The General Accounting Office issued several reports in 1998 and 1999 dealing with the E-rate program’s start-up activities. Among other things, the GAO reviewed key aspects of the program’s administrative structure, the design of its procedures, and its internal controls for reviewing applications. The GAO made recommendations to the FCC to improve the program’s operations, which program officials implemented before making their first-year funding commitments to applicants in late 1998.

The GAO has stated that, until recently, the E-rate program lacked meaningful performance goals and measures as defined by the Government Performance and Results Act of 1993. The FCC’s initial goals focused on increasing the percentage of school buildings connected to the Internet, but these connectivity goals were much lower than the percentage of schools already connected.

In September 2000, the FCC finalized new goals and measures that focus on Internet connections to classrooms. Unlike the old goals, these properly reflect the percentage of classrooms already connected. The new goals include having 100 percent of public school instructional classrooms connected to the Internet by 2002 and 95 percent of private school instructional classrooms connected by 2003. The plan also seeks to improve participation in the E-rate program by urban low-income school districts and rural school districts located outside of towns, as well as rural libraries and libraries serving small populations. According to the FCC's data, the participation rates for these groups currently fall below the average rates of participation for all groups of applicants.

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