NATIONAL 

TELECOMMUNICATIONS 

AND INFORMATION 

ADMINISTRATION 

NTIA Needs Stronger 

Monitoring of BTOP Grant 

Recipients’ Match 

FINAL REPORT NO. OIG-12-029-A 

JUNE 18, 2012 

U.S. Department of Commerce 

Office of Inspector General 

Office of Audit and Evaluation 

FOR PUBLIC RELEASE 
UNITED STATES DEPARTMENT OF COMMERCE 

Office of Inspector General 

Washington, D.C. 20230 

June 18, 2012 

MEMORANDUM FOR: Lawrence E. Strickling 

Assistant Secretary for Communications and Information 

FROM: 

National Teleco,munications and Information Administration 

Ann C. Eile~ ~ () Fi f.&v, 

Principal Assistant lnspecto?-ceneral for Audit and Evaluation 

SUBJECT: NT/A Needs Stronger Monitoring ofBTOP Grant 

Redpients' Match 

Final Report No. OIG-12-029-A 

We are providing our final audit report on the effectiveness of NTIA monitoring of the 

Broadband Technology Opportunities Program (BTOP) grant recipients' match. The objectives 

of our audit were to (I) determine whether NTIA has processes in place to ensure BTOP 

matching share contributed by grantees meets the terms and conditions of the award; (2) assess 

how NTIA monitors the grantees' match throughout the grant award period; and (3) review 

how NTIA and grants officers address grantees' postaward requests for changes in type of 

match (e.g., cash, equipment, or i~-kind contributions) and changes in subrecipients or other 

partners that agreed during the application process to provide matching share. 

Our report recommends steps to improve NTIA's existing oversight of grantee match. 

Specifically, we recommend that NTIA strengthen monitoring of Public Computing Centers and 

Sustainable Broadband Adoption grant match, bolster recipient controls for cash drawdowns, 

continue to improve proper recording of grant recipient match, and strengthen proportional 

spending of grant match contributions. 

Your June 6 response to our draft report states that NTIA is taking appropriate action to 

address recommendations and summarizes the steps NTIA plans to take. Where appropriate, 

we have modified the final report based on this response and subsequent discussions with 

NTIA officials. The formal NTIA response is included as an appendix. The final report will be 

posted on the OIG's website pursuant to section 8L of the Inspector General Act of 1978 as 

amended. 

In accordance with the Department Administrative Order 213-5, within 60 days of the date of 

this memorandum, please provide us with an action plan that responds to all of the report 

recommendations. 

We would like to express our thanks to your staff for the courtesies shown to us during our 

review. Please direct any inquiries regarding this report to Chris Rose, Senior Auditor, 

Recovery Act Task Force, at (202) 482-5558, and refer to the report title in all 

correspondence. 

Attachment 
cc: 	 Ellen Herbst, Senior Advisor to the Deputy Secretary 

Angela Simpson, Acting Chief of Staff and Senior Advisor on Broadband, NTIA 

Anthony Wilhelm, Deputy Associate Administrator, 

Office of Telecommunications and Information Applications, NTIA 

Kathy Smith, Chief Counsel, NTIA 

Aimee Meacham, Director of BTOP Program Services, NTIA 

Milton Brown, Audit Liaison, NTIA 
Report In Brief 

JUNE 18, 2012 

NATIONAL TELECOMMUNICATIONS AND INFORMATION 

ADMINISTRATION 

NTIA Needs Stronger Monitoring of BTOP Grant Recipients’ 

Match 

OIG-12-029-A 

Background 

From the time the President 

signed the American Recovery 

and Reinvestment Act of 2009 

into law, OIG has provided oversight of NTIA’s administration of 

the $4.4 billion Broadband Technology Opportunities Program 

(BTOP). The Recovery Act requires BTOP grantees to provide 

at least a 20 percent nonfederal 

matching share. 

On September 27, 2010, NTIA 

awarded 233 BTOP grants, including Comprehensive Community Infrastructure (CII), Public 

Computing Centers (PCC), and 

Sustainable Broadband Adoption 

(SBA) grants. By March 31, 2012, 

the number of BTOP grants had 

decreased to 228 due to grant 

cancelations and terminations. 

Why We Did This Review 

Our audit objectives were to 

1. Determine whether NTIA 

has processes in place to 

ensures that the matching 

share contributed by BTOP 

grantees meets the terms 

and conditions of the award. 

2. Assess how NTIA monitors 

the grant recipients’ match 

throughout the grant award 

period. 

3.	 Review how NTIA and 

grants officers address recipients’ postaward requests 

for changes in type of match 

(cash, equipment, or in-kind 

contributions) and changes 

in subrecipients or other 

partners that agreed during 

the application process to 

provide matching share. 

WHAT WE FOUND 

To oversee grant recipients’ match throughout the award, including postaward, 

NTIA monitors cash drawdowns, reviews grantees’ quarterly financial reports 

for matching share, and documents proportionality waivers. In December 2010, 

NTIA developed a match matrix to review grant match. NTIA’s reviews of CCI 

grants included an in-depth review of all proposed budgeted match line items. 

However, for the SBA and PCC grants, NTIA’s match matrix did not provide 

sufficient information to determine if NTIA’s review was thorough and effective. 

We also found two internal control vulnerabilities with respect to access to the 

Treasury Automated Standard Application for Payment (ASAP) system to make 

cash drawdowns. In addition, 32 percent of our sample of grantees did not 

record all of their match amounts in their financial records. Finally, a significant 

number of grant recipients were not in compliance with the proportionality 

clauses of their grants. 

WHAT WE RECOMMEND 

We recommend that the Assistant Secretary for Communications and 

Information: 

1. Develop and implement improved processes for reviewing PCC and SBA 

grant match amounts. 

2. Formally communicate the risk associated with third-party cash drawdowns 

to all grant recipients and stress the importance of increased monitoring on 

their behalf when allowing third parties to draw down grant funds from the 

Treasury ASAP system. 

3. Implement program office controls to closely monitor ASAP drawdowns on 

a timely basis, especially those grant recipients that have delegated ASAP 

system access to third parties. 

4. Communicate to recipients that match expenditures must be supported and 

correctly reflected in their financial records. 

5. Work with NIST and NOAA grants officers to provide NTIA with the BTOP 

grantees’ quarterly financial status reports and monitor the contribution 

trends and proportionality waiver activity to ensure grantees are providing 

their required match. 
         

       

           

  

U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

Contents 

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

Findings and Recommendations .................................................................................................................... 5
 

I. NTIA Needs to Thoroughly Review PCC and SBA Grant Match Amounts to Ensure 

 Their Accuracy and Availability ............................................................................................................. 6
 

Recommendation.......................................................................................................................................... 8
 

II. NTIA Needs to Ensure That Grantees Have Strong Monitoring Controls for Cash 

 Drawdowns from the Treasury ASAP System and That the NTIA Program Office 

 Effectively Monitors These Drawdowns ............................................................................................ 8
 

Recommendations..................................................................................................................................... 10
 

III. NTIA Needs to Ensure That BTOP Grantees Record Their Grant Match in Their

 Financial Records ................................................................................................................................. 10
 

Recommendation....................................................................................................................................... 12
 

IV. NTIA Needs to Ensure That Match Contributions Are Proportionate to Grant-Funded 

 Expenditures ......................................................................................................................................... 12
 

Recommendation....................................................................................................................................... 13
 

Other Issues ............................................................................................................................................... 13
 

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

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

Appendix B: OIG Sample Methodology.................................................................................................... 19
 

Appendix C: NTIA’s Criteria, Data, and Report Review of BTOP Grant Match.......................... 21
 

Appendix D: Agency Response .................................................................................................................. 22
 

