Schools and Libraries Program: Update on E-Rate Funding 	 
(11-MAY-01, GAO-01-672).					 
								 
The Telecommunications Act of 1996 expanded the traditional	 
definition of universal service--affordable,  nationwide	 
telephone service--to include eligible schools and libraries.	 
Among other things, the act authorized the Federal Communications
Commission (FCC) to implement a program to assist these 	 
institutions in acquiring advanced telecommunications services.  
Under FCC's program, (often referred to as the 'e-rate' program),
schools and libraries can receive discounts from the vendors on  
the cost of eligible telecommunications services, Internet	 
access, and internal connections. FCC appointed the Universal	 
Service Administrative Company (USAC) as the program's permanent 
administrator, although FCC retains responsibility for overseeing
the program's operations and ensuring compliance with its rules. 
USAC's Schools and Libraries Division (SLD) is responsible for	 
carrying out the program's day-to-day operations. Schools and	 
libraries do not receive funding directly from the program. The  
committed funds are held by USAC, which reimburses vendors	 
directly for the discounted portion of the e-rate approved	 
services that they provide. This report provides information on  
(1) the amount of funds requested and committed for all three	 
program years (1998-2000) and (2) the result of FCC and SLD's	 
steps to reduce the amount of committed funds that go unspent.	 
GAO found that requests for e-rate support have increased	 
steadily each year since program funding began in 1998. For the  
third and fourth program years, total requests greatly exceeded  
the program's current annual funding cap of $2.25 billion. For	 
the third program year (2000), the requests exceeded $4.2	 
billion. Although SLD had sufficient e-rate funds to support all 
valid requests for telecommunications services and Internet	 
access for the third year, it could not support requests for	 
internal connections from applicants with discount levels of 81  
percent or lower, leaving nearly $2 billion of the $3.2 billion  
requested for internal connections unfunded. For the fourth	 
program year (2001), SLD estimates that applicants requested	 
nearly $5.2 billion in program funds as of April 17, 2001.	 
However, it appears that a large proportion of the nearly $3.5	 
billion in internal connection requests may go unfunded. Data	 
from January 2001 indicate that more than $880 million (24	 
percent) of the $3.7 billion committed to applicants for the	 
first two program years remains unused. This is a decrease from  
$1.3 billion in unused funds (35 percent) at the end of August	 
2000. GAO also found that FCC and SLD have taken steps to reduce 
the amount of committed funds that go unspent, including	 
canceling the funding commitments of second-year applicants that 
have not confirmed that they have begun receiving services	 
associated with these funds.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-672 					        
    ACCNO:   A00987						        
  TITLE:     Schools and Libraries Program: Update on E-Rate Funding  
     DATE:   05/11/2001 
  SUBJECT:   Internet						 
	     Libraries						 
	     Public schools					 
	     Telecommunication					 
	     Telecommunication equipment			 
	     Unexpended budget balances 			 
	     Funds management					 
	     FCC E-Rate Program 				 

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GAO-01-672
     
Report to the Subcommittee on Commerce, Justice, State, the Judiciary, and
Related Agencies, Committee on Appropriations, U. S. Senate

United States General Accounting Office

GAO

May 2001 SCHOOLS AND LIBRARIES PROGRAM

Update on E- Rate Funding

GAO- 01- 672

Page i GAO- 01- 672 Update on E- Rate Funding Letter 1

Appendix I Funding Requested, Committed, and Approved for Payment, 1998-
2000 9

Appendix II Comments From the Federal Communications Commission 16

Appendix III Comments From the Universal Service Administrative Company 18

Tables

Table 1: E- rate Funding Requested for the First 3 Program Years, by
Category of Service 5 Table 2: Estimated Amount of Program Funds Requested
by

Applicants for Fourth Program Year (as of April 17, 2001) 6 Table 3: Amounts
of Funds Committed, Approved for Payment, and

Unused for the First 2 Program Years, as of January 2001. 7 Table 4: Funds
Requested, Committed, and Approved for Payment

in the First Program Year (1998) 10 Table 5: Funds Requested, Committed, and
Approved for Payment

in the Second Program Year (1999) 12 Table 6: Funds Requested, Committed,
and Approved for Payment

in the Third Program Year (2000) 14 Contents

Page 1 GAO- 01- 672 Update on E- Rate Funding

May 11, 2001 The Honorable Judd Gregg Chairman The Honorable Ernest F.
Hollings Ranking Member Subcommittee on Commerce, Justice, State,

the Judiciary, and Related Agencies Committee on Appropriations United
States Senate

