Commerce's Inspector General Shares Concerns with Congress

The Department of Commerce's Office of Inspector General has presented its Semiannual Report to Congress for the 6 months ending September 30, 2010. One of eight management challenges identified in the report is Enhancing Accountability and Transparency of the American Recovery and Reinvestment Act Program’s Key Technology and Construction Programs.

The American Recovery and Reinvestment Act of 2009 (Recovery Act) is an unprecedented effort to promote economic activity, invest in long-term growth, and implement a level of transparency and accountability that will allow the public to see how their tax dollars are being spent. The Department of Commerce received $7.9 billion in Recovery Act funds. Of that amount, approximately $6 billion were obligated in the form of grants or contracts for key technology and construction programs in four of the Department’s operating units: Economic Development Administration (EDA), National Institute of Standards and Technology (NIST), NOAA, and National Telecommunications and Information Administration (NTIA). As of September 30, 2010, the Department has spent $1.7 billion (or 24 percent of the obligated funds), leaving significant spending yet to be completed. Of the riskier programs, the largest is NTIA’s Broadband Technology Opportunities Program (BTOP), which awarded 233 grants totaling $3.9 billion for broadband Internet access across the nation. There is considerable uncertainty about how NTIA will administer or monitor these grants because the agency has not received any funding to manage the program beyond September 30, 2010. Additionally NOAA, NIST, and EDA are overseeing a number of development and construction activities. Effective management by the agencies is critical to completing these projects on schedule and within budget, and to making certain the public receives the intended benefits from the Recovery Act.

In the year ahead, we will focus on how the four agencies manage the contracts and grants awarded to ensure that the technology and construction programs are managed effectively. We are particularly interested in how the agencies monitor recipients’ adherence to grant or contract terms, proper payments or drawdowns of funds, required matching shares for grant programs, and adherence to Recovery Act requirements such as the Buy America Act.