U.S. DEPARTMENT OF COMMERCE 

Office of Inspector General 

National 

Telecommunications and 

Information Administration 

Broadband Program 

Faces Uncertain Funding, 

and NTIA Needs to Strengthen 

Its Post-Award Operations 

Final Report No. OIG-11-005-A 

November 4, 2010 

FOR PUBLIC RELEASE 

Office of Audit and Evaluation 
UNITED STATES DEPARTMENT OF COMMERCE 

Office of Inspector General 

Washington, D.C. 20230 

November 4, 20 I0 

MEMORANDUM FOR:	 Lawrence E. Strickling 

Assistant Secretary 

for Communications and Information 

National Telecommunications and Information Administration 

FROM:	 Ann C. Eilers t £k6 

Principal Assistant Inspector General 

Office of Audit and Evaluation 

SUBJECT:	 Broadband Program Faces Uncertain Funding, and NTIA 

Needs to Strengthen its Post-Award Operations 

Final Audit Report No. OIG-II-005-A 

This memorandum transmits our final report on the National Telecommunications and 

Information Administration's (NTIA's) efforts to establish an effective post-award process for 

the Broadband Technology Opportunities Program (BTOP). 

We discussed our findings with senior BTOP officials on August 4, 2010, and provided you with 

a draft report on September 24. In the draft report, we expressed our concern that there was no 

authority or funding to provide oversight ofBTOP grants beyond September 30, 20 I0, and that 

while NTIA has made significant progress with its post-award operations, additional steps are 

needed to ensure effective oversight of a portfolio of about $4 billion in grant awards. Since the 

draft report, our concerns have increased because the continuing resolution NTIA is operating 

under did not include funds to administer BTOP and monitor the more than 230 grants that have 

been awarded. 

Your October 22 response to our draft report affirms that NTIA is taking appropriate action to 

address the recommendations in the report and discusses steps that it has initiated. The response 

provides details about the lack of funding for grant oversight, and expresses NTIA's concern that 

its ability to maintain BTOP after the continuing resolution expires on December 3 will depend 

upon Congress taking action before that date to appropriate adequate funding for FY 2011. We 

share your concern that a lack of oversight funding and its impact on NTIA's oversight of the 

awards substantially increases the risk of delay in grant projects and jeopardizes NTIA's ability 

to guard against waste, fraud, and abuse. Therefore, we encourage you to work with the 

Department, the Office of Management and Budget, and Congress to secure funds to administer 

the program. We summarize your response in our audit report and have included it in its entirety 
as appendix B. Also, we are pleased that NTIA has already taken steps to address the 

deficiencies we noted in our draft report. 

In accordance with Department Administrative Order 213-5, please provide us with an audit 

action plan within 60 days of the date of this memorandum. Please accept our thanks to NTIA 

and its operating units for the courtesies shown to us during our field work. If you have any 

questions, please contact me at (202) 482-2754 or Chris Rose at (202) 482-5558. 

cc: Scott Quehl, Chief Financial Officer and Assistant Secretary for Administration 

Kathy Smith, NTIA Chief Counsel 
Report In Brief Report In Brief 

U.S. Department of Commerce Office of Inspector General 

November 4, 2010 

Why We Did this Review 

Background 

On February 17, 2009, the President 

signed the American Recovery and 

Reinvestment Act of 2009 into law. 

The Recovery Act gave $4.7 billion 

to NTIA to establish BTOP, a competitive grant program intended to 

provide funds for deploying broadband infrastructure in unserved and 

underserved areas of the United 

States, enhance broadband capacity 

at public computer centers, improve 

access to broadband services for 

public safety agencies, and promote 

sustainable broadband adoption 

projects. 

Almost $4 billion in BTOP grants 

were awarded in time to meet the 

Recovery Act deadline of September 30, 2010. The act did not 

provide for funding after that date; 

therefore, BTOP is operating under 

a continuing resolution until December 3. After December 3, NTIA 

will be faced with very limited 

resources with which to perform 

post-award monitoring, support of 

grantees, and prevention of fraud, 

waste, and abuse. 

The Broadband Technology Opportunities Program (BTOP) is 

the largest grant program that the 

National Telecommunications and 

Information Administration (NTIA) 

has managed to date. With BTOP, 

NTIA has had to confront a number 

of challenges, including staffing a 

program office, developing rules 

and regulations, coordinating development activities with other departments and agencies, awarding 

grants, and performing effective 

oversight of activities. 

We initiated this review in April 

2010 as part of our continuing 

oversight of the BTOP grant award 

process. Our audit examined 

NTIA’s efforts to develop and 

implement effective policies and 

procedures, systems, and postaward oversight. 

American Recovery and Reinvestment Act 

Broadband Program Faces Uncertain Funding, and NTIA 

Needs to Strengthen Its Post-Award Operations 

(OIG-11-005-A) 

What We Found 

NTIA has completed both funding rounds of its broadband grant awards. By September 30, 

2010, NTIA had made almost $4 billion in awards to over 230 recipients, making BTOP 

the largest grants program NTIA has ever managed. With the announcement of the last 

awards, NTIA’s focus has shifted to monitoring this diverse portfolio of grants, which were 

awarded to a wide variety of recipients, including public entities, for-profits, nonprofits, 

cooperative associations, and tribal entities. While NTIA has been proactive in its establishment of a post-award oversight program, we did find the following causes for concern: 

1. NTIA has developed many new processes to assist BTOP’s program office and grant 

recipients with post-award activities, but the program will have no federal funding 

source after December 3, 2010. This lack of future funding will hinder the agency’s 

efforts to provide effective long-term oversight of grants, as NTIA will not be able 

to maintain the comprehensive oversight program it developed to monitor BTOP. 

