Every Last Penny

Are you using all of your E-Rate dollars? A well-equipped district offers tips on how to make the most of your award.

In a time when districts are scraping for every penny, it seems almost unthinkable that they would let E-Rate funds get away. But the truth is, a lot of money is being left behind. In fact, districts' use of awarded E-rate funds declined from 80 percent in 2000 to 55 percent in 2004, according to E-Rate consulting firm Funds for Learning. Wise districts make it a priority to ensure they're employing all the funds at their disposal. The School District of Philadelphia, for example, is a model E-Rate recipient.

The Philadelphia Story

Philadelphia, with 273 schools and 190,000 students, was allocated $30.9 million in E-Rate funds in 2004-2005, and it expects to use 97 to 98 percent of that amount. "That's one thing Philly does really well — what we call our usability ratio, how much of the funding you actually use of what you request and receive," says Bob Westall, Philadelphia's executive director for technology services.

E-Rate has helped put Internet, cable television, and telephones in every Philadelphia classroom — all 18,500 of them. The program also pays for cell phone service for principals and assistant principals, as well as operations and tech support personnel. All teachers have e-mail, voicemail, and access to online scheduling and collaboration software. And the district plans to have wireless Internet in every classroom by mid-2007.

Why has Philadelphia been successful where others have failed? For one thing, it has almost a decade of experience. The district was hooked up with an E-Rate consulting company and got in on the ground floor of the program in 1997. And Westall brings valuable knowledge, too. As a member of the Task Force on the Prevention of Waste, Fraud and Abuse, a group set up by the Federal Communications Commission to look at program abuses in 2003, he saw vivid examples of problems everywhere, from one-room schoolhouses to the country's biggest districts.

Here are some of the lessons he learned on the way:

Centralize and standardize. In its first year of participating in E-Rate, Philadelphia's administration asked each school what it needed and got more than 200 different funding requests from individual school principals. The next year, the process was streamlined. "In a large district, the only rational thing is to have a centralized approach," says Westall. That means having one office in charge of the program, standardizing the technology used, and contracting with a minimal number of vendors.

Allocate correctly. Funnel E-Rate funds to the right place. "Districts need to make sure the money is reinvested into the technology budget, not used to supplement the general operating budget," says Westall.

Put one person in charge. Collaboration is helpful, but one person or department (usually the CIO or CTO in the office of information technology) should have the final say. "You need somebody who is tech-savvy and budget-savvy as well," says Westall.

Use it or lose it. Districts need to be pragmatic about what can be accomplished in a given time period. A district won't get all the E-Rate funds it asked for to pay for an installation project, for example, if the project isn't completed within the funding year plus three months in the following summer. (Note: In some cases the time frame can be extended.) Design issues, the permit process, and the ramifications of working with labor unions are important considerations when developing a project timeline.

Carefully vet contractors. During his time on the E-Rate Task Force, Westall came across several vendors who sold districts technology they didn't need — for example, heavy bandwidth networks when a cable modem might have worked just as well. "It really depends on the school's technology model — how much they use tech in their everyday teaching and learning process," he says.

He also encountered unscrupulous consultants who would manipulate data concerning a district's poverty level, for example. In recent years, some consultants have gone to prison for illegal arrangements with vendors in which vendors bury the cost of services by overcharging for the product.

How can districts protect themselves against these threats? "References. Get good references. Talk to them," says Westall. Districts can exercise due diligence by checking out consultants online; talking to their state's E-Rate coordinator (see www.e-ratecentral.com or www.eratemanager.com for contacts); and, for urban schools, tapping in to the Council of the Great City Schools network.

As for Philadelphia's E-Rate future, the district was approved to receive $11.8 million for the 2005-2006 year, and it has requested $11.3 million for 2006-2007. Dollar amounts have dropped dramatically because the district completed the infrastructure portion of the work and is now in maintenance mode. "The program did what it was intended to do in Philadelphia," says Westall.

