Substantive Errors: What E-Rate Applicants Need to Know

E-Rate funding continues to be one of the most valuable resources available to schools and

libraries, but it is also one of the most heavily scrutinized federal programs. In recent years, the

FCC and USAC have drawn a clearer and firmer line between ministerial errors and

substantive errors—and the distinction matters more than ever.

Understanding what constitutes a substantive error, and how to prevent one, is critical to

protecting funding commitments and avoiding denials, recoveries, or audit findings.

What Is a Substantive Error?

A substantive error is an error that affects program compliance, eligibility, or competitive

bidding integrity. These are not simple typos or clerical mistakes. Substantive errors go to the

core requirements of the E-Rate program and, when identified, are often not correctable after

the fact.

In contrast, ministerial or clerical errors are minor, administrative mistakes that do not change

the substance of an application (for example, a transposed digit or minor data entry issue). USAC

may allow these to be corrected under limited circumstances.

Substantive errors generally cannot.

Common Examples of Substantive Errors

E-Rate applicants most frequently encounter substantive errors in the following areas:

1. Competitive Bidding Violations

• The price of eligible products and services is not weighted as the highest factor

• Inconsistent bid evaluation criteria between the Form 470, RFP, and evaluation matrix

• Failure to wait the whole 28-day competitive bidding period

• Service provider involvement in drafting the Form 470 or RFP

2. Eligibility Errors

• Requesting ineligible services or equipment

• Including ineligible costs in bundled pricing without cost allocation

• Mischaracterizing services (e.g., treating non-eligible services as eligible connectivity)

3. Discount Calculation Errors

• Incorrect student counts or National School Lunch Program (NSLP) data

• Misapplication of urban/rural status

• Applying the wrong discount rate to an FRN

4. Contract and Procurement Issues

• Contracts not signed or dated properly

• Missing required contract elements

• Selecting a service provider without a valid, enforceable contract

5. Program Integrity Issues

• Material misstatements on FCC forms

• Documentation that does not support certifications

• Inability to demonstrate compliance during an audit or PIA review

Why Substantive Errors Are High Risk

The FCC has consistently reinforced that program integrity outweighs administrative

convenience. When an application contains a substantive error:

• USAC may deny the FRN entirely

• Previously disbursed funds may be subject to recovery

• Appeals are often unsuccessful if the error affects core program rules

• Audit exposure increases significantly

Importantly, good faith or lack of intent does not automatically cure a substantive error. The

standard applied is whether the error materially affects compliance with E-Rate rules—not

whether the applicant intended to violate them.

Timing Matters: Errors Discovered Before vs. After Filing

• Before filing Form 471: Many issues can be corrected by revising procurement

documents or re-posting a Form 470.

• After filing but before funding commitment: Some errors may be addressed during

PIA, but discretion is limited.

• After funding or disbursement: Substantive errors discovered at this stage often lead to

denial or recovery rather than correction.

Proactive review before filing remains the strongest risk-mitigation strategy.

Best Practices to Avoid Substantive Errors

• To reduce exposure, applicants should:

• Use standardized, compliant bid evaluation matrices

• Maintain detailed procurement documentation

• Conduct internal compliance reviews before Form 471 submission

• Ensure contracts align precisely with Form 470 and RFP language

• Retain records for the full required retention period [ten years from the last date of

service or ten years from the contract expiration date].

• Seek expert review for complex or high-dollar applications

Final Thoughts

Substantive errors are one of the leading causes of E-Rate funding denials and post-commitment

recoveries. As FCC oversight continues to emphasize strict adherence to statutory and program

rules, applicants must treat compliance as a front-end responsibility—not a back-end fix.

Careful planning, thorough documentation, and informed oversight are essential to protecting E-

Rate funding and ensuring long-term program success.