Reduced monitoring may mean that NTIA will be less able to ensure that the grant 

projects successfully meet program objectives. NTIA will have to prioritize its future 

oversight activities carefully so that long-term program monitoring does not suffer. 

2. Despite the potential lack of funding, NTIA’s post-award monitoring and oversight 

practices need to be strengthened in several ways. First, some agreements with other 

Commerce agencies are unclear and have not been carefully managed. In addition, 

there is a knowledge gap between the staff of the contractor that designed BTOP’s software systems and the NTIA staff who must maintain the systems. NTIA also does not 

have a robust means for tracking employee training and development. While NTIA has 

created new manuals and guidance to help employees and grantees understand BTOP, 

several of the manuals lack important details about policies and procedures. Finally, 

some aspects of award monitoring are not being completed promptly or efficiently. 

What We Recommended 

We made several recommendations to NTIA with the intention of improving internal 

controls, promoting transparency, and increasing efficiency. According to NTIA’s response 

to our draft report, the agency is taking many of our recommendations into consideration. 

Based on the agency’s response, our current recommendations include: 

• managing the future lack of funding for BTOP by developing alternative approaches to 

monitoring and oversight, and revising manuals and documentation accordingly; and 

• ensuring that agreements with other agencies, manuals and guidance, training and 

development, and monitoring procedures are clearly documented and fully adhered to. 
U.S. Department of Commerce Final Report No. OIG-11-005-A
 

Office of Inspector General November 4, 2010 

Contents 

Introduction..................................................................................................................................... 1 

Findings and Recommendations ..................................................................................................... 6 

I. Uncertain Funding Poses a Challenge to NTIA’s Oversight of Broadband Grants ............ 6 

II. Post-Award Monitoring and Oversight Need to Be Strengthened ....................................... 7 

A. Memorandums of Understanding with Commerce Agencies Are Unclear, and NTIA 

Has Not Been Overseeing the Agreements Carefully ............................................................. 7 

B. NTIA Staff Members Have Not Received Sufficient Technical Knowledge Transfer 

Documentation and Training to Effectively Maintain Contractor Provided IT Systems ........ 9 

C. While NTIA Has Made Progress in Documenting BTOP Policies and Procedures, 

Additional Steps Should Be Taken........................................................................................ 10 

D. Internal Controls over Professional Development and Training Are Not Robust ......... 12 

E. Some Aspects of BTOP Award Monitoring Are Not Being Completed in a Timely or 

Efficient Manner.................................................................................................................... 13 

Summary of Agency Comments and OIG Response .................................................................... 15 

Appendix A: Objectives, Scope, and Methodology ..................................................................... 16 

Appendix B: Agency Response to Draft Report........................................................................... 18 
                                                           

U.S. Department of Commerce Final Report No. OIG-11-005-A
 

Office of Inspector General November 4, 2010 

Introduction 

On February 17, 2009, the President signed the American Recovery and Reinvestment Act of 

2009 into law.1

 The Recovery Act gives the Department of Commerce’s National 

Telecommunications and Information Administration (NTIA) $4.7 billion to establish the 

Broadband Technology Opportunities Program (BTOP).2

 BTOP is a competitive grant program 

intended to provide funds for deploying broadband infrastructure in unserved and underserved 

areas of the United States, enhance broadband capacity at public computer centers, improve 

access to broadband services for public safety agencies, and promote sustainable broadband 

adoption projects. BTOP appropriations and uses of funds are broken down in table 1. 

Table 1. BTOP Funding: Appropriations and Actual Fund Use 

Appropriationa Actual Category (in millions) (in millions) 

Broadband Infrastructure $ 3,729 $3,485 

State Broadband Data and Development Program 350 312 

Sustainable Broadband Adoption 250 251 

Public Computer Center 200 201 

Rescission - 302 

Otherb

 171 147 

Total $ 4,700 $ 4,698 

Source: OIG, based on NTIA data. 

a

 Includes “up to” amount for State Broadband Data and Development program, “not less than” amounts 

for Sustainable Broadband Adoption and Public Computer Center grants, transfer of $10 million to OIG 

for oversight, up to $141 million for administrative expenses, and transfer to Federal Communications 

Commission of funds needed to develop a national broadband plan. 

b

 Includes transfer to OIG, transfer to Federal Communications Commission, and administrative 

expenses. Figures have been rounded. 

Because BTOP is a new program, NTIA has had to confront a number of challenges involved in 

implementing it, including staffing a program office, developing grant program rules and 

regulations, coordinating development activities with other departments and agencies (such as 

the Department of Agriculture and the Federal Communications Commission), awarding a 

contract to provide program support, awarding grants, initiating award monitoring, and 

1 Pub. L. No. 111-5, § 6001, 123 Stat. 115 (2009).
 2

 A recent public law rescinded $302 million from the Broadband Technology Opportunities Program. Pub. L. No. 

111-226, § 302, 124 Stat. 2404 (2010). 

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Office of Inspector General November 4, 2010 

performing effective oversight of activities. Expenditures to develop and manage this new 

program were limited to 3 percent of the program appropriation ($141 million). 

The Recovery Act required all awards to be made by September 30, 2010, and did not provide 

additional funding after that date. As of September 30, NTIA had made around $3.9 billion in 

Broadband Infrastructure, Public Computer Center (PCC), and Sustainable Broadband Adoption 

(SBA) awards, and had reached its funding target for PCC and SBA projects. Figure 1 presents 

the total number and dollar amount of awards for infrastructure, PCC, and SBA as of September 

30, and provides insight into the size of specific awards by each category. 

