E-rate applicants have started to receive notifications that they are to undergo attestation examinations in what's being called the "Round Three" audits. It is expected that additional applicants will be notified of audit examinations in the coming weeks and months.
E-rate applicants have started to receive notifications that they are to undergo attestation examinations in what's being called the "Round Three" audits. It is expected that additional applicants will be notified of audit examinations in the coming weeks and months.
Round Three audits cover a disbursement period of July 1, 2007 through June 30, 2008. Applicants which are selected for an audit may have any funding commitment reviewed–regardless of E-rate Funding Year–in which funding was disbursed during the covered period. This means that some applicants may undergo audits that span several E-rate Funding Years.
The timing of this latest round of audits could not be worse, according to Scott Weston, the Executive Director of Communications for Funds For Learning. "Applicants are currently under a tremendous amount of pressure to manage the process of applying for funding for next year. Applicants that must also deal with an audit during the Form 470 and Form 471 application process may find themselves in over their heads," Weston said.
A Funds For Learning/eSchoolNews nationwide survey of E-rate applicants finds that 64% of applicants have only one person managing the entire E-rate process for their organization. The survey also shows that an average 21 hours is spent per month by applicants in managing the E-rate process.
"Auditing these applicants in the weeks leading up to the Form 471 deadline can easily lead to errors, either in their applications for Funding Year 2009, or in their responses to the audits. Waiting until applicants complete this critical application phase of the E-rate process would have been a much more desirable approach," said Weston.
One change noted in the documentation provided to applicants receiving audits is that they now have 15 business days to provide the "Attachment D" documentation. It is currently unclear if these '15 business days' will take into account days that school offices are closed for the holidays or mid-term breaks, or if applicants must respond based on a different calendar. In the last round of audits, applicants were given just 10 business days to respond with this information. Attachment D documentation the covers the applicant's technology plan and approval; budget and audited financial statements; discount rate calculation; contracts; fixed asset inventory; records retention policy; and responses to an internal controls questionnaire.
This latest round of audits follows last week's release of the FCC Office of Inspector General's preliminary analysis of the Round Two audits.