As you know, the Telecommunications Act of 1996 expanded the traditional
definition of universal service- affordable, nationwide telephone service-
to include eligible schools and libraries. 1 Among other things, the act
authorized the Federal Communications Commission (FCC) to implement a
program to assist these institutions in acquiring advanced
telecommunications services. Under FCC?s program, (often referred to as the
?e- rate? program), schools and libraries can receive discounts from vendors
on the cost of eligible telecommunications services, Internet access, and
internal connections (the equipment needed to deliver these services). The
discounts range from 20 to 90 percent, with higher discounts going to
applicants in low- income and rural areas. 2 FCC appointed the Universal
Service Administrative Company (USAC) as the program?s permanent
administrator, although FCC retains responsibility for overseeing the
program?s operations and ensuring compliance with its

1 Generally, educational institutions that meet the definition of ?schools?
in the Elementary and Secondary Education Act of 1965 are eligible to
participate in the e- rate program. Libraries eligible to receive assistance
from a state?s library administrative agency under the Library Services and
Technology Act are eligible for support unless their budgets are part of a
school?s budget. Individual e- rate applications can cover single schools or
libraries, whole school districts or library systems, consortia, or schools
in entire cities and states.

2 The program measures how economically disadvantaged the schools and
libraries are by the number of students eligible to participate in the
national school lunch program. Urban and rural designations are based on the
Metropolitan Statistical Area (MSA) listing.

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 01- 672 Update on E- Rate Funding

rules. 3 USAC?s Schools and Libraries Division (SLD) is responsible for
carrying out the program?s day- to- day operations.

To obtain e- rate support, eligible schools and libraries must submit an
application to SLD specifying the services they wish to purchase, how much
discount funding they would need, and the vendors they have selected to
provide the services. SLD reviews each application and commits (i. e., sets
aside) program funds for eligible requests. If the total amount of program
funding requested by all applicants exceeds the program?s funding cap
(currently $2. 25 billion annually), priority is given to supporting
requests for telecommunications services and Internet access. Any remaining
funds are then used to support internal connection requests, starting with
applicants with the highest discount level (90 percent) and moving downward
through lower discount levels until the available funds are committed.

Schools and libraries do not receive funding directly from the program. The
committed funds are held by USAC, which reimburses vendors directly for the
discounted portion of the e- rate- approved services that they provide. In
accordance with its internal control procedures, SLD will not approve
payments of committed funds until (1) the applicant submits a form
certifying that it has begun to receive e- rate- supported services from its
vendor and (2) the vendor or the applicant has filed an invoice form
requesting reimbursement for these services. Once SLD reviews these forms
and approves payment, USAC disburses program funds to the vendors.

In our December 2000 report on e- rate issues, we included data on the
amount of program funds requested, committed, and approved for payment
during the first 2 program years (1998 and 1999), broken out by state. 4
Funding commitments for the third program year (2000) were not

3 USAC was originally established as a subsidiary of the National Exchange
Carrier Association (NECA) to administer the high- cost and low- income
universal service support mechanisms. USAC currently performs billing,
collection, and disbursement functions for all universal service support
mechanisms, including the e- rate program. These mechanisms are funded
through a universal service fund. Under the act, every telecommunications
carrier providing interstate service must contribute to this fund, unless
exempted by FCC. The Commission also requires certain other
telecommunications service providers, such as pay phone service providers,
to contribute to the universal service fund.

4 Schools and Libraries Program: Application and Invoice Review Procedures
Need Strengthening (GAO- 01- 105, Dec. 15, 2000).

Page 3 GAO- 01- 672 Update on E- Rate Funding

yet available because SLD and FCC had not finished making all of their
commitment decisions at the time we concluded our review. After subsequent
discussions with Subcommittee staff, we agreed to provide state- level data
on (1) the amount of funds requested and committed for all 3 program years
and (2) an update on the amount of committed funds approved for payment
during the first 2 program years. In addition, we have included a
preliminary estimate of the amount of e- rate funding requested for the
fourth program year (2001).

