[tmcnet] It should not come as any surprise -- given earlier delays -- that the first project awards under the the American Recovery and Reinvestment Act’s “broadband stimulus” program will be late.
The program is supposed to allocate $7.2 billion to provide broadband services or training to rural and other underserved communities, through the Department of Commerce’s National Telecommunications and Information Administration and the Department of Agriculture’s Rural Utilities Service.
The problem is that the work load required to evaluate and award funds so vastly exceeds the volume of work either agency has handled in the past. The NTIA must now disburse sums that are about 4.7 times greater than normal, while the RUS faces the task of disbursing amounts 192 times larger than normal.
Those would be challenges under the best of circumstances, so it is no surprise that the first awards may not be made until December, about a month later than anticipated. There are other risks, according to the Government Accountability Office, including a lack of funding for oversight beyond fiscal year 2010 and a lack of updated performance measures to ensure accountability for NTIA and RUS.
“Waste and fraud” potential, in other words, will exist. “NTIA and RUS face scheduling, staffing, and data challenges in evaluating applications and awarding funds,” GAO said in a report. The agencies have taken steps to meet these challenges, to be sure.
“While these steps address some challenges, the agencies lack the needed time to apply lessons learned from the first funding round and face a compressed schedule to review new applications,” said the GAO. “As a result, the agencies may risk awarding funds to projects that are not sustainable or do not meet the priorities of the Recovery Act.”
“During the first funding round, the agencies missed several milestones,” according to the GAO. “For example, RUS originally intended to select a contractor on June 12, 2009, and NTIA intended to select a contractor on June 30, 2009; however, both agencies missed their target dates, with RUS selecting its contractor on July 31, 2009, and NTIA selecting its contractor on August 3, 2009.”
Because of the compressed schedule within the individual funding rounds, “NTIA and RUS have less time to review applications than similar grant and loan programs,” said the GAO report. “In the first funding round, the agencies have approximately two months to review 2,200 applications.”
In contrast, from fiscal year 2005 through 2008, “RUS took from four to seven months to receive and review an average of 26 applications per year for its Broadband Access Loan Program,” said the GAO. “NTIA’s Public Telecommunications Facilities Program operated on a year-long grant award cycle,” and completed application reviews in roughly six months.
A month delay in getting the stimulus funds out is the latest setback for the broadband grant program, which has drawn criticism for being laden down with so many rules and conditions that the nation’s largest Internet providers, including AT&T Inc., Comcast Corp. and other smaller phone and cable companies didn’t bother applying for funds.
That Agriculture Department program has been criticized over the past few years by congressional investigators and the USDA’s own inspector general, which has found the program has offer low-cost loans for broadband lines in suburban areas with existing service and other problems, observers note.
GAO Issues Warning About Broadband Stimulus Program