RECOVERY ACT

USDA Should Include 

Broadband Program's 

Impact in Annual 

Performance Reports

Report to Congressional Requesters

June 2014

GAO-14-511

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-511, a report to 

congressional requesters

June 2014

RECOVERY ACT

USDA Should Include Broadband Program's Impact in 

Annual Performance 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 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.

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.

View GAO-14-511. For more information, 

contact Mark L. Goldstein at (202) 512-2834 

or goldsteinm@gao.gov.
Page i GAO-14-511 Recovery Act

Letter 1

Background 4

RUS’s Oversight Indicates Most Projects Will Be Completed on 

Time and As Approved but Faces Challenges Given the 

Program’s Scope 10

RUS Collects BIP’s Performance Information but Provides Limited 

Reporting of Program’s Impact 18

Conclusion 22

Recommendation 22

Agency Comments 22

Appendix I: Objectives, Scope, and Methodology 24

Appendix II: GAO Contact and Staff Acknowledgments 27

Tables

Table 1: Summary of Rural Utilities Service’s (RUS) Broadband 

Grant and Loan Programs 5

Table 2: Broadband Initiatives Program Infrastructure Projects, 

2010 to 2014 7

Table 3: BIP Infrastructure Project Status, as of March 31, 2014 12

Figures

Figure 1: Phases of Broadband Initiatives Program Project 

Implementation 9

Figure 2: BIP’s Oversight Activities by Project Phase and RUS 

Staff 11

Contents
Page ii GAO-14-511 Recovery Act

Abbreviations

BCAS Broadband Collection and Analysis System

BIP Broadband Initiatives Program 

CRS Congressional Research Service

GFR general field representative

OIG Office of Inspector General

OMB Office of Management and Budget

Recovery Act American Recovery and Reinvestment Act of 2009

RUS Rural Utilities Service

USDA U.S. Department of Agriculture

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Page 1 GAO-14-511 Recovery Act

441 G St. N.W.

Washington, DC 20548

June 17, 2014

The Honorable Fred Upton

Chairman

Committee on Energy and Commerce

House of Representatives

The Honorable Tim Murphy

Chairman

Subcommittee on Oversight and Investigations

Committee on Energy and Commerce

House of Representatives

The Honorable Greg Walden

Chairman

Subcommittee on Communications and Technology

Committee on Energy and Commerce

House of Representatives

Access to affordable broadband telecommunications1

To extend access to broadband throughout the United States, as well as 

to stimulate the economy and create jobs, Congress appropriated $7.2 

billion for broadband programs under the American Recovery and 

is increasingly 

viewed as vital to long-term economic growth and improved quality of life, 

just as electricity, telephone service, and the Interstate Highway System 

filled similar roles in previous generations. Sharing large amounts of 

information at ever greater speeds increases productivity, facilitates 

commerce, and drives innovation. Furthermore, broadband can improve 

citizens’ quality of life. For example, broadband technology makes it 

possible for a patient to visit a local clinic and receive medical attention 

from specialists hundreds of miles away or for a student to access 

information not available from the local library. Broadband is particularly 

critical to provide advanced communications to remote communities and 

offer rural Americans new ways to participate in our economy and society.

 1

The term broadband commonly refers to high-speed Internet access. GAO, 

Telecommunications: Broadband Deployment Is Extensive throughout the United States, 

but It Is Difficult to Assess the Extent of Deployment Gaps in Rural Areas, GAO-06-426

(Washington, D.C.: May 5, 2006). 
Page 2 GAO-14-511 Recovery Act

Reinvestment Act of 2009 (Recovery Act).2 This appropriation 

represented an unprecedented level of federal investment in expanding 

broadband. The $7.2 billion included $2.5 billion for the Broadband 

Initiatives Program (BIP) of the U.S. Department of Agriculture’s (USDA) 

Rural Utilities Service (RUS), to provide loans, grants, and loan and grant 

combinations for broadband infrastructure projects primarily in rural 

areas.3 In 2010, RUS awarded over $3.5 billion to awardees for 320 BIP 

projects, primarily for projects expected to provide broadband service 

directly to end users in rural areas, including critical community facilities 

such as hospitals, libraries, and schools.4

This review responds to your request that we assess the results and

impact of BIP to assist Congress in its ongoing oversight of Recovery Act 

broadband programs. This report also builds on our previous work on 

BIP.5

 2

Pub. L. No. 111-5, 123 Stat. 115 (2009).

In this report, we address: (1) how RUS ensures that funded 

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. The information provided in this report also responds to a 

3

Recovery Act, div. A, title I, 123 Stat., 118-119. The Recovery Act also included $4.7 

billion for the Department of Commerce’s National Telecommunications and Information 

Administration to create the Broadband Technology Opportunities Program to expand 

broadband services.

4

Because of provisions in the Federal Credit Reform Act of 1990, 2 U.S.C. § 661a(5)(F), 

RUS may award grants and loans that exceed its budgetary authority. Because loans, 

unlike grants, must be repaid to the government with interest, RUS is required to account 

for the budgetary impact of loans by estimating the expected net loss (or gain) of loans. 

This net amount, which is estimated by calculating the net present value of all cash flows 

to and from RUS over the lifetime of the loans, is referred to as the subsidy cost of the 

loans. RUS must charge the cost of any grants plus the subsidy cost of loans against its 

budget authority.