COVER: Detail of fisheries pediment,

U.S. Department of Commerce headquarters,
 

by sculptor James Earle Fraser, 1934
 

FINAL REPORT NO. OIG-12-029-A 
 

                                                           

U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

Introduction
 

From the time the President signed the American Recovery and Reinvestment Act of 20091 

into law, the Department of Commerce Office of Inspector General (OIG) has provided 

oversight of NTIA’s administration of the $4.4 billion2

 Broadband Technology Opportunities 

Program (BTOP). In his February 2011 testimony on broadband spending before the House 

Committee on Energy and Commerce, Subcommittee on Communications and Technology,3 

the Inspector General focused on the need for effective award monitoring and oversight, 

including concerns with recipient matching funds, especially the existence and availability of 

match. The Recovery Act requires BTOP grantees to provide a 20 percent nonfederal matching 

share. However, in its second Notice of Availability of Funds issued on January 22, 2010, NTIA 

announced that it was providing additional consideration for applicants proposing a nonfederal 

match of 30 percent or more during the competitive award selection process.4

 As underscored 

by this statutory requirement for a minimum match and this extra consideration offered by 

NTIA to applicants who provide additional match, the grantees’ match is essential to the 

financial success of the proposed broadband projects. 

Table 1 contains a summary of the 228 current BTOP grants, including Comprehensive 

Community Infrastructure (CCI), Public Computing Centers (PCC), and Sustainable Broadband 

Adoption (SBA) grants, and their proposed nonfederal match as of December 31, 2011.5 As 

shown in table 2, two BTOP awards had grants issued with a hardship waiver for less than the 

20 percent required nonfederal match. The Recovery Act provides the Assistant Secretary 

authority to waive the 20 percent match requirement based on financial need if the applicant 

petitions for a waiver. As shown in table 3, three BTOP grantees had their nonfederal match 

reduced after the grant awards were made. 

1 Pub. L. No. 111-5. 

2

 The Recovery Act established BTOP with $4.7 billion, including administration and oversight expenses. A $302 

million rescission occurred in August 2010 pursuant to Pub. L. No. 111-226, reducing the total funding. In all, 

BTOP initially awarded $3.9 billion in grants; however, five grants with awards totaling $120 million were canceled/ 

terminated, and two grants were reduced by $6 million in total. The remaining funding went to develop and update
 

the publicly searchable National Broadband Map, administrative expenses, and transfers to the OIG for oversight 

and the Federal Communications Commission for the development of a national broadband plan. 

3

 U.S. Department of Commerce, Office of Inspector General, February 10, 2010. Inspector General’s Testimony on 

Recovery Act Broadband Spending: House Committee on Energy and Commerce. Washington, D.C.: Department of 

Commerce OIG.
 4

 U.S. Department of Commerce, National Telecommunications and Information Administration, Broadband 

Technology Opportunities Program. 75 Fed. Reg. 3799–3800 (Jan. 22, 2010). 5

 On September 27, 2010, NTIA concluded the BTOP award process with 233 grants. By March 31, 2012, the 

number of BTOP grants had decreased to 228 due to grant cancelations and terminations.
 

FINAL REPORT NO. OIG-12-029-A 1 
 

 

 

 

U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

 Table 1. BTOP Federal Grant Awards and Matching Funds 

Project Type No. of Awards/ 

Average Grant 

Match Percent 

Federal Funds Percent of 

Federal 

Funds 

Recipient Match Total Cost 

Comprehensive 

Community 

Infrastructure 

120 

26.3% 

$3,358,774,652 88% $1,198,699,569 $4,557,474,221 

Public Computing 

Centers 

65 

29.9% 

199,244,164 5% 85,023,612 284,267,776 

Sustainable 

Broadband 

Adoption 

43 

29.9% 

249,525,540 7% 106,642,208 356,167,748 

Total 228 $3,807,544,356 100% $1,390,365,389 $5,197,909,745 

Source: OIG based on NTIA data 

Table 2. BTOP Federal Grant Awards with Less Than 20 Percent Matching Funds 

Award Grantee Total Grant 

Amount 

Federal 

Funds 

Nonfederal 

Match 

Match 

Percent 

20 Percent 

Match 

Match 

Difference 

Board of Regents 

State of Louisianaa $95,016,532 $80,596,415 $14,420,117 15.2% $20,149,104 $5,728,987 

Executive Office 

State of Mississippi 

83,987,788 70,055,000 13,932,788 16.6% 17,513,750 3,580,962 

Total $9,309,949 

Source: OIG based on NTIA data a

Terminated October 26, 2011. 

Table 3. BTOP Federal Grant Awards with Matching Funds Reduced After the Grant Award 

Award Grantee Federal Funds Nonfederal 

Match 

Match 

Percent 

Revised 

Nonfederal 

Match 

Revised 

Match 

Percent 

Change in Match 

Communication 

Services for the Deaf, 

Inc. 

$14,988,657 $5,229,846 25.9% $4,571,139 23.4% $ 658,707 

Adams County 

Communications 

Center 

12,137,422 5,891,647 32.7% 4,541,340 27.2% 1,350,307 

MCNC 28,225,518 11,760,038 29.4% 10,286,573 26.7% 1,473,465 

Total $3,482,479 

Source: OIG based on NTIA data 

FINAL REPORT NO. OIG-12-029-A 2 
U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

NTIA faces the following challenges in ensuring that the nonfederal match needed to complete 

BTOP projects exists and is available in a timely manner: 

	 BTOP award recipients include public entities, for-profits, nonprofits, and tribal entities; 

this is the first time that NTIA has made awards to for-profit entities, which represent 

almost 24 percent of the number of awards. Eligible costs, including each recipient’s 

nonfederal match, are established by federal cost principles, which each grantee uses to 

prepare a budget to complete the approved project. Without the required nonfederal 

match, project completion can be jeopardized. 

	 BTOP grantees use the Treasury Automated Standard Application for Payment (ASAP) 

system to request online cash transfers to their bank account to pay project costs. 

Once the recipients meet the environmental assessment special award conditions, they 

can draw down up to the full amount of the grant in anticipation of expenses to be 

incurred within 30 days. NTIA will need to closely monitor recipients’ drawdown of 

funds to ensure that it is in accordance with their spending rate as directed by the grant 

agreement. 

	 BTOP grantees file quarterly financial status reports of their grant-funded and 

nonfederal match expenses. NTIA monitors grantee match through the National 

Institute of Standards and Technology (NIST) and National Oceanic and Atmospheric 

Administration (NOAA) grants offices, using a proportionality waiver for grantees that 

do not contribute their proposed match at the same general rate as their grant-funded 

expenses. Unless total match and the budget line items for match are monitored, NTIA 

has no assurance that recipients are providing the grant-required match and that the 

recipients’ match meets the BTOP program requirements. 

	 BTOP state and local governments and nonprofit recipients expending $500,000 or more 

in a year in federal awards are required to have annual single audits, and for-profit 

entities receiving more than $100,000 annually are required to have a financial audit after 

their first and third year. These audits require auditors to report on grant expenditures 

and to test for 14 major compliance requirements, including match expenditures. Unless 

match is tested as part of a single audit or BTOP program-specific audit, NTIA has no 

assurance that the match meets federal cost principles of being reasonable, allowable, 

and allocable. 

From the outset of the program, OIG has stressed the importance of match documentation and 

oversight in training sessions and presentations to BTOP staff, applicants, and grantees, as well 

as in OIG Congressional testimony. 

