Federal authorities say Frontier Communications overcharged West Virginia for $4.7 million of federal grant money in the $126 million project to extend broadband internet to underserved regions of the state.
The Office of Inspector General cites reimbursements for $465,000 for invoice processing fees as "unreasonable" and at least $4.24 million in "unallowable" indirect charges for overhead and administrative expenses.
The office also notes "substantive miscommunication" between state and federal agencies involved.
Frontier said working with the state from 2010 to 2013 it built 675 miles of broadband fiber reaching some of West Virginia's most underserved people and connected 645 community anchor institutions including schools, libraries, health care providers and police.
The company says its administrative costs were proper and any reimbursement issues resulted from state miscommunications with the grants administrator.