5

GAO, Recovery Act: Broadband Programs Are Ongoing, and Agencies’ Efforts Would 

Benefit from Improved Data Quality, GAO-12-937 (Washington, D.C.: Sept. 14, 2012); 

Recovery Act: Broadband Program Awards and Risks to Oversight, GAO-11-371T

(Washington, D.C.: Feb. 10, 2011); Recovery Act: Further Opportunities Exist to 

Strengthen Oversight of Broadband Stimulus Programs, GAO-10-823 (Washington, D.C.: 

Aug. 4, 2010); and Recovery Act: Agencies Are Addressing Broadband Program 

Challenges, but Actions Are Needed to Improve Implementation, GAO-10-80

(Washington, D.C.: Nov. 16, 2009). 
Page 3 GAO-14-511 Recovery Act

recurring mandate in the Recovery Act that we review bimonthly, the use 

of Recovery Act funds by recipients.6

To determine what actions RUS is taking to ensure that funded projects 

are completed within required time frames and as approved, including 

within designated service areas, we reviewed documents on RUS’s 

monitoring policies and procedures and conducted interviews with RUS 

officials who oversee loan specialists, engineers, and general field 

representatives (GFR) who have BIP-related duties. We collected data 

from RUS on all BIP infrastructure projects, including completion status 

and disbursement of funds as of March 31, 2014. We assessed the 

reliability of this data by interviewing RUS officials about their databases 

and collection practices and reviewing relevant documentation, including 

guidance, descriptions of internal controls, and USDA Office of Inspector 

General (OIG) reviews. Based on this information, we determined that the 

data provided by RUS were sufficiently reliable for our reporting 

purposes. To further identify RUS’s oversight actions, we selected seven 

(six ongoing and one completed) BIP infrastructure projects with 

approved service area locations throughout the United States based on 

criteria such as location, percentage of funds disbursed, and total award 

size. We selected ongoing projects to understand BIP’s current oversight 

activities and one completed project in order to understand project 

impact. For each project we selected, we reviewed documents provided 

by RUS such as applications, award files, and quarterly visit reports. We 

also interviewed the RUS GFRs responsible for overseeing the projects 

and representatives from the awardees.7

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 reports and status reports, and USDA’s annual performance 

plans and reports. We also reviewed previous GAO and USDA OIG 

reports on BIP performance goals and measures, including previous 

recommendations. To determine RUS’s policies and procedures for 

collecting and reporting performance information and the agency’s 

 6

Recovery Act, div. A, title IX, § 901, 123 Stat.,191. Updates on GAO’s oversight of 

Recovery Act funds can be found at: http://gao.gov/recovery. 

7

We spoke to representatives from five of the seven awardees we selected. The 

remaining two awardees did not respond to our requests to be interviewed. 
Page 4 GAO-14-511 Recovery Act

actions in response to recommendations made by USDA’s OIG, we 

interviewed officials from RUS and USDA OIG. We also reviewed RUS’s 

data collection policies and procedures and spoke with GFRs from the 

sample of seven projects, and awardee representatives from five of the 

seven, in regard to how they report, collect, and verify performance 

information. We also reviewed applicable criteria related to agency 

performance measurement and reporting, such as reporting provisions in 

the Recovery Act, associated Office of Management and Budget (OMB) 

guidance, and the GPRA Modernization Act of 2010,8 which updated the 

Government Performance and Results Act of 1993.9

We conducted this performance audit from August 2013 to June 2014 in 

accordance with generally accepted government auditing standards. 

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

sufficient, appropriate evidence to provide 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.

Rural areas tend to lag behind urban and suburban areas in broadband 

deployment. The provision of broadband Internet networks and services 

in the United States is generally privately financed. Rural areas, though, 

can have conditions that increase the cost of broadband deployment—

such as remote areas with challenging terrain like mountains, which 

increase construction costs—or conditions that make it difficult to recoup 

deployment costs—such as relatively low population densities and 

incomes. These conditions make it less likely that a private service 

provider will build out or maintain a broadband network. Low population 

density can mean fewer potential subscribers, and low-income 

populations are less likely to use broadband. Other evidence suggests 

that rural low-income households are less likely to use broadband than 

metropolitan low-income households are.

However, because of broadband’s perceived economic and social 

benefits, several federal programs aim to encourage its deployment, and 

the Recovery Act represented an unprecedented investment in this area. 

 8

Pub. L. No. 111-352, 124 Stat. 3866 (2011). 

9

Pub. L. No. 103-62, 107 Stat. 285 (1993). 

Background
Page 5 GAO-14-511 Recovery Act

To extend access to broadband and therefore increase rural economic 

opportunity, RUS finances broadband infrastructure deployment in rural 

areas. The BIP program represented an unprecedented federal 

investment in broadband deployment in general and for RUS in particular. 

Prior to the enactment of the Recovery Act, RUS’s Rural Broadband 

Access Loan and Loan Guarantee and Community Connect programs 

were the only federal programs exclusively dedicated to deploying 

broadband infrastructure.10 Together, these programs were appropriated 

a total of $295 million in the past decade (See table 1).11

Table 1: Summary of Rural Utilities Service’s (RUS) Broadband Grant and Loan Programs 

The $2.5 billion 

appropriated to BIP through the Recovery Act represented over eight 

times the federal investment in RUS broadband programs over the past 

decade.

RUS program Grant or loan Purpose

Total 

appropriations, 

fiscal years 

2003-2013

Rural Broadband Access

Loan and Loan Guarantee 

Program 

Loan To fund the costs of the construction, improvement, and 

acquisition of facilities and equipment for broadband 

service in eligible rural communities.

$170 milliona

Community Connect 

Grant Program

Grant To provide broadband on a community-oriented basis to 

currently unserved rural areas to foster economic growth 

and deliver enhanced health care, education, and public 

safety services.

$125 million

Broadband Initiatives 

Program (BIP)

Loan, grant, and 

loan and grant 

combinations

To deploy infrastructure in rural areas, with an emphasis 

on infrastructure projects to provide service directly to end 

users. 

$2.5 billion

Source: GAO analysis.

a

During 2009 and 2010, the Rural Broadband Access Loan and Loan Guarantee Program was in 

hiatus while RUS implemented BIP.

 10GAO has ongoing work related to the Rural Broadband Access Loan and Loan 

Guarantee program that is expected to be released in June 2014. 