The objectives of our audit were to 

1.	 determine whether NTIA has processes in place to ensure that the BTOP matching 

share contributed by grantees meets the terms and conditions of the award, 

2.	 assess how NTIA monitors the grantees’ match throughout the grant award period, and 

FINAL REPORT NO. OIG-12-029-A 3 
                                                           

U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

3.	 review how NTIA and grants officers address recipients’ postaward requests for 

changes in type of match (e.g., cash, equipment, or in-kind contributions) and changes in 

subrecipients or other partners that agreed during the application process to provide 

matching share. 

To ensure that NTIA processes were in place and effective, we selected a random sample of 25 

BTOP grant recipients to review from the 228 grant recipients.6 Our sample included CCI, 

PCC, and SBA grant recipients to reflect the composition of the BTOP grants. See appendix A 

for a detailed summary of our audit objectives, scope, and methodology; appendix B for our 

sample methodology; and appendix C for NTIA’s criteria, data, and report review of BTOP 

grant match. 

6 At the time of sample selection, 229 BTOP grants were active; however, 1 grant award has since been 

terminated. 

FINAL REPORT NO. OIG-12-029-A 4 
U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

Findings and Recommendations 

NTIA has a process in place to monitor grant recipients’ match throughout the award, including 

the postaward period, by taking steps to develop a match review process, monitor cash 

drawdowns, review grantees’ quarterly financial reports for matching share, and document 

proportionality waivers. Proportionality waivers temporarily waive the requirement that the 

grantee spend the nonfederal share at the same general rate as grant funds, for grantees behind 

on their quarterly match proportionality rate. 

In December 2010, NTIA developed a match matrix to review grant recipients’ proposed 

match. During this review, NTIA analyzes the recipients’ match sources listed in their approved 

budget to determine if the proposed match is allowable. NTIA then sends the resulting matrix 

to the grant recipient for validation and clarification where needed. Figure 1 illustrates NTIA’s 

complete review process. 

Figure 1. NTIA BTOP Match Matrix Review Process 

• Project 

identified for 

review 

• Original match 

contribution 

identified 

Grantees 

selected 

• Project officers 

review match 

• Grantee reviews 

match and 

returns matrix 

to BTOP 

Grantees 

reviewed 

• Project officer 

and grantee 

finalize match 

• Grants officer 

processes 

amendment, if 

needed 

Review 

completed 

Source: OIG based on NTIA data 

Note: NTIA’s review of grant recipient match does not include requesting or reviewing supporting documentation 

to verify the proposed match line items. 

NTIA’s match matrix review process allows recipients to understand the grant conditions more 

clearly and promptly identifies potential issues regarding match contributions. Despite these 

measures, our review found grant match problems that require stronger monitoring and 

corrective action by NTIA, including: 

	 thoroughly reviewing grant match budgets for PCC and SBA grants (i.e., completing 

budget analysis by line item and expanding program match review processes to a larger 

percentage of the PCC and SBA grant recipients), 

	 ensuring that grantees have strong monitoring controls for cash drawdowns from the 

Treasury ASAP system and that the NTIA Program Office effectively monitors these 

drawdowns, 

	 ensuring that grantees record their grant match in their financial records, and 

FINAL REPORT NO. OIG-12-029-A 5 
                                                           

 

U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

	 ensuring that grant match contributions are proportionate to grant-funded 

expenditures. 

I. NTIA Needs to Thoroughly Review PCC and SBA Grant Match Amounts 

 to Ensure Their Accuracy and Availability 

NTIA initially selected nine grant recipients for its postaward match review. By reviewing 

budgeted match by line items for these CCI recipients, NTIA was able to refine its match 

review process and recognize the benefits of this process. According to Department of 

Commerce standard terms and conditions, the nonfederal share, whether in cash or in-kind, is 

expected to be paid out at the same general rate as the federal share,7

 thus assuring the 

availability of match during the grant period. By December 2011, NTIA had expanded its match 

review to 160 of 228 grantees, as shown in table 4, including all CCI grantees. Any PCC and 

SBA grantees that were first-time grantees with more than $5 million in match were also 

selected for match review. 

Table 4. Number of Grantees Reviewed by NTIA and by OIGa 

Project Type BTOP 

Grantees 

NTIA 

Match 

Review 

OIG 

Sample of 

BTOP 

Grantees 

Comprehensive Community 

Infrastructure 120 120 13 

Public Computing Centers 65 22 7 

Sustainable Broadband Adoption 43 18 5 

Total 228 160 25 

Source: OIG sample and NTIA data a

See footnote 5. 

We reviewed NTIA’s results for the 25 grants in our sample. NTIA’s match reviews of CCI 

grants included an in-depth review of all proposed budgeted match line items to ensure that 

match sources were in place and well documented, as described in figure 1. Of the 13 CCI 

grant recipients that we reviewed, 7 had shifts in match budget line items, totaling more than $2 

million, but none of these shifts, resulting from the BTOP match review process, changed the 

recipients’ total proposed nonfederal match. For example, one grantee determined that 

equipment contributed as match had been incorrectly valued at $1.6 million when it should 

have been valued at $1.3 million. This caused a shortage in match, and therefore, the grantee 

revised its budget to include additional cash contributions to meet match requirements. 

Another grantee revised its match budget to increase the cash match by close to $800,000 

instead of providing in-kind equipment contributions as originally proposed by the grantee. 

For the SBA and PCC grants that we reviewed, NTIA’s match matrix did not provide sufficient 

information to determine if NTIA’s review was thorough and effective. The match matrices for 

7 U.S. Department of Commerce, March 2008. Financial Assistance Standard Terms and Conditions. Washington, D.C.: 

Department of Commerce, 3. 

FINAL REPORT NO. OIG-12-029-A 6 
 

                                                           

                                       

                       

U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

these grants did not provide budget line item detail, as the CCI matrices we reviewed did. For 

example, NTIA completed a match review matrix for an SBA grant recipient that stated that 

the information provided in the recipient’s quarterly performance report as of September 30, 

2011, matched the recipient’s detailed budget; no other information or detail was provided 

regarding future match contributions or changes in match. The SBA grant recipient’s response 

to our request for information on proposed match was that its matching share is evolving as 

the project progresses and funding from other grants becomes available. Because of the 

recipient’s uncertain response, we do not have assurance that it will meet match requirements. 

Additionally, we are not confident that NTIA is able to identify potential match issues for these 

categories of awards with their current PCC/SBA match review process. Without a more 

thorough NTIA match review, we did not have enough evidence to determine how NTIA could 

identify issues with proposed match for other PCC and SBA grants. 

BTOP grantees, governments, nonprofits, tribal entities, and colleges and universities are 

required by OMB Circular A-133 to have an annual audit performed by an independent audit 

firm.8 However, based on the independent auditors’ reports that we reviewed for these 

recipients, 33 PCC and 11 SBA grants might not have had their match tested because the 

grantees’ expenditures fell below the dollar thresholds that would result in a more detailed 

review by the independent auditors. Without a thorough review from NTIA or the 

independent auditors, the risk of fraud, waste, and abuse increases and may go undetected. 

The match matrix process has been demonstrated to be an effective tool when used properly, 

as with CCI grants, and is a potential best practice to assure that grantees have timely match 

available and have accurately calculated the match value to assure that BTOP projects can be 

completed within the 3-year grant period. Expanding the match review process to a larger 

percentage of the PCC and SBA grants and including a review at the budgeted line item level 

would compensate for the gaps in single-audit coverage and provide added assurance that 

grantees have complete and accurate match for the total $1.4 billion match required from all 

228 grantees. 

NTIA officials told us that they are in the process of determining the level of BTOP project 

monitoring, including review of grant match, that can be sustained after NTIA’s program 

support contract completes its initial term in March 2012. A renewal of the support contract is 

anticipated at reduced funding from present levels and with a reduced level of support staff, 

requiring NTIA to prioritize the most critical risks to the BTOP program. Despite funding 

limitations, grant match is important for the success of the projects, and NTIA should look for 

opportunities to strengthen grant match monitoring and reduce the potential for questioned 

cost at the end of BTOP grant awards. 

