Broadband Grant Applications Overwhelming Feds, Says GAO Report

Awarding broadband stimulus grants may be proving more difficult than expected for the National Telecommunications and Information Administration (NTIA) and Rural Utilities Service (RUS), the two federal organizations distributing $7.2 billion set aside in the American Recovery and Reinvestment Act for broadband projects. The U.S. Government Accountability Office (GAO) updated the U.S. Senate Committee on Commerce, Science and Transportation on the project Tuesday, Oct. 27, saying the NTIA and RUS faced scheduling and staffing challenges in evaluating applications and awarding funds. The two agencies are evaluating far more applications than they did under normal circumstances and have fewer employees to do it.

The GAO warns this could diminish the thoroughness of the review process, which involves contractors and volunteers to help meet the first award deadline in December.

"The agencies may lack time to apply lessons learned from the first funding round and to thoroughly evaluate applications for the remaining rounds," said Mark Goldstein, director of physical infrastructure issues for the GAO.

The GAO is also concerned the staff shortage will lead to insufficient oversight of the funds after they're awarded. To address the challenge, the 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, according to the GAO. However, that likely won't solve the all of the problems, the GAO added.

"Several risks remain, 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," Goldstein said.

The NTIA and RUS still need to define audit requirements for commercial organizations collecting broadband stimulus grants.

Lawrence Strickling, assistant secretary for Communications and Information and administrator at the NTIA assured the Senate committee the applications process was progressing adequately.

"At least three expert reviewers are evaluating each application against established criteria, including the proposed project's purpose, benefits, viability, budget and sustainability," Strickling said.