11For the Rural Broadband Access Loan and Loan Guarantee Program, the direct 

appropriation covers the loan subsidy. Congress also approves a specific loan level or 

lending authority for the program, a level that has generally been much higher than the 

loan subsidy amount. For example, in fiscal year 2012, the direct appropriation was $6 

million but the lending authority was $212 million. 
Page 6 GAO-14-511 Recovery Act

BIP awardees must meet requirements set by the Recovery Act and 

RUS—such as requirements to deploy broadband infrastructure within 

and throughout service areas that are at least 75 percent rural—and 

regularly report information on progress to RUS. The Recovery Act 

authorized RUS to award grants, loans, and loan guarantees for 

broadband infrastructure in any area of the United States and mandated 

that areas to be served be at least 75 percent rural12 without sufficient 

access to high-speed broadband service to facilitate rural economic 

development.13

By September 2010, RUS awarded $3.5 billion in BIP loans, grants, and 

loan and grant combinations to 320 projects, of which about $3.4 billion 

went to 297 infrastructure projects to enable service to end users such as 

households and businesses.

The rest of the project could be located in an area that 

was not rural. As a condition of the award, RUS requires BIP awardees to 

provide service to all customers who request and subscribe to its services 

within and throughout the approved service area. In addition, RUS 

officials say they require BIP awardees to submit quarterly financial and 

performance reports for at least 5 years after the completion of BIP 

projects. These quarterly reports, called Broadband Collection and 

Analysis System (BCAS) reports, require awardees to list detailed 

financial information and the number of subscribers in the approved 

service area.

14

 12Recovery Act, div. A, title I, 123 Stat.,118-119. For purposes of BIP, rural area is “any 

area, as confirmed by the 2000 census, which is not located within (1) a city, town, or 

incorporated area that has a population of greater than 20,000 inhabitants or (2) an 

urbanized area contiguous and adjacent to a city or town that has a population of greater 

than 50,000 inhabitants. For purposes of the definition of rural area, urbanized area 

means a densely populated territory as defined by the latest decennial census. 74 Fed. 

Reg. 33104, 33109 (July 9, 2009). 

RUS solicited applications and made 

awards in two rounds, with the first round beginning in June 2009 and 

ending in April 2010, and the second round beginning in January 2010 

and ending in September 2010. BIP awards went mainly to private-sector 

entities, including for-profit companies and cooperatives, to construct 

13In the first-round Notice of Funds Availability for BIP, RUS defined broadband as 

providing a two-way data transmission with advertised speeds of at least 768 kilobits per 

second (kbps) downstream and at least 200 kbps upstream to end users. In the secondround Notice for BIP, the definition was changed to service at the rate of 5 megabits per 

second (upstream and downstream combined).

14The amount of funds awarded by RUS exceeds its appropriation because RUS can 

award and obligate funds in excess of its budget authority through the use of loans. 
Page 7 GAO-14-511 Recovery Act

“last-mile” infrastructure projects, meaning a project that provides service 

directly to end users. Specifically, of the 297 infrastructure projects 

originally awarded, 267 were awarded to for-profit companies or 

cooperatives. In addition, 285 were last-mile projects, while the remaining 

12 projects were middle-mile projects to provide a link from the Internet 

backbone to the last-mile networks of local providers that serve end 

users. RUS also funded 19 technical assistance and four satellite projects 

that accounted for approximately $103 million awarded.15

Based on information provided in the applications selected for award, in 

2010 RUS estimated that 847,239 subscribers would receive new or 

improved broadband service through BIP infrastructure projects (see 

table 2). 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. Consequently, in a BIP status report as of March 31, 2014, 

RUS updated its subscribership estimate goal to show that 728,733 

subscribers were expected to receive new or improved broadband access 

as a result of BIP funding. According to RUS officials, this new number 

was calculated by removing the subscribership estimates attributed to 

terminated projects. In addition, after the terminated projects were 

removed, RUS estimated that 61,047 fiber miles and 1,391 wireless 

access points would be installed through BIP infrastructure projects.

Table 2: Broadband Initiatives Program Infrastructure Projects, 2010 to 2014

Date Number of projects 

Total funding 

(in millions) Estimated results

Awarded as of September 2010 297 $3,425 847,239 subscribers will receive new or 

improved broadband service

Terminated as of December 2013 42 $325

Updated as of March 2014 255 $3,100 728,733 subscribers will receive new or 

improved broadband service

61,047 fiber miles will be installed

1,391 wireless access points will be installed

Source: GAO analysis of RUS data.

 15As of March 31, 2014, all satellite and technical assistance projects were completed. 

The remainder of this report will be focused on infrastructure projects. 
Page 8 GAO-14-511 Recovery Act

BIP projects have encountered delays, and in response, RUS has pushed 

back the project completion deadline to shortly before funds expire in 

September 2015. Initially, when BIP grants and loans were awarded to 

projects in 2010, RUS stated that projects should be substantially 

completed within 2 years of award and should be fully completed within 3 

years.16 However, BIP projects generally follow a process that includes 

planning/contracting, construction, funding, and reporting phases (see fig. 

1). We previously found that some BIP projects experienced delays in 

the planning and contracting phase, such as delays in environmental 

reviews, securing permitting and rights-of-way agreements, and obtaining 

RUS approval of contracts and plans.17 Projects also encountered 

challenges during construction due to severe weather or terrain and 

difficulty securing fiber due to a shortage. In response to these delays, in 

October 2011, RUS extended the BIP completion deadline to June 2015 

to ensure that awardees could be reimbursed before the appropriation is 

closed on September 30, 2015.18

 16A BIP project was required to be substantially complete no later than 2 years after award 

and was considered to be substantially complete once an awardee had received 67 

percent of its award funds. 74 Fed. Reg., 33110. 