8 An audit completed by an independent auditor is commonly referred to as a single audit. During the single audit,

the independent auditor sets dollar limits to determine which items will be reviewed.

FINAL REPORT NO. OIG-12-029-A 7 
 

                                                           

U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

Recommendation 

We recommend that the Assistant Secretary for Communications and Information: 

1.	 Develop and implement improved processes for reviewing PCC and SBA grant match 

amounts (for example, completing budget line item detail analysis on PCC and SBA 

grants and expanding NTIA’s match review process to a larger percentage of PCC and 

SBA grant recipients). 

II. NTIA Needs to Ensure That Grantees Have Strong Monitoring Controls 

 for Cash Drawdowns from the Treasury ASAP System and That the NTIA 

 Program Office Effectively Monitors These Drawdowns 

We found two internal control vulnerabilities with respect to NTIA’s safeguarding of assets in 

the Treasury ASAP system: (1) contractors can draw down funds, and (2) grantees can draw 

down funds that exceed their expenditures. The Government Accountability Office has issued 

Standards for Internal Control in the Federal Government,9 which provides an overall framework for 

establishing and maintaining internal control, including the need to secure and safeguard 

vulnerable assets. This vulnerability to risk of loss or unauthorized use may not be fully 

appreciated by first-time BTOP grantees. Moreover, unlike grant recipients, contractors and 

other parties are not required to comply with the award conditions and, therefore, need 

additional monitoring by the grant recipient when they are allowed to draw down grant funds. 

For example, 2 grant recipients of the 25 in our sample permitted their project partners 

(contractor in the case of 1 grantee) to draw down federal grant funds from the Treasury ASAP 

system for more than a year, totaling $9.3 million (see table 5). BTOP monthly status meetings 

and reports include presentations on grant recipient cash drawdowns that exceed $1 million; 

however, neither the monthly status meetings nor other reports identify the entity making the 

ASAP draws. 

Table 5. Treasury Cash Drawdowns Made by Entities Other Than Grantee 

BTOP Grantee (OIG Sample) Total Drawdowns, 

Sept. 30, 2011 

No. of 

Drawdowns 

Duration of 

Drawdowns 

CCI Grantee10 $7,286,396 26 14 months 

CCI Grantee 13 2,085,824 14 16 months 

Total $9,372,220 40 

Source: OIG sample based on NTIA data 

We notified NTIA of this additional risk factor and of the importance of closely monitoring the 

2 grantees in question and determining if this risk factor was present in the remaining 203 grant 

recipients not in our sample. NTIA reported that it has addressed this weakness with both 

9

 U.S. General Accounting Office, November 1999. Standards for Internal Control in the Federal Government, 

GAO/AIMD-00-21.3.1. Washington, D.C.: GAO. 

FINAL REPORT NO. OIG-12-029-A 8 
 

 

 

                                                           

  

U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

grantees and, at our request, initiated a review of all other BTOP grantee access to the 

Treasury ASAP system and has communicated the risks and the need for additional monitoring. 

As an example of how this internal control vulnerability can affect a program grant, for one 

grant, that has since been terminated, in a different NTIA grant program, the grantee gave a 

consultant access to the Treasury ASAP system, and the consultant drew down almost 

$322,362 for personal use rather than for equipment for the project. OIG investigators were 

able to recover about $131,965, and the consultant has been indicted. Although this case did 

not involve a BTOP grantee, this same risk of weak internal controls over cash could be 

present in BTOP grants. 

Department of Commerce standard terms and conditions permit drawdowns for expenses 

anticipated within 30 days.10 NTIA’s review of ASAP on a weekly and monthly basis highlights 

individual grantee drawdowns exceeding $1 million, large-percentage drawdowns, and grantees 

nearing substantial completion, which provides assurance that drawdowns are being monitored. 

While NTIA regularly monitors grantees’ Treasury ASAP system cash drawdowns, our review 

of the September 30, 2011, comparison of expenditures with cash drawdowns noted that 17 

percent of BTOP grantees (40 of 229) had collectively drawn down more than $17 million of 

federal funds in excess of their expenditures. Additionally, drawdowns for 5 grantees exceeded 

$1million. As tables 6 and 7 show, we noted improvements in our March 31, 2012, comparison 

of drawdowns and grantee reported expenditures. However, the drawdowns must be 

continuously monitored, so that they remain in line with expenditures. 

Table 6. Comparison of BTOP Grantee Expenditures with Cash Drawdowns 

Range of Drawdowns Exceeding 

Expenditures 

Total Drawdowns Exceeding 

Expenditures as of September 30, 2011 

Total Drawdowns Exceeding 

Expenditures as of March 31, 

2012

 Drawdowns Number of 

Grantees 

Drawdowns Number of 

Grantees 

$1 million+ $12,563, 200 5 0 

$500,001 to $1million 1,316,022 2 $1,751,361 2 

$100,001 to $500,000 2,935,909 13 645,575 4 

$10,001 to $100,000 450,495 10 191,583 6 

$.01 to $10,000 9,496 10 19,714 14 

Expenditures exceed drawdowns 0 189 0 202 

$17,275,122 229 $2,608,233 228 

Source: OIG sample based on recovery.gov and NTIA data 

10 U.S. Department of Commerce, March 2008. Financial Assistance Standard Terms and Conditions. Washington, 

D.C.: Department of Commerce, 2.

FINAL REPORT NO. OIG-12-029-A 9 
 

 

 

                                                           

 

U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

Table 7. BTOP Grantees with the Five Largest Total Cash Drawdowns 

 in Excess of Expenditures 

September 30, 2011 March 31, 2012

 Drawdown 

Exceeding 

Expenditures 

Drawdown 

Exceeding 

Expenditures 

Grantee $ 4,025,511 Grantee $ 986,460 

Grantee 3,704,375 Grantee 764,901 

Grantee 2,623,618 Grantee 223,860 

Grantee 1,168,926 Grantee 170,815 

Grantee 1,040,771 Grantee 141,404 

Total $12,563,201 Total $2,287440 

Source: OIG sample based on recovery.gov and NTIA data 

Note: Grantees are arranged by amount of expenditure (highest to lowest for 

top five) but are not the same across periods. 

For prior quarters, we requested additional information from NTIA to verify that the recipients 

expended the advances within the 30 days allowed. NTIA found that those recipients either 

returned the excess timely, reported incorrectly and made subsequent corrections to their 

reporting, or were instructed by the grants office to retain the excess. 

Recommendations 

We recommend that the Assistant Secretary for Communications and Information: 

1.	 Formally communicate the risk associated with third-party cash drawdowns to all grant 

recipients and stress the importance of increased monitoring on their behalf when 

allowing third parties to draw down grant funds from the Treasury ASAP system. 

2.	 Implement program office controls to closely monitor ASAP drawdowns on a timely 

basis, especially those grant recipients that have delegated ASAP system access to third 

parties. 

III. NTIA Needs to Ensure That BTOP Grantees Record Their Grant Match 

 in Their Financial Records 

Federal Cost Principles11 and Uniform Administrative Requirements for Grants12 require recipient 

match to be recorded in the recipient’s financial records regardless of its source. Also, NTIA 

issued supplemental guidance, the Recipient and Third-Party In-kind Contributions Fact Sheet, in 

February 2011 to grantees requiring that cost sharing or match be verifiable from the grantee’s 

11 2 C.F.R. parts 220, 225, 230; 48 C.F.R. part 31. 12 15 C.F.R. parts 14, 24. 

