Another big point of interest for E-rate applicants is how to account for non-instructional facilities (NIFs) in a Category Two budget.

Non-instructional facilities do not get their own Category Two budget because they are not a school or a library. But there are some cases where schools/libraries can cost allocate part of their budget to a NIF, if the NIF building is essential to deliver service to a school/library, for example, it houses a piece of equipment that is shared between schools/libraries.

If you need to cost-allocate a piece of equipment that involves a NIF, you can do the calculation based on student count, usage, or any tangible criteria that reach a realistic, reasonable result. Make sure you retain the calculation as part of your E-rate documentation/records retention (keep it for ten years).

And if you have shared equipment in a NIF, say so in the “Narrative” section of the funding request for that piece of equipment.

And here are the details…

Shared, essential piece of equipment stored in a NIF

If the non-instructional facility houses a piece of shared equipment that is essential to connecting a school’s or library’s network to the Internet, and the NIF itself does not use the piece of equipment at all, cost-allocate it between the Category Two budgets of the schools/libraries that are sharing that piece of equipment.

Cost Allocation Example:

Cost of equipment: $2,000
Total # of students in the schools using the equipment = 1,200
Cost allocated per student: $2,000/1,200 = $1.667
School A has 600 students: $1.667 x 600 = $1,000.20; use $1,000 of their Category Two budget
School B has 350 students: $1.667 x 350 = $583.45; use $583 of their Category Two budget
School C has 250 students: $1.667 x 250 = $416.75; use $417 of their Category Two budget
All $2,000 is now cost-allocated. You may round each expense to the nearest dollar (round up for .50 and greater; round down for <.50)

If the NIF uses the shared equipment too…

If the equipment housed in the non-instructional facility is also used by the non-instructional facility itself, estimate an appropriate portion of the cost and allocate it to the NIF. Because NIFs are not eligible for Category Two Funding, you should remove their portion of cost from the funding request. You can document the NIF’s usage in the “ineligible costs” field of your cost calculation in EPC.

Cost Allocation Example:

Cost of equipment: $2,000
Estimated usage by the NIF itself: $100 (ineligible for E-rate funding)
Portion of the equipment cost that is used by schools: $1,900
Total # of students in the schools using the equipment = 1,200
Cost allocated per student: $1,900/1,200 = $1.583
School A has 600 students: $1.583 x 600 = $949.80; use $950 of their Category Two budget
School B has 350 students: $1.583 x 350 = $554.05; use $554 of their Category Two budget
School C has 250 students: $1.583 x 250 = $395.75; use $396 of their Category Two budget
All $1,900 is now cost-allocated. You may round each expense to the nearest dollar (round up for .50 and greater; round down for <.50)

You can estimate the NIFs portion with any realistic, reasonable method, including basing it on usage or the proportion of the number of user accounts.

Annexes

Annex can share a Category Two budget with the school/library they are the annex of, but they do not receive their own Category Two budget. An annex is just a second part of the same school or library. You may split the Category Two costs between the school/library and its annexes, or put all of the services at either the main building or the annex.

Hope this is making sense! For more information about special situations, visit the Category Two Budgets FAQ on the E-rate Program website or watch a recording of the webinar about Category Two budgets:

Webinar Recording: Category Two Budgets (25:26)

Next week, we’ll review all the work we’ve covered so far in the blog, as we prepare to cover the step-by-step process for filing FCC Form 471.

 

Editor’s note: If you submitted FCC Form 470 on the same day we wrote about it on the blog (March 3), then at this point you’ll be in the 28-day waiting period. During the 28-day period, we’re covering general information about program rules and topics that are important to know about. We’ll begin posting about FCC Form 471, the funding request form, starting the week of April 4.