Selective Review-Checklist

What do they want in a Selective Review? Here is a quick checklist. There are two sections: bidding and budget.

Bidding
They want everything, including every email you sent to any prospective bidder. Include contracts, RFPs or other specs, bids, bidder evaluation sheets, etc.

Budget
They want to see your actual budget, with circles and arrows (but no paragraph on the back) showing the revenue and expenditure lines that will pay the undiscounted portion of your funding requests. They also want to see figures on cost for ineligible but necessary hardware, software and maintenance, as well as professional development and retrofitting. Finally, they want narratives describing how you intend to fund the E-Rate and what your implementation plan is.

Selective Review-First Contact

I was called by a PIA reviewer to check on my vacation schedule. I recognize the reviewers name from a Selective Review last year. It's nice to know that there's an experienced professional at the other end.

When I said I had no vacation schedule (no vacations for the self-employed), he said he'd fax over a Selective Review Information Request (SRIR) right away. I don't know what happens if you say you'll be on vacation, but I have seen situations where people have gotten extensions for months, and my experience with PIA is that if you let them know you need an extension, and you have a good reason, you get it.

This year the SRIR is 20 pages, instead of the famous 17, but only because there's a fax cover sheet and a cover letter. Otherwise, it doesn't look like much has changed.

So the clock is ticking; I've got 14 days to respond. I have all the paperwork on hand for the competitive bidding process, since I manage that for my clients, but I need to get an approved budget and annotate it with the revenue and expense budget lines which cover the undiscounted portion of the requests as well as the "required-but-not-eligible-for-funding" costs: training, maintenance, end user equipment/software, and retrofitting.

There are a number of other little pieces of information I need to collect: numbers of servers, workstations, network drops, training hours, percent of staff trained, etc. But since we had a Selective Review last year, I have a baseline to work from, so I'm not too concerned about getting those numbers right. The Technology Implementation Level Worksheet (page 13 of the SRIR) also won't have changed much.

I will, however, have to run my response by several people in the district, and I'm afraid a lot of them will be in Disneyland or "down the shore" (as we say here in NJ). So this will probably take a day or two out of my week next week.

I'll post more on what I compile, but unfortunately, I don't know if I'll be able to scrub out all identifying info and post the response as a sample. We'll see.

Selective Review-what is it?

And now, the first Selective Review of the year. Last year I came in to clean up a bit of a mess that had been created, including a Selective Review that had gone on and on. We cleaned up that mess, but now that client is going through it again. So I'll be writing about the process.

What is a Selective Review? It's an in-depth review of an application by PIA (Program Integrity Assurance, the group at the SLD that scrutinizes applications before approval). You know at the bottom of every form there is a long (and growing) list of certifications? Yes I have a tech plan, yes I have budgeted for the undiscounted portion of service costs, etc., etc. For the vast majority of applications, they just take your word for it.

But a lucky few are asked to prove it. You say you have a tech plan; let's see it. You say you budgeted for the undiscounted costs; show us where in your budget. You say you ran an open, fair competitive bid process; show us the paper trail. And so on and so on.

So you get a long information request by fax. Here's a link to an old version of the information request. I can't find a link to a more recent one. I know last year's had 17 pages, and this year's has 20, but I haven't yet looked into the differences. One change I expect to find: on the new 471 you have to give an estimate of all the unfunded costs associated with the services and equipment you're getting, so they'll probably ask about that. I'll talk more about that in the next post and see if I can post a copy of the new form (if I can scrub out all reference to my client).

One nice change: in addition to the fax, I got the forms as a Word attachment in an email. It's nice to have an electronic version I can edit.

Extended Outreach site visit - First Contact

The first contact was a phone call from a BearingPoint employee. BearingPoint is the firm that was selected to conduct the site visits. The employee left a message with an 800 number, and she answered when I called back, knew the visit I was calling about, and told me that the visit would be on August 9th; what time would I like to do it? Well, August 9th I'll be presenting at the NJ Dept. of Ed's Generation Next conference, so I asked if I could do another day. At first she said no, but I was nice, and offered to meet any other day that week, so she said I could have August 8th at 10:00 a.m. Done.

