Recovery Act: Agencies Are Addressing Broadband Program Challenges, but Actions Are Needed to Improve Implementation
Highlights
Access to broadband service is seen as vital to economic, social, and educational development, yet many areas of the country lack access to, or their residents do not use, broadband. To expand broadband deployment and adoption, the American Recovery and Reinvestment Act (Recovery Act) provided $7.2 billion to the Department of Commerce's National Telecommunications and Information Administration (NTIA) and the Department of Agriculture's Rural Utilities Service (RUS) for grants or loans to a variety of program applicants. The agencies must award all funds by September 30, 2010. This report addresses the challenges NTIA and RUS face; steps taken to address challenges; and remaining risks in (1) evaluating applications and awarding funds and (2) overseeing funded projects. The Government Accountability Office (GAO) reviewed relevant laws and program documents and interviewed agency officials and industry stakeholders.
NTIA and RUS face scheduling, staffing, and data challenges in evaluating applications and awarding funds. NTIA, through its new Broadband Technology Opportunities Program, and RUS, through its new Broadband Initiatives Program, must review more applications and award far more funds than the agencies formerly handled through their legacy telecommunications grant or loan programs, including NTIA's largest legacy grant program, Public Safety Interoperable Communications. NTIA and RUS initially proposed distributing these funds in three rounds, but recently adopted two rounds. To meet these challenges, the agencies have established a two-step application evaluation process that uses contractors or unpaid, independent experts for application reviews and plan to publish information on applicants' proposed service areas to help ensure the eligibility of proposed projects. While these steps address some challenges, the upcoming deadline for awarding funds may pose risks to the thoroughness of the application evaluation process. In particular, the agencies may lack time to apply lessons learned from the first funding round and to thoroughly evaluate applications for the remaining rounds. NTIA and RUS will oversee a significant number of projects, including projects with large budgets and diverse purposes and locations. In doing so, the agencies face the challenge of monitoring these projects with far fewer staff per project than were available for their legacy grant and loan programs. To address this challenge, NTIA and RUS have hired contractors to assist with oversight activities and plan to require funding recipients to complete quarterly reports and, in some cases, obtain annual audits. Despite these steps, several risks remain, including a lack of funding for oversight beyond fiscal year 2010 and a lack of updated performance goals to ensure accountability for NTIA and RUS. In addition, NTIA has yet to define annual audit requirements for commercial entities funded under the Broadband Technology Opportunities Program.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Agriculture | To reduce the risk of awarding funds to projects that may not be sustainable or do not meet the priorities of the Recovery Act, the Secretaries of Commerce and Agriculture should (1) delay the issuance of the second Notice of Funds Availability (NOFA) in order to provide time to analyze application and evaluation processes and apply lessons learned from the first funding round, and (2) provide review time in the second funding round comparable with other broadband grant and loan programs. | The American Recovery and Reinvestment Act (Recovery Act) appropriated $7.2 billion to extend access to broadband throughout the United States. The Recovery Act provided $4.7 billion to the National Telecommunications and Information Administration and $2.5 billion to the Rural Utilities Service. The agencies initially indicated that they would award Recovery Act broadband program funds in three separate funding rounds and on July 1, 2009, the agencies released the first joint Notice of Funds Availability detailing the requirements, rules, and procedures for applying for grants, loans, and loan-grant combinations. With an 18-month period to award all program funds and three funding... rounds, we found that each funding round would operate under a compressed schedule. We reported that the compressed schedule posed challenges for both program applicants and the agencies. In particular, the agencies would have less time to review applications than similar grant and loan programs. The compressed schedule could increase the risk of awarding funds to projects that may not be sustainable or do not meet the priorities of the Recovery Act. Therefore, in a draft report to the agencies on October 15, 2009, we recommended that the agencies combine the second and third funding rounds. Subsequently, on November 10, 2009, the agencies announced that they would award the remaining funds in one funding round, instead of two rounds. The agencies noted that this change will increase efficiency and better accommodate applicants.
View More |
| Department of Commerce | To reduce the risk of awarding funds to projects that may not be sustainable or do not meet the priorities of the Recovery Act, the Secretaries of Commerce and Agriculture should (1) delay the issuance of the second Notice of Funds Availability (NOFA) in order to provide time to analyze application and evaluation processes and apply lessons learned from the first funding round, and (2) provide review time in the second funding round comparable with other broadband grant and loan programs. | The American Recovery and Reinvestment Act (Recovery Act) appropriated $7.2 billion to extend access to broadband throughout the United States. The Recovery Act provided $4.7 billion to the National Telecommunications and Information Administration and $2.5 billion to the Rural Utilities Service. The agencies initially indicated that they would award Recovery Act broadband program funds in three separate funding rounds and on July 1, 2009, the agencies released the first joint Notice of Funds Availability detailing the requirements, rules, and procedures for applying for grants, loans, and loan-grant combinations. With an 18-month period to award all program funds and three funding...
