New FCC Gift Rule Restrictions
Message Posted February 3, 2011
~ Please Read and Circulate to Staff/Board ~
Since the October listserve message outlining the new changes to the E-rate program was sent and the fall E-rate veterans and beginners workshops were presented, the FCC has provided additional guidance on the new E-rate gift rule restrictions. This message attempts to clarify and summarize all of the gift rule restrictions for applicants and service providers; a .pdf version of this document is attached. I strongly encourage you to share this message with all affected staff and elected officials in your schools and libraries so everyone is aware of these new requirements/restrictions. This information also will be presented in detail at the PETE&C Pre-Conference Workshop being held Sunday, February 13, from 1:00 - 4:00 p.m. at the Hershey Lodge and Convention Center. The session is free, but pre-registration is required at http://www.peteandc.org/registrationform.asp. If you have any questions, please don't hesitate to contact me at jtschell@comcast.net.
This analysis provides updated information concerning the newly enacted E-rate rules governing receipt of gifts as understood from the FCC's 6th Report and Order (FCC 10-175), the FCC's Clarification Order (DA 10-2355), and Title 5 of C.F.R. § 2635.205.
Which School and Library Officials are Affected? All school and library employees, officers, representatives, agents, technology consultants, E-rate consultants, or independent contractors of schools and libraries that perform any of these functions:
· Prepare, approve, sign or submit E-rate applications, technology plans, or other forms related to the E-rate program;
· Prepare or approve school or library technology plans;
· Prepare RFPs, communicate or work with E-rate service providers; or
· Monitor a school or library's compliance with E-rate.
· All school board members and library board members.
· Presumably, affected staff includes, but is not limited to, school business officials, superintendents, technology directors, school board members, and library directors -- anyone who has any role in procurement, E-rate, or technology planning.
Which Service Provider Staff are Affected? All service provider employees, officers, representatives, agents, independent contractors of such entities, and board members of service provider's company.
What Are the Requirements?
· All gifts from service providers to applicants are prohibited at any time (not just during a competitive bidding process) with these minor exceptions:
(1) Modest refreshments that are not offered as part of meal (e.g., coffee and donuts provided at a meeting) and items with little intrinsic value intended for presentation (e.g., certificates and plaques); and
(2) $20/$50 Rule: Items that are worth $20 or less (e.g., pencils, pens, hats, t-shirts, meals, drinks, etc) as long as those items do not exceed $50 per school or library employee from any one company per funding year. The $50 per funding year exception is computed as an aggregate value of all gifts from a company.
Examples:
a) Susan Himes, business manager, could not accept a vendor lunch worth $21 from an single E-rate vendor company because the value is more than $20.
b) Ben Tomlin, school board member, could not accept three $20 lunches in a single year from three different employees of a single E-rate vendor company because the aggregate donation from that company would be more than $50.
c) Lauren Naugle, technology director, could accept a vendor raffle prize at a conference worth $15, as long as the total value of gifts from that vendor's company did not exceed $50 in that given E-rate funding year.
(3) Charitable Contributions: Service providers can continue making charitable donations to E-rate eligible entities in the support of schools – including, for example, literacy programs, scholarships, and capital improvements – as long as such contributions are not directly or indirectly related to E-rate procurement activities or decisions.
(4) Personal Gifts: Personal gifts to vendor family members are generally acceptable when those gifts are made using personal funds of the donor (without reimbursement from an employer) and are not related to a business transaction or business relationship.
(5) Disposal of Gifts: Applicants may dispose of the gift in order for the value of the gift to not be counted toward the $20/$50 rule and such disposal should be recorded.
(6) Repayment of Value of Gifts: Applicants may repay to the vendor the retail value of the gift so the gift is not counted toward the $20/$50 rule if repayment is made immediately following the gift donation. Such repayment should be recorded.
Who Must Keep Track of Gift Receipts/Donations? It is the responsibility of both the applicant and the vendor to keep an annual record of the value of all gifts received and donated during each year (July 1 - June 30). Such records may be requested during an audit or USAC investigation.
Are Both Priority 1 and Priority 2 Applicants Affected?
· If an applicant only applies for Priority 1 Services, gifts received from E-rate vendors that only sell Priority 2 equipment/services are not subject to the $20/$50 rule.
· If an applicant opts to apply for Priority 2 equipment/services for the first time, the applicant must have been in compliance with the E-rate gift rules for the six months preceding the posting of the Form 470.
Example: A school business official from a school district with a 50% E-rate discount could accept gifts without restriction from vendors that only sell Priority 2 equipment/services because the District does not qualify for Priority 2 E-rate funding.
Are vendor-sponsored trinkets, gifts, raffle-prizes, and hospitality suites at conferences included in the Gift Rule restrictions? Yes.
Information in this analysis was obtained from the FCC's 6th Report and Order (FCC 10-175), the FCC's Clarification Order (DA 10-2355), Title 5 of C.F.R. § 2635.205.
-- Julie
717-730-7133 - o
717-730-9060 - f
jtschell@comcast.net
www.e-ratepa.org
Penn*link
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