FINAL REPORT NO. OIG-12-029-A 10 
                                                           

U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

records.13 However, we found that 8 (32 percent) of the 25 grant recipients in our sample 

tracked match contributions using offline software (spreadsheets) but did not record more than 

$3.2 million of in-kind and subrecipient match in their financial records (see table 8). Recipients 

need to record all costs in their financial records, to document grant match and to ensure that 

all costs are subject to annual audit. For instance, if a recipient claims donated equipment as 

match, it must be recorded in the recipient’s financial records to ensure that it is not being 

claimed as match for other federal awards and that the value of the equipment can be assessed 

during an annual audit. 

NTIA monitoring efforts currently include grant recipient site visits and, as noted previously, 

match must be included in the recipient’s accounting records. The site visits include a general 

review of proposed match; however, NTIA does not verify that match expenditures are 

appropriately recorded and supported. In response to our report dated November 2011, NTIA 

Has an Established Foundation to Oversee BTOP Awards, But Better Execution of Monitoring Is 

Needed, NTIA agreed to revise their site visit processes to include the request for supporting 

match valuation documentation as well as seeking additional match information when match 

concerns are identified. We estimate, based on the $102 million in our proportion-topopulation sample, that the undocumented match for the remaining 204 BTOP grants could 

range from $88 million to $329 million. As such, NTIA should continue to emphasize the need 

for match to be recorded in recipient records. 

Table 8. Grantees with Unrecorded Match 

BTOP Grantee (OIG Sample) Award Type Match 

Reported, 

Sept. 30, 2011 

Unrecorded 

Match Amount 

Percent 

Unrecorded 

CCI Grantee 6 CCI $1,764,331 $1,653,932 93.7% 

SBA Grantee 4 SBA 528,918 528,918 100.0% 

PCC Grantee 1 PCC 358,425 358,148 99.9% 

SBA Grantee 2 SBA 319,119 319,119 100.0% 

PCC Grantee 5 PCC 206,926 206,926 100.0% 

PCC Grantee 6 PCC 72,251 72,251 100.0% 

SBA Grantee 3 SBA 97,359 85,903 88.2% 

PCC Grantee 4 PCC 328,278 15,405 4.7% 

Total $3,675,608 $3,240,602 

Source: OIG sample based on NTIA data 

In a previous report,14 we found that some grantees submitted erroneous financial reports and 

that federal program officers (FPOs) needed to verify match to source documents. We 

13 U.S. Department of Commerce, National Telecommunications and Information Administration, December 2011. 

Fact Sheet: Broadband Technology Opportunities Program Recipient and Third Party In-kind Contributions, Version 4.
 

Washington, D.C.: Department of Commerce, 1. 

14 U.S. Department of Commerce Office of Inspector General, November 2011. NTIA Has an Established Foundation 

to Oversee BTOP Awards, But Better Execution of Monitoring Is Needed, OIG-12-013-A. Washington, D.C.: Department 

of Commerce OIG.
 

FINAL REPORT NO. OIG-12-029-A 11 
 

 

                                                           

U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

concluded that more than 40 PPC and SBA awards were not likely to have their BTOP grants 

included in independent audits because BTOP funds were a very small part of the grantees’ 

federal funds spent. To enable NTIA to prepare guidance for FPOs to use in their review of 

recipient match during their site visit process, we reported these issues as finding III in our 

previous report. The NTIA audit action plan for that report agreed to revise site visit 

documentation to include match valuation and to seek additional match information for specific 

cases, as needed. 

Recommendation 

We recommend that the Assistant Secretary for Communications and Information: 

1.	 Communicate to BTOP grant recipients that match expenditures must be supported 

and correctly reflected in each grantee’s financial records. This can be communicated 

through BTOP webinars or grantee workshops and by responding to questions about 

match in quarterly financial reports. In addition, BTOP federal project officers can verify 

that documentation to support match exists during any scheduled site visits. 

IV. NTIA Needs to Ensure That Match Contributions Are Proportionate 

 to Grant-Funded Expenditures 

The Department of Commerce has had a long-standing requirement for programs to ensure 

that grantees are contributing their nonfederal match in proportion to the federal share.15 

Although NTIA monitors match contributions, there continues to be a risk that BTOP grantees 

may not provide their proposed match to complete projects on time. 

For the reporting period that ended December 31, 2011, 49 (21 percent) of the 228 BTOP 

grant recipients did not meet their recipient match requirement by 2 percent or more (see 

figure 2 and table 9). NTIA, through its agreements with NIST and NOAA Grants Offices to 

provide grant management services, has instituted a process to review quarterly grantee 

financial reporting, to determine if proportional match spending requirements are being met. As 

part of this process, NTIA can recommend that the Grants Office waive proportionality 

requirements if the grantee has a plan in place to meet match requirement in the following 

reporting period. Causes for match proportionality waivers include (1) PCC and SBA grantees 

making large equipment and supplies purchases with federal funds at the beginning of the award 

but providing staff salaries and training as in-kind match throughout the award, and (2) CCI 

projects using federal funds early in the award to pay for environmental assessments and/or 

equipment purchased but providing other construction expenditures later in the award period 

as their match. 

15 U.S. Department of Commerce, March 2008. Financial Assistance Standard Terms and Conditions, section A.03.b. 

Washington, D.C.: Department of Commerce. 

FINAL REPORT NO. OIG-12-029-A 12 
U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

Behind Schedule

SAB

PCC

On Schedule CCI

101

11

19

46

19

32

0 20 40 60 80 100 120 
 

Source: OIG based on NTIA data 

Award 

Type 

# of 

Awards 

 December 31, 

2011, Match 

Required 

December 31, 

2011, Match 

Provided 

Difference Percentage 

Difference 

CCI 19 

 

$78,113,301 $41,831,046 $36,282,255 46% 

PCC 19 

 

12,591,785 7,563,694 5,028,091 40% 

SBA 11 

 

23,893,476 14,492,073 9,401,403 39% 

Total 49 

 

$114,598,562 $63,886,813 $50,711,749 44% 

Figure 2. Status of Grant Recipients in Meeting Their Match Requirement, for the Reporting 

PeriodThat Ended December 31, 2011 

Table 9. Grantees That Are Behind Schedule with Their Match 

Source: OIG based on NTIA data 

Although match proportionality waivers decreased from 72 for the quarter that ended on March 

31, 2011, the number of grant recipients that were not in compliance with proportionality clauses 

was significant. As of March 31, 2012, 3 (12 percent) of the 25 grantees in our sample did not 

provide matching share proportionate to grant-fund expenditures, with an overall shortage of 

close to $2 million, and only 2 of these 3 grantees had written proportionality waivers. 

Recommendation 

We recommend that the Assistant Secretary for Communications and Information: 

1.	 Work with NIST and NOAA grants officers to provide NTIA with the BTOP grantees’ 

quarterly financial status reports and monitor the contribution trends and 

proportionality waiver activity to ensure grantees are providing their required match. 

Other Issues 

On February 11, 2011, the OIG received a complaint on Clackamas County, Oregon, BTOP 

grant match and several technical issues. We referred the technical issues to NTIA for 

resolution using a new NTIA complaint resolution process. On December 5, 2011, NTIA 

responded to the complaint’s technical issues by stating that the BTOP award is a final agency 

FINAL REPORT NO. OIG-12-029-A 13 
 

U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

decision that is not subject to third-party appeal, and after reviewing the facts, NTIA declined 

to recommend corrective actions on the Clackamas award. These technical issues were outside 

the scope of this audit, and, therefore, we did not specifically analyze NTIA’s review or their 

conclusions in conducting our fieldwork and forming our findings and recommendations relating 

to NTIA’s oversight of grant match. 

