1. E-rate Audits/Reviews Be prepared!! Prepared by Judy Jones, State Library of Iowa

2. E-rate Audits This is meant to provide information about what may be expected if your library were selected for an audit of e-rate funding. There are various audits and reviews and various agencies that do these reviews. Anyone receiving e-rate funds could expect to be audited for past years’ processes and receipts. This is meant only as an aid in order that you be prepared with the correct documentation. The key is, do not throw anything away. More information can be found on the Schools and Library Division web site: http://www.sl.universalservice.org/reference/

3. Fifth Order – Record Retention Keep GOOD RECORDS Keep records for five years after last date of service This is now a rule and non-compliance can mean return of funds http://www.sl.universalservice.org/referenc e/BestPractices.asphttp://www.sl.universalservice.org/referenc e/BestPractices.asp

4. Record Retention – keep all the following: Technology Plan and plan approval letter Three year technology plans may require longer retention RFPs, documents describing the bid evaluation criteria and weighting Bid evaluation worksheets Winning bids, non-winning bids Written correspondence from bidders Board minutes with info re: bids, why you chose certain vendor

5. Record Retention - continued Contracts All application forms Documents used to support discount percentage (on file at the State Library or your individual worksheets) Documents used to prepare Item 21 attachments

6. Record Retention - continued Inventory records of equipment purchased and verify location (internal connections) All invoices and records showing payment of invoices Record of BEAR payments and deposits or proof of payment Budget information that supports that you had the money for non-discounted amount, plus equipment maintenance, software and staff training.

7. Types of Audits/Questions Problem Resolution Program Integrity Assurance (PIA) Review Selective Review –Certification 25 –Technology Plan –CIPA Beneficiary Selective Review USAC Site Visits

8. E-Rate Questions – Problem Resolution First questions you may receive about your application Necessary to get missing data on initial applications because your form does not meet minimum standards Mostly for those that apply manually

9. E-rate Questions – PIA Review (Program Integrity Assurance) Necessary to make sure you comply with the rules: You are eligible entity You applied for only eligible services You made eligible use of those services You followed competitive bid process You have a written technology plan

10. E-rate Audits – various types of audits can be done by the following: USAC Internal Reviews USAC External Auditors, i.e. KPMG FCC/Office of Inspector General Special Investigations – result of whistleblower hotline Can be either random or selected

11. E-rate Audit - Selective Review You are lucky; you have been selected! Focus is on the Item 25 certification and competitive bidding process - can you support this certification? Can you prove you had the money to pay for the non- discounted share when you filed 471? –They will check your budget and check against the non- discounted amount required Can you prove the service provider did not provide applicant’s share either directly or indirectly? Are you using grant money? Can you prove it was secured before 471 filed?

12. More Selective Review You must demonstrate you have computers to connect to the network connections being requested (internet) You must demonstrate you have necessary (ineligible) hardware to fully use the requested services – such as printers, phone sets (Internet and telecommunications) You must demonstrate you have software on hand to run on the computers to meet the goals of the technology plan (Internet) You must demonstrate that there is sufficient electrical capacity to run the computer and/or telecommunications network

13. More Selective Review You must demonstrate staff are/will be trained on how to use equipment sought (Internet, telecommunications as Centrex) You must demonstrate resources ($$) are in place to maintain equipment and train staff The following site provides additional information: –Program Compliance and Checklist http://www.sl.universalservice.org/reference/dcpr.asp http://www.sl.universalservice.org/reference/dcpr.asp

14. E-Rate Audit - Beneficiary Selected recipients - Looking for waste, fraud and abuse in discounted services Checking to make sure you complied with FCC rules and reasonable business practices Auditors go back to previous years Have completed ‘98, ’99, ‘00 Done by Program Integrity Assurance USAC Internal or by KPMG – group hired by USAC

15. E-Rate Audit - CIPA This audit is done after submission of 486 The specific purpose is to check compliance of CIPA certification You must be able to produce documents to show: Internet Safety Policy, adoption of Internet Policy, date and copy of minutes of public hearing regarding Internet Policy, copies of application forms

16. E-Rate Audit – Technology Plan Common findings on completed audits –Insufficient budget to cover non-discounted amount –Approval letter not available –Plan does not cover time period of funding –Goals & objectives not monitored –Missing a required section –No evaluation done –No plan or certification available

17. USAC Site Visits - Random 1,000 per year/ 84 per month Physical site review for waste, fraud and abuse Enhanced outreach to school & library community Gather information on: procurement, deployment, technology re: e-rate http://www.extendedoutreach.com/www/

18. E-rate Audits – Summary Be prepared with good documentation Do not throw away any paperwork related to your application or receipt of funds Be prepared to pull out budget information If selected for audit, contact Judy Jones, State Library 1-800-248-4483