Figure 1. BTOP Awards, as of September 30, 2010 

Source: OIG 

As shown in figure 1, infrastructure projects are generally the largest dollar awards (some are for 

over $100 million) and present a challenge in that they generally necessitate the completion of an 

environmental assessment. Environmental assessments require months to complete, and because 

programs need to be substantially complete (meaning awardees have met 67 percent of their 

milestones and received 67 percent of their funding) within 2 years and fully complete within 

3 years, the resulting delays can affect project timelines. Of the 233 awards made as of 

September 30, 2010, more than 100 (representing nearly $3.1 billion in funding) will require 

environmental assessments to be completed before certain actions related to the project can be 

performed. As of October 8, 31 draft environmental assessments had been submitted to NTIA 

and 11 had been finalized. 

As the process to award grant funds has ended, NTIA will now be responsible for overseeing a 

diverse portfolio of awards that will present several new challenges. For example, BTOP awards 

have been made to many different types of recipients, including public entities, for-profits, 

nonprofits, cooperative associations, and tribal entities. Table 2 (on the next page) identifies the 

diverse set of award recipients with which NTIA will be working. This will be the first time that 

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Office of Inspector General November 4, 2010 

NTIA has made awards to for-profit companies, which represent approximately 25 percent of 

BTOP awards. Awards also differ in terms of experience of the recipient in administering federal 

awards, the size of the award, and the need to satisfy special award conditions such as 

environmental requirements. 

Table 2. BTOP Funding by Entity Type 

Entity Type Number of Funding Amount % of Total 

Grants (in millions) Funding to Date 

Public 109 $1,937 49.2 

Non-Profit 58 831 21.2 

For-Profit 50 813 20.7 

Cooperative a 10 310 7.9 

Tribal Entity 6 45 1.1 

Total 233 $3,936 100.0 

 Source: OIG 

a Cooperative refers to member-owned organizations that provide members with telecommunication 

services.
 

The spending rate of BTOP funds will also need to be closely monitored. As of September 30, 

2010, the following obligations and expenditures had occurred with respect to BTOP awards, 

and total funds committed to BTOP were $4.26 billion (see figure 2). Not only has $3.94 billion 

in federal funds been obligated for awards, but recipients also have pledged a match of 

$1.42 billion, representing about 36 percent of total BTOP funding. 

Figure 2. BTOP Obligations & Expenditures as of September 30, 2010 

Obligated

funds: $4.26 B

Amount spent:

$92.6 M

$0 $1,000 $2,000 $3,000 $4,000 $5,000

Source: OIG 

3 
  

     

  

   

     

   

   

  

  

   

   

  

   

   

   

      

U.S. Department of Commerce Final Report No. OIG-11-005-A
 

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Monitoring such a large and diverse portfolio of awards will require significant attention. NTIA 

has been developing a proactive approach to monitoring BTOP awards while concurrently 

accepting, reviewing, and announcing additional awards. With the announcement of the last 

awards, NTIA’s focus will be on monitoring its portfolio of awards. Therefore, NTIA has taken 

an aggressive posture in establishing a post-award program that will involve several elements: 

1. Establishing

post award team,

developing

systems, policies,

and procedures.

2. Issuing grants

and providing

award packages

to recipients

3. Providing

training and

technical support

to recipients

4. Monitoring

special award

conditions and

reporting.

5. Performing

desk reviews

and site visits.

1.	 Establishing post award team and developing systems/policies/procedures. NTIA dedicated 

staff to serve as federal program officers (FPOs) to monitor BTOP grants, developed several 

guidance manuals, provided training to guide the FPOs in their oversight efforts, and 

implemented two systems to monitor and oversee grant projects. We will discuss NTIA’s 

efforts further in our second finding. 

2.	 Issuing grants and providing award packages to recipients. Each recipient received a 

welcome package containing an overview of BTOP, guidance on the next steps to be taken, 

and identification of their assigned FPO. These welcome packages were followed by 

individual calls from the FPOs, orientation conferences, and “drop-in” conference calls. 

3.	 Providing training and technical support to recipients. NTIA personnel have actively 

supported BTOP recipients by providing them with training and technical assistance, 

including a post-award workshop and multiple webinars on such topics as compliance, 

procurement, and program performance reporting. 

4.	 Monitoring special award conditions and recipient reporting. BTOP maintains a spreadsheet 

to monitor recipients’ special award conditions (SACs) relating to such issues as 

environmental compliance and accounting system verifications that must be met, and 

identified a series of progress reports that must be provided. We will discuss SACs further in 

finding II.E. 

5.	 Performing desk reviews and site visits. Site visits and desk reviews (reviews by FPOs of 

recipient-submitted performance and financial reports and other data available to the program 

office), will be the two principal tools NTIA will use to monitor the progress of recipients. 

Under the Recovery Act, inspectors general are expected to be proactive in their oversight and 

focus on prevention. To meet this expectation, we provided guidance to NTIA on establishing 

appropriate internal controls; we also participated in the workshops supporting the first and 

second funding rounds, briefing potential applicants about the Recovery Act’s accountability and 

transparency requirements; and in a post-award workshop, briefing recipients on pertinent issues 

and on fraud prevention. 