Later that day, I received by email attachment a notification letter, laying out what documents I need to supply and what the visitors will do during the visit. It's a pretty clear letter, though it's generic (talking about looking at equipment, when this is an FRN for phone service). It's funny that they ask to observe students using the service; there is a paucity of students in August, and they aren't allowed to make phone calls anyway. I wonder how many Potemkin villages they see.

The only item in the letter that seems vague is "evidence of E-Rate document retention." What does that mean? The only guidance on document retention comes from the FCC's Fifth Report & Order (starting in Paragraph 45), which gives all kinds of "illustrative" examples, but the FCC admits "we do not believe that an exhaustive list of such documents is possible." So no one can tell you all the documents you'll need, but you're required to have them.

So my first task: create a checklist of everything they might want to see. I'll start with the letter from BearingPoint and the Fifth Report & Order, and add anything else I can think of. I'll post it here when it's done.

Extended Outreach site visit - how was I picked?

What did you do to deserve a site visit? Nothing; you are the victim of chance.

I was on a conference call where a representative of the SLD explained the selection process for site visits. He said that as the stream of invoices went through the payment process, a few were plucked from the stream. My understanding is that invoices are selected after they have been approved for disbursement.

When I pointed out that such an approach would mean you could cut your audit risk by invoicing once a year instead of every month, he said that they had an algorithm for selecting invoices that compensated for that. Like many SLD processes, the algorithm for the selection is secret, so I don't know of any way to reduce your chances of being selected.

Extended Outreach site visit - what is it?

Well, it's happened. One of my clients has been selected for a "site visit" by USAC. So I'm taking the opportunity to let everyone see what it's like. But first, let's talk about what these visits are.

If you ask USAC, they'll tell you that the site visits are part of a new outreach campaigns, to facilitate the transfer of information between applicants and USAC. The visits do present an opportunity for feedback, and one of the items in the first report from the auditors was their surprise at the high level of fear among applicants.

But the word in the applicant community is that it's a "mini-audit." In addition to observing the funded equipment or service in action, the auditors will want to see tech plan approvals, proof of payment, etc. I'll talk more about how serious an audit it is as we go through the process together. At first glance, it looks like a Selective Review plus physical inspection.

The reason it's called "mini" is that the audit focuses on one FRN, not all your funding. Only records which relate to that FRN will be requested. Only equipment or services funded by that FRN will be inspected.

Tomorrow we'll talk about how you get selected for a site visit.

Free E-Rate training

On-Tech Consulting and Microsoft are holding a series of free E-Rate Webinars. These online workshops will be vendor-neutral and focus on what applicants need to know in order to maximize their E-Rate funding. Each workshop will include an opportunity for questions.
The dates and topics are listed below. For more information or to register, go to http://www.blogger.com/www.on-tech.com/webinars, or email webinar@on-tech.com.

All presentations will run from 1:00 to 3:00 p.m. EST.

July 26: E-Rate overview
August 18: E-Rate funding for construction projects
September 15: Avoiding E-Rate application pitfalls
October 13: Recent changes in the E-Rate program
November 10: What is eligible for E-Rate funding?

Waste, fraud and abuse? Where?

The E-Rate now has a reputation of being rife with waste, fraud and abuse. Everywhere I see complaints about how the program is riddled with abuse. For example, in the latest issue of eSchoolNews, there is an article on SES which uses the E-Rate as the poster boy for impropriety. Certainly the program is not without mistakes and bad actors. But let's look at the numbers.

First, the figures from the FCC's Fifth Report and Order. They said that of the $4.7 billion disbursed in the first 3 years of the program, $1.1 billion had been subject to audit, and recovery was sought on $18 million. Analysis of those numbers give us 3 striking facts:

1. Over 23% of all the funding disbursed under the program was subject to audit. That seems like plenty of auditing, even before USAC started making 1,000 "site visits" each year.
2. Of the funds audited, recovery was sought on only 1.6%. That's comfortingly low, especially when you consider that any reports of suspicious activity would have been included in the audited funding.
3. Only 0.38% of the funding disbursed for the first three years was found to have been disbursed improperly. I would be very happy if I could say the same about the expenditures for my business.

The SLD's first Semi-Annual Audit Report to the FCC, which covers 1998-2002, paints a similar picture.

1. About 14% of all disbursed funding was audited.
2. Recovery was sought on 2.8% of audited funding.
3. Recovery was sought on 0.4% of all disbursements.

Where is all waste, fraud and abuse?