Transfer of Equipment

Recipients of E-Rate funding are expected to use all equipment purchased with E-Rate program discounts at the particular location, for the specified purpose, and for a reasonable period of time, as approved on the FCC Form 471 Funding Request Number. If an applicant wants to transfer equipment from the entities specified in the FCC Form 471 Funding Request Number (FRN) approved by USAC, the applicant needs to ensure that they transfer the equipment in a manner consistent with FCC rules.

Eligible products and services purchased with E-Rate program discounts cannot be sold, resold, or transferred for money or any other thing of value, with the following exceptions:

• Beginning January 3, 2011, applicants can dispose of, donate, or trade “obsolete” equipment for payment or other consideration. Obsolete equipment is defined as equipment that has been installed for five years or more (see FCC 10-175).  Applicants are not required to continue using the equipment after five years, nor are they required to dispose of such equipment five years after installation.
• Applicants may transfer equipment in the following situations, depending on whether the transfer occurred before or after July 1, 2021.  In neither situation can the equipment be sold or transferred for money or anything of value, (unless it is “obsolete” as described above):
  • Transfers that occurred before July 1, 2021
    • Equipment may be transferred to other eligible entities three years after the purchase date.
    • Equipment may be transferred from a temporarily or permanently closed location to other eligible entities within three years of the date of purchase.
    • Notification of transfers must be submitted to USAC using the FCC Form 500
  • Transfers that occur on or after July 1, 2021
    • Equipment may be transferred to other E-Rate eligible entities within the same school district or library system.
    • Equipment may be transferred from a temporarily or permanently closed location to other eligible entities
    • Equipment transfers may occur without notifying USAC via the FCC Form 500.  However, both the transferor and the recipient must maintain detailed records documenting the transfer and the reason(s) for the transfer for a period of five years after the transfer occurs.

Equipment Transfer Requirements

A transfer of equipment has occurred if the equipment provides services to entities that were not included in the original FRN.  The table below summarizes the actions required for the specific period (within or after three years of purchase) depending on whether the equipment transfer took place before or after July 1, 2021.  The equipment transfer rules apply to all Funding Years.

	Time Period	Actions Required
Equipment Transfer before July 1, 2021	Transfer occurs within three years of purchase	Applicant maintains documentation and files an FCC Form 500
	Transfer occurs three years after purchase	Applicant maintains documentation and does not file an FCC Form 500
Equipment Transfer on or afterJuly 1, 2021	Transfer occurs within or after three years of purchase	Applicant maintains documentation and does not file an FCC Form 500

The E-Rate Equipment Transfer webinar slides from July 27, 2021 provide examples of what is and is not considered an equipment transfer.  The procedure filing guide provides an installation checklist, equipment transfer guidelines and details on document retention requirements for equipment transfers and fixed asset listings.

Equipment Transfer Documentation Requirements

Both the transferor and recipient must maintain detailed records (e.g., a detailed fixed asset list or inventory records) documenting the transfer and the reason for the transfer for five years after the transfer occurs under FCC rules. The requirement to maintain equipment transfer records for five years does not affect the requirement that schools, libraries, and consortia maintain accurate asset and inventory records of equipment purchased, and the locations of such equipment, for a period of 10 years after purchase. Applicants are required to implement controls and procedures to ensure that equipment is transferred only to eligible approved locations. The detailed documentation information should include the following information:

• Equipment model, serial number, quantity installed
• Location in school or library where equipment was originally installed
• Location in school or library where equipment was transferred
• Date of installation/transfer
• Records of business reason for transfer
• FCC Form 500 supporting transfers within three years of purchase, if transfer occurred before July 1, 2021
• Operating status of funded equipment
• Information demonstrating that the equipment was operational and connected

Tips to Avoid Common Pitfalls

• Remember to file the FCC Form 500 for equipment transfers that occurred prior to July 1, 2021.
• Ensure the equipment is properly installed, secured, and operational.
• Maintain an updated asset register including make, model, serial number, FRN, installation date, and location for all E-Rate funded equipment for a period of 10 years after purchase.
• Update your asset register when equipment is replaced for warranty purposes.
• Label your E-Rate equipment to make it easy to find.
• Keep complete documentation of all transfer(s) and ensure that the recipient is also E-Rate eligible.
• Perform regular inventory audits.
• Maintain all documentation related to the application for, receipt, and delivery of supported services for 10 years after the latter of the last day of the applicable funding year or the service delivery deadline for the funding request.

See the E-Rate Document Retention page for further information.

Equipment Trade-Ins

Equipment purchased with E-Rate program funds can also be traded in, but no sooner than five years after the equipment is installed. Trade-ins are not allowed before the five-year period has elapsed.

The value of a trade-in does not have to be deducted from the pre-discount amount of a new funding request. Applicants are not required to notify USAC of the disposal or trade-in of equipment. However, an applicant disposing of or trading in equipment should make an appropriate entry in its asset register or inventory for E-Rate funded equipment.

For a list of donation and recycling locations for communications equipment, you may visit the Electronics Donation and Recycling page maintained by the United States Environmental Protection Agency.