However, since the time of award to March 31, 2014,  approximately 14 percent of the awarded BIP infrastructure projects (42  out of 297) were terminated. According to RUS officials, these projects  were turned down by the awardee or terminated by RUS for a variety of  reasons, such as awardee financial difficulties or inability to meet  requirements. RUS’s Oversight Indicates Most Projects Will Be Completed on Time and As Approved but Faces Challenges Given the Program’s Scope

		RUS Monitors BIP Projects and Expects Most Will Be Completed by the 2015 Deadline, but Awardees Face Challenges

RUS monitors projects and takes oversight actions through all BIP project  phases, as shown in figure 2. Specifically, 87 percent of the 255 BIP  infrastructure projects were completed, meaning they were providing  service throughout the entire approved service area, or were partially  operational, meaning they were providing service to some subscribers in  the approved service area (see table 3). Based on data RUS tracks on project status and funds disbursed, RUS  officials stated that they expect almost all BIP projects to be completed by  the 2015 deadline. As mentioned above, RUS officials said they did not allow changes to  project service areas although they did allow other types of changes,  such as changes in technology. Although RUS has met the Recovery Act reporting requirements, it has  provided limited reporting on BIP program status and results during  project implementation. However, it plans to now publish reports quarterly  until at least September 2015. The Recovery Act required that RUS  submit quarterly reports to Congress on the use of BIP funds until all  funds were obligated. Therefore, BIP’s subscribership  measures do not indicate the extent to which Recovery Act funding was  used to deploy broadband access in rural areas. USDA Annual Performance Reports Do Not Track BIP’s Performance against a Related Goal

In addition, USDA has missed opportunities to report on BIP’s impact. The GPRA  Modernization Act requires that each year agencies establish  performance goals in performance plans and provide an update by  comparing actual performance achieved against performance goals in  annual performance reports. A USDA official told us that BIP performance was  not included in USDA’s annual performance report because it was part of  the Recovery Act reports. Regarding  reporting on BIP performance, instead of reporting actual results, RUS  reported its performance goal, or estimate of BIP subscribership, as  results. As previously reported by the USDA OIG, RUS  officials said the results were reported in fiscal year 2010 because that  was the year the funds were obligated. As we found in 2012, this total did  not reflect actual program results, because it was calculated by RUS  using estimates contained in applications and developed prior to the   Further, the estimated number of  execution of the funded projects.subscribers to receive new or improved service through BIP that RUS  reported in fiscal year 2010—847,239—is now out of date given that as of  March 31, 2014, RUS reduced this estimate to 728,733, as we explained  earlier in this report. As a result, RUS has not  shown how the approximately $3 billion in funds awarded to BIP projects  have affected broadband availability. Reporting on and tracking the  number of subscribers receiving service through BIP is particularly  important given that the majority of projects are ongoing and that projects  are to continue to add, and awardees are to continue to report, BIP  subscribers for at least 5 years after construction is completed. Without  reliable and regular information on the results of BIP projects, it will be  difficult for USDA, RUS, and policy makers to determine the impact of  Recovery Act funds and BIP’s progress on improving broadband  availability. Recommendation

To provide information on the impact of federal investments in expanding  broadband infrastructure, we recommend the Secretary of Agriculture  include BIP performance information as part of the USDA’s annual  performance plan and report by comparing actual results achieved  against the current subscribership goal. Agency Comments

We provided a draft of this report to the Secretary of Agriculture for review  and comment. In an email received June 4, 2014, a Management Analyst  with USDA on behalf of USDA Rural Development stated that RUS  generally agreed with the report and its recommendation and will institute  procedures to fully address the recommendation. RUS also provided technical comments, which we  incorporated as appropriate. Appendix I: Objectives, Scope, and Methodology

This report discusses (1) how the Rural Utilities Service (RUS) ensures  that funded Broadband Initiatives Program (BIP) projects are completed  within required time frames and as approved, including within designated  service areas and (2) the extent to which RUS is providing information to  show the program’s impact on broadband availability. To further characterize RUS’s oversight actions, we selected a  nongeneralizable sample of six ongoing infrastructure projects and one  completed project. To determine the extent to which RUS is providing information to show  the program’s impact on broadband availability, we reviewed publicly  available RUS performance information, such as BIP project directories,  BIP quarterly and status reports, and USDA annual performance plans  and reports.
Why GAO Did This Study

