deficiency Advisory • Possible outcome of the Selective Review • Explains which areas we believe are deficient • Applicants should carefully consider their level of investment in those areas. PIA may follow up in subsequent years regarding their necessary resources.

13. Whistleblower Hotline • USAC maintains a national Hotline in an effort to curb waste, fraud and abuse. • Hotline accepts information on possible rule violations. • Callers can remain anonymous if they wish. • Investigated by Special Investigations Function

14. Special Investigations • Case studies • Charter school shuffle • Sometimes they’re NOT guilty

15. Charter School Shuffle • 38 BENs; all private charter schools; all but two in one East Coast City • Special Investigations looks at possible competitive bidding violations and budget issues • All BENs have same Service Provider • All have very large dollar requests for Internal Connections

16. Charter School Shuffle (cont.) • Ultimately, all denied for budget issues: When contacted by Special Investigations, they wanted to cancel FRNs or reduce them to levels that could be supported by their budget (e.g., reduce $600,000 FRN to $60,000)

17. Sometimes They’re NOT Guilty • Special Investigations receives LONG list of allegations regarding vendor selection (bid-rigging) against a School District and one particular employee. • Due Diligence requires that a Site Investigation be conducted. • Special Investigations interviews EVERYONE associated with the selection of the winning bidders. • Superintendent informs Investigators that the District has conducted its own internal investigation.

18. Sometimes… (cont.) • Contracted investigators found all allegations to be without merit • Special Investigations also finds no merit to the allegations it received • Special Investigations clears the District’s applications to proceed through normal PIA process

19. QUESTIONS