In October 2011, RUS modified BIP 

requirements, requiring that construction commence within 180 days of 

the latter of the completion of the project’s historic preservation or 

environmental reviews, and be fully completed no later than June 30, 

2015. After September 30, 2015, the expired appropriation account will be 

closed and any balances remaining will be cancelled.

17GAO-12-937. 

18Appropriations available for definite periods close 5 years after the period of availability 

has expired as provided by 31 U.S.C. § 1552(a).
Page 9 GAO-14-511 Recovery Act

Figure 1: Phases of Broadband Initiatives Program Project Implementation

a

The construction, funding, and reporting phases occur concurrently.

To address the challenge of overseeing the approximately 300 BIP 

projects and over $3 billion in funding, RUS hired temporary staff and a 

contractor. Before BIP implementation, RUS reported having 26 GFRs in 

fiscal year 2008. RUS awarded a contract to ICF International to assist 

with reviewing technical and financial materials and developing the postaward monitoring and reporting framework. In addition, RUS hired eight 

temporary GFRs to assist with the additional BIP workload. In August 

2010, we recommended that USDA address the variability in funding 

levels for post-award oversight of BIP, given that the Recovery Act BIP 

funds could not be obligated after September 30, 2010, which ended the 

period of availability of the BIP appropriation.19 In response, RUS 

extended its contract with ICF International through fiscal year 2013.20

 19See 

However, that contract and temporary staff appointments expired at the 

end of September 2013. As a result, fewer RUS staff, including 

engineers, loan specialists, and GFRs, are now responsible for BIP 

GAO-10-823; Recovery Act, div. A, § 1603, 123 Stat., 302.

20 See GAO-11-371T.
Page 10 GAO-14-511 Recovery Act

oversight. Since the contract ended on September 30, 2013, RUS has 

been transitioning the contractor’s work back to RUS staff.

RUS monitors projects and takes oversight actions through all BIP project 

phases, as shown in figure 2. For example, RUS engineers are 

responsible for ensuring that projects meet the specifications listed in 

applications and loan specialists are responsible for ensuring that projects 

are financially sustainable by reviewing funding requests and reporting.21

 21In addition, according to RUS officials, field accountants are responsible for reviewing 

BIP grant and loan transactions and annual awardee financial audits to ensure that BIP 

funds are used for allowable activities. Field accountants are part of the Program 

Accounting Services Division of Rural Development, which conducts loan fund and 

accounting reviews of Rural Development electric and telecommunications borrowers.

Meanwhile, GFRs are the primary RUS point of contact for awardees and 

are responsible for collecting and reporting information on projects. For 

example, RUS GFRs submit monthly reports on projects’ status and the 

number of fiber miles and wireless access points deployed.

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
Page 11 GAO-14-511 Recovery Act

Figure 2: BIP’s Oversight Activities by Project Phase and RUS Staff

a

The construction, funding, and reporting phases occur concurrently.

Based on GFR monthly reports, as of March 31, 2014, most projects were 

completed or partially operational. 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). Therefore, about 87 percent of 

BIP projects were beginning to offer broadband service to subscribers. 

However, since the partially operational projects had not yet been 

completed totally, as of this date, 216 projects, or about 85 percent of BIP 

infrastructure projects, were incomplete.
Page 12 GAO-14-511 Recovery Act

Table 3: BIP Infrastructure Project Status, as of March 31, 2014

Project status Number of projects Percentage of projects 

Planning/ Contracting 0 0%

Construction 32 13%

Partially Operational 184 72%

Complete 39 15%

Total 255a 100%

Source: GAO analysis of RUS data.

a

RUS originally awarded a total of 297 infrastructure projects and as of March 2014, 42 projects were 

terminated.

RUS also tracks projects by the amount of funding they have received, as 

RUS disburses funds to projects incrementally during implementation. As 

of March 31, 2014, RUS had disbursed about $2.2 billion, about 72 

percent of the $3.1 billion in total BIP funds, to awardees. In addition, 

awardees of approximately 85 percent of the Recovery Act BIP 

infrastructure projects had received over half of the funds they had been 

awarded. The remaining approximately 15 percent have received less 

than half of the funds they had been awarded. However, the 

disbursement of funds by RUS does not fully reflect the amount of work 

completed on projects. RUS disburses BIP funds incrementally through 

advancements or reimbursements after awardees submit funding 

requests. Funding schedules vary among projects and can lag behind 

project construction. For example, representatives from one awardee told 

us that they are currently constructing a wireless tower and that given the 

nature of the contract, they would not be reimbursed by RUS until after 

construction was completed.

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. However, they predicted a small number of projects 

may have difficulty meeting the deadline due to project challenges and 

delays. RUS officials told us that because building out the entire service 

area was a condition of the original award agreement, awardees must 

use their own funds to complete the project if construction extends 

beyond the 2015 deadline. They also told us they are currently working 

with their Office of General Counsel to develop policies and potential 

actions in response to projects that have not built out the entire service 

area of the project by the 2015 deadline.
Page 13 GAO-14-511 Recovery Act

According to RUS officials and GFRs, current project delays were due to 

a variety of challenges, some of which the awardee and RUS have limited 

options to overcome. These challenges include lengthy environmental 

reviews, weather, compliance with reporting requirements, and approval 

of contracts and plans.22

Awardees who were unfamiliar with RUS’s processes encountered 

particular challenges and delays. We previously found that, according to 

RUS officials, BIP awardees that had not received funding from RUS in 

the past were more likely to experience difficulties complying with 

reporting requirements than those awardees with a history of borrowing 

from RUS.

To address these challenges, awardees have 

tried to construct projects in compressed time frames but can encounter 

further construction delays, such as weather. For example, 

representatives from one awardee we spoke to noted that environmental 

review delays caused the project to miss an entire construction season, 

while subsequent seasons were shortened due to severe weather. 

Additionally, RUS officials reported that some awardees faced financial 

challenges. For example, according to a GFR, one BIP project was 

struggling due in part to the awardee’s overall financial problems. The 

GFR noted that RUS was limited in taking action against the awardee, 

since holding back BIP funds would only make the financial problems 

worse, putting the project further at risk.

