I completed this report while working as an intern at WCYB. Bristol Virginia Utilities was under a state required audit due to a corruption scandal. In this update, I included the preliminary findings of the audit and how that would affect the sale of BVU's internet service, Optinet.
The sale price for BVU’s Optinet division will not be affected by an audit currently in progress. In a preliminary report, the audit requires BVU to return nearly $14 million of debt improperly removed from Optinet to the books.
The audit reveals BVU miscalculated the amount of debt that could be covered by money from its electric division. Virginia state law only allows cross-subsidization of internet services but not telephone or cable. BVU calculated Optinet’s share of debt by using its fair market value rather than the actual debt amount.
Optinet’s pending sale to Sunset Digital could be delayed by the finding.
“It probably doesn't have a lot of impact on them,” BVU CEO Don Bowman said. “But it could affect the tobacco commission and other agencies and how they review the deal and whether they give us approval or not.”
BVU is currently looking at ways to pay the debt if Optinet does not sell. They will discuss the audit at a board meeting on June 27.
The final audit report will be completed on June 30.
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