FirstNet taken to task over conflict-of-interest procedures, financial disclosures

The First Responder Network Authority (FirstNet) got a bit of a black eye thanks to a report from an internal government watchdog that faulted the group's board members for failing to adhere to financial disclosure rules and not having adequate protections to monitor for conflicts of interest. The report also faulted FirstNet for how it awarded several contracts.

The report came from the Office of Inspector general of the Department of Commerce and made several recommendations to FirstNet, which is an independent authority within the National Telecommunications and Information Administration, itself a part of the Department of Commerce. FirstNet is the group that is designing the country's nationwide public-safety broadband network. It held its first meetings in the fall of 2012.

The Inspector General was tasked with looking into two things: whether FirstNet "had adequate processes in place to ensure that FirstNet Board members properly filed financial disclosures and identified potential conflicts of interest" and whether the group "used the appropriate contract type, fairly awarded and appropriately administered FirstNet contracts, ensured services purchased under those contracts met industry standards, and were consistent with contract requirements."

Conflict-of-interest allegations have dogged FirstNet almost since its inception, especially because many board members are not full-time federal government employees and may hold other positions elsewhere.

According to the report, FirstNet board members did not file timely public financial disclosure reports. For example, one board member initially did not file a required public disclosure, and, when they eventually did they did not disclose information that may have been a conflict of interest. Another board member submitted the required public disclosure form five months late.

The report found that the FirstNet board's procedures for monitoring potential conflicts of interest need improvement. Additionally, six months after the Board began regular meetings, senior NTIA and office of general counsel officials were still debating how best to routinely monitor potential conflicts of interest.

Two contracts the report examined were not awarded or administered properly, in part because of "undue influence from a FirstNet official, which interfered with the contractor's ability to independently recruit and hire consultants."

In part, the Inspector General's report recommended that the Commerce Secretary determine whether any of the financial disclosure issues identified in the audit require additional administrative action. The report also said the department's office of general counsel should review internal controls related to financial disclosure and conflict of interest at FirstNet. FirstNet should also provide the department's office of general counsel routinely updated lists of entities representing potential conflicts of interest with FirstNet board members and staff.

In a statement in response to the report, FirstNet Chair Sue Swenson said that the group concurs with the recommendations, many of which have been put in place already. "We acknowledge some administrative missteps were made in the early days, and we have taken and will continue to take steps to address them," she said. "I am confident that the FirstNet of today is on the right path forward for these and many other reasons."

She said the Commerce Department and FirstNet "have instituted a comprehensive and effective ethics program and are taking the appropriate measures to help ensure first-rate procurement practices to assist in FirstNet's mission. This includes the ongoing expansion of FirstNet's formal compliance program to supplement existing Commerce Department requirements. We also have learned lessons from the early procurements and are now applying these experiences going forward to further improve."

Swenson noted that in the past year FirstNet has beefed up its staff and procedures by adding an experienced management team, dedicated legal counsel, and more than 80 employees. "We understand the unique risks that FirstNet faces in its mission to deploy the nation's first public safety broadband network, and we will continue to take the steps necessary to ensure we remain committed to the highest level of transparency, integrity, ethics, and ongoing compliance as we move forward," she said.

For more:
- see this report
- see this FirstNet post

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