23

 22In an earlier review that included BIP, we found that similar challenges contributed to 

project delays. See 

Although 38 percent of the original 297 BIP infrastructure 

projects went to new awardees that had not previously received funding 

from RUS, we found these projects made up a majority of projects 

terminated (64 percent). RUS officials and GFRs told us that new 

awardees faced continued challenges complying with RUS’s reporting 

and contracting requirements. Representatives from one such new 

awardee we spoke to, a local government entity, noted they faced 

challenges in filing BCAS reports regularly because their financial 

systems were not designed to produce the information required on a 

quarterly basis. These BCAS reporting problems resulted in RUS 

withholding funding, and consequently, project delays. Representatives 

from another new RUS awardee said they were a small company that 

was unable to handle the additional BIP workload and, as a result, hired 

an outside consultant to handle the required reporting. To help address 

GAO-12-937.

23GAO-12-937.
Page 14 GAO-14-511 Recovery Act

these challenges, RUS GFRs have provided additional assistance to new 

awardees. For example, a GFR we spoke to told us he reminded a new 

awardee of BIP reporting requirements. In another case, GFRs we spoke 

to worked to ensure that a new awardee’s contracts met RUS 

requirements by acting as a liaison to RUS headquarters staff to help 

resolve issues.

RUS takes several steps to ensure projects are completed as approved. 

First, according to RUS officials and GFRs, RUS did not allow projects to 

make changes to the approved service areas specified in their 

applications. RUS officials expect all projects to provide service within 

and throughout the areas specified in their applications. However, in 

some cases, RUS officials said they approved other types of project 

changes. We were unable to assess the nature of project changes 

because RUS did not systematically track them and did not provide us 

with a list of all project changes.24

1. Ongoing construction inspections: RUS requires GFRs to conduct 

construction inspections to confirm that BIP funds are used for 

approved purposes and within the designated service areas. Through 

periodic inspections, GFRs verify the work is aligned with the 

Second, as mentioned earlier, RUS 

also has a framework of oversight activities in place to ensure projects 

are completed as specified in their applications (see fig. 2). As part of its 

overall oversight framework, RUS relies on GFRs located throughout the 

country to verify that project construction and subsequent service are 

within and throughout approved service areas. GFRs are generally 

assigned to BIP projects based on the state where the project or awardee 

is located. GFRs monitor the implementation and status of project buildout through three steps, as described below:

 24 RUS did not provide us with this information because RUS officials said that the effort to 

provide it would not be efficient since it did not have a master list of considered project 

changes.

RUS Expects That 

Projects Will Be 

Completed as Approved, 

but Faces Challenges 

Given Scope of Program

RUS’s Oversight Processes

to Ensure Projects Are 

Completed as Approved
Page 15 GAO-14-511 Recovery Act

approved application. The frequency of these inspections depends on 

factors such as whether construction is active on site to inspect. GFRs 

we interviewed described various ways they inspected construction. 

For example, one GFR we spoke to described how he tracked 

planned and completed construction on a map to ensure the awardee 

was building within the approved service area. Another GFR we 

spoke to mentioned viewing equipment installed, such as the 

placement of fiber cables, to verify the construction was within the 

service area.

2. Verification of subscribership: RUS requires GFRs to review and 

verify that the subscribership numbers reported by awardees are 

reasonable. Once BIP project awardees begin signing up customers, 

they submit subscribership numbers to RUS quarterly through BCAS. 

GFRs we interviewed described various ways they verify the 

awardee-reported subscribership numbers. For instance, a GFR told 

us he requested copies of billing records from an awardee to verify 

that subscribers were located within the project’s service area. 

Another GFR we spoke to stated that he confirmed subscribership by 

traveling throughout the project service area and viewing the 

placement of equipment on subscribers’ property.

3. Final project closeout inspections: As part of the closeout process, 

RUS requires GFRs to conduct a final inspection to ensure that 

service is available throughout the approved service area. RUS

instructs GFRs to test service throughout the service area, including 

areas difficult to reach, and to interview local residents and 

businesses regarding the service. If GFRs find any problems with 

service coverage, they will investigate other areas within the service 

area and bring any issues to the attention of RUS management. RUS 

officials told us that as of April 2014, they had conducted 

approximately 25 closeout inspections out of about 40 completed 

projects. GFRs we spoke to described various ways they plan to verify 

the service availability in the approved service area. For example, one 

GFR told us he will test the availability of wireless service by using a 

smart phone to test the signal strength in multiple locations within the 

service area. Another GFR told us he will proactively reach out to 

residents in the service area to solicit feedback on service quality and 

availability to ensure service was being provided at the level indicated 

in the awarded application.

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. However, we were unable to verify this 

because RUS did not provide us with any information about these 
Page 16 GAO-14-511 Recovery Act

changes. According to RUS officials, awardees could request project 

changes, which RUS engineers reviewed and approved on a case-bycase basis. RUS engineers told us they evaluated requested changes 

based on the approved application and budget, with a focus on whether 

the proposed change affected the access to or speed of broadband 

service. RUS documented project change decisions in letters to 

awardees. However, RUS does not have policies on the types of changes 

allowed or a master list of changes considered, and did not provide us 

with a list of projects with approved changes. As a result, we could not 

evaluate these changes. According to RUS officials, less than 15 projects 

made significant changes for reasons such as updates in technology. For 

example, representatives from one awardee told us they changed their 

project because the equipment specified in their application was no 

longer available. Representatives from another awardee said they 

changed the design of their project to include one less wireless tower to 

provide the same level of service at a lower cost than was proposed in 

their application.

Despite these oversight processes, RUS faces challenges ensuring that 

all projects are completed as approved for the following reasons.

