Although a notice that audit firm KPMG plans to look at a district's E-Rate program may not be welcome news, there are ways to ensure the process goes as smoothly as possible. Rick Rodriguez, in charge of information systems for the 49,000-student Garden Grove Unified School District in southern California, and Kim Friends, vice president of E-Rate Services for the California School Management Group, offer their suggestions. Don’t panic. An audit isn’t designed to get a district in trouble. It's important to understand that audits are a necessary part of the E-Rate process, and that they ensure the continued viability and success of E-Rate for everyone, Friends says. "The federal government has to be able to justify handing out $2.25 billion a year to schools and libraries throughout the country," she says. Document every step ahead of time. "The preparation all should be done up front," says Friends. "When you're filing your application, you should automatically be preparing for an audit." Although large districts with high-dollar internal connections are more likely to get audited, Friends says, all districts should document every step of service provider selection. She also advises districts to double check that their state-approved technology plans cover the period of time for which discounts are requested and that all products and services to be discounted are listed in the plans. Notify everyone involved. An audit often involves several departments—the business office, IT, purchasing, and facilities and maintenance. Everyone involved in E-Rate has to be put on notice, says Friends. That includes the superintendent, assistant superintendents, and the E-Rate coordinator if there is one, Rodriguez adds. Principals also should be told there may be a site visit from auditors. Make it easy for the auditors. When a district gets audit notification, it should put together a quick-reference binder with copies of all critical information auditors are requesting and have it tabbed by section—for example, applications, procurement, budget, invoices, correspondence—and notes about where the complete documentation is located. "I can tell you the auditors love it," says Friends. Have a warrant register. Auditors will ask for service provider invoices to confirm that districts paid their portion. Districts don't need to keep copies of every single warrant, but they should have a copy of their warrant register that shows warrant number, amount, invoice number that the warrant paid, and date, says Friends. When they hear that KPMG is coming, districts should order copies of those individual warrants that paid the bills. Keep on top of inventory control processes. Garden Grove puts color-coded inventory control tags on all district-purchased equipment and additional tags on "E-Ratable" items, says Rodriguez. Those tags also indicate the year of purchase. It's not all about what's E-Ratable. In order to receive E-Rate dollars, districts must comply with the federal Children's Internet Protection Act, says Rodriguez. Auditors will want to see proof, such as documentation about Internet filtering, that districts are addressing this issue. They will also want to see due diligence on maintenance agreements with both eligible and non-eligible equipment, Rodriguez says. A firewall, for example, is not E-Ratable, but districts must have them. Don't forget professional development paperwork. Auditors also will ask for documentation of professional development processes to use E-Rate equipment—how it has taken place or how it’s going to, Rodriguez says. Ask for help if you need it. If you have a large district with a high percentage of students who qualify for free and reduced lunch, consider getting outside assistance. Garden Grove, with its 49,000 students at 70 sites, has between 79 and 86 percent free and reduced lunch student population. "We qualify for quite a bit of E-Rate funding," Rodriguez says. The district did its E-Rate paperwork on its own for five years but went to the California School Management Group in the sixth year. "As E-Rate evolved and became more complicated, we needed assistance," says Rodriguez. Remember that you can challenge the audit report. You can disagree with the auditors as long as you do it in writing. Take the time you can within the audit deadlines to respond, and support your arguments with documentation, Rodriguez advises. Sheila Riley is a San Francisco-based freelancer who also writes for EE Times and Investor’s Business Daily.
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