The U.S. Department of Agriculture's inspector general (IG) has released a report saying the Rural Utilities Service's (RUS) broadband program may not have the chops to distribute effectively the $2.5 billion in extra funding provided by the broadband stimulus package.
RUS was heavily criticized in 2005 when auditors found issues with a quarter of the funds its broadband program had handed out in the first four years of operation. Monday's report said RUS continued to grant loans to areas that already have broadband service and to communities near major cities - not the purpose of the program.
Funds out of the RUS broadband program should be going to projects that provide service to the most rural residents that do not have access to broadband service, but in 2005, RUS provided $45 million for a project in Texas to wire up a golf course community.
More than 90 percent of the loan applications RUS had approved since 2005 were for areas that already had broadband service, a finding that gave the IG concern. About 148 projects that got RUS loans were within 30 miles of cities with more than 200,000 people, including communities outside of Chicago and Las Vegas.
With $2.5 billion on deck in the broadband stimulus package, RUS will have nearly twice as much cash to manage as the amount of loans they've passed out in the last eight years.
For more:
- ProPublica post.
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