In our initial report on BTOP, National Telecommunications and Information Administration: 

NTIA Must Continue to Improve Its Program Management and Pre-Award Process for Its 

Broadband Grants Program (April 2010), we stated that NTIA needed to ensure sufficient staff 

to run the program; improve the documentation of policies, procedures, and management 

decisions; overcome system challenges encountered in the first round; and closely monitor 

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Office of Inspector General November 4, 2010 

compliance with environmental laws during post-award. NTIA has been responsive to these 

recommendations. 

In April 2010, we continued our oversight by initiating this audit of NTIA’s post-award efforts to 

implement systems, develop policies and procedures, and establish an oversight organization. 

Appendix A of this report outlines the objectives, scope, and methodology we followed for the 

review. OIG is also working with NTIA to develop a program-specific audit guide for BTOP 

award recipients that are for-profit entities. 

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Office of Inspector General November 4, 2010 

Findings and Recommendations 

I. Uncertain Funding Poses a Challenge to NTIA’s Oversight of Broadband Grants 

Recipients of infrastructure project funding have up to 2 years to substantially complete projects 

and up to 3 years to fully complete projects. Therefore, some projects are not expected to be 

complete until 2013, and NTIA will need to provide continued oversight of the grants for several 

years after they are issued. However, the Recovery Act does not provide budget authority for 

BTOP-funded projects beyond the September 30, 2010, deadline for issuing funds. NTIA 

requested approximately $24 million in funding for grant monitoring from Congress for FY 

2011, but a budget was not approved; therefore, NTIA is operating under a continuing resolution 

until December 3, 2010. 

The continuing resolution did not provide funds to operate BTOP. Instead, NTIA is operating the 

program through a deficiency apportionment authorized by the Office of Management and 

Budget. While this apportionment does not provide additional dollars beyond what is approved 

in the continuing resolution, it does enable NTIA, in its judgment, to spend at a rate that will 

allow the program to be maintained through December 3. However, NTIA is concerned that 

without sufficient funding, its ability to effectively administer the program beyond that date will 

be threatened. 

The uncertainty regarding oversight funding for FY 2011 raises significant concerns about the 

adequacy of future BTOP oversight. Without sufficient resources, NTIA will be challenged to 

monitor its diverse awards, and it will also be unable to provide the comprehensive oversight 

program that it has developed to monitor BTOP. Moreover, NTIA has invested time and effort in 

training BTOP staff, developing and implementing the tools needed to perform grant monitoring, 

and training and providing grant implementation guidance to grantees. The potential effects of 

reduced award monitoring include a decreased capability to minimize waste, fraud, and abuse. 

Reduced monitoring may also result in a lessened ability to ensure that the grant projects 

successfully meet program objectives. NTIA will have to prioritize its future oversight activities 

carefully so that long-term program monitoring does not suffer. 

In its August 2010 report Recovery Act: Further Opportunities Exist to Strengthen Oversight of 

Broadband Stimulus Program, The U.S. Government Accountability Office (GAO) 

recommended that to ensure effective monitoring and oversight of BTOP, NTIA should 

incorporate into its monitoring plans ways to address the variability in funding levels for postaward oversight beyond September 30, 2010. 3 We concurred with GAO and recommended that 

NTIA develop alternative oversight approaches based on different potential funding levels; 

NTIA will also need to modify its documents outlining its monitoring and oversight approaches 

to reflect the funding levels it eventually receives. 

In its FY10 BTOP Monitoring Plan, NTIA defined a comprehensive award oversight approach 

that involves monitoring, program reporting, and technical assistance. NTIA officials stated that 

their ability to implement the plan is contingent upon receiving the funds it requested for FY 

3 GAO, August 2010. Recovery Act: Further Opportunities Exist to Strengthen Oversight of Broadband Stimulus 

Programs, GAO-10-823, p. 31. 

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Office of Inspector General November 4, 2010 

2011. In its October 22, 2010, response (see appendix B) to our draft report, NTIA stated that it 

is now determining the feasibility of operating at the lower funding levels proposed by 

congressional appropriations committees prior to the enactment of the continuing resolution. 

Recommendations 

We recommend that NTIA 

1.	 develop alternative approaches to monitoring and oversight based on different funding 

levels; and 

2.	 revise its monitoring plan and FPO and recipient handbooks to reflect the steps to be 

performed with the funding received. 

II. Post-Award Monitoring and Oversight Need to Be Strengthened 

After September 30, 2010, NTIA will be responsible for monitoring a portfolio of grant awards 

that is larger and more diverse than it has previously overseen. NTIA has made significant 

progress in establishing systems to facilitate grants administration and management; developing 

comprehensive policies, procedures, and processes to oversee BTOP; and establishing a program 

office to monitor and manage the BTOP grant awards. However, we identified several areas 

where NTIA should strengthen its grant monitoring and oversight: 

•	 memorandums of understanding (MOUs) with other Commerce bureaus supporting 

NTIA’s administration and oversight of the agreements; 

•	 vendor management oversight; 

•	 post-award policies and procedures; 

•	 internal controls over professional development and training; and 

•	 monitoring of grant recipients. 

A. Memorandums of Understanding with Commerce Agencies Are Unclear, and NTIA Has 

Not Been Overseeing the Agreements Carefully 

Lacking a grants management office of its own, NTIA entered into a $4.15 million MOU with 

the National Oceanic and Atmospheric Administration (NOAA) and a $2.23 million service level 

agreement with the National Institute of Standards and Technology (NIST) to provide grants 

administration and management services for BTOP. NOAA manages infrastructure grants while 

NIST manages PCC, SBA, and State Broadband Data and Development (mapping) grants. 

Responsibilities of and relationships between these parties must be clearly understood, as only 

the grants officers at NOAA and NIST can approve or issue amendments to grant awards. 