|
| Department of Commerce | To ensure that all funded projects receive sufficient oversight and technical support beyond September 30, 2010, and through their required completion dates, the Secretaries of Commerce and Agriculture should develop contingency plans to ensure sufficient resources for oversight of funded projects beyond fiscal year 2010. | The American Recovery and Reinvestment Act (Recovery Act) authorized the National Telecommunications and Information Administration (NTIA), in consultation with the Federal Communications Commission, to create the Broadband Technologies Opportunities Program (BTOP); the Recovery Act appropriated $4.7 billion for NTIA. Through BTOP, NTIA would manage competitive grants to a variety of entities for broadband infrastructure, public computer centers, and innovative projects to stimulate demand for, and adoption of, broadband. We found that NTIA faced the risk of having insufficient resources to actively monitor BTOP-funded projects. In particular, funded projects needed to be complete no...
|
| Department of Agriculture | To ensure that all funded projects receive sufficient oversight and technical support beyond September 30, 2010, and through their required completion dates, the Secretaries of Commerce and Agriculture should develop contingency plans to ensure sufficient resources for oversight of funded projects beyond fiscal year 2010. | In the American Recovery and Reinvestment Act (Recovery Act), Congress authorized the Department of Agriculture's Rural Utilities Service (RUS) to establish the Broadband Initiatives Program (BIP) to make loans and award grants and loan/grant combinations for broadband infrastructure projects primarily in rural areas; the Recovery Act appropriated $2.5 billion for RUS. We found that RUS faced the risk of having insufficient resources to actively monitor BIP-funded projects after September 30, 2010, which could result in insufficient oversight of projects not yet completed by that date. In particular, some projects were not expected to be complete until 2013. However, the Recovery Act...
|
| Department of Agriculture | To ensure that management has appropriate tools in place to evaluate the effectiveness of Broadband Technology Opportunities Program (BTOP) and Broadband Initiatives Program (BIP) and to apply limited resources to achieve desired program outcomes, the Secretaries of Commerce and Agriculture should use information provided by program applicants in the first funding round to establish quantifiable, outcome-based performance goals by which to measure program effectiveness. | In the American Recovery and Reinvestment Act (Recovery Act), Congress appropriated $2.5 billion for the Department of Agriculture's Rural Utilities Service (RUS); RUS established the Broadband Initiatives Program (BIP) to make loans and to award grants and loan-grant combinations for broadband infrastructure projects in rural areas. The Government Performance and Results Act of 1993 directs federal agencies to establish objective, quantifiable, and measureable goals within annual performance plans. While RUS established quantifiable program goals for its existing broadband grant and loan programs, we found that RUS had not updated its goals to reflect the large increase in funding it...
|
| Department of Commerce | To ensure that management has appropriate tools in place to evaluate the effectiveness of Broadband Technology Opportunities Program (BTOP) and Broadband Initiatives Program (BIP) and to apply limited resources to achieve desired program outcomes, the Secretaries of Commerce and Agriculture should use information provided by program applicants in the first funding round to establish quantifiable, outcome-based performance goals by which to measure program effectiveness. | In the American Recovery and Reinvestment Act (Recovery Act), Congress authorized the Department of Commerce's National Telecommunications and Information Administration (NTIA) to create the Broadband Technology Opportunities Program (BTOP) to manage competitive grants to a variety of entities for broadband infrastructure, public computer centers, and innovative projects to stimulate demand for, and adoption of, broadband; the Recovery Act provided $4.7 billion for NTIA. We found several risks to adequate oversight, including a lack of updated performance goals. In particular, NTIA had established preliminary performance measures for BTOP; however, NTIA had not established quantitative,...
|
| Department of Commerce | To ensure that NTIA has sufficient insight into the expenditure of federal funding by commercial entities that may receive BTOP grants, the Secretary of Commerce should determine whether commercial entities should be subject to an annual audit requirement. | The American Recovery and Reinvestment Act (Recovery Act) appropriated $4.7 billion for the Department of Commerce's National Telecommunications and Information Administration (NTIA) to manage competitive grants to a variety of entities for broadband infrastructure, public computer centers, and innovative projects to stimulate demand for, and adoption of, broadband. The first round grant awardees include public (e.g., state and local governments), for-profit, nonprofit, cooperative, and tribal entities. We found that NTIA did not have audit requirements or guidelines in place for annual audits of commercial entities. NTIA officials reported that because this is the first program managed...
|