Rural broadband stimulus program faces increased scrutiny

We reported last month that a USDA program to expand rural broadband access was set to receive billions of stimulus dollars despite its less-than-perfect record of effectively spending money, revealed by an Inspector General’s report.  Undeserving suburban communities were getting loads of money to expand broadband to places that already had it, and deeply rural towns that needed it were not getting it.

Now, a new Inspector General’s report (PDF) reveals ongoing problems with the way the Rural Utilities Service’s broadband program hands out cash, even now, and questions the program’s worthiness of stimulus dollars.

Michael Grabell reports for ProPublica:

The Rural Utilities Service’s broadband program faced heavy criticism in 2005 when auditors found irregularities with a quarter of the funds the program had received in its first four years of operation. In one case, the program loaned $45 million to wire affluent subdivisions in the Houston suburbs—including one that was built around a golf course and another outside one of the richest cities in Texas.

Monday’s report found that the Rural Utilities Service continues to grant loans to areas that already have broadband service and to communities near major cities.

“We remain concerned with RUS’ current direction of the broadband program, particularly as they receive greater funding under the American Recovery and Reinvestment Act,” Assistant Inspector General Robert W. Young wrote. “RUS’ broadband program may not meet the Recovery Act’s objective of awarding funds to projects that provide service to the most rural residents that do not have access to broadband service.”