A consulting firm hired by Gov. Earl Ray Tomblin's administration started an audit of the state's use of $126.3 million in stimulus funds to expand high-speed Internet, but the governor's office abruptly stopped the review in May 2011, records show.
Tomblin's office had given the go-ahead for the audit after ICF International submitted a scathing memo about the statewide project, finding that the state was using the stimulus funds to build a fragmented broadband network that solely benefited Frontier Communications, West Virginia's largest high-speed Internet provider. ICF also criticized Frontier for "inadequate project documentation" that failed to comply with federal grant rules.
Tomblin aides said last week the audit wasn't completed because Frontier "answered or addressed" the issues raised by ICF's memo. Frontier also submitted documentation that disputed many of ICF's findings, including an "external audit" - paid for by Frontier - that found "no material deficiencies" of its work on the broadband expansion project.
"Subsequent to ICF providing the memo, the state determined that it received the information it needed for purposes of the grant, and ICF went to work on other matters," said Amy Shuler Goodwin, a Tomblin spokeswoman.
At the request of Tomblin's top aides, Virginia-based ICF International started a "detailed project audit" last year, according to documents obtained by The Charleston Gazette. ICF's audit, in part, was designed to help state officials prepare for a federal inspection. ICF planned to scrutinize invoices, examine policies and set up a database to audit project costs.
The audit was to include a review of high-speed fiber construction to more than 1,000 "community anchor institutions" - schools, libraries, health clinics, jails and other public facilities. Tomblin's top aides also authorized ICF to examine plans to build fiber between the National Radio Astronomy Observatory at Green Bank and West Virginia University.
In a three-page memo delivered to Tomblin aides last April, ICF concluded that the fiber network the state was building had "no practical use for the public or competition." ICF also accused Frontier of subverting federal regulations and driving up construction costs by "gold-plating" facilities - installing up to six times more strands of fiber than needed at public facilities throughout the state.
Tomblin's chief of staff, Rob Alsop, asked for specific examples of Frontier's questionable construction requests. ICF's consultants red-flagged seven locations, including the Berkeley County Judicial Center, Cameron High School and the Harrison County Courthouse. At one site, the state authorized Frontier to spend $153,000 to install 20,500 feet of fiber cable, but the building was scheduled to receive 6,200 feet of fiber, according to ICF's report.
Frontier has called ICF's findings "worthless." ICF has said it stands by its report.
ICF had planned to submit monthly audit reports to Tomblin's office, and the consultants also proposed meeting with federal officials overseeing West Virginia's stimulus project, according to the consultant's "draft audit plan," which the Gazette obtained under the state's Freedom of Information Act.
The state initially planned to build a 900-mile fiber network, but state officials have since directed Frontier to scale back fiber construction to about 500 miles.
The short-lived ICF audit excluded a review of the state's decision to tap the stimulus funds and purchase more than 1,000 high-capacity Internet routers for $24 million. State officials bought the routers - which cost $22,600 each - in 2010.
"The routers already had been purchased at that time," Goodwin said. "The focus at that time was on dealing with current, in process implementation."
In February, the state Legislative Auditor's Office released a report that found state officials wasted at least $7.9 million - and up to $15 million - by purchasing oversize routers that weren't needed at many locations.
Tomblin has ordered a review of more than 1,000 public buildings that received routers.
Meanwhile, the legislative auditor has expanded its review to include spending on other facets of the $126.3 million project.
The Gazette previously reported that ICF's lead consultant, Keith Montgomery, has ties to West Virginia Commerce Secretary Keith Burdette, whose agency hired ICF.
In 2005, Montgomery headed a start-up company called iTown Communications. Burdette was iTown's lobbyist. The company, which offered to provide government-subsidized broadband Internet services to rural towns and counties, was shut down in 2008.
Goodwin noted that the commerce department initially hired ICF last year to examine other statewide broadband issues - not the $126.3 million project. The company has completed several additional reports on broadband-related topics for the state.
Frontier's West Virginia spokesman was unavailable for comment last week.
Reach Eric Eyre at firstname.lastname@example.org or 304-348-4869.
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