Requests for e- rate support have increased steadily from year to year since
program funding began in 1998. For the third and fourth program years, total
requests greatly exceeded the program?s current annual funding cap of $2.25
billion. For the third program year (2000), the requests exceeded $4.2
billion. Although SLD had sufficient e- rate funds to support all valid
requests for telecommunications services and Internet access for the third
year, it could not support requests for internal connections from applicants
with discount levels of 81 percent or lower, leaving nearly $2 billion of
the $3.2 billion requested for internal connections unfunded. For the fourth
program year (2001), SLD estimates that applicants requested nearly $5.2
billion in program funds as of April 17, 2001. This estimate is subject to
change as SLD reviews applications to eliminate invalid requests and accepts
additional applications postmarked before the deadline. However, it appears
that a large proportion of the nearly $3.5 billion in internal connection
requests may go unfunded.

Data from January 2001 indicate that more than $880 million (24 percent) of
the $3.7 billion committed to applicants for the first 2 program years
remains unused. This is a decrease from $1. 3 billion in unused funds (35
percent) at the end of August 2000. Funds that are committed, but unused,
are held by USAC in interest- bearing accounts pending requests for
reimbursements. FCC and SLD have taken steps to reduce the mount of
committed funds that go unspent, including canceling the funding commitments
of second- year applicants that have not confirmed that they have begun
receiving services associated with these funds. Commenting on a draft of
this report, FCC?s Managing Director agreed with our analysis and provided
some updated information. For example, FCC stated that as of April 2001, the
amount of unused funds had decreased further to $774 million. USAC?s Chief
Executive Officer commented that our report provides a useful update, and
she also clarified USAC?s policy on how it maintains its data. Copies of
FCC?s and USAC?s comments are included in appendix II. Results in Brief

Page 4 GAO- 01- 672 Update on E- Rate Funding

Table 1 summarizes the funding requests for the first 3 program years at the
national level. 5 (Detailed state- level tables providing data on funding
for each program year are found in app. I). SLD?s data indicate that
applicants requested more than $2.3 billion in discount funding in the first
program year. 6 Because FCC set the first- year funding level at $1.925
billion, not all of the requests could be funded. In accordance with FCC?s
funding priorities, SLD first committed funds to all valid requests for
telecommunications and Internet access, and it then committed the remaining
funds to valid internal connections requests from applicants with discount
levels of 70 percent or higher. During the second program year (1999), FCC
raised the funding level to the full $2.25 billion allowed under the cap.
After screening out approximately $700 million in ineligible requests, SLD
found that it had more than enough funds to approve all of the valid
requests it received before the initial application deadline. Thereafter,
FCC directed SLD to reopen the second- year application period so that the
remainder of the funds could be used. In the third program year (2000),
applicants requested more than $4.2 billion in discount funding. Although
the amount of funds requested for all categories of service increased from
the previous program years, most of the additional funding requests were for
internal connections. Because the program?s annual funding cap remained at
$2.25 billion, SLD again approved requests using the funding priority rules.
SLD was able to fund all eligible requests for telecommunications and
Internet access, but it could fund internal connections requests only from
applicants with discount levels of 82 percent or higher.

5 The amounts presented in this report for the first 2 program years differ
from those included in our December 2000 report because they reflect more
current information. For example, some applicants cancelled funding requests
or had their commitments revoked due to the inclusion of ineligible
services. Also, in this report we included data for secondyear applications
received and processed after the initial application period.

6 These estimates exclude requests that did not meet a filing deadline or
include a required certification. However, because of inconsistencies in how
SLD maintains its data, we could not exclude the value of requests for
ineligible services. Thus, these estimates are likely to overestimate the
level of valid requests but underestimate the amount originally requested.
We discuss this issue further in appendix I. Demand for E- Rate

Support Is Exceeding the Program?s Funding Cap

Page 5 GAO- 01- 672 Update on E- Rate Funding

Table 1: E- rate Funding Requested for the First 3 Program Years, by
Category of Service

Category of service First program

Year (1998) Second program

year (1999) Third program

year (2000)

Internal connections $1,484,137,664 $1,747,716,342 $3,169,458,246 Internet
access 133,100,693 181,203,526 247,451,662 Telecommunications 716,506,732
733,187,591 811,264,432

Total $2,333,745,089 $2,662,107,458 $4,228,174,339

Note: Columns may not add to totals due to rounding. Source: GAO analysis of
SLD data, as of January 2001.