1. Reduced RUS Staffing: RUS staffing resources have been reduced 

while BIP projects are ongoing, and as a result, staff workload has 

increased. In 2009 and 2010, we found that RUS’s ability to oversee 

BIP projects faced challenges because it lacked sufficient staff and 

resources, among other reasons.25

 25

RUS officials stated that they did 

not request or receive additional funds to cover administrative costs 

beyond funding appropriated by the Recovery Act. Furthermore, most 

of the eight temporary GFRs RUS hired to assist with BIP oversight 

left when their terms ended in September 2013, while some were 

hired as permanent GFRs, according to RUS officials. RUS now has 

approximately the same number of GFRs as before the Recovery Act 

was enacted, but has an increased workload given that 216 BIP 

projects were still ongoing as of March 2014. Specifically, RUS 

officials report that there were 26 GFRs in fiscal year 2008 before BIP 

implementation, and that as of April 2014, RUS had 25 GFRs and 2 

vacancies. GFRs are now responsible for BIP projects previously 

overseen by temporary GFRs, in addition to the other projects they 

oversee, such as projects from the Community Connect Grant 

GAO-10-823 and GAO-10-80.

Challenges to RUS’s

Oversight Processes
Page 17 GAO-14-511 Recovery Act

Program and the Rural Broadband Access Loan and Loan Guarantee 

Program.

2. Reduced Travel Funds: RUS has also faced challenges overseeing 

BIP projects with reduced travel funds. At a minimum, RUS requires 

GFRs to conduct visits quarterly, which can be conducted in-person or 

remotely through a teleconference. In-person visits can take place at 

the project’s service area location or at the awardee’s offices or 

headquarters when the offices are in a different location from the 

project. GFRs we spoke to overseeing six of the seven projects we 

examined noted that reduced travel funds have been a challenge. 

GFRs noted reduced travel funds resulted in fewer in-person visits to 

the project than on a quarterly basis in some cases. For example, 

GFRs overseeing one of the seven projects in our sample had 

conducted visits with the awardees’ headquarters, but had not yet 

conducted an in-person inspection of the project service areas. A 

senior RUS official said that although funding has been limited at 

times throughout BIP implementation, such as the end of budget 

cycles, RUS is not concerned about there being sufficient travel funds 

to conduct the needed BIP closeout visits.

3. Scope of Work Remaining: Given that BIP projects must be 

completed within one year, RUS faces challenges in completing its 

oversight processes, including a final in-person closeout inspection to 

verify service availability, for all projects as they finish construction. As 

mentioned previously, RUS officials said that as of April 2014, RUS 

had completed about 25 closeout inspections among approximately 

40 completed projects. Given that an additional 216 BIP infrastructure 

projects were ongoing (under construction or partially operational) as 

of March 2014, GFRs will have numerous closeout inspections to 

complete in a short time frame. A RUS senior official noted that GFRs 

will likely continue conducting closeout inspections beyond the 2015 

deadline.

GFR on-site inspections are RUS’s key oversight mechanism for ensuring 

that remote areas are built out as planned and that Recovery Act funds 

reach hard-to-serve rural areas. We have previously concluded that 

companies may have an incentive to build first where they have the most 

opportunity for profit and leave the more remote parts of their projects for 

last in order to achieve the highest number of subscribers as possible.26

 26GAO-10-823. 
Page 18 GAO-14-511 Recovery Act

As the deadline for the BIP program nears, some awardees may be 

stretched to complete remaining construction. While awardees try to 

complete their projects before the Recovery Act BIP appropriation is 

closed, RUS may likewise be stretched to complete close out inspections 

with fewer staff than when the Recovery Act was enacted and with limited 

travel funds to visit projects throughout their territories, which can cover 

thousands of miles and multiple states. To help address these 

challenges, RUS plans to monitor projects beyond the 2015 deadline to 

ensure service is provided throughout the approved service area. RUS 

officials stated that they are currently working with their Office of General 

Counsel to explore options to take regarding awardees that have not 

provided service throughout the approved service area by the September 

2015 deadline.

Although RUS collects performance information to measure BIP’s impact 

on broadband subscribership, it has provided limited reporting of this 

information. OMB’s Recovery Act guidance required federal agencies to 

measure specific program outcomes, supported by corresponding 

quantifiable output measures.27

Although RUS has met the Recovery Act reporting requirements, it has 

provided limited reporting on BIP program status and results during 

To this end, RUS requires awardees to 

submit quarterly BCAS reports on the number of households, businesses, 

educational providers, libraries, health care providers, and public safety 

providers subscribing to new or improved broadband service through BIP.

 27OMB Memorandum M-09-10, Initial Implementing Guidance for the American Recovery 

and Reinvestment Act of 2009 (February 18, 2009).

RUS Collects BIP’s 

Performance 

Information but 

Provides Limited 

Reporting of 

Program’s Impact

RUS Collects and Has 

Provided Limited 

Reporting of BIP 

Performance Information 

despite Efforts to Improve 

Reliability
Page 19 GAO-14-511 Recovery Act

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.28 Further, OMB guidance calls for federal agencies 

to report the public benefits of Recovery Act funds clearly, accurately, and 

in a timely manner.29

In addition, BIP status reports have previously contained information that 

was determined unreliable by GAO and USDA’s OIG, although RUS is 

taking steps to improve reliability, according to officials. RUS’s BIP status 

reports have included subscribership information such as the number of 

households, businesses, and libraries receiving new or improved 

broadband service as a result of BIP. In September 2012, we found that 

this subscribership information was inaccurate and that RUS was taking 

steps to improve it.

As required by the Recovery Act, RUS provided 

quarterly reports to Congress during the period while BIP’s funding was 

being obligated. From May 2009 through December 2010, RUS published 

seven quarterly reports on its website. These quarterly reports detailed 

RUS’s actions to obligate BIP funds, including information on the funding 

announcements and obligated awards. Since then, RUS status reporting 

has been limited and inconsistent. Specifically, since December 2010, 

RUS has issued three status reports, reporting data as of April 3, 2013; 

August 26, 2013; and March 31, 2014. These reports have included 

performance results, including the number of households, businesses, 

educational providers, libraries, health care providers, and public safety 

providers subscribing to new or improved broadband service through BIP. 

