We’ve been talking about COPs for a few weeks now.

It’s no secret that a COP, or Closeout Package, is a known standard for any tower construction project. But for REPACK stations specifically, no matter what your standard COP looks like on its own, your REPACK-specific COP is a game changer.

In addition to the fact that the FCC requires REPACK stations to keep all financial documentation until 2033, and can audit stations both financially and physically at any point between right now and that date, the FCC has also confirmed its own internal closeout process when a station indicates that it’s ready to close its REPACK project.

The moment a station tells the FCC it’s ready to close out, this email is automatically generated.

 

This email informs REPACK project participants of the FCC’s interim closeout requirements. As expected, the FCC requires documentation aligning the station’s financial records throughout the REPACK project in order to true up what was submitted to the FCC versus what actually happened. But once a station initiates that process, a timer starts.

In short, once a station initiates the closeout process with the FCC, a 30-day countdown begins.

You’ll have 30 days to provide financial reconciliation. Basically you’ll need to prove definitely that the invoices you submitted were valid and necessary, and that what your station was reimbursed for was used on site, and funds paid out correctly.

The financial reconciliation form, attached to the above email, looks like this.

 

It’s essentially a confirmation form — the station owner signing off on the fact that what has been submitted and represented is, indeed, true and is an accurate representation of costs accrued during the REPACK project.

Separately, you’ll have 30 days to provide proofs of payment. This is where it gets tricky.

The FCC had been reimbursing costs submitted throughout the life of the project. Now this is where a station can prove that after reimbursed, those funds had gone where they should go. The form looks like this.

 

Very simple format. But the involvement of third parties entails a risk of missing a deadline. You’ll be relying on other companies or individuals to respond to, say, an email or a phone call to yield a deliverable that the FCC will accept as proof of payment, according to the parameters they’d established in their initial closeout email. Relying on a third party with a hard deadline is hardly ideal.

Here’s what that actually means for REPACK station owners.

First, and maybe most importantly, once you tell the FCC that you’re ready to close out, you no longer have the option to submit additional invoices.

Closing out with the FCC locks your access to the Form 399. If you incur additional REPACK-related costs after initiating the FCC’s closeout process, it will be out of pocket.

So if you don’t already have a COP (closeout package) ready prior to closing out — which is the package that actually prepares you to handle the FCC’s closeout process, in addition to protecting you from future audits — then your time spent compiling your own COP or hiring out a third party to compile your COP will no longer be reimbursable. Conversely, if you get your COP professional compiled during your REPACK phase, it is 100% reimbursable.

But of course that also means that if you’re not actually completely done with your REPACK project, then initiating the FCC closeout process will serve to your detriment. If you will have upcoming costs, whether related to equipment or legal support or PM costs, you will no longer be able to submit those costs as REPACK-eligible costs after initiating the closeout process.

Second, if you do not have those types of documents at hand — and truly, most stations do not have a reason to have these kinds of documents at hand — then that 30-day deadline will go from a reasonable timeframe to an absolute nightmare. Financial reconciliation sounds like a day of messing around in Excel. In reality, it is months and years of research and data compiled into a single document.

Additionally, as aforementioned, when relying on third parties to confirm proof of payment, station owners have very little say in how quickly vendors, suppliers or financial institutions choose to respond to an inquiry. That 30-day timeframe is firmly established. It’s a hard deadline. But your vendors really don’t have a reason to comply with that deadline in the same way that you do. It’s better to gather these requirements before closing out.

Third, it means something very simple: don’t close out until you’re ready to close out.

Forgive us: we don’t mean to sound condescending with this obvious statement. But this is a cautionary tale. We have seen stations answer the questions at the very bottom of the Form 399 with all questions indicating “We’re done,” when they were not at all done. And as a result, we have seen stations lose out on a great deal of reimbursable expenses.

We’ve seen a station initiate the FCC closeout process with only two submitted invoices — a great deal of reimbursable expenses now suddenly out of pocket.

We’ve seen stations without a COP vendor who relied on an internal party to keep track of these documents suddenly be at a loss when that one person left the company.

We’ve seen stations assume that email attachments would serve as enough documentation to hold up to the FCC’s questions.

The fact is, without a fully compiled COP, a station is not fully ready to close out with the FCC. These pieces of information may seem simple to compile, but they may actually take weeks to months to get together.

When you are truly ready to close out your project with the FCC, absolutely do so. But understand that without a COP ready at hand, that 30-day closeout period could be something close to insurmountable.

Get in touch today to learn more about our COPs.

1 Comment

  1. Tony zumMallen on April 20, 2021 at 2:21 pm

    Audits – I cannot over emphasized the reality of these’ Treasury and GAO and FCC audits. If you have ever been part of an, IRS, OHSA or EPA audit you will understand the audit is not just a formality. The purpose to determine, Fraud, Waste and Abuse. As we all know not all agents interpret the laws and rules exactly the same. Since this could be 10 to 13 years from now, are you certain the same REPACK personnel or accounting project documents will be accessable. Remember banks only go back 18mths or so on statements. Vendors typically purge records every 7 yrs, as well as yourt company. IF you do not have all of the documents in order and protected and with engineerering and process descpriptions of why your repack required this or that, these items may be considered UPGRADES or outright DENIED as reasonable or reimbursable. Meaning you have to pay these funds back. Remember they ask and you have to PROVE! No proof and you lose automatically. That is how Audits work! If you dont utilzie our professional team , I encourage you to get with your accounting, engineering and legal team to at least make sure all documents are assembled in a secure place and clearly marker for when the day comes with a knock on your door and you hear,”We are with the government and here to help.”, They may be nice people and they have a tough job to do and they only have their data and have already reviewed the project and know exactly what they want from you. If you cannot provide satifactory documentations, you lose. Simple as that. SO iit personnle leave with the data in thier heads and/or the station is sold, all if this liablity transfers to the new owner. THey will want to be protected from this audit as well. The Average reapck project is over $1million, that a lot to come up with when the bell tolls for thee.

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