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U.S. House approves Broadband Stimulus Oversight legislation

The U.S. House of Representatives has passed legislation that seeks to improve the “accountability and transparency” of the broadband portion of the stimulus package.

The bill requires the Rural Utilities Service (RUS) and the National Telecommunications and Information Administration (NTIA) to terminate awards and return funds if the Treasury finds associated waste, fraud or insufficient performance.

About $7 billion has been allocated in grants and loans for broadband build-out, adoption and education. Republicans, who control the House of Representatives, have expressed concerns about oversight of that money.

“This legislation improves oversight of the awards and clarifies ambiguities regarding what happens to returned or reclaimed funds,” said House Energy & Commerce Committee Chairman Fred Upton (R- MI).
“For example, if an inspector general flags a potential problem with a project, the NTIA or RUS must determine what action to take within 30 days and tell Congress what it has done. With such large sums of money, it is wise to provide proper oversight and protect the American taxpayers from more wasteful and fraudulent spending.”

Beyond waste, fraud and abuse, the cable industry is concerned some of the money is going to overbuild their existing service.

Some House Democrats said the legislation is redundant and a waste of time. Of the 553 projects to which NTIA and RUS granted through the American Recovery and Reinvestment Act, two have been terminated —both due to the grantees’ changed circumstances.

The bill’s requirement that de-obligated funds be returned to the Treasury within 30 days would, however, create a conflict with some Department of Justice criminal fraud and misappropriation investigations. The Justice Department may request in certain instances of suspected fraud that agencies do not revoke funds in order to complete a criminal investigation.