As the dearth of cell phone and internet service in Northern New Mexico hits headlines again with an announcement from Santa Fe's mayor of a "communications emergency," rural residents are still waiting for answers about what happened to federal stimulus money intended to increase connectivity for their communities years ago.
Regardless of the $10.5 million granted by the feds to develop broadband in the region, they're still behind in terms of speed and accessibility, and now the money granted for infrastructure can't be entirely accounted for. A joint government agency is undergoing a special audit amid allegations that it mismanaged federal broadband stimulus money.
In 2010, an agency called the North Central New Mexico Economic Development District received $10.5 million in federal stimulus money to develop broadband infrastructure. The district also collected $2 million in matching funds and contributions from members for the project, then formed a community broadband network called REDI Net that aimed to provide internet service to schools, libraries, colleges, government offices, public utilities and fire departments.
The agency oversaw REDI Net's finances until 2015, at which time Rio Arriba County took over as fiscal agent.
With 140 miles of new fiber optics in place, Rio Arriba County saw the role of fiscal agent as a substantial investment opportunity. From 2011 to 2013, the county had contributed $700,000 to the REDI Net project. It made sense to step up for the role. But Deputy County Manager David Trujillo told the state auditor that the agency never turned over bookkeeping files that were needed to ensure internet service continued.
Trujillo tells SFR in a recent interview he assumed there would be a smooth transition until his staff couldn't determine REDI Net's monthly income or whether service was even provided with certain agreements. Its then-general manager Duncan Sill resigned and could not be reached for comment.
"When you're looking at this stuff, you don't know how to proceed," Trujillo tells SFR, noting the agency did not provide bank statements or invoices, and it appeared from the limited documents it did provide that some contracts weren't executed or were only in draft form.
One of REDI Net's customers, Black Mesa Wireless LLC, provides internet to homes and businesses from Pojoaque to Dixon, Rinconada and Hernandez to the north. Black Mesa co-owner Brock Tice says he had ongoing billing issues with REDI Net before Rio Arriba County took over as fiscal agent. He says his checks weren't credited to his account, resulting in invoices double the amount of what he owed.
"We're talking thousands of dollars. It's not a small check to be deposited and go missing," he says. Further, when Black Mesa Wireless wanted to change its service level agreement to use more bandwidth, REDI Net was unresponsive. "It was very disconcerting. We were very dependent on them for our business, so I'm glad it's moving in a different direction now," Tice says.
Rio Arriba County stepped into the administrative role for REDI Net before billing issues affected service. The county did an internal audit verifying active customers and balances, but after continuous requests for documents needed to oversee REDI Net, officials filed an Inspection of Public Records Act request. Trujillo says the economic development agency ignored the request.
That's when the county reported to the state auditor. The auditor then notified REDI Net it was out of compliance with the state rules, and ordered the special audit that began six months ago in May.
While the independent auditor hired to conduct the audit, Jaramillo Accounting Group, hasn't found any serious indication of fraud or embezzlement, the agency can't entirely account for how money was spent, says Kevin Sourisseau, director of special investigations at the Office of the State Auditor. "There's infrastructure there. The money didn't go into a black hole, but there's no list of assets."
Sourisseau tells SFR the firm's report should be ready early next year. The scope of work includes identifying assets, inventories, accounts, contracts and administrative costs. Auditors will also evaluate for compliance with federal, state and local laws on accounting principles. Auditors asked that Tim Armor, executive director of the North Central New Mexico Economic Development District, outline policies and procedures followed in the financial management of REDI Net.
Armor tells SFR he's sure the audit will affirm his agency is in the right, and explains the investment by the feds paid solely for the development of broadband infrastructure.
"We noted that we followed policies and procedures and didn't make any exceptions to the best of our knowledge," Armor says. "We're confident none of the dollars were spent inappropriately, misspent or misdirected."