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Broadband Stimulus Projects Need Oversight, Report Says

The U.S. Commerce Department's grant awards lack resources to sufficiently oversee funds' use, agencies say.

Federal agencies granting the second round of broadband stimulus funds face even greater challenges than those seen during the first round, a recent Government Accountability Office (GAO) report stated. While much more money is being awarded -- about $4.8 billion compared to $2.2 billion -- there will be more pressure to approve awards before the Sept. 30 deadline and the agencies may lack resources to adequately oversee American Recovery and Reinvestment Act-funded broadband projects, the report concluded.

The 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, which are being awarded in two rounds and must dispense all funds by Sept. 30.

With a deadline looming to approve the awards, the report stated, they lack "detailed data on the availability of broadband service throughout the country, making it difficult to determine whether a proposed service area is unserved or underserved, as defined in the program funding notices."

While the NTIA and the RUS are putting oversight plans in place, some risks remain, the GAO report stated. "The agencies will need to oversee far more projects than in the past and these projects are likely to be much larger and more diverse than projects funded under the agencies' prior broadband-related programs," the report stated. "Additionally NTIA and RUS must ensure that the recipients construct the infrastructure projects in the entire project area, not simply the area where it may be most profitable for the company to provide service."

In response to these challenges and the short time frame, the NTIA and the RUS have streamlined their application review processes by, for example, eliminating joint reviews and reducing the number of steps in the due-diligence review process. The NTIA also started using census tract data to verify the presence of service, the report stated.

But it's hard to enact oversight when there are no funds to do so. Secretary of Commerce Gary Locke, in a letter to the GAO, said the Recovery Act doesn't provide authority or funding for administration and oversight of program-funded projects or maintenance of the national broadband map beyond Sept. 30. But the president's fiscal 2011 budget includes authority and funding for NTIA to administer and monitor the grant projects, he stated.

"The department is determined to obtain and provide the funding necessary to successfully monitor and oversee these grants," the letter stated.