GAO Questions Effectiveness of USDA’s Broadband Loan Program

June 25, 2014 in News

The U.S. Department of Agriculture should evaluate the effectiveness of a program aimed at providing rural communities with loans to increase their broadband access since many of the agency’s loans have been canceled or rescinded, according to a new Government Accountability Office report, FierceHealthIT reports

Background on Program

According to FierceHealthIT, telehealth has been a large focus of the broadband loan program, which has helped some rural areas bolster their care delivery capabilities (Bowman, FierceHealthIT, 6/24).

Earlier this year, USDA announced nearly $16 million in grants to help fund telehealth and distance learning initiatives in rural U.S. areas as part of its Distance Learning and Telemedicine program (iHealthBeat, 2/5).

GAO Report Details

For the report, GAO looked at the Rural Utilities Service loans provided by USDA from 2003 to 2011, as well as corresponding data from the U.S. Census Bureau.

The loan program is aimed at increasing broadband access, but as of June 2013 areas that received loans from USDA had about the same number of providers as areas that were not given loans, according to the report.

In addition, GAO found that many of the loans were canceled before full payout because of provider default or failure to adhere to the loan’s terms (FierceHealthIT, 6/24).

USDA since 2013 has doled out 100 RUS loans worth $2 billion. GAO found that of those loans:

  • 48 currently are being repaid;
  • 25 have been rescinded;
  • 18 have been defaulted upon; and
  • Nine have been fully repaid.

According to the report, the loan statuses demonstrate an inefficient use of USDA resources. It added that despite federal guidance, the agency has not taken steps “to better understand what might lead a project to default or otherwise make a project a poor candidate for receiving a loan” (Mitchell, FedScoop, 6/24).

However, the report noted that the loans might have helped improve care delivery in certain areas. For example, a South Dakota provider told GAO that the loans allowed the use of Department of Veterans Affairs services, while a Kansas provider said the loans provided rural hospitals with access to data and personnel from more advanced facilities (FierceHealthIT, 6/24).

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