For the fourth program year (2001), requests have again increased
significantly. SLD?s preliminary estimates indicate that applicants have
requested almost $5. 2 billion in program funds. As shown in table 2,
applicants requested about $1.7 billion for telecommunications and Internet
access. Under the current cap, this leaves only $517 million from which to
fund internal connections requests and other program needs - far less than
the nearly $3.5 billion requested by applicants for this purpose. Although
these figures may change as SLD accepts additional valid applications and
excludes ineligible requests, it appears likely that there will be
insufficient funds to cover the $1.6 billion in internal connections support
requested by applicants in the highest priority level (i. e., those with a
90 percent discount level). According to FCC?s priority rules, if the
remaining funds are not sufficient to support all of the funding requests
within a particular discount level, the total amount of remaining support
available is to be divided by the amount of support requested within the
particular discount level to produce a pro rata factor. The support level
for each applicant within the particular discount level is then reduced by
the amount derived from multiplying each applicant?s requested amount of
support by the pro- rata factor. 7 SLD officials said that FCC is also
considering other prioritization options.

7 See 47 C. F. R. 507( g)( iv).

Page 6 GAO- 01- 672 Update on E- Rate Funding

Table 2: Estimated Amount of Program Funds Requested by Applicants for
Fourth Program Year (as of April 17, 2001)

Discount level Telecommunications

services Internet access

Internal connections

Total (Percent of

total)

20- 29 $2,124,662 $554,757 $2,910,514 $5,589,934 (0.1%) 30- 39 9,323,491
1,993,868 3,823,332 15,140,691

(0.3) 40- 49 119,085,067 33,981,845 155,050,412 308,117,323

(5.9) 50- 59 139,158,034 44,404,260 125,889,608 309,451,902

(6.0) 60- 69 177,133,506 88,282,664 211,815,966 477,232,191

(9.2) 70- 79 233,790,586 91,319,962 159,073,112 484,183,660

(9.3) 80- 89 306,147,139 84,449,009 1, 247,026, 394 1,637,622, 541

(31.5) 90 298,847,831 101,970,713 1, 556,519, 702 1,957,338, 246

(37.7)

Total (Percent of total) $1,285,610,370

(24.7%) $446,957,078 (8.6%) $3,462,109,039

(66.6%) $5,194,676,487

(100%)

Note: Columns may not add to totals due to rounding. Source: Schools and
Libraries Division of USAC.

Although demand for program funds has been high, our December 2000 report
noted that a significant portion of the funds committed for the first and
second program years (1998 and 1999) remained unused. Specifically, as of
August 31, 2000, at least 35 percent ($ 1.3 billion) of the $3.7 billion in
program funds committed to applicants for these years had not yet been
approved for payment. As table 3 below shows, this situation has improved
somewhat, with the balance of unused funds decreasing to 24 percent ($ 885
million) as of January 2001. According to FCC, as of April 24, 2001, $774
million in committed funds remained unspent. Most of the decrease is due to
additional disbursements of funds committed for the second program year.
More of the unused funds may still be disbursed because, under certain
circumstances, vendors can request payment for services until September
2001. USAC holds the unused, committed funds in interest- bearing accounts.
A Significant Amount

of Committed Funds Remains Unused

Page 7 GAO- 01- 672 Update on E- Rate Funding

Table 3: Amounts of Funds Committed, Approved for Payment, and Unused for
the First 2 Program Years, as of January 2001.

Category of service Funds

committed Funds

approved for payment Unused funds

Percentage of funds

unused First program year (1998)

Telecommunications $916,683,436 $792,638,769 $124,044,666 13.5% Internet
access 135,767,598 95,324,145 40,443,453 29.8 Internal connections
679,260,413 507,556,121 171,704,292 25.3

Total $1,731,711,446 $1,395,519,035 $336,192,411 19.4% Second program year
(1999)

Telecommunications $1,208,059,709 $924,846,350 $283,213,359 23.4% Internet
access 145,472,048 87,395,961 58,076,086 39.9 Internal connections
603,783,828 396,799,396 206,984,432 34.3

Total $1,957,315,585 $1,409,041,708 $548,273,877 28.0%

First 2 program years (1998 and 1999)

Total $3,689,027,031 $2,804,560,743 $884,466,288 24.0% Note: Columns may not
add to totals due to rounding. Source: GAO analysis of SLD Data, as of
January 2001.

