Walden Draft Bill Aims to Speed Unused Broadband Funds to Treasury
A draft House bill on broadband stimulus spending would take away NTIA’s discretion to decide when to take back grants provided under the American Recovery and Reinvestment Act. The draft bill by Communications Subcommittee Chairman Greg Walden, R-Ore., also would speed delivery of reclaimed funds to the U.S. Treasury. But committee Democrats asked in a Democratic Commerce Committee staff memo circulated Wednesday among lobbyists why the bill is necessary.
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The committee plans to discuss the draft bill at a hearing Thursday. The hearing “is an opportunity to examine how the broadband funds under the stimulus were used, whether they achieved their stated goals, and what kind of accountability measures are in place to protect the taxpayers’ interests,” Walden told us in an e-mail. “In short, we will begin to examine what worked and what did not to inform policy discussions of universal service reform and other issues going forward."
"While not wanting to prejudge the answers to these questions before we hold the hearing, the draft proposal is also intended to spur a discussion about how we can reclaim unused funds from these programs and return them to the Treasury,” Walden said. “Ultimately, it is a matter of good government that Congress affirmatively decide how these dollars be allocated, rather than having them shifted to new purposes Congress did not authorize."
Committee Democrats said current law already requires NTIA and Rural Utilities Service to transfer deobligated funds to the Treasury. The draft bill “could unintentionally jeopardize ongoing oversight by [the Office of Inspector General] and the agencies,” they said in the Democratic staff memo. The draft would limit agencies’ flexibility “to reduce the amounts of awards and scope of projects in order to fashion cooperative solutions to transfer the project to a new, more capable entity.” The bill also would require disclosure of sensitive information that “could hinder the ability of the agency Inspector General to investigate allegations of fraud and other criminal activity.” And it could force NTIA and RUS to recover funds “that have already been validly expended by the awardee,” they said.
The Walden draft bill would modify Section 6001(i)(4) of the Recovery Act. Existing law says that NTIA “may … deobligate awards to grantees that demonstrate an insufficient level of performance, or wasteful or fraudulent spending, as defined in advance by the Assistant Secretary, and award these funds competitively to new or existing applicants consistent with this section.” The Walden bill would require NTIA to deobligate the funds, and strike the line about repurposing them to another applicant.
The Recovery Act requires that all funds withdrawn or recaptured by an agency must be “rescinded” and “deposited in the General Fund of the Treasury … for the sole purpose of deficit reduction” and “prohibited from use as an offset for other spending increases or revenue reductions.” While the Act allowed NTIA to repurpose broadband funding to other applicants, it also required NTIA to make all awards by Sept. 30 last year.
But the draft bill sets deadlines to return reclaimed funds to the U.S. Treasury. NTIA and RUS would be required to take back awards if they determine that the recipient “has demonstrated an insufficient level of performance or wasteful or fraudulent spending,” and the agencies would have 30 days after deobligation to return the money to the Treasury. The agencies also would have to give back to the Treasury any money that is returned or disclaimed by the award recipient. NTIA and RUS also would have to notify the Commerce and Agriculture committees in the House and Senate not more than three days after any report by the Inspector General or Comptroller General saying that a grant or award recipient has shown an “insufficient level of performance or has engaged in wasteful or fraudulent spending."
The “staff draft” is “meant as a launching point for legislation to ensure that any unused or reclaimed funds are returned to the federal treasury,” said the House Commerce Committee Republican staff in a memo that also circulated this week. “Everyone agrees on the importance of oversight,” the staff memo said. The fact that oversight funding for NTIA expires March 4 (CD Feb 2 p1) “has heightened concerns over potential waste, fraud, and abuse,” it said. NTIA declined to comment; RUS didn’t respond to a request for comment.
The Schools, Health & Libraries Broadband Coalition “supports the goal of ensuring there is no wasteful or fraudulent spending in the BTOP and BIP programs,” said Coalition Coordinator John Windhausen. “We are happy to work with the Congress to ensure that the BTOP and BIP programs meet their statutory goals.”