2.1.1. Application Processing The review of the FCC Form 471 applications received is known as the Program Integrity Assurance (“PIA”) review and is the largest work stream and most complex part of the ERate program to be handled by Contractor. Approximately thirty-six thousand (36,000) funding applications with over fifty-five thousand (55,000) individual funding requests are submitted annually. Approximately two-thirds are Category 1 funding applications (Data Transmission/Internet Access) and one-third are Category 2 funding applications (Internal Connections/Managed Internal Broadband Services/Basic Maintenance of Internal Connections). All applications first go through an automated review process within EPC to identify potential issues in the application which may require further review. These business rules in EPC identify different types of issues based on the information contained within the application, various databases, and a complex set of business rules. All issues flagged by the system require review before a funding decision can be issued. The review is managed through EPC and requires manual effort, which includes communicating with applicants, generally through EPC, but sometimes also by phone, to ask further questions or request additional documentation. All electronic communications are managed and stored in USAC’s IT systems and calls are summarized in EPC. Different PIA reviews can have different levels of complexity and take a varying amount of time to complete. The team conducting the application review process must review the application against an extensive set of guidelines and federal regulations that are embodied in the internal application review procedures. The rules and regulations governing universal service are located in Title 47 of the Code of Federal Regulations, Part 54 and in orders and directives issued by the FCC. Reviews can include a four (4)-level review process. The first level of review is conducted by an initial reviewer. The initial reviewer resolves all of the issues, documents findings, and makes a funding decision recommendation. Next, a second reviewer with additional training and experience checks the work of the initial reviewer and signs off on the decisions. The second reviewer can return the application to the initial reviewer for additional work if they determine that the procedures were not followed. For the third level of review, the BPO’s quality assurance team selects a sample of applications to review to ensure that the initial and final reviews were done correctly. For the fourth level of review, USAC independently selects applications for USAC quality assurance review. If any issues are found during either of the third or fourth level of review, or at the final review, the applications are returned to the initial reviewer for more work. USAC, at its discretion, but in consultation with Contractor may also review a subset of applications in-house. USAC or USAC’s designated third party, may also conduct independent validations and verifications (“IV&Vs”) of Contractor reviewed applications in addition to its quality assurance work. The PIA review process entails verifying information and reviewing documentation to ensure FCC Form 471 applications are compliant with FCC rules for the E-Rate Program. Once the PIA review is complete, USAC issues a Funding Commitment Decision Letter (“FCDL”). FCDLs are issued in “waves,” or groups of commitments. Waves are run through USAC’s IT systems and require a distinct series of checks and balances to ensure that applications are committed in compliance with program rules.