In our December report, we noted that FCC and SLD had not conducted a
comprehensive analysis to determine why this situation was occurring. FCC
and SLD officials recently told us that they have taken several steps to
address this situation, including implementing new policies to provide
applicants with flexibility to change service providers or modify the
services originally requested. Also, they said that they have established
new deadlines for notification of the receipt of services and for submitting
invoices. If these deadlines are not met, SLD will recapture the committed
funds. For example, in January 2001, SLD sent letters to applicants that had
not confirmed that they were receiving services for second- year funding
commitments. The letters stated that if the applicants did not confirm by
February 15, 2001, that they had begun receiving these services, their
funding commitments would be automatically cancelled. According to SLD,
these cancellations will make more money available to second- year
applicants that submitted requests after the initial application deadline.
FCC still needs to determine whether changes to program rules and procedures
are needed to address the difficulties that applicants may be having in
using committed funds in a timely manner, as recommended in our December
2000 report.

Page 8 GAO- 01- 672 Update on E- Rate Funding

To provide the updated information in this report, we interviewed officials
at USAC and SLD and obtained program funding data from them. When using
computer- generated data provided by SLD, we tested their reliability
against complementary data sets. Limitations on the validity of the data on
the amounts of funding that applicants requested are discussed in appendix
I. We performed our review from January through April 2001 in accordance
with generally accepted government auditing standards

We provided a draft of this report to FCC and USAC for comment. In response,
FCC?s Managing Director agreed with our analysis and provided some updated
information. USAC?s Chief Executive Officer commented that our report
provides a useful update, and she also clarified USAC?s policy on how it
maintains its data. Copies of their comments are included in appendices II
and III.

We are sending copies of this report to interested congressional committees;
the Honorable Michael K. Powell, Chairman of the Federal Communications
Commission; and other interested parties. We will also make copies available
to others upon request.

If you or your staff have any questions about this report, please call me or
John Finedore at (202) 512- 2834. Other major contributors include James R.
Sweetman, Jr.; Teresa Russell; and Mindi Weisenbloom.

Sincerely yours, Stanley J. Czerwinski Director, Physical Infrastructure
Issues Scope and

Methodology Agency Comments

Appendix I: Funding Requested, Committed, and Approved for Payment, 1998-
2000

Page 9 GAO- 01- 672 Update on E- Rate Funding

The Schools and Libraries Division of the Universal Service Administrative
Company (SLD) provided us with a copy of its database for the first 3
program years (1998- 2000), which included funding requests, commitments,
and authorized payments of committed funds for each year. The data for
program years 1 and 2 were current as of January 22, 2001; and the data for
year 3 were current as of January 18, 2001. Because SLD?s database is
constantly changing as funding decisions and appeal decisions are reached,
the data included in this report constitute a snapshot in time.

In addition, the data on requests do not reflect the original amount of
discount funding requested by applicants. SLD officials stated that for
reasons of efficiency, the database was designed in a way that makes
retrieving the amount originally requested for each application an
administrative burden. Instead, SLD provided request data that had been
modified during application review. For example, some entries in the
database reflect the original amounts requested minus funding for ineligible
services denied by SLD. Other entries were adjusted to correct mathematical
errors made by the applicants in calculating their requests. However, we
found that SLD did not consistently maintain this data. For example, SLD
modified request information in cases where it denied a small percentage of
the funding, but not when it denied the entire request. Also, in the first
and third program years, SLD did not review requests for internal
connections from applicants with low discount levels because these requests
were unlikely to be funded. As a result, there is no way to determine what
percentage of these requests was ineligible for funding.

We also found that funding requests that were denied at some point but later
restored through the appeal process were not reflected consistently in the
database- in some cases, the committed amounts but not the requested amounts
were adjusted to reflect the appeal decisions. As a result, some applicants
appeared to receive more discount funds than the database showed them
requesting. SLD officials stated, however, that no applicant received more
discount funding than had been validly requested.

