Colorado rescinds over $100M in BEAD awards after investigation into whistleblower complaints

After a monthslong investigation, Colorado officials have rescinded more than $100 million in Broadband Equity, Access, and Deployment (BEAD) funding that was tentatively awarded to an internet service provider following whistleblower complaints alleging “financial mismanagement and misuse of grant funds.”

The Colorado Broadband Office said it received two complaints in May about the misuse of state and federal broadband grant dollars by Maverix Broadband, Inc., an ISP that provides internet services to rural and suburban Colorado. CBO said it immediately froze payments through six open BEAD grants, opened an inquiry, and initiated enhanced monitoring oversight of Maverix, which found payments for services and materials that were not received and unpaid vendors. 

CBO said it sought to recover $3.2 million in grant funding — $2.5 million in federal Capital Projects Fund dollars and $700,000 in state funding — from the company. But before it could do so, Maverix filed for bankruptcy earlier this month, according to reporting from BusinessDen, and was placed into receivership. CBO said it hopes to get the funds back through Maverix’s bankruptcy proceedings, and the agency referred the findings of financial mismanagement to the U.S. Treasury’s inspector general and the Colorado Bureau of Investigation.

The office is also rescinding the more than $100 million in provisional BEAD awards it awarded to Maverix, which covered roughly 10,000 locations. CBO clarified that no BEAD contracts were signed with Maverix and no BEAD money was distributed. The state plans to reopen those locations to other providers through a competitive rebid process.

The cancellation is significant to Colorado’s BEAD program. The state’s total BEAD allocation was about $826.5 million, and its provisional awards following the program’s revised requirements in June 2025 totaled about $397.4 million. Maverix’s $103 million allocation represented about 26% of the state’s provisional awards and about 12.5% of Colorado’s total federal BEAD allocation.

“Colorado takes our responsibility to protect taxpayer funds seriously, and when concerns were raised, our safeguards worked,” Colorado Chief Information Officer and Governor’s Office of Information Technology Executive Director Sarah Tuneberg said in a statement. 

“The State took swift action to freeze all payments, investigate the source of funding misuse, and is taking full action to hold Maverix accountable,” Tuneberg added. “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.”

News of the state’s BEAD shakeup comes amid recent changes to the BEAD program, with the National Telecommunications and Information Administration announcing earlier this month that states must conduct another round of BEAD funding and leadership changes within the CBO last week. 

Brandy Reitter, the office’s executive director, resigned last week after holding the position for over four years. Reitter told StateScoop that she resigned for “personal reasons” and her decision had nothing to do with the investigation into Maverix, which she led. Under Reitter’s leadership, CBO took action to freeze the company’s funding.

“I am very pleased with the state’s response to Maverix and engaging CBI, which I strongly advocated for and support. I have always emphasized holding ISPs accountable and have a very successful track record of doing so over the last 5 years,” Reitter told StateScoop. “Colorado is no stranger to ISP defaults and not making good on their promises. [Rural Digital Opportunity Fund] defaults were a much larger problem for Colorado, which stranded 40k locations and left several tens of millions in unspent funds.” 

The broadband funding is also happening while Colorado’s OIT is simultaneously undergoing a significant organizational reset. The office announced a restructuring in May, which included the elimination of 173 positions, the replacement of its chief information officer and the adoption of a new operating model intended to improve delivery of state digital services.

Though Tuneberg, who was selected to replace former CIO David Edinger, shared with the Colorado legislature’s Joint Technology Committee earlier this month that OIT had hired back 15 of the 173 workers who were laid off during the restructuring, committee member Rep. Brianna Titone, D-Arvada, said that she heard OIT employees were “at their breaking point and are being overworked.” 

Tuneberg said during the hearing that a recent employee survey showed positive responses to the restructuring, with 55% of respondents “on board with OIT’s direction, compared with 42% in March,” according to reporting from the Colorado Sun.

“We are doing a lot of work to support employees through the change. That looks like significant amounts of training, more than we’ve ever offered. Very clear performance expectations so that people know what they’re expected to do and how they’re supposed to show up in this model,” Tuneberg reportedly said in the hearing. “I appreciate again that change is hard and I do not minimize that. We’re seeing people excited, and the feedback is strong.”