Recommendation: 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.

Agency Affected: Department of Commerce

Status: Closed - Implemented

Comments: In its 2012 Annual Performance Plan Formulation, NTIA identified four performance goals for BTOP. These goals included (1) miles of broadband networks deployed, (2) community anchor institutions connected, (3) new and upgraded public computer workstations, and (4) new household and business subscribers to broadband. For each of these four goals, NTIA reported quantitative targets, such as 250,000 new household and business subscribers to broadband in fiscal year 2012. As we noted, without such goals, future efforts to expland broadband deployment and adoption may lack important information on the types of projects that were most effective at meeting subscriber goals and other targets, thereby limiting the ability to apply federal resources to programs with the best likelihood of success.

Recommendation: 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.

Agency Affected: Department of Agriculture

Status: Open

Comments: According to Rural Utilities Service (RUS) officials, the agency has developed short-term performance metrics for the BIP program, including (1) the number of recipients' subscribers (households and businesses) receiving new broadband access, (2) the number of recipients' subscribers (households and businesses) receiving improved broadband access, and (3) the number of recipients' anchor institution subscribers (educational, library, healthcare, and public safety providers) receiving new or improved access to broadband service. RUS is in the process of establishing longer term performance measures for the program. RUS will work with USDA Economic Research Service to explore longer term economic and other impacts of the broadband infrastructure. RUS will also monitor activities at FCC and NTIA relating to developing other performance measures of broadband deployment.

Recommendation: 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.

Agency Affected: Department of Agriculture

Status: Closed - Implemented

Comments: 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 only provided funding through September 30, 2010. Further, RUS officials reported that given the large increase in its project portfolio from BIP, RUS's capacity to actively monitor these projects after its BIP funding expired may be stressed. Because of this, we reported that RUS may be unable to ensure that all recipients have expended their funding and completed projects as required. Therefore, to ensure that all funded projects receive sufficient oversight and technical support, we recommended that the Secretary of Agriculture develop contingency plans to ensure sufficient resources for oversight of funded projects beyond fiscal year 2010. RUS has taken several actions to address our recommendation and improve oversight of funded projects. RUS is putting into place a multifaceted oversight framework to monitor compliance and progress of BIP funding. RUS plans to use the same oversight framework for BIP that it uses for its existing grant and loan programs; the main components of RUS's oversight framework are (1) financial and program reporting and (2) desk and field monitoring. We expressed concern with this initial strategy, because existing RUS staff members have other duties in addition to oversight of BIP projects. RUS subsequently enhanced its oversight framework by extending its contract with ICF International to provide BIP program support through 2013. According to RUS, the agency fully funded the contract extension using Recovery Act funds and no additional appropriations are required to continue the contract through fiscal year 2013. As we noted, without these resources, RUS might not be able to ensure that all projects are completed as intended and guard against waste, fraud, and abuse.

Recommendation: 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.

Agency Affected: Department of Commerce

Status: Open

Comments: For fiscal year 2013, the President's budget request included nearly $26 million to continue oversight activities.

Recommendation: 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.

Agency Affected: Department of Commerce

Status: Closed - Implemented

Comments: 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, 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.

Recommendation: 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.

Agency Affected: Department of Agriculture

Status: Closed - Implemented

Comments: 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, 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.

Recommendation: 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.

Agency Affected: Department of Commerce

Status: Closed - Implemented

Comments: On May 17, 2010, NTIA reported that for-profit awardees will be required to comply with the program-specific audit requirements set forth in OMB Circular A-133, Subpart B, Section 235. Section 235 provides audit and reporting guidance for program-specific audits. Such audit and reporting will give NTIA the oversight tool it needs to help ensure that projects meet the objectives of the Recovery Act and guard against waste, fraud, and abuse.