NTIA grants lag, but $4.7B expected by February

The Commerce Department has had to push back by three months its scheduled date for awarding the first round of broadband grants under the American Recovery and Reinvestment Act (ARRA) of 2009, according to a new report from the Government Accountability Office.

Commerce’s National Telecommunications and Information Administration (NTIA) is administering the distribution of $4.7 billion in broadband grants to expand services to unserved and underserved areas, enhance broadband capacity at public computer centers, and encourage sustainable adoption of broadband.

NTIA initially hoped to finish awarding the first round of grants by November 2009 but now expects those grants to be awarded by the end of February, due to delays brought on because of a compressed time frame to set up the program and insufficient staffing to handle the flood of applications, according to a GAO report dated Dec. 28, 2009.

In order to award the broadband monies by Sept. 30, 2010, under the law, NTIA and the Agriculture Department's Rural Utilities Service must establish their respective grant programs, solicit and evaluate applications, and award the funds. In addition to a compressed time frame, the agencies are handling many more applications than they are accustomed to handling. For example, NTIA received 1,770 applications for the $4.7 billion in broadband grants, which is twice as many applications and three times as much funding as the agency has handled in other grant programs.

One of the risks is to NTIA’s required “maintenance-of-effort” rule under the stimulus law. Under that provision, agencies must show that stimulus grant recipients would not have proceeded with the projects “but for” or without the stimulus law funding.

“Due to limited staff, NTIA may have an inability to thoroughly review applications and therefore the agency risks funding projects that might not meet the objectives of the Recovery Act’s ‘but-for’ test,” the GAO report said.

To beef up its capacity, Commerce estimated that it would need 30 additional staffers in fiscal 2009 and 40 additional personnel in fiscal 2010.

The GAO, in a previous report, recommended that Commerce and Agriculture create contingency plans to address the staffing issues, and officials from both departments agreed with the recommendations.