Due to these concerns, we cannot ensure that SLD?s request data validly
reflect either the original amount requested by the applicants or the amount
SLD estimates is eligible for program funding. Instead, they likely reflect
a hybrid of these cases. We did not identify similar concerns with the data
on commitments or requests approved for payment. Finally, when analyzing the
data provided by SLD, we excluded those applications that were cancelled by
the applicant or were not eligible for funding because they either missed a
filing deadline or did not include a required certification. Appendix I:
Funding Requested, Committed,

and Approved for Payment, 1998- 2000

Appendix I: Funding Requested, Committed, and Approved for Payment, 1998-
2000

Page 10 GAO- 01- 672 Update on E- Rate Funding

Table 4 shows the amounts of discount funding requested by applicants, as
well as the amounts of discount funding committed to applicants by SLD and
approved for payment in the first program year. Tables 5 and 6 present the
same information for years 2 and 3, respectively. The data in tables 4 and 5
differ slightly from those presented in our December 2000 report because
they are more recent.

Table 4: Funds Requested, Committed, and Approved for Payment in the First
Program Year (1998)

State Funds

requested Funds

committed Funds approved

for payment

Alabama $56,352,486 $46,904,698 $40,810,055 Alaska 15,276,225 13,613,107 8,
759,085 American Samoa 3, 557,348 3,557,348 2,798,764 Arizona 45,682,133
35,641,528 30,015,387 Arkansas 15,650,841 13,408,504 10,543,027 California
287,517,094 211,712,610 165,574,053 Colorado 25,413,660 14,316,280
11,494,794 Connecticut 33,172,203 24,162,307 21,492,462 Delaware 4,060,210
1,019,235 922,451 District of Columbia 6,724,843 4,866,831 4,624,354 Florida
74,447,357 49,699,726 41,429,911 Georgia 90,609,589 78,370,374 56,795,293
Hawaii 7,181,467 5,891,557 5,172,319 Idaho 6,219,595 4,620,940 3,508,863
Illinois 104,284,467 81,027,851 63,829,587 Indiana 33,278,462 21,908,289
16,264,636 Iowa 26,155,569 7, 309,466 5,578,971 Kansas 15,309,464 10,450,532
7, 874,258 Kentucky 54,610,400 50,345,985 38,220,231 Louisiana 44,882,023
40,236,482 33,633,146 Maine 3, 940,030 3,014,559 2,248,063 Maryland
22,875,785 15,026,602 13,321,165 Massachusetts 42,982,446 30,089,620
24,955,199 Michigan 94,424,272 58,518,651 49,684,389 Minnesota 33,918,346
24,759,157 20,262,210 Mississippi 25,986,317 24,379,441 19,221,563 Missouri
35,528,370 25,221,660 20,637,661 Montana 4,728,651 3,674,052 2,797,163
Nebraska 6,360,346 4,934,595 4,196,382 Nevada 9,839,022 5,380,808 4,067,259
New Hampshire 3, 116,485 1,619,911 1,269,257 New Jersey 82,078,787
62,721,247 53,437,478 New Mexico 35,364,048 19,308,898 12,660,849

Appendix I: Funding Requested, Committed, and Approved for Payment, 1998-
2000

Page 11 GAO- 01- 672 Update on E- Rate Funding

State Funds

requested Funds

committed Funds approved

for payment

New York 215,656,278 172,102,413 139,168,187 North Carolina 35,652,532
26,918,980 21,035,721 North Dakota 4,509,036 2,583,641 2,191,752 Ohio
74,365,692 58,143,969 50,030,883 Oklahoma 40,862,134 33,697,803 27,888,235
Oregon 14,074,069 9, 603,463 7,561,852 Pennsylvania 83,224,045 52,219,758
45,342,395 Puerto Rico 47,647,135 47,646,855 22,056,308 Rhode Island
7,004,329 6,010,398 5,843,552 South Carolina 30,117,056 26,365,435
23,001,684 South Dakota 4,273,080 2,958,618 2,010,585 Tennesseea 48,983,537
51,685,706 45,767,927 Texas 197,163,718 129,745,272 114,831,265 Utah
6,586,661 6,386,100 5,216,653 Vermont 3,428,912 2,073,329 1,303,886 Virgin
Islands 2, 181,929 2,180,444 2,121,557 Virginia 39,082,350 25,575,119
21,269,369 Washington 50,811,355 29,311,208 22,468,500 West Virginia
10,517,798 9, 350,687 5,519,416 Wisconsin 63,949,180 38,218,134 31,935,968
Wyoming 2, 125,917 1,221,264 853,053

Total $2,333,745,089 $1,731,711,446 $1,395,519,035

a The data indicate that Tennessee applicants received more funding than
requested. According to SLD officials, this discrepancy reflects FCC?s
reversal of an SLD decision to deny funds to the Tennessee Department of
Education. SLD officials stated that although SLD updated its data to
reflect the funds committed following the reversal, it did not update the
amount requested, which had been reduced to reflect the initial denial.

