"With the discounts we received and the free routers, we do believe West Virginia made an appropriate use of the [stimulus] funds for the router purchase," Alsop said.
The Gazette-Mail previously has reported that the Cisco 3945 series routers are designed to service a minimum of 500 users, or device connections. Yet the state has installed the pricey devices primarily in rural schools and libraries with only a handful of computer terminals.
According to Friday's audit report, West Virginia mismanaged its inventory of 1,164 routers. Some routers weren't at the public facilities where they were assigned, the report states. Other devices were found in storage but not included in the state's inventory.
"As the lack of an effective management system increases the risk of fraud, waste or abuse, it is vital for [West Virginia] to maintain an accurate equipment inventory tracking system, including router inventory," according to the report.
Federal auditors also interviewed administrators at some public facilities in West Virginia.
"The representative of one group stated that three routers currently designated for a smaller location could be better utilized by other, larger sites," the report states. "Another representative stated that the service to operate the new router was cost-prohibitive."
The Gazette-Mail has reported that some public facilities have refused to use the devices because they can't afford faster Internet service. The state is using about $40 million of the $126.3 million in stimulus funds to bring high-speed, fiber-optic cable to the community buildings. The routers connect to the fiber-optics cable.
State officials told federal auditors that they would remove oversized routers from facilities that don't want them and install the devices at places that do.
The Inspector General report also cites the state for failing to have agreements with public facilities to continue to use the routers.
"Without an agreement, the community anchor institution may not understand it cannot dispose of the equipment without first seeking approval," the report states.
Alsop said the state would have the facilities sign agreements.
The auditors directed West Virginia officials to establish an accurate "master list" to track routers and make sure routers are installed and functioning -- not just delivered. The state previously has tracked only deliveries.
"We have concluded that [West Virginia] must strengthen its control over router inventory," the report states.
Alsop said the state tags every router and plans to catalog all 1,164 devices into a new inventory system within 90 days. Also, government employees have started going to every public facility to ensure routers are "in place, tagged and appropriately located."
"We believe the funding provided to West Virginia through the grant will provide tremendous opportunities for West Virginia," Alsop said. "We want to be good stewards of taxpayer dollars, and we used the review process to learn how we can do an even better job managing this project."
The West Virginia Legislative Auditor also is reviewing the router purchase. That report is expected next month.
Reach Eric Eyre at erice...@wvgazette.com or 304-348-4869.