Legislative Update

With telecom reform stalled in the Senate, what's in store for E-Rate?
By Amy Poftak

Despite Senate hearings last month to review federal telecommunications legislation, of which E-Rate is just one part, don't expect action any time soon.

The Communications, Consumer's Choice, and Broadband Deployment Act (S. 2686) calls on the FCC to make several changes to the E-Rate program, including establishing measures to ensure program money is being spent effectively and imposing sanctions on parties who "repeatedly and knowingly violate program rules."

Perhaps more significant, the bill would permanently exempt the E-Rate and other Universal Services Funds from the Antideficiency Act, which says federal programs can't make funding commitments unless monies are available. Currently the E-Rate program can commit dollars well in advance of the time money is drawn down thanks to a temporary Congressional exemption, which expires this December.

Odds are the Senate bill won't be passed by the end of the year, says Winston Himsworth, executive director of E-Rate Central, a New York-based consulting firm, which according to him means one of three possibilities: other legislation will be passed; the E-Rate fund will be temporarily frozen until reserve funds are built up; or Congress will extend its exemption so the program can continue to operate without interruption. "It's most likely that [Congress] will provide another exemption," says Himsworth.

The Paper Chase

Keeping track of administrative details is crucial to E-Rate success.

A key aspect of making the most of E-Rate funding is the often thankless, but nonetheless crucial, task of paperwork. Peter Kaplan, director of regulatory affairs for Funds for Learning, notes that districts often lose out on E-Rate money simply because they fail to make filing deadlines. "Each spending request has several dates and deadlines associated with it, whether it's an installation, payment, or Form 486 deadline," he says. E-Rate filing deadlines can be found at www.eratemanager.com.

Another mistake, says Kaplan, is handing the paperwork job to someone on the low end of the office hierarchy. "Someone relatively high up on the food chain needs to manage and oversee the program," he says. "There's a lot of money at stake here."

Scott Smyth, vice president of legal and regulatory services at Trillion Partners, which sells security and networking services to schools, advises schools to keep copies of all bids and correspondence — even losing bids. It's a legal requirement, but sometimes the last thing on an overworked technology director's mind. Smyth also encourages districts to file early, since some mistakes can't be fixed after the deadline. Smyth has seen districts lose funding for a year when incorrect paperwork is submitted at the last possible minute.

Finally, Smyth says, be patient. With 40,000 applications to process annually, the program is overwhelmed. Districts also need to be vigilant in their responses to requests for additional information about service providers during the application review process. "There's hope that the process might be simplified [in the future], but when that will happen we don't know," he says.

Case Study: How an Alaskan district is putting E-Rate to work

Nationally, the amount of districts maximizing their use of E-Rate funds has been declining steadily since 2001, but not in the Yupiit district in rural western Alaska. Most of the 450 mainly Yu'pik Eskimo students there lack running water at home, but they do have Internet access at school, thanks to E-Rate funding. In the villages of Akiak, Akiachak, and Tuluksak, E-Rate money accounted for $600,000- $700,000 of the district's overall $7 million operating budget for 2005- 2006. The district used every dollar available to it, according to technology coordinator Dave Reilly.

Not surprisingly, the funds have made a huge impact. For instance, four years ago, Reilly didn't even have a phone. E-Rate funds paid for a 200-phone PBX system. Another central piece of the Yupiit E-Rate program is interactive video, allowing some 20 percent of students to take online classes that the district couldn't otherwise offer. The district also uses interactive video for professional development and other purposes, such as broadcasting a regional basketball tournament.

Reilly says that in order to get the maximum benefit from E-Rate, certain elements have to be in place. One is collaboration between a district's tech person and its business person. In Yupiit's case, it's an efficient arrangement: They're married. Reilly's wife is the business manager.

They would be working together on E-Rate even if they weren't married, though. "It's just so critical to have that working relationship, that partnership," Reilly said. "The tech guy understands what eligible services are needed, and the business manager understands what the district can afford."

Sheila Riley is a freelance writer based in San Francisco.