Rural Development: REA Telephone Borrowers' Cash Holdings and Rural Development Investments

GAO discussed Rural Electrification Administration (REA) borrowers' investments and rural development activities. GAO noted that: (1) some REA borrowers hold revenues from long-distance telephone call access charges, accumulating large amounts of cash for non-investment purposes; (2) REA borrowers made only limited rural development investments, because they had little expertise in businesses not related to telephone communications; (3) REA has not implemented various legislative mandates, including the Rural Economic Development Grant and Loan Program, the Distance Learning and Medical Link Program, the Rural Business Incubator Fund Program, and a loan deferment program; and (4) REA has held a series of rural economic development conferences in response to a legislative mandate.