We reviewed the two interagency agreements. The MOU details the roles and responsibilities of 

each agency; however, the service level agreement for NIST describes the relationship with and 

obligations to NTIA in more general terms than the agreement with NOAA. Specifically, we 

found that the agreement with NIST does not specify the deliverables it is expected to produce 

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Office of Inspector General November 4, 2010 

for NTIA. Additionally, the service level agreement does not clearly detail roles and 

responsibilities of each agency, nor does it state any method for measuring performance under 

the agreement. 

The Commerce Acquisition Manual states that for interagency agreements, “the parties must 

collaborate effectively in order to establish a strategy to apply acquisition processes and tools in 

the most effective manner possible.”4

 Therefore, it is essential that interagency agreements 

outlining roles and responsibilities (e.g., MOUs and service level agreements) are clear to the 

parties and that effective oversight of the agreements is performed. 

While the MOU with NOAA more clearly documents the roles and responsibilities of the parties, 

NTIA expressed frustration with the difficulties it encountered obtaining financial information 

from the NOAA grants office. NTIA staff indicated that they did not receive sufficient 

accounting information on time spent and work generated by grants office staff processing 

grants. NTIA uses this accounting information to track the amounts it spends on staffing and to 

plan for funding from the grants management office over the remainder of the program lifecycle. 

Without adequate accounting information, NTIA management cannot effectively oversee the 

funds spent to date, nor will they be able to provide justification for funding requests in future 

years. 

These issues are of particular concern because NTIA has not demonstrated rigorous monitoring 

of the agreements. For example, the BTOP program office is ultimately responsible for 

monitoring agreements with other federal agencies. However, as of August 4, 2010, the BTOP 

program office stated that it had only recently received cost information on the services provided 

by the NIST grants office. Also, we were told that NTIA does not have an oversight plan for the 

agreements with these other federal agencies. NTIA officials told us that the level of oversight 

was limited because they did not consider implementation of the agreements to be a high-risk 

area. Only after the agencies have reached an understanding on what the agreements represent, 

and after NTIA has performed a thorough analysis of NOAA’s and NIST’s charges, can NTIA 

management be certain that the best work is being done with the limited administrative funds 

available. 

While NTIA’s payments to NIST and NOAA for grants management services represent a small 

portion of program costs, the program must have the benefit of thorough oversight. Moreover, 

the relationships with the grants offices need to be addressed, as most awards are expected to be 

open for 3 years, and mapping grants for 5 years, beyond September 30, 2010. 

Recommendations 

We recommend that NTIA 

1.	 ensure that roles, responsibilities, and deliverables are clearly defined in interagency 

agreements; and 

2.	 develop and follow a plan to oversee services performed by other federal agencies and on 

behalf of NTIA. 

4 U.S. Department of Commerce, April 2010. Commerce Acquisition Manual.§ 1317.570, p.10. 

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B. NTIA Staff Members Have Not Received Sufficient Technical Knowledge Transfer 

Documentation and Training to Effectively Maintain Contractor Provided IT Systems 

BTOP includes both experienced and first-time federal fund recipients, among them for-profit 

entities, state and local governments, and non-profit institutions. Therefore, information systems 

are essential for effective communication, receipt and maintenance of grant recipient compliance 

data, and documentation. In addition, accountability and transparency requirements prescribed 

by the Recovery Act further stress the importance of efficient and effective information systems. 

NTIA contracted with Booz Allen Hamilton (BAH) through the Department of Interior to 

provide comprehensive assistance in implementing the program, including engaging BAH and its 

subcontractors to develop and implement new applications for monitoring and overseeing grant 

projects: 

•	 The Management Dashboard Tool (MDT), a commercial off-the-shelf application, was 

delivered by BAH through a third-party vendor as a part of the contract to help NTIA 

implement BTOP. MDT was designed to provide summary-level information about 

awarded grants for NTIA senior management and program staff. The data include maps 

navigable by state; maps viewable by recipient type, goal area, dollar value, and grant 

received; and data related to quarterly budget expenditures and drawdown rates. MDT 

was implemented on March 15, 2010. 

•	 The Post-Award Monitoring (PAM) system was developed to provide a workspace for 

submitting and reviewing recipient reports, housing documents for most recipient data, 

and storing program documentation. The system enables collaboration between grant 

recipients and grants officers. PAM was deployed on July 9, 2010. 

MDT is currently being hosted and supported by the third-party vendor contracted through BAH. 

Any changes or upgrades to the database, application, and supporting infrastructure are made by 

the vendor. There are plans to move the hosting of MDT over to the National Technical 

Information Service (NTIS) in October 2010. PAM is currently being hosted by NTIS; therefore, 

NTIS performs the maintenance and support of the system’s infrastructure. Specifically, NTIS 

manages and monitors BAH’s access to the PAM infrastructure but does not make changes to the 

application code or database objects and structure. 

It is still too early in its deployment to assess whether PAM will effectively provide the 

environment envisioned by NTIA to manage its estimated workload. PAM was used for the first 

time to accept and process July 31, 2010, required reports. The degree of accuracy and timeliness 

of reporting this information should give some indication of the system’s effectiveness and 

reliability. Although MDT was deployed in March, it could not provide complete information in 

its reports because a portion of its data was to come from PAM. Therefore, it is also too early to 

draw conclusions about MDT’s success as a reporting tool. 

