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GAO, Commerce Concerned About BTOP Oversight - Broadcasting & Cable

GAO, Commerce Concerned About BTOP Oversight

Witnesses to air concerns at House hearing on broadband stimulus program
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The Government Accountability Office still has concerns about the government's oversight of its Broadband Technology Opportunities Program stimulus grant/loan program, a concern long shared by some legislators and lots of cable operators. The Commerce Department, which is overseeing much of that program, shares that concern, but says it has a plan if Congress has the funds. 

That is according to the prepared testimony of Mark Goldstein, director of physical infrastructure issues for GAO, for a House Communications & Internet Subcommittee hearing Thursday, and a top Commerce Department official. Goldstein is a familiar face at communications-related hearings. 

Commerce's National Telecommunications & Information Administration and the Ag Department's Rural Utilities Service have awarded over $7 billion in grants and loans for broadband deployment and adoption as part of the American Recovery, and must now try to make sure the money goes where it should and to whom it should.

Goldstein says risks to the program's success remain, including monitoring 553 projects that are "diverse in scale, scope, and technology" and funding that oversight since the recovery act funds ran out Sept. 30. 

But even with NTIA and RUS' contingency plans, which Goldstein said have been developed by both on the advice of GAO, his office "remains concerned about the oversight of the broadband programs. In particular, GAO believes the agencies, and especially NTIA, need to do more to ensure their oversight plans reflect current fiscal realities." 

For his part, NTIA witness Todd Zinser, Inspector General of the Commerce Department, called the broadband stimulus program "the largest and most complex" grant program NTIA has ever overseen, and agreed there were concerns at Commerce about the ability to oversee the program. 

While the grants have been awarded, most of the money has yet to be handed out. According to his prepared testimony, he will tell the legislators that the potential for waste, fraud and abuse will increase over the next few years as grant recipients spend the money, and tie his concerns to the issue of funding. "The uncertainty regarding NTIA oversight funding for FY2011 and beyond raises significant concerns for the Department about the adequacy of future BTOP oversight," he says. 

Among Commerce's chief concerns about potential waste, fraud and abuse are 1. false claims--charging for unrelated or nonexistent expenses or unauthorized consulting fees; 2. substandard products--foreign products where 'made in U.S.A. is required, or laying four feet of cable when you are supposed to lay 6; and 3. price fixing by or conflicts of interest with subcontractors, not to mention--actually he did mention--bribes and kickbacks. 

Concern of Republicans now in control of the subcommittee and the House over waste, fraud and abuse in the program was one of the reasons the Thursday hearing was called, so he was preaching to the choir on that point.

Zinser said Commerce has a comprehensive plan to monitor the program going forward, but suggested that will be dependent on getting more money.    

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