Audit Office Report Finds Broadband Subsidy Scheme Lacks Oversight

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According to a report released earlier this month by the Legislative Audit Bureau, broadband service providers who received millions of dollars in federal grants to expand Internet access throughout Wisconsin were not required to document the amount they actually spent on these projects.

The bureau reviewed the more than $100 million the state Civil Service Commission has handed out under two federal emergency relief bills — the CARES Act (Coronavirus Aid, Relief and Economic Security) and the US Rescue Plan Act (ARPA). The two bills, passed to help revive the economy during the COVID-19 pandemic, including massive sums to help expand internet access, which has become increasingly important in many aspects everyday life, such as school, work and medical appointments, posted online.

Across the state, hundreds of thousands of people do not have reliable internet access. State estimates show that about 650,000 people lack access to high-speed internet with downloads of 25 megabits per second and uploads of 3 Mbps. Another 650,000 people cannot afford a reliable internet connection. These problems are largely concentrated in the more rural parts of the state.

In addition to federal assistance in the two COVID bills, additional funds for broadband expansion were included in the federal Infrastructure Investment and Jobs Act passed last year and million dollars for expansion have been included in recent state budgets.

In total since 2014, including money allocated for new projects this year, $1.4 billion has been spent on the issue in Wisconsin.

But the audit office report warns that Wisconsin’s program for allocating the $100 million in federal funds lacked oversight.

“We found that the PSC had not established written program policies for the administration of funds and that most of the documents submitted by suppliers in support of their claims for reimbursement did not indicate the amounts that they had actually paid to build the projects,” the report said. “We also found that PSC had not documented its efforts to verify that telecommunications providers had built the broadband infrastructure for which they were reimbursed.”

In addition to the lack of written policies or project documentation, the report found that the PSC did not require grant applicants to state the speeds at which internet would be needed, the four PSC members took account of factors not specified in the grant. requests when making spending decisions and lacked transparency on the disbursement of funds.

“We regularly hear from Wisconsin residents requesting broadband access, but without any written procedures, documented verification efforts, or proper cost accounting, it’s still unclear if those dollars are being put to the best use,” Sen. Robert Cowles (R-Green Bay) said in a statement. “The PSC’s lack of oversight and the rewriting of application criteria after applications were submitted has eroded much of my confidence in the PSC’s ability to award future broadband expansion grants. With Wisconsin slated for large federal dollars for broadband expansion soon, PSC needs to bolster this program immediately.

The report makes a number of recommendations to the PSC on how it can improve broadband subsidy programs to disburse both federal and state money.

The office recommends that the commission establish written policies on how the program will be run, including how grant opportunities will be advertised, applications required, and how applications will be scored.

“PSC should establish comprehensive written policies for the administration of broadband expansion grant programs,” the report said. “These policies should include provisions for publicizing grants, reviewing and awarding grants, reimbursing telecommunications providers for project costs actually paid, and overseeing the program. Establishing comprehensive written policies will help ensure that the PSC administers the program in a transparent, fair and consistent manner. »

In future rounds of grants, the report says the PSC should not reimburse telecom companies for project costs until the companies provide documentation of what they spent, and only reimburse if the companies provide all the information required by their agreements with the State.

“PSC should improve the way it reimburses telecommunications providers,” the report said. “First, PSC should only reimburse vendors after submitting documentation showing the amounts they actually paid to build projects, such as receipts or invoices containing information, such as stamped or handwritten notations, indicating that the vendors had actually paid the amounts shown on the invoices. . Second, PSC should only reimburse the vendors after providing all the information required by the grant agreements.”

The office says the PSC should report to the Legislative Joint Audit Committee on its progress in implementing the recommendations by November 15.

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