BAH served as the system integrator for MDT and as both developer and system integrator for 

PAM. NTIA purchased licenses for both applications; however, it only owns the source code for 

PAM. But as neither NTIA nor NTIS IT staff actually developed the primary application source 

code or its customizations, they do not have intimate working knowledge of the application or its 

database construct. Documentation such as network/infrastructure schematics, installation 

guides, hardware and software requirements, functional diagrams, and release notes were 

provided to NTIA for both applications. However, no application code reviews were conducted 

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Office of Inspector General November 4, 2010 

by NTIA or NTIS, and BAH has not provided technical programming documentation that could 

enable a cohesive knowledge transfer. This being the case, if BAH finds it necessary to replace 

or reassign key technical staff to other engagements (as often happens with consulting firms), or 

for any other reason cannot fulfill the entire contract term, it could adversely affect BTOP. 

Specifically, further development or even troubleshooting of production problems for the 

applications might prove difficult for NTIA without substantial input from BAH. 

This transfer of IT knowledge is of particular concern because NTIA is a relatively small-staffed 

agency charged with the execution of a major program, and it has relied heavily on the expertise 

and capabilities of BAH in virtually every aspect of BTOP. As a result of this engagement, BAH 

has acquired considerable institutional knowledge, which has worked well for NTIA throughout 

the program’s implementation. However, because BAH personnel are so heavily involved in the 

program and significantly exceed the number of NTIA staff, it does not appear likely or possible 

that a complete knowledge transfer can successfully occur. 

Recommendations 

We recommend that NTIA 

1.	 evaluate PAM and MDT once the systems are processing reports for all award recipients 

to ensure that both have been implemented in accordance with the business and 

functional requirements of the contract; and 

2.	 define and document an overall program transition plan to include specific provisions for 

a technical knowledge transfer from BAH to the NTIA and NTIS staff, as well as hold 

knowledge transfer sessions on a periodic basis. 

C. While NTIA Has Made Progress in Documenting BTOP Policies and Procedures, 

Additional Steps Should Be Taken 

GAO’s Internal Control Standards state that “...all transactions and other significant events need 

to be clearly documented, and the documentation should be readily available for examination.”5 

As BTOP is a new program, NTIA has had to develop and document all new procedures. While 

we acknowledge NTIA has taken significant steps in the development process, more remains to 

be done. 

For post-award, NTIA developed the BTOP Post-Award Concept of Operations (CONOPS), 

which outlines the organizational structure of the BTOP office, key roles and responsibilities for 

each position in the organization, and the overall post-award monitoring process. CONOPS 

serves as the basis for the Federal Program Officer [FPO] Handbook Volume I: Post-Award 

Procedures for Grants, Management, Reporting and Compliance, the BTOP Recipient 

Handbook, and the FY10 BTOP Monitoring Plan (see table 3). 

5 GAO, November 1999. Standards for Internal Control in the Federal Government. GAO/AIMD-00-21.3.1, p. 15. 

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Table 3. BTOP Documentation on Post-Award Policies and 

Procedures 

CONOPS 

Title 

March 23, 

2010 

Release 

Date 

NTIA staff 

Target 

Group 

Basis for conducting BTOP 

Describes roles and responsibilities of federal staff 

Brief Description 

FPO 

Handbook 

June 9, 

2010 NTIA staff 

Describes roles and responsibilities of FPOs 

Outlines the relationship between FPOs and other 

staff (grants officers, contractors, other federal staff) 

Describes business processes for conducting BTOP 

work 

Describes systems used for managing work 

BTOP 

Recipient 

Handbook 

June 23, 

2010 

BTOP 

grant 

recipients 

Describes responsibilities of recipients of federal 

grants 

Describes responsibilities under Recovery Act 

Outlines procedures for fulfilling requirements under 

federal grant agreements 

Describes systems used for reporting and drawing 

down funds 

FY10 BTOP 

Monitoring 

Plan 

July 14, 

2010 NTIA staff 

Outlines the concepts for monitoring grants 

Describes the method of review of grants 

Describes the levels of monitoring for each grant, 

based on risk 

Source: OIG 

Our review of CONOPS found that it provides a reasonable basis for outlining the 

implementation and monitoring of BTOP awards. Also, the handbooks for FPOs and recipients 

provide useful guidance to their audiences. However, several areas of the monitoring plan need 

improvement. Specifically, the plan 

•	 calls for the use of review templates to guide FPOs but does not include examples of the 

templates; 

•	 does not specify the method of documentation that will be developed to document 

grantees’ issues and track progress addressing these issues; 

•	 does not describe how the data will be used to identify potential trends among recipients 

so that timely corrective actions can be taken; 

•	 does not provide guidance on what the FPO or grants officer should do if fraud, waste, or 

abuse is detected (nor does it specify any consequences if corrective action plans are not 

followed by recipients); and 

•	 does not identify how federal staff should monitor the internal controls of recipients to 

assure the prescribed processes are being followed. 

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We communicated our concerns with BTOP officials in an August 4, 2010, meeting to discuss 

potential findings. NTIA stated that the monitoring plan was a high-level document and that 

more detail would be added to the FPO Handbook; we were told that NTIA would address our 

concerns and use results from its initial post-award reviews to strengthen the FPO Handbook. 

Recommendation 

We recommend that NTIA 

1.	 revise post-award guidance (e.g., the FPO Handbook) to more comprehensively define 

the procedures that FPOs should follow in the oversight of BTOP grant awards. 