Note: Columns may not add to totals due to rounding. Source: GAO Analysis of
SLD data, as of January 2001.

Appendix I: Funding Requested, Committed, and Approved for Payment, 1998-
2000

Page 12 GAO- 01- 672 Update on E- Rate Funding

Table 5: Funds Requested, Committed, and Approved for Payment in the Second
Program Year (1999)

State Funds

requested Funds

committed Funds

approved for payment

Alabama $33,574,488 $26,341,929 $21,138,280 Alaska 15,850,548 11,572,864 8,
711,612 American Samoa 2, 703,821 2,703,821 2,356,670 Arizona 53,409,676
38,150,606 29,858,064 Arkansas 12,729,836 10,316,474 7, 608,097 California
381,263,218 235,517,675 158,015,725 Colorado 14,637,982 12,354,214 9,
685,922 Connecticut 44,597,278 32,109,207 28,784,565 Delaware 1,403,126
1,371,571 1,220,631 District of Columbia 21,795,155 9, 427,956 1,921,400
Florida 109,698,532 73,718,033 49,678,520 Georgia 103,128,251 91,048,416
52,704,100 Hawaii 6,145,771 5,329,023 3,458,578 Idaho 5,859,594 4,728,506
3,449,685 Illinois 193,040,643 161,365,691 131,358,046 Indiana 27,579,682
22,803,861 16,858,891 Iowa 12,444,522 7, 941,063 5,050,069 Kansas 19,237,766
14,932,360 11,781,778 Kentucky 73,781,430 56,905,176 34,126,421 Louisiana
46,528,820 37,635,994 32,377,213 Maine 5, 847,337 3,614,466 2,349,611
Maryland 27,720,784 22,048,893 16,459,133 Massachusetts 42,536,703
32,999,872 25,370,141 Michigan 109,578,156 78,885,150 61,479,449 Minnesota
40,874,343 29,397,790 21,036,816 Mississippi 35,466,473 29,997,805
24,269,505 Missouri 34,193,367 28,768,900 19,986,646 Montana 4,227,761
3,725,173 3,010,520 Nebraska 8,167,701 6,741,507 4,868,229 Nevada 5,202,240
3,137,231 2,080,680 New Hampshire 1, 740,403 1,269,103 826,587 New Jersey
68,479,713 43,906,311 27,751,146 New Mexico 32,766,672 29,106,091 23,818,103
New York 254,122,382 192,668,511 147,700,157 North Carolina 44,007,444
36,692,607 28,172,063 North Dakota 2,520,972 2,187,730 1,625,846 Northern
Mariana Islands 95,401 95,401 43,940 Ohio 52,293,847 43,133,998 28,606,871
Oklahoma 73,808,674 33,903,196 25,390,269

Appendix I: Funding Requested, Committed, and Approved for Payment, 1998-
2000

Page 13 GAO- 01- 672 Update on E- Rate Funding

State Funds

requested Funds

committed Funds

approved for payment

Oregon 14,319,445 10,952,270 6, 643,764 Pennsylvania 93,968,541 56,197,419
41,984,917 Puerto Rico 68,206,779 67,279,777 37,441,100 Rhode Island
8,143,900 7,823,910 5,453,141 South Carolina 59,831,982 28,657,229
23,727,570 South Dakota 3,030,240 2,114,491 1,160,034 Tennessee 69,042,221
62,773,984 42,991,894 Texas 183,636,552 134,955,191 100,492,975 Utah
6,482,067 5,729,296 4,453,263 Vermont 1,972,646 1,589,727 958,016 Virgin
Islands 2, 997,929 2,347,516 1,895,757 Virginia 36,609,504 25,177,652
18,758,834 Washington 41,834,364 32,769,036 20,503,669 West Virginia
9,395,817 9,361,363 4,538,108 Wisconsin 34,184,790 26,064,005 20,160,172
Wyoming 5, 390,171 4,968,551 2,888,517

Total $2,662,107,458 $1,957,315,585 $1,409,041,708

Note: Columns may not add to totals due to rounding. Source: GAO Analysis of
SLD data, as of January 2001.

