• Inspector General Flags Concern over RUS Oversight of Stimulus Funds
  • May 8, 2009 | Authors: Jennifer L. Richter; Carly T. Didden; Jennifer A. Cetta
  • Law Firm: Patton Boggs LLP - Washington Office
  • A new report from the Agriculture Department’s Office of Inspector General (OIG) questions the ability of RUS to distribute broadband stimulus funds effectively, given its past performance. "[W]e remain concerned with RUS' current direction of the broadband program, particularly as they receive greater funding under the American Recovery and Reinvestment Act,” the OIG found. “The Rural Broadband program may not meet the [American Recovery and Reinvestment] Act’s objective of awarding funds to projects that provide service to the most rural residents that do not have access to broadband service.” The OIG report was sent to RUS Acting Administrator Jim Newby. It is unclear whether congressional appropriators will conduct hearings.

    The OIG found continuing irregularities that were first flagged in a September 2005 report regarding how RUS approved and serviced rural broadband. OIG originally took a closer look at the program after prompting from Congressional appropriators, who expressed concern that RUS, instead of focusing on rural areas that have no broadband service, granted funding to companies that proposed to deploy in areas where broadband service is already offered by private providers. The OIG found that only three borrowers were providing service to totally unserved areas, which represented $40 million in loans to 20 communities. To date, RUS has lent approximately $1.35 billion in loans. OIG found that prior to the 2008 Farm Bill, RUS did not record how many households were unserved prior to issuing a broadband loan. RUS now requests that applicants list the number of unserved households that a project will serve and has updated its Broadband Application Information Log.