D. Internal Controls over Professional Development and Training Are Not Robust 

An adequately trained federal program office staff is essential to ensure consistent, equitable, and 

transparent monitoring of grant recipients. GAO’s Standards for Internal Control in the Federal 

Government states that management needs to identify appropriate knowledge and skills needed 

for various jobs and to provide needed training.6 

To meet this challenge, effective internal controls are needed to plan and track training. NTIA 

has extensively used webinars and conference workshops to train federal program office staff 

and grant recipients, and has also arranged for vendor-provided on-site training on grants 

management issues. While NTIA has provided ample training to federal personnel as well as 

recipients, NTIA should strengthen its internal controls over professional development and 

training by 

•	 formalizing its process for identifying the professional development and training needs of 

its staff, and 

•	 improving its process for verifying attendance at training events and tracking the training 

that has been taken. 

We found that FPOs do not have development plans that articulate the training and/or other 

development activities that they should take to meet certain core competencies. Therefore, 

limited confidence can be placed on whether future and ongoing training needs for individuals 

are appropriately identified. 

In order to verify appropriate training has been completed, Department of Commerce Human 

Resources Bulletin Number 076 on training policy requires that each bureau maintain and report 

accurate training data. NTIA utilizes a spreadsheet to monitor training; however, officials were 

unable to provide OIG with sufficient evidence of training attended and completed by NTIA 

staff. NTIA’s training tracker provided information related to dates, subject, facilitator, materials, 

and location, but did not record which staff members attended and successfully completed 

training. 

6

 GAO, November 1999. Standards for Internal Control in the Federal Government. GAO/AIMD-00-21.3.1, p.7-8. 

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Recommendations 

We recommend that NTIA 

1. strengthen internal controls to ensure training is identified, taken, recorded, and tracked 

for FPO staff supporting BTOP award monitoring. 

E. Some Aspects of BTOP Award Monitoring Are Not Being Completed in a Timely or 

Efficient Manner 

Monitoring grantee performance helps ensure that the goals of grants are reached and required 

deliverables are completed.7 Ineffective grant monitoring increases the risk of untimely 

expenditures and may also result in an increased risk of fraud. 

Awards made between December 2009 and April 2010 have provided NTIA with opportunities 

to implement several of its monitoring processes, to include 

•	 evaluating whether recipients have achieved satisfactory progress against special award 

conditions (e.g., accounting system verifications and environmental assessments); 

•	 ensuring that financial, performance, and Recovery Act reporting requirements are met; 

and 

•	 performing initial desk review audits to assess the risks associated with a particular 

recipient. 

Grant award SACs are used to either provide guidance to recipients or require specific actions 

for complying with the grant award. In some cases, SACs limit or prohibit other actions until the 

award condition is complete.8 

We randomly selected 40 of 82—approximately 49 percent—of the first-round BTOP grants to 

test whether SAC documentation, including environmental assessments, was submitted timely 

and properly approved. While we found a few instances where documentation was not submitted 

in a timely manner, the overall monitoring of SAC completion was sufficient. Specifically, 

environmental assessments were submitted on time, extensions granted were justified, and 

evidence of a thorough environmental assessment review process existed. In addition, NTIA 

closely monitored the status of required consultations and worked with the recipient to complete 

any that were outstanding. 

NTIA and its supporting grants offices review (1) Recovery Act reports that provide data on the 

types and number of jobs created, (2) financial reports that provide performance data on key 

financial indicators, and (3) program performance reports that provide data on key programmatic 

milestones and indicators. Recipients of BTOP grants are required to satisfy several reporting 

requirements that provide valuable information on performance and transparency of activities, 

and facilitate monitoring of the program. The grants officer, with NTIA support, is responsible 

for reviewing the Recovery Act and financial reports; NTIA is responsible for reviewing the 

program performance reports. A review of financial and performance progress reporting in the 

7 Domestic Working Group, October 2005. Guide to Opportunities for Improving Grant Accountability. p.25. 8 BTOP Recipient Handbook FY 2010. June 23, 2010. p. 17. 

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same sample of 40 awards found that 5 of the files (13 percent) contained deficiencies in 

reporting. Of those, one was more than 15 days overdue, two were fewer than 15 days overdue, 

and two others did not contain the required signature of the authorizing official. We did not 

review Recovery Act reporting requirements as they are being covered by a separate OIG 

review. 

Monitoring activities such as desk reviews and site visits will generate voluminous data about the 

progress of recipients in completing grant projects, concerns NTIA identifies about award 

implementation, and corrective actions to address noted deficiencies. For its first set of desk 

reviews, performed in July and August 2010, NTIA placed the results on a shared network drive. 

However, this approach does not facilitate the efficient aggregation and manipulation of 

information needed for program-wide analyses. We were told that PDFs that can be queried 

could have collected the data more easily, but were not used for the first set of reviews due to 

schedule constraints. NTIA officials noted that their current approach has limitations and that 

they will be looking for ways to improve the process in the future. 

Recommendations 

We recommend that NTIA 

1.	 continue to closely monitor the completion of SACs; 

2.	 work with NIST and NOAA grants offices to ensure that reports are received timely; and 

3.	 take steps to more efficiently use the data collected in monitoring efforts when analyzing 

recipient performance and tracking any corrective actions. 

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Summary of Agency Comments and OIG Response 

In responding to our draft report, the Assistant Secretary for Communications and Information 

summarized the steps NTIA is taking to address our recommendations. Where appropriate, we 

modified this final report to incorporate NTIA’s comments. 

NTIA notes that it has overcome a number of challenges in implementing the program, but 

admits that improvements are needed for the program to be more effective. In its response, NTIA 

discusses the significant actions it has taken to establish a comprehensive oversight framework, 

details its efforts to continue the program without an appropriation, and notes the need to secure 

funding after December 3, 2010. The response cautions that a lack of funding would adversely 

affect the technical assistance and monitoring NTIA feels is essential to effectively monitor its 

grant awards. 