Access to affordable broadband is seen as vital to economic growth and improved quality of life, yet its deployment in rural areas can be costly. The American Recovery and Reinvestment Act of 2009 (Recovery Act) appropriated funding for BIP, a USDA RUS program to fund broadband projects to provide service to end users in mostly rural areas. By 2010, RUS had awarded over $3 billion, primarily to 297 infrastructure projects, and required that projects be completed by June 2015 in approved areas.
GAO was asked to review BIP's results and impact. This report addresses (1) how RUS ensures that projects are completed by the deadline and as approved and (2) the extent to which RUS provides information to show BIP's impact. GAO interviewed RUS officials, reviewed policies, and analyzed RUS project data as of March 2014. GAO also interviewed five awardees from a nongeneralizable sample of seven BIP projects selected in part based on award size and location.

What GAO Found

The Rural Utilities Service (RUS) expects most Recovery Act-funded Broadband Initiatives Program (BIP) projects will be completed by the June 2015 deadline and as approved, but RUS faces challenges given the large scope of the program. As of March 2014, approximately 14 percent (42 of 297) of BIP infrastructure projects were terminated for a variety of reasons according to RUS officials, such as financial difficulties or inability to meet requirements. Of the 255 projects remaining, 87 percent were completed (39 projects) or partially operational (184 projects), meaning they provide service to some subscribers. To monitor projects and ensure they are completed within approved service areas, RUS relies on general field representatives to conduct in-person inspections and report monthly on project status. RUS officials said that they did not allow changes to service areas, but approved other types of changes such as changes in technology. GAO could not confirm this since RUS did not systematically track changes and did not provide GAO with information on project changes. Also, several challenges affect RUS's ability to oversee projects. For example, reduced staffing and travel funding levels during BIP's implementation will challenge RUS to complete inspections given the scope of the program, including 216 ongoing infrastructure projects to be completed by the June 2015 deadline.
RUS has reported limited information on BIP's impact since awarding funds to projects, and BIP results are not tracked in the Department of Agriculture's (USDA) annual performance reporting. Consequently, RUS has not shown how much the program's approximately $3 billion in project funding—an unprecedented level of federal investment in broadband—has affected broadband availability. RUS met the Recovery Act requirement to report to Congress quarterly until all funds were obligated. However, since the Recovery Act's reporting requirement ended, RUS has provided limited reporting on BIP program status and results during project implementation. A senior RUS official says RUS will now issue quarterly status reports until at least September 2015. USDA also has missed opportunities to report on BIP's impact as part of its annual performance plan and report. The GPRA Modernization Act of 2010 directs agencies to establish performance goals in annual performance plans and report the progress made toward these goals in annual performance reports. USDA's annual performance plan included a performance goal to provide new or improved broadband, but USDA did not include BIP results in its annual performance reports. USDA reported its BIP goal and results for fiscal year 2010 only and used the same estimate of BIP subscribership—developed before project execution—for both. RUS officials say the results were reported in fiscal year 2010 because that was the year funds were obligated. More recently, in March 2014, RUS updated the estimated number of subscribers from 847,239 to 728,733 to account for terminated projects. Reporting on and tracking BIP actual results against the updated goal is particularly important given that the majority of projects are ongoing and awardees are to continue to report the number of BIP subscribers added for at least 5 years after construction is completed. Without an updated performance goal and regular information reported on the results of BIP projects, it will be difficult for USDA, RUS, and policy makers to determine the impact of Recovery Act funds or BIP's progress on improving broadband availability.

What GAO Recommends

GAO recommends that the Secretary of Agriculture include as part of the USDA annual performance plan and report, actual BIP results achieved against the updated subscribership goal. In commenting on a draft of this report, USDA said it agreed with the recommendation and will institute procedures to fully address it. USDA also provided technical comments, which were incorporated as appropriate.