Schools and Libraries

Step 9: Payment Process and Status

USAC can be invoiced by the service provider using a Service Provider Invoice (SPI) Form (Form 474) or by the applicant using a Billed Entity Applicant Reimbursement (BEAR) Form (Form 472). In both cases, reimbursement is made to the service provider.

After the service provider has submitted a SPI Form 474, USAC reviews the invoice for accuracy and for compliance with program rules. Service providers should remember the following:

  • USAC will not pay for services delivered prior to the Receipt of Service Confirmation Form (Form 486) Service Start Date for the Funding Request Number associated with the funding request. USAC may adjust the date reported by the applicant on the Form 486 to comply with program rules. The service provider should refer to the Service Start Date featured in the Form 486 Notification Letter, which reflects any adjustments made by USAC.
  • In general, USAC will not pay for services that were not requested on the Description of Services Ordered and Certification Form (Form 471). This is why it is important for service providers to work with applicants on the Form 471 Item 21 Attachments and to ask applicants for a copy of the attachment submitted to USAC. Service substitutions may be requested if items of similar function are substituted for outdated or out-of-stock items. However, submitting these items on an invoice may mean that USAC must first process a service substitution request before being able to pay the invoice.
  • Invoices submitted electronically automatically pass Minimum Processing Standards and speed processing.

Invoices are processed by line item (which is the same as a Funding Request Number, or FRN). Communications regarding items included on an invoice will be at a line-item level.

Batch Validation

All invoice line items go through a batch validation process that determines whether the line item has a structural flaw and must be "passed $0" (described below), whether the line item has information validation issues and must go through review, or whether the line item can immediately pass through to payment.

Invoice Status Report

The Invoice Status Report shows each line item that was processed through the Batch Validation process. Line items marked "Passed Validation - Approved For Payment" or "Passed $0" will be sent to USAC for final distribution. Lines marked "Held for Form 486" will be held and revalidated daily for ten days. If USAC does not receive a Form 486 in those ten days, the line will become "Passed $0." If a line is marked "Requires Review," the service provider will need to await Program Integrity Assurance contact to finalize the review on the line item. Once the review is completed, the service provider will receive a final determination in the next remittance statement.

Passed $0

Line items that contain a structural flaw, such as a mismatch between the Form 471 Application Number and the FRN, will show as "Passed $0." This means that no money can be paid on the line item until it is corrected. Invoice error codes are provided on the USAC remittance statement. The service provider must fix what is wrong with the line item(s) and resubmit an invoice for proper payment.

Requires Review

The Invoice Status Report will indicate which line items require review. This may mean that there is a substantive flaw in the information itself (as opposed to the structure of the invoice) or that the invoice was selected for random review. For example, there may be issues with dates - for example, a bill date or shipping date that is outside the funding year or before a Form 486 Service Start Date. There are other types of reviews as well, including reviews done for policy reasons or as part of audits.

In most cases, USAC will contact the service provider for more information. The types of information required may be copies of bills, confirmation of shipping dates, etc.
Every effort will be made to resolve issues in a timely fashion. It is important to respond promptly to any requests for information that you receive from USAC.

Service Certification

There are some situations that require USAC to confirm that the applicant has received the services for which USAC is being billed. In those instances, USAC contacts the service provider and asks the service provider to have the applicant confirm that the services covered in the submitted invoice were delivered and installed.

USAC Remittance Statement

The remittance statement provides detailed information by line item (which is the same as the FRN) in terms of the processing outcome. Payment on the FRN will either be the invoiced amount, a partial payment, or a zero payment.

The statement provides detailed information to help you identify the FRN and applicant and includes invoice error codes when less than the full invoiced amount is being disbursed by USAC. The remittance statement will include information on only those FRNs that have been processed. It is important to remember that these can be from separate invoices submitted by the service provider.

Options for Payment: Check vs. Electronic Funds Transfer

Service providers have the choice of receiving their distributions electronically (ACH) or by check. USAC strongly recommends the electronic method.


Last modified on 2/25/2008