We share NTIA’s concern about the impact of inadequate funding to oversee the grant awards, 

specifically its abilities to protect against waste, fraud, and abuse and to ensure program 

objectives are met. Therefore, we updated our finding on the challenge that uncertain funding 

poses to NTIA’s oversight of broadband grants to reflect the current status of program funding 

and the importance of securing funding to administer BTOP. 

Furthermore, NTIA agrees that strengthening its post-award monitoring and oversight will be 

critical to the successful implementation of BTOP projects. NTIA does note that hiring 

additional staff to enable a technology knowledge transfer from BAH to NTIA and NTIS staff 

would be impractical. However, we did not intend to recommend that NTIA hire more personnel, 

but that NTIA should ensure current staff obtain the technical knowledge necessary to continue 

IT development and support in the event BAH was unable to provide it. Therefore, we reaffirm 

our recommendation that NTIA address the current knowledge and skills gaps that exist. 

We encourage NTIA to work with the Department, the Office of Management and Budget, and 

Congress to secure funding to oversee the BTOP grant awards. Also, we are pleased that NTIA 

has begun to improve the administration of the program. We look forward to reviewing the 

NTIA action plan that will address these concerns in more detail. 

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Appendix A: Objectives, Scope, and Methodology 

We initiated this audit in April 2010 because we recognized that NTIA faced significant 

challenges in performing post-award activities while concurrently conducting a second round of 

making broadband awards. The objectives of the audit include (1) assessing the capabilities of 

the systems that NTIA will use to monitor recipients of BTOP awards; (2) determining whether 

NTIA is establishing post-award operations and processes to facilitate the effective execution of 

BTOP; and (3) evaluating whether NTIA is taking appropriate steps to implement a program 

office to perform the essential post-award oversight and monitoring of BTOP recipients, 

including post September 30, 2010. 

Although it presents information on grant awards through September 30, 2010 , this review 

covers only post-award activities for BTOP awards issued between December 2009 and April 

2010. We obtained an understanding of internal controls for the BTOP post-award process by 

•	 interviewing NTIA, BAH, and NTIS IT representatives to gain an understanding of the 

key systems’ functions and key IT controls; 

•	 interviewing BTOP officials to obtain information on NTIA’s organization structure and 

initial post-award efforts; 

•	 attending a post-award workshop and multiple webinars on BTOP compliance issues 

provided to program office personnel and recipients; 

•	 reviewing manuals providing guidance to recipients of awards and federal program staff 

on and implementing and monitoring post-award activities; 

•	 attending BTOP all-hands staff meetings and quarterly meetings with BAH; and 

•	 meeting with NTIA officials to discuss BTOP resources for post-award, including 

resources post September 30, 2010. 

To assess the capabilities of the systems that NTIA uses to monitor recipients of BTOP awards, 

we performed the following: 

•	 reviewed the BAH contract and supporting IT specific modifications; 

•	 attended system functionality demonstrations for both MDT and PAM (pre- and postproduction for PAM) to understand the systems’ functionality; 

•	 obtained and reviewed documentation related to system certification and accreditation for 

both MDT and PAM; documentation included but was not limited to security plans, risk 

assessments, vulnerability assessments, and plans of action; and 

•	 obtained and reviewed for reasonableness the service level agreement between NTIA and 

Xservices (BAH’s hosting partner) and the MOU between NTIA and NTIS. 

We reviewed BTOP compliance with applicable provisions of pertinent laws and regulations, 

including: 

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•	 The American Recovery and Reinvestment Act of 2009 

•	 The July 9, 2010, Notice of Funds Availability for the Broadband Initiative Program and 

the Broadband Technology Opportunities Program 

•	 Department of Commerce Updated Interim Grants Manual 

•	 The National Environmental Policy Act of 1969 

•	 National Historic Preservation Act 

While we identify and report on internal controls deficiencies, no incidents of fraud, illegal acts, 

violations, or abuse were detected during our audit. 

To test NTIA’s efforts to monitor recipient compliance with special award conditions and 

reporting requirements relating to financial and performance progress reporting, we randomly 

selected a sample of 40 awards, including infrastructure, PCC, and SBA projects. In completing 

our reviews, we 

•	 verified form CD-450s had been completed; 

•	 determined whether actionable SACs were completed appropriately; 

•	 verified amendments were issued and properly approved for completed special award 

conditions, where applicable; and 

•	 tested quarterly performance and financial reports for completion, accuracy, and timely 

submission. 

With regards to data reliability, most computer-generated information was used for background 

purposes. In testing relating to BTOP oversight of special award conditions and report 

monitoring, we assessed the reliability of Grants Online by interviewing program officials 

knowledgeable about the system and its data and reviewing related audit reports, including the 

Department of Commerce’s FY 2009 Performance and Accountability Report, which covered 

grant processing at NOAA. We determined that the data were sufficiently reliable for purposes 

of this report. For our testing at NIST, we reviewed paper files. 

Our work was performed in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain sufficient, appropriate 

evidence that provides a reasonable basis for our findings and conclusions based on our audit 

objectives. We believe that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. 

We conducted our review from April through August 2010 under the authority of the Inspector 

General Act of 1978 and Department Organization Order 10-13. We performed our work at the 

Department of Commerce headquarters in Washington D.C.; at NIST in Gaithersburg, Maryland; 

and at NOAA in Silver Spring, Maryland. 

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Appendix B: Agency Response to Draft Report 

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