We reviewed the Clackamas County, Oregon, BTOP grant with a proposed $3,344,649 match. 

To obtain evidence on the Clackamas County match, we 

1.	 reviewed the Clackamas County BTOP grant file, including the proposal and grant 

award, and discussed the grant match with the NOAA grants officer and the NTIA FPO 

for the grant, 

2.	 met with Clackamas County financial and program officials for the BTOP grant to 

discuss matching share budgeted line items and the role of match in the BTOP approved 

project, 

3.	 analyzed supporting documentation for the reasonableness of the Clackamas County 

BTOP grant match, including third-party valuation of the right-of-way and pole fees by 

two municipalities and the Portland, Oregon, General Electric Company, 

4.	 examined the NTIA BTOP match matrix review process to determine if NTIA identified 

all sources of match to be contributed and if the total amount of the proposed match 

changed from the original approved budget, and 

5.	 reviewed federal cost principles and the NTIA BTOP Notice of Funds Availability to 

determine the allowability and allocability of the proposed and contributed match. 

We concluded that the types of match proposed were allowable under federal cost principles 

and the BTOP Notice of Funds Availability and that the valuation of the proposed match 

amount was reasonable. 

FINAL REPORT NO. OIG-12-029-A 14 
U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

Summary of Agency Response and OIG 

Comments 

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

stated that NTIA is taking appropriate action to address our recommendations. The response 

also summarized the steps NTIA has implemented and will take to address the 

recommendations. 

OIG met with NTIA officials after issuing the draft report. We have made slight modifications 

to the report based on constructive comments and subsequent information NTIA provided at 

that meeting. Also, we have updated tables and figures to reflect current information. 

NTIA has responded that they have taken steps to strengthen its oversight of BTOP recipients’ 

match, and we encourage NTIA to continue its efforts. We look forward to reviewing NTIA’s 

action plan, which addresses our concerns in greater detail. 

FINAL REPORT NO. OIG-12-029-A 15 
U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

Appendix A: Objectives, Scope, and 

Methodology 

We initiated this audit in April 2011 as part of our continuing oversight of NTIA’s Broadband 

Technology Opportunities Program (BTOP). The objectives of our audit were to (1) determine 

whether NTIA has processes in place to ensure BTOP matching share contributed by grantees 

meets the terms and conditions of the award, (2) assess how NTIA monitors the grantees’ 

match throughout the grant award period, and (3) review how NTIA and grants officers 

address grantees’ postaward requests for changes in type of match (e.g., cash, equipment, or inkind contributions) and changes in subrecipients or other partners that agreed during the 

application process to provide matching share. Fieldwork was completed between April 2011 

and February 2012. 

NTIA has a process in place to monitor grant recipients’ match throughout the award, including 

the postaward period. The process includes developing a match review process, monitoring 

cash drawdowns, reviewing grantees’ quarterly financial reports for matching share, and 

documenting proportionality waivers for grantees behind on their quarterly match 

proportionality rate. 

To meet our objectives, we reviewed BTOP compliance with laws, regulations, policies, and 

procedures, including 

	 the American Recovery and Reinvestment Act of 2009, 

	 the July 9, 2009, and January 22, 2010, Notice of Funds Availability for the Broadband 

Initiative Program and BTOP, 

	 Department of Commerce Grants Manual, 

	 Department of Commerce financial assistance standard terms and conditions and BTOP 

special terms and conditions for grantee match, 

	 Office of Management and Budget circulars and federal cost principles that were terms 

and conditions of the BTOP grant awards, 

	 BTOP’s Recipient Handbook FY 2010, and 

	 BTOP’s Recipient and Third-Party In-kind Contributions Fact Sheet, February 2011. 

FINAL REPORT NO. OIG-12-029-A 16 
U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

To gain an understanding of internal controls and assess how NTIA monitors the grantees’ 

match throughout the grant period, we interviewed pertinent staff, including 

	 NTIA compliance officials and BTOP federal program officers, 

	 NIST and NOAA grants management personnel, and 

	 grantee financial and program personnel contacted by telephone for a random sample of 

25 grantees selected proportional to population and in-person for Clackamas County, 

Oregon to obtain supporting documentation for their nonfederal match and how the 

match met federal cost principles and BTOP program requirements. 

To review how NTIA and grants officers address grantees’ postaward requests for changes in 

type of match (e.g., cash, equipment, or in-kind contributions) and changes in subrecipients or 

other partners that agreed during the application process to provide matching share, we 

selected a random sample of 25 grantees, described in more detail in appendix B. We tested 

the sample of 25 grantees’ matching share by several means, including 

	 comparing the amount, type, and budget line items for grantee match proposed in the 

BTOP application with the amount, type, and budget line item of grantee match 

reported in the grantees’ grant file in the NOAA Grants Online or the NIST Grants 

Management Information System, 

	 obtaining and reviewing the BTOP match matrix review used by BTOP federal program 

officers to confirm the amount, type, and budget line item of grantee match, 

	 tracing the grantees’ match from the NIST and NOAA grant files to the grantees’ most 

recent financial status reports (SF 424, 425) and then to the grantees’ general ledger and 

obtaining and reviewing supporting documentation for a sample of the grantees’ match, 

	 reviewing BTOP grantee proportionality match waiver statistics for our sample, and 

	 comparing the grantees’ BTOP grant award amount with the grantees’ major program 

for their most recent audit on file with the Census Federal Audit Clearinghouse to 

determine the likelihood that grantee match would be audited as part of a major 

program. 

In addition to the random sample, we reviewed the grantee match for the BTOP CCI grant 

awarded to Clackamas County, Oregon. This grant was selected for review based on a 

complaint received by the Inspector General. The complaint is discussed in the Other Issues 

section of the findings. 

In testing for BTOP oversight of grantees’ match, we relied on the assessment completed for 

our November 2011 report, NTIA Has an Established Foundation to Oversee BTOP Awards, But 

Better Execution of Monitoring Is Needed, where we assessed the reliability of the NOAA Grants 

Online and NIST Grants Management Information System by interviewing officials 

knowledgeable about the systems and their data and reviewing related reports. Also, we tested 

FINAL REPORT NO. OIG-12-029-A 17 
U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

the accuracy and reliability of grantees’ reported results in the systems with the grantees’ 

financial management system and related source documents for cash, in-kind, and subrecipient 

match. We determined that the data were sufficiently reliable for the purposes of this report. 

We performed our work in accordance with generally accepted government auditing standards. 

These standards require that we plan and perform our 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 2011 through February 2012 under the authority of the 

Inspector General Act of 1978, as amended, and Department Organization Order 10-13. We 

performed our work at the Department of Commerce headquarters and NTIA offices in 

Washington, D.C.; at NIST in Gaithersburg, Maryland; at NOAA in Silver Spring, Maryland; and 

in Oregon City, Clackamas County, Oregon. 

FINAL REPORT NO. OIG-12-029-A 18 
 

 

 

 

 

U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

Appendix B: OIG Sample Methodology 

To review how NTIA and grants officers address grantees’ postaward requests for changes in 

type of match (e.g., cash, equipment, or in-kind contributions) and changes in subrecipients or 

other partners that agreed during the application process to provide matching share, we 

selected a random sample of 25 grantees. 

The proportionate stratified sample of 25 grantees assured representation of the three subpopulations of BTOP grantees (CCI, PCC, and SBA), minimized margin of error, and permitted 

the team to estimate sample results for the population of 228 BTOP grantees. Table 10 breaks 

the BTOP grantee population into three strata. Table 11 provides a breakdown of BTOP grants 

included in the sample tested by OIG, and table 12 provides the detailed results of the sample. 

