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Thursday, May 16, 2013

Block 4 Eruv

Pondering ways to simplify rules got me thinking: Why do I have to wait three years to transfer equipment between entities if they are both in the Block 4 of the 471 for that equipment?  And why do I have to inform USAC?

The rule was originally created to stop abuse by districts from using high-discount schools as "equipment mills" for the district; they'd buy the equipment with E-Rate funding at the higher discount, then the following year replace it with new equipment, and move the almost-new equipment to a school with a lower discount.  I don't think many schools really did that, because it's a major logistical nightmare, but OK, it's a practice that should be stopped.  (Incidentally, the 2-in-5 Rule stops equipment mills, but we should dump the 2-in-5 Rule.)

If I have a Form 471 that lists several schools, shouldn't I be able to install equipment in any of those schools, and move it around among those schools as I see fit?  So if a school district lists all of its schools (and a couple of NIFs eligible for P2), shouldn't the district be able to move equipment around among those locations?  The locations in Block 4 all contribute to the discount calculation, so if the equipment is bouncing around among entities in Block 4, who cares?  The transfer rules should only apply if the equipment is being moved to an entity not listed in Block 4.

I have been been through audits where the auditor demanded to know where each piece of equipment was originally installed, and then checked to make sure the equipment was still there.  Two switches had been moved, and the auditor recommended that USAC recover the cost of those switches.  That's just wrong.  Applicants should have to show where each piece of equipment is, and it should be in one of the locations listed in Block 4 of the 471, but it doesn't need to be in the building where it was originally installed.

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