Beginning with the March 2014 report, RUS intends to publish reports 

quarterly until the end of fiscal year 2015, according to a senior official. 

This official noted that if BIP does not appear to have met its 

subscribership goals by then, RUS may consider continuing to publish 

quarterly reports given that projects will continue to add, and awardees 

will continue to report, BIP subscribers for at least 5 years after projects 

are completed. A senior RUS official previously noted that projects will 

continue to add subscribers for years after completing construction.

30

 28Recovery Act, div. A, title XVI, 123 Stat., 118-119. 

Despite these efforts by RUS, in August 2013, the 

USDA OIG found some BIP performance information unreliable and that 

29OMB Memorandum M-09-10. 

30GAO-12-937. 
Page 20 GAO-14-511 Recovery Act

RUS lacked adequate controls to ensure the reliability of the data. 

USDA’s OIG recommended that RUS revise the BCAS guidance for 

awardees and staff and provide detailed and clear instructions on the 

entry and review of BIP performance data in BCAS.31

In addition, RUS does not track subscribership by rural area and, as a 

result, is not able to show the impact of the BIP program on rural 

broadband availability. The OIG previously found that RUS’s performance 

information makes it impossible to measure BIP’s impact in rural areas 

because the information was not collected by rural area. The Recovery 

Act required that BIP service areas be at least 75 percent rural without 

sufficient access to high-speed broadband service to facilitate economic 

development. The rest of the project area may not be rural. According to 

a RUS official, very little of projects’ service areas were non-rural. Despite 

this, BIP awardees may potentially attract subscribers disproportionately 

in the non-rural areas of the service area. Therefore, BIP’s subscribership 

measures do not indicate the extent to which Recovery Act funding was 

used to deploy broadband access in rural areas. To address this gap, 

OIG recommended that RUS report performance data that directly 

measure the impact of each award on the expansion of broadband 

service in rural areas. In its response to OIG, RUS reported it that cannot 

report this level of detailed information because it was not specified that 

way in RUS’s agreements with its awardees. RUS further indicated that 

since BIP is a one-time program, it does not believe using taxpayers’

funding to make substantial changes to its reporting system in order to 

collect subscribership information in rural areas would be appropriate. In 

response, USDA’s OIG accepted RUS’s management decision.

In response to this 

recommendation, according to a senior RUS official and USDA OIG 

officials, RUS is developing guidance and anticipates this corrective 

action will be implemented in June 2014. This could improve the reliability 

of subsequent reports.

 31See USDA OIG, American Recovery and Reinvestment Act of 2009—Broadband 

Initiatives Program—Post-Award Controls, Audit Report -9703-0002-32 (Washington, 

D.C.: Aug. 22, 2013). 
Page 21 GAO-14-511 Recovery Act

In addition, USDA has missed opportunities to report on BIP’s impact. 

Over the life of the BIP program, USDA’s annual performance reports 

have not tracked BIP’s performance results against a goal. 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.32 Regarding a goal related to BIP, although 

USDA performance reports identified expanding broadband access as a 

goal, they did not include BIP. For example, USDA’s most recent annual 

performance report, from fiscal year 2013, and its most recent 

performance plan, for fiscal year 2015, listed the “number of 

borrowers/subscribers receiving new or improved telecommunications

services” as a performance goal. This goal was listed under a strategic 

objective to “enhance rural prosperity.” The numbers reported under this 

annual performance goal did not include BIP and instead included other 

RUS programs, such as the Rural Broadband Access Loan and Loan 

Guarantee program. 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. However, as mentioned previously, RUS is no 

longer required under the Recovery Act to provide reports. Regarding 

reporting on BIP performance, instead of reporting actual results, RUS 

reported its performance goal, or estimate of BIP subscribership, as 

results. Specifically, in fiscal year 2010, USDA reported the 847,239

subscribers that it anticipates will receive new or improved broadband 

service as results.33 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 

execution of the funded projects.34

 32Pub. L. No. 111-352, § 3,124 Stat. 3866, 3867 (2011), amending 31 U.S.C. § 1115.

Further, the estimated number of 

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.

33This was previously reported by USDA’s OIG. See USDA OIG, American Recovery and 

Reinvestment Act of 2009- Broadband Initiatives Program- Post-Award Controls, Audit 

Report -9703-0002-32 (Washington, D.C.: Aug. 22, 2013).

34GAO-12-937.

USDA Annual 

Performance Reports

Do Not Track BIP’s 

Performance against 

a Related Goal
Page 22 GAO-14-511 Recovery Act

Given the amount of funding devoted to BIP, having information on BIP’s 

actual performance is important for determining the program’s 

effectiveness. By not reporting annually on BIP’s actual performance, 

USDA is not demonstrating the impact of Recovery Act funds and BIP’s 

progress on improving broadband availability. Without this information, 

future efforts to expand broadband may lack important information on the

types of projects that were most effective at meeting subscribership 

goals, thereby limiting the ability to apply federal resources to programs 

with the best likelihood of success.

BIP represented an unprecedented level of federal investment in 

broadband infrastructure, amounting to over eight times the funds RUS 

otherwise had available for broadband in the past decade. RUS collects 

and is taking steps to improve the reliability of BIP performance 

information. However, BIP’s reporting has been limited and is not 

reflected in USDA annual performance reports. 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. Without this information, future efforts to expand broadband 

may lack important information on the types of projects that were most 

effective at meeting subscribership goals, thereby limiting the ability to 

apply federal resources to programs with the best likelihood of success.

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.