Table 10. BTOP Grant Awards Federal and Matching Fundsa 

Project 

Type 

Award 

s 

Federal Funds % of Total Recipient Match Total Project Cost 

CCI 120 $3,358,774,652 88 $1,198,699,569 $4,557,474,221 

PCC 65 199,244,164 5 85,023,612 284,267,776 

SBA 43 249,525,540 7 106,642,208 356,167,748 

Total 228 $3,807,544,356 100 $1,390,365,389 $5,197,909,745 

Source: OIG based on NTIA data a

See footnote 5. 

Table 11. OIG BTOP Grant Test Sample Federal and Matching Funds 

Project 

Type Awards Federal Funds 

% 

Population 

Category 

Recipient Match Total Project Cost 

CCI 13 $275,130,900 8 $ 90,067,119 $365,198,019 

PCC 7 11,442,712 6 5,242,551 16,685,263 

SBA 5 13,951,475 6 6,343,617 20,295,092 

Total 25 $300,525,087 20 $101,653,287 $402,178,374 

Source: OIG based on NTIA data 

From the time of our sample selection until the completion of our audit, the number of SBA 

grantees was reduced from 44 to 43 by the deobligation of funds for the grant awarded to the 

City of Tallahassee, Florida. 

FINAL REPORT NO. OIG-12-029-A 19 
Table 12. OIG Sample Results16 

Type 

Recipient in OIG Sample

 Federal Award 

Dollars Obligated Matching Share Total Award

 Changes in 

Matching Share 

Line Items $ Match Tested 

Allowable, 

Allocable, and 

Reasonable 

Costs 

Propo

W

SBA SBA Grantee 1 $ 6,856,399 $ 3,134,876 $ 9,991,275 $ 1,018,051 Yes 

SBA SBA Grantee 2 1,457,488 556,929 2,014,417 255,103 No 

SBA SBA Grantee 3 2,131,322 699,324 2,830,646 53,052 No 

SBA SBA Grantee 4 980,591 728,351 1,708,942 238,824 Yes 

SBA SBA Grantee 5 2,525,675 1,224,137 3,749,812 479,784 Yes 

PCC PCC Grentee 1 698,924 541,144 1,240,068 222,385 Yes 

PCC PCC Grantee 2 1,477,722 410,399 1,888,121 20,800 Yes 

PCC PCC Grantee 3 4,680,963 2,236,060 6,917,023 1,186,800 Yes PCC PCC Grantee 4 1,829,473 867,231 2,696,704 193,339 Yes 

PCC PCC Grantee 5 536,737 230,030 766,767 206,926 Yes 

PCC PCC Grantee 6 1,434,893 746,687 2,181,580 180,810 Yes 

PCC PCC Grantee 7 784,000 211,000 995,000 17,201 Yes 

CCI CCI Grantee 1 22,698,010 13,522,526 36,220,536 4,117,293 Yes CCI CCI Grantee 2 9,604,840 4,701,924 14,306,764 20,496 577,592 No 

CCI CCI Grantee 3 11,252,066 5,350,633 16,602,699 156,782 898,753 Yes 

CCI CCI Grantee 4 3,201,760 814,104 4,015,864 441,039 236,548 Yes CCI CCI Grantee 5 99,660,678 29,297,353 128,958,031 791,632 6,946,965 Yes 

CCI CCI Grantee 6 8,325,530 2,113,505 10,439,035 32,050 99,849 Yes 

CCI CCI Grantee 7 24,606,978 6,151,744 30,758,722 531,393 Yes CCI CCI Grantee 8 11,547,866 4,949,086 16,496,952 322,814 1,008,021 Yes 

CCI CCI Grantee 9 19,643,717 5,327,550 24,971,267 159,355 Yes 

CCI CCI Grantee 10 30,142,676 9,227,000 39,369,676 140,083 Yes 

CCI CCI Grantee 11 1,648,941 412,235 2,061,176 21,461 Yes 

CCI CCI Grantee 12 27,257,838 6,814,459 34,072,297 337,079 1,556,106 Yes 

CCI CCI Grantee 13 5,540,000 1,385,000 6,925,000 312,766 Yes 

Total $ 300,525,087 $ 101,653,287 $ 402,178,374 $ 2,101,892 $ 20,679,259 

16 Changes in Matching Share Line Items are discussed in finding I. 

$ Match Tested represents the total amount of recipient match tested to determine compliance with BTOP award conditions and f

The costs that did not comply, as noted in the Allowable, Allocable, and Reasonable Costs column, were immaterial. 

The data in the last two columns—Proportionality Waiver and Quarter 1 2012 Proportionality Variance ($)—are a subset 

finding IV. 
Overview of NTIA’s BTOP Grant Match Monitoring 

Eligible costs, 

including grantee 

match 

Cash management Accounting and financial 

reporting 

Single audits and 

program-specific 

audits 

Criteria 

Notice of Funds Availability July 9, 2009, and January 22, 2010 

Department of Commerce standard terms and conditions 

Federal cost 

principles 

Treasury Automated 

Standard Application for 

Payment 

Federal uniform 

administrative 

requirements 

OMB Circular 

A-133 + BTOP audit 

guides 

Data and Report Reviews 

Proposal and budget 

amendments 

Treasury ASAP drawdown 

reports 

Quarterly financial reports 

(424s, 425s) Audit reports 

Monitoring 

Match review matrix BTOP weekly + monthly 

reports 

BTOP match 

proportionality waivers BTOP audit reviews 

Results/Findings 

NTIA identifies necessary corrective actions 

Monitoring Level Adjustment 

NTIA adjusts monitoring based on corrective actions 

Source: OIG chart based on NTIA data 

U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

 Appendix C: NTIA’s Criteria, Data, and 

Report Review of BTOP Grant Match 

FINAL REPORT NO. OIG-12-029-A 

21 
The l!onomblc Todd J. Zinser 

T n~pcctor General 

United Slates Depru1ment of Commerce 

1401 Con.slitution Avenue, N.W. 

Washington, D.C. 20230 

Dear Mr. Zinser: 

This Jetter is in reply to your May 3, 2012 draft report, NT/A Needr Stronger Monitoring of 

JJTOP Grant Recipients· Match (Draft Report). The National Telecommunications und 

lniormation Administration's (NT!A's) monitoring processes and tools set\•e a valuable function 

of the agency's oversight of the Broadband Technology Opportunities Program (BTOP), a S4 

billion grant program authorized by the American Recovery and Reinvestment Act of2009 

(Recovery Act). T appreciate that your office recognizes that NTIA has established 

comprehensive processes to assess and monitor recipients' BTOP matching share contributions. 

As detailed below, we an: taking oppropriutc uclion to nddress the recommcndulions described in 

the Draft Report 

As you have noted in previous reports, NTIA bas implemented a rigorous monitoring and 

oversight plan for BTOP grants. NTIA 's regular monitoring includes multiple reviews for 

recipients' adherence to their matching share requirements, including cash drawdown 

monitoring. pcrfommnce report reviews, risk assessment analysis, and site visit feedback. In 

ttddition to its monitoring, N11A has provided recipients with varimL'I fonns of guidance 

regarding the BTOP matching share requirement. This guidance ranges from the BTOP 

Recipient Handbook 1111d fact sheets, which ure readily available on !be BTOP website, to 

compliance training at recipient workshops. All of these activitieos serve as internal ovenigbt 

controls above and beyond what the National Oceanic and Atmospheric Administration (NOAA) 

and National Institute of Standards and Technology (NISD Grants Offices provide to ensure that 

recipients cxpcncl ftmds at an appropriate rate and meet their matching requirements. 

