Fund Administration
About Fund Administration:
- Fund Adminstration Overview
- How the Universal Service Fund Works
- Purpose of the Universal Service Fund
- Understanding Audits
Fund Administration Tools:
Contribution and Circularity Factors
Carriers can calculate the circularity deduction to determine estimated contribution amount. Also includes information on grace period, payment adjustments, credits, late fees, bankruptcy, and "negative" contributions.
Circularity Deduction for Carriers
Calculating the Deduction Amount
The circularity deduction for a given quarter's revenue data will be calculated by summing the contributor's payments and disbursement credits applied during that quarter and then subtracting any late filing fees and late payment fees applied to the contributor's account in that quarter.
The circularity deduction will be used in calculating support mechanism charges according to the following timeline:
Payments/Disbursements /Late Fees applied: |
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Will be used to calculate the circularity deduction on invoices in: |
January 1 - March 31 |
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July - September |
April 1 - June 30 |
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October - December |
July 1 - September 30 |
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January - March |
October 1 - December 31 |
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April - June |
Received vs. Applied Date
Payments are generally noted on USAC invoices and in carrier accounts using the received date. The received date is the date that will be recorded as the date of receipt at the bank.
However, for the purposes of calculating the circularity deduction, the applied date will be used. The applied date is the date that the payment is actually applied to a carrier's account. The received date and the applied date will be the same date except in the following instances:
- A carrier paying for one ID has failed to provide the requested filer ID or invoice number to USAC when remitting payment.
- A carrier paying for multiple IDs with a single payment has failed to provide a payment ID worksheet that directs USAC on how to allocate the payment to the multiple IDs.
The applied date will be used to calculate the circularity deduction even if the applied and received dates fall in different quarters. For example:
USAC receives a $27,000 check without any accompanying filer ID information on March 31, which is the last day of the 1st Quarter. Since no ID information was provided, USAC researches the filer ID account(s) to which the money should be applied. USAC determines on April 2 that $15,000 of the check should be applied to 800001 and $12,000 to 800002. Those amounts will not be used in calculating 800001 and 800002's 1st Quarter circularity deductions. The amounts will instead be used to calculate their 2nd Quarter deductions.
Grace Period
There is no grace period for applied dates and USAC is not responsible for any delays in mail delivery that may prevent a payment from being received and applied by the end of a given quarter.
Consolidated IDs
For carriers that consolidate multiple IDs at the start of a new quarter, the circularity deduction will be calculated by summing the circularity deductions of all previous IDs.
Payment Adjustments
Any payment adjustments applied against a carrier's account will be added to the payment total used in calculating the circularity deduction. The payment adjustment will be included in the circularity deduction for the quarter in which the adjustment was applied, regardless of which quarter the corresponding payment occurred.
Disbursement Adjustments
Any disbursement adjustments applied against a carrier's account will be added to the disbursement credit total used in calculating the circularity deduction. The disbursement adjustment will be included in the circularity deduction for the quarter in which the adjustment was applied, regardless of which quarter the corresponding disbursement credit occurred.
Late Fee Credits
Late filing fee credits and late payment fee credits (together, late fee credits) will be added to the late fee total used in calculating the circularity deduction. The late fee credits will be included in the circularity deduction for the quarter in which the credits were applied, regardless of which quarter the corresponding late fee occurred.
Other Transactional Credits
Other transactional credits such as support mechanism credits and balance transfer credits will not be considered contributions and will not be included in the calculation of the circularity deduction.
Bankruptcy Recovery Payments
Any payments that are received as part of a bankruptcy recovery are not included in any circularity deduction calculations.
"Negative" Deduction
If the sum of a carrier's payment adjustments, disbursement adjustments, and late fees exceeds the sum of payments and disbursement credits, the carrier's deduction calculation will result in a "negative" deduction. In such cases, the deduction shall default to $0.
Negative Contribution Base
If a carrier's deduction for prior quarter payments is greater than the Form 499 revenue data used to calculate the current quarter's charges, the contributor may be left with a negative contribution base. In these cases, the contribution base will default to $0 for the purpose of calculating support mechanism charges and the contributor's quarterly support mechanism charges will then also equal $0. Contributors will not be given support mechanism credits for having a negative contribution base.
