Colorado cancels $103 million BEAD award to Maverix after finding misuse of funds

Colorado has cancelled more than $100 million in broadband grant funding to Maverix Broadband after an inquiry found misuse of taxpayer money, in one of the biggest enforcement actions in the federal BEAD programme’s history.

The Colorado Broadband Office said on Monday that after receiving whistleblower reports, it froze payments to Maverix, launched an inquiry, moved to terminate six active grants, and rescinded more than $100 million in provisionally-awarded Broadband Equity, Access, and Deployment (BEAD) funding that had not yet gone out, the state’s Office of Information Technology announced. Trade outlet Fierce Network reports the provisional BEAD award was worth $103 million.

The office received two whistleblower complaints in late May raising concerns about Maverix’s use of grant funding. The inquiry found financial mismanagement and misuse, including payments for services and materials that were never received, and vendors left unpaid.

“Colorado takes our responsibility to protect taxpayer funds seriously, and when concerns were raised, our safeguards worked,” said Chief Information Officer and Executive Director Sarah Tuneberg. “While I’m proud of the CBO team’s efforts and reassured to see our safeguards working, I’m disappointed that this could delay high-speed internet access to rural Coloradans as we seek to find a new vendor.”

Maverix, a fibre broadband provider serving rural Colorado, was earlier placed into receivership and filed for Chapter 11 bankruptcy protection on 31 August, Fierce Network reports. The state is pursuing recovery of $3.2 million in grant funds — $2.5 million federal and $700,000 state — through the receivership and bankruptcy proceedings, and has referred its findings to the US Treasury’s Office of the Inspector General and the Colorado Bureau of Investigation.

Maverix had already received about $9.17 million from three federal Capital Projects Fund grants and three state High Cost Support Mechanism grants, according to the Colorado Sun via Fierce Network. Broadband Breakfast reports the state is rebidding the 10,000 affected locations.

Sources

• Colorado Office of Information Technology — Colorado Takes Action to Protect Taxpayer Funds Following Broadband Grants Inquiry
• Fierce Network — Colorado rescinds BEAD awards to Maverix Broadband after whistleblower warnings
• Broadband Breakfast — Colorado Cancels $100 Million BEAD Award After Finding Misuse of Funds