In addition to our comprehensive day-to-day monitoring, NTIA instituted a process in December 

2010 to thoroughly review a recipient's matching share contribution. lbrough tlus process, 

NTIA reviews and analyzes the allowability, consideration, source, consistency, and valuation of 

each recipient's proposed cash and in-kind match sources. NTIA documents results of these 

reviews in a match matrix, which allows NTIA to better monitor recipient match proportionality 

and validate oompliancc with nwa.rd requirements to provide matching share. Oivcn our limited 

program resources, NTIA has applied this match review process to those grants representing the 

greatest programmatic risk. NTIA selected 16 1 projects, which represent approximately 72 

percent of the BTOP portfolio and 95 percent of award funds, to conduct a thorough match 

review analysis and match share verification. NTlA appreciates that OIG has recognized our 

match review process as a best practice. 

UNITED STATES DEPARTMENT DF COMMERCE 

The Assietant Secretary for Communication& 

and Information 

Woohlngl:()n, D.C. 20230 

JUII 6 20!2 

U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL

 Appendix D: Agency Response 

FINAL REPORT NO. OIG-12-029-A 

22 
Nonethclcss, we can always do better and we are taking seriously your suggestions on ways to 

improve the administration of N'rlA's oversight and monitoring ofihe BTOJ' portfolio. We 

recognize the importance of your recommendations and, as [ outline below, we are taking 

immediate steps to address each of theJIL 

Strengthen Monitoring of PCC tmd SBA Match A unt~ 

As the Droll Report notes, N11A 's match matrix process has been an effective tool to help us 

assess whether BTOP recipients are rneetiog federal match requirements and oost principles. 

lltrOugb March 2012, NTIA and recipients worked together to finalize match reviews for 147 

projects or 91 percent of !he 161 selected projects. The finalized reviews acoount for 71 percent 

of award funds, including a significant percentage of the BTOP Public Computer Centers (PCC) 

and Sustainable Broadband Adoption (SBA) awards. However, the Draft Report recommends 

that NTIA expand our match review process to a larger percentage ofPCC and SBA recipients, 

as 1.\'ell as review specific budget line item details. 

NTIA and the NIST Grants Oftice reviewed the aUowability of recipients' proposed in-kind 

match prior to awarding any PCC or SBA grants. Moreover, the NIST Grants Office requires 

recipients to amend their budgets, if they make 11 change to any of their match sources. At that 

time, NTTA and NTST review proposed changes in detail and will Continue to follow this 

estabHshed process to review specific budget line ilem details. In line with yotll' 

recommendation, however, NTIA will increase the rmli'lbcr of match reviews for PCC and SBA 

projects to a larger percentage of recipients by expauding U1e init.iaJ risk profile to PCC and SBA 

awards over $3 million. 

Continue to Bolster Recipientlnternal Controls for Cash Drawdow11s 

The Draft Report recommends that NTIA formally communicate the risk associated with thirdparty cash drawdowns to all recipients and stress the irnpor1Mce of increased monitoring when 

allowing third parties to d.mw down grant funds from the Treasury Automated Stand!lrd 

Application for Payment (ASAP) system. NTIA worked closely with the Department of 

CollUllerce Office of General Counsel Federal Assistance Law Division to determine whether 

allowing third party drawdowns would be appwpriatc in limited circumstances. For example, it 

may be appropriate to allow third parties to )lave access to a recipient's ASAP account, when a 

parent oompany provides aU acex>llllting and financial services to a subsidiary oompany that bas a 

DTOP grant. As a result, in February 2012, NTIA advised recipients to limit ASAP access to 

staff directly within their organizations and not allow subrecipients;vendors, or contractors 

access to directly draw down funds. NTIA also noted that if recipients bad unique circumstances 

that might justify allowing others direct access to ASAP, they should oonsult with their Federal 

Program Officer (FP.O). 

The Draft Report also recommends that N'OA implement program office oontrols to closely 

monitor ASAP drawdowns on a timely basis, especially for recipients that have appropriately 

U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL
 

FINAL REPORT NO. OIG-12-029-A 

23 
delegated ASAP system access to third parties. As noted in the Draft Repori, NTIA has an . 

established process for reviewing and monitoring ASAP dmwdowns on a weekly and monthly 

basis. Because NTIA does not have direct access to ASAP, we worked closely with the NIST 

and NOAA Grants Offices to evaluate which individuals have access to each recipient's ASAP 

account. As a result of this review, NTIA advised a few recipients to change the personnel that 

have access to ASAP. Although the current review process remains an effective monitoring tool, 

N11A will monitor more closely Ute recipients that have been identified as having delegated 

ASAP systems access to third parties in order to reduce the risk of a drawdown being used for 

unauthori7.ed purposes. 

Contittue to Improve Recipient Match Record keeping 

The Draft Report recommends that NTIA: l) add a process to its site visits to verify recipient 

match source documentation; 2) communicate to recipients !hat they must support match 

expenditures and must conectly reflect them in their grantee financial records; and 3) respond to 

match questions in recipients' quarterly financial reports. NTTA agrees with these 

recommendations. Effective February 2012, NTTA modified portions oftbe BTOP Site Visit 

Checklist to include a list of "Required Documents" that recipients should be prepared to make 

available to their FPO. This modified checklist includes additional guidance for recipients 

specifically relating to the importance of match valuation and to maintaining the required 

suppotting documentation for any claimed match. In May 2012, to further emphasize the 

importance of properly recording match in financial records, NTIA compliance staff informed 

BTOP recipients at a recipient conference that they must :record -all matching share contributions 

in their books, and they must have records and verifiable documentation to support tl1ose entries. 

Develop Strategy for Ensuring Prf!porlionate Recipie11t Match Contributions 

The Draft Report recommends that NTIA work with the NIST and NOAA grant officers to 

obtnin BTOP recipients' quarterly financial status reports and monitor the contributiou.trends 

and proportionality waiver activity.lo ensure recipients are providing their required match. 

NTIA agrees with tlJe recommendation and we will continue to collaborate closely with the 

NOAA and NIST Grants Offices on these issues. In addition to working with the NOAA and 

NIST Grants Offices to assess whether BTOP recipients are expending funds proportionately, 

NTIA conducts a thorough review of each recipient's match, as recorded in their quarterly 

financial reports. Specifically, NTIA assesses whether BTOP recipients are contributing their 

match in proportion to their federal expenditures. If we discover any match proportionality 

issues, NTIA will fol1ow up direcl.ly with recipients during regular monitoring calls and 

scheduled site visits to !'esolve the issues. If recipients request a tempomry waiver of the 

proportionality requirement, NTIA works closely with the recipients to ensure they have a plan 

for returning to compliance with this requirement. 

U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL
 

FINAL REPORT NO. OIG-12-029-A 

24 
U.S. DEPARTMENT OF COMMERCE OFFICE OF INSPECTOR GENERAL
 

I look forward to continuing to work with you as NTIA carries out this important program to 

expand broadband access and adoption in the United States, create jobs, and lay a new 

foundation for economic growth in America. IfNTIA may be of further assistance, please 

contact Milton Brown, NTIA's Liaison to the OIG, at (202) 482-1853. 

Sincerely, 

cc: Ann Eilers, Principal Assistant Inspector General for Audit and Evaluation 

Anthony Wilhelm, Deputy Associate Administrator, Office of Teleconummications and 

Information Application, NTIA 

Milton Brown, NTIA Audit Liaison 

John Bunting, Senior Auditor, Recovery Act Task Force, OIG 

Chris Rose, Senior Auditor, Recovery Act Task Force, OIG 

Aimee Meacham, Director of BTOP Program Services, NTIA 

BTOP000124 

FINAL REPORT NO. OIG-12-029-A 

25