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. However, RUS cited 

Conclusion

Recommendation

Agency Comments
Page 23 GAO-14-511 Recovery Act

concerns that our discussion of RUS’s requirement to serve the entire 

service area in the context of design changes may give the impression 

that project service areas were not completely served. RUS stated this is 

a mischaracterization and that, although it does not have a master list of 

considered project changes or policies on the types of changes allowed, it 

does have information on changes that were approved. However, RUS 

stated it did not provide us with this information because the effort to 

provide it would not be efficient. In response, we clarified language in the 

report to indicate that RUS did not—rather than could not—provide the

information. RUS also provided technical comments, which we 

incorporated as appropriate. 

We are sending copies of this report to the appropriate congressional 

committees and the Secretary of Agriculture. In addition, the report will be 

available at no charge on the GAO Web site at http://www.gao.gov

If you or your staffs have any questions, please contact me at (202) 512-

2834 or goldsteinm@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page

of this report. GAO staff that made major contributions to this report are 

listed in appendix II.

Mark L. Goldstein

Director, Physical Infrastructure Issues
Appendix I: Objectives, Scope, and 

Methodology

Page 24 GAO-14-511 Recovery Act

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 determine how RUS ensures that funded BIP infrastructure projects 

are completed within required time frames and as approved, including 

within designated service areas, we collected and analyzed documents 

from RUS on its monitoring policies and procedures. This information 

included RUS policies and guidance on general field representative 

(GFR) quarterly visits and monthly reporting, contracting and 

disbursement of funds procedures, and awardee Broadband Collection 

and Analysis System (BCAS) instructions. We conducted interviews with 

RUS officials who oversee loan specialists, engineers, and GFRs with 

BIP-related duties. We also reviewed previous reports on BIP oversight 

from GAO, US Department of Agriculture’s (USDA) Office of Inspector 

General (OIG), and the Congressional Research Service (CRS).

To determine how RUS tracks infrastructure project completion, describes 

the status of all infrastructure projects, and characterizes the types of 

projects terminated and ongoing, we collected and analyzed data from 

RUS on all BIP projects as of December 2013 and summary data as of 

March 31, 2014. The data as of December 2013 included the size of 

award, completion status, location (state) of designated or approved 

service area, whether the awardee had previously received RUS funding, 

and amount of funds disbursed. We later updated this information by 

collecting summary data from RUS as of March 31, 2014. To determine 

the reliability of RUS data, we reviewed relevant documentation—

including guidance, descriptions of internal controls, and USDA’s OIG 

reviews—and interviewed RUS officials about their databases and 

collection practices. Based on this information, we determined that the 

data provided to us were sufficiently reliable for our reporting purposes.

To further characterize RUS’s oversight actions, we selected a 

nongeneralizable sample of six ongoing infrastructure projects and one 

completed project. We selected ongoing projects to understand BIP’s 

current oversight activities and one completed project in order to 

understand project impact. First, we initially selected two infrastructure 

projects, one completed and one ongoing. These projects were selected 

based on factors such as the total size of the award, number of premises 

proposed to be served, and not covered by previous GAO or USDA’s OIG 

audit work. Both projects’ approved service areas were in Michigan. We 

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 25 GAO-14-511 Recovery Act

then selected an additional five projects that were not substantially 

completed, according to RUS’s definition (having received less than 67 

percent of BIP funds disbursed), and were not previously sampled by 

previous USDA OIG or GAO audit work. We selected case study projects 

based on: approved service area location; total award size; percentage of 

BIP funds disbursed as of December 2013; type of broadband technology 

(wireline or wireless); and awardee type (for example, for-profit company 

or state or local government). We selected infrastructure projects 

dispersed throughout the US with approved service areas in 

Pennsylvania, South Carolina, Iowa, Texas, and Nevada. The sample of 

infrastructure projects we chose is not representative of all BIP projects. 

For each selected case-study project, we reviewed documentation 

provided by RUS such as award applications, grant or loan agreements, 

letters documenting project changes (if any), and GFR quarterly visit 

reports. In addition, we interviewed GFRs assigned to each case study 

project and representatives from the awardee.1

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. We also reviewed previous GAO, CRS, and USDA OIG 

reports on BIP performance measures, including previous 

recommendations regarding RUS performance information. To determine 

RUS’s policies and procedures for collecting and reporting performance 

information and the agency’s actions in response to recommendations 

made by USDA OIG, we interviewed officials from RUS and USDA OIG. 

We also reviewed RUS’s data collection policies and procedures and 

spoke with GFRs from the seven case studies and awardee 

representatives from five of the seven, in regard to how they report, 

collect, and verify performance information. We also reviewed applicable 

criteria related to agency performance measurement and reporting, such 

as reporting provisions in the American Recovery and Reinvestment Act

 1

We spoke to representatives from five of the seven awardees we selected. The 

remaining two awardees did not respond to our requests to be interviewed. 
Appendix I: Objectives, Scope, and 

Methodology

Page 26 GAO-14-511 Recovery Act

of 2009,

2 associated Office of Management and Budget (OMB) guidance, 

and the GPRA Modernization Act of 2010.3

We conducted this performance audit from August 2013 to June 2014 in 

accordance with generally accepted government auditing standards. 

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

sufficient, appropriate evidence to provide 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.

 2

Pub. L. No. 111-5, 123 Stat. 115 (2009).

3

Pub. L. No. 111-352, 124 Stat. 3866 (2011).
Appendix II: GAO Contact and Staff 

Acknowledgments

Page 27 GAO-14-511 Recovery Act

Mark L. Goldstein, (202) 512-2834 or goldsteinm@gao.gov

In addition to the contact named above, Teresa Anderson (Assistant 

Director), Elizabeth Curda, Lorraine Ettaro, Colin Fallon, Thomas James, 

Bert Japikse, Emily Larson, Joshua Ormond, and Carl Potenzieri made 

key contributions to this report.

Appendix II: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(543330)
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