Reminders for Early Purchases of Category 2 Equipment

April 7, 2015

Starting with FY 2015, E-rate rules permit applicants to purchase Category 2 equipment as early as April 1 prior to the start of the funding year.  Normally, I wouldn’t send out this type of message until after July 1, but because I’ve heard of many schools that are taking advantage of this new rule and making purchases in April and May, I wanted to be sure you were aware of the additional requirements/steps that come with Category 2 funding.  Obviously, you will only want to make these early purchases if they are NOT contingent on E-rate funding and you plan to pay for your equipment in full and seek E-rate reimbursement after your Funding Commitment Letter arrives.

Category 2 Rules/Reminders:

1)  Only purchase the equipment prior to receiving the E-rate Funding Commitment Decision Letter (FCDL) if you can afford to pay for the equipment in full without E-rate funding.

2)  If you make an early C2 purchase, and receive your E-rate FCDL prior to July 1, 2015, you cannot submit your Form 472 BEAR until July 1 (the start of the FY 2015 E-rate funding year).  Also, don’t forget that the Form 486 must be submitted AFTER the FCDL arrives, and before the Form 472 BEAR is submitted.

3)  If you purchase some of the equipment on an FRN before you receive your FCDL and some equipment after you receive your FCDL, you must continue with the same payment method for that entire funding request.  Meaning, if you start using the BEAR reimbursement process for the FRN, you must continue paying in full and using the BEAR reimbursement process for all equipment on that FRN — you cannot use two different billing methods on a single FRN.

4)  On your Purchase Order, list Funding Year 2015, the Form 471 # and Funding Request Number.  If possible, it may be helpful to cut a separate PO for each Funding Request.

5)  Be sure the equipment you order matches EXACTLY what you requested on your Form 471.

6)  When the equipment arrives, label each piece of equipment with “FY 2015, FRN XXX” listing the FRN number, of course. This is what the auditors will look for during their site visits.

7)  Record each piece of equipment in your school or library’s Asset (Inventory) Register or create your own E-rate Asset Register (recommended).  The Asset Register must contain the following information:

Make & Model
Serial number (if available)
Physical location of equipment (building/room number)
Date installed
Funding Year and Funding Request Number

Purchase Order #

Attached to this message is the USAC Sample Asset Inventory Worksheet and an Excel file that you can use that lists the same data.  You can see that it shows more than is required, but I think it’s very helpful to maintain such a detailed record of the payments and POs so that you can easily show this to the auditors.

8)  Equipment must stay at the location indicated on the Form 471 for a period of three years after the date of purchase.  After that, the equipment can be transferred to other eligible entities.  If a location closes, equipment from that closed location can be transferred to another eligible entity within the first three years, but USAC must be notified of such equipment transfers.  After five years from the date of installation, equipment can be disposed of, sold, transferred, traded, etc. with no USAC notification required.  If equipment is sold, no funding is required to be returned to USAC.

If you have any questions, please don’t hesitate to contact me at

– Julie

Julie Tritt Schell

PA E-rate Coordinator

717-730-7133 – o
717-730-9060 – f


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