Appendix I: Funding Requested, Committed, and Approved for Payment, 1998-
2000

Page 14 GAO- 01- 672 Update on E- Rate Funding

Table 6: Funds Requested, Committed, and Approved for Payment in the Third
Program Year (2000)

State Funds requested Funds

committed Funds

approved for payment a

Alabama $50,710,884 $18,713,260 Alaska 17,607,525 11,964,037 American Samoa
2, 244,050 2,070,977 Arizona 96,843,614 44,964,866 Arkansas 31,108,114
17,340,649 California 969,806,036 471,583,366 Colorado 31,663,757 14,146,345
Connecticut 53,830,139 24,483,956 Delaware 6,549,312 1,395,743 District of
Columbia 31,157,789 9, 399,918 Florida 156,486,845 53,436,513 Georgia
102,403,176 48,088,233 Guam 3,867,079 851,958 Hawaii 7,008,124 2,578,090
Idaho 6,683,896 2,659,172 Illinois 167,208,884 114,262,677 Indiana
43,833,548 19,343,927 Iowa 12,415,130 5, 272,539 Kansas 26,524,499 7,
753,611 Kentucky 67,982,997 26,241,771 Louisiana 94,048,641 25,466,300 Maine
7, 745,848 3,447,627 Maryland 38,135,968 19,003,465 Massachusetts 58,806,297
46,330,905 Michigan 171,698,201 52,716,366 Minnesota 38,715,045 17,431,029
Mississippi 40,501,639 30,408,084 Missouri 100,761,574 72,293,461 Montana
4,806,143 3,122,080 Nebraska 10,545,041 6, 111,282 Nevada 7,611,262
4,040,753 New Hampshire 2, 891,263 1,241,405 New Jersey 80,263,298
42,113,321 New Mexico 44,819,180 18,681,934 New York 443,760,003 275,364,966
North Carolina 67,029,785 27,392,726 North Dakota 3,310,760 1,721,543
Northern Mariana Islands 2, 675,060 498,872 Ohio 93,490,811 60,904,057

Appendix I: Funding Requested, Committed, and Approved for Payment, 1998-
2000

Page 15 GAO- 01- 672 Update on E- Rate Funding

State Funds requested Funds

committed Funds

approved for payment a

Oklahoma 80,273,048 24,481,411 Oregon 26,186,696 10,484,221 Pennsylvania
93,659,840 52,235,284 Puerto Rico 112,360,240 76,756,365 Rhode Island
5,644,445 4,293,060 South Carolina 90,817,598 51,111,807 South Dakota
12,420,638 1, 794,575 Tennessee 83,657,683 46,535,680 Texas 359,698,078
153,408,129 Utah 11,166,132 5, 095,243 Vermont 2,483,252 1,670,053 Virgin
Islands 870,425 731,860 Virginia 41,754,344 18,488,337 Washington 43,460,608
18,189,878 West Virginia 16,303,211 5, 425,793 Wisconsin 47,311,975
25,396,199 Wyoming 2, 554,913 1,126,779

Total $4,228,174,339 $2,102,066,459 $329,830,464

a SLD did not finish committing third- year funds until December 2000.
Although we have included the total amount approved for payment as of
January 2001 for informational purposes, not enough time has passed to
warrant a state- level breakdown of this data.

Note: Columns may not add to totals due to rounding. Source: GAO Analysis of
SLD data, as of January 2001.

Appendix II: Comments From the Federal Communications Commission

Page 16 GAO- 01- 672 Update on E- Rate Funding

Appendix II: Comments From the Federal Communications Commission

Appendix II: Comments From the Federal Communications Commission

Page 17 GAO- 01- 672 Update on E- Rate Funding

Appendix III: Comments From the Universal Service Administrative Company

Page 18 GAO- 01- 672 Update on E- Rate Funding

Appendix III: Comments From the Universal Service Administrative Company

Appendix III: Comments From the Universal Service Administrative Company

Page 19 GAO- 01- 672 Update on E- Rate Funding (391010)

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