CHARLESTON, W.Va. -- The June 29 derecho storm and a U.S. Department of Commerce inspector general's audit have slowed West Virginia's $126.3 million high-speed Internet expansion project, but the state still expects to complete construction by February, according to the latest quarterly report to the federal government.West Virginia has five months to finish the broadband project or risk losing unspent funds. The state has completed 56 percent of the project, which started in the summer of 2010.West Virginia Homeland Security Director Jimmy Gianato said Thursday the state would meet the federal government's Feb. 13 deadline."The West Virginia project is still on track to be completed on time and within the original proposed budget," Gianato said.In 2010, West Virginia received a $126.3 million federal stimulus grant designed to bring fiber-optic cable to more than 1,000 "community anchor institutions" -- schools, libraries, health clinics, 911 centers, county courthouses and other public agencies.Last month, Gianato notified the National Telecommunications & Information Administration -- the federal agency that distributed the grant funds -- that the June 29 windstorm set back the broadband project by a month.At the time, Gianato said the delay would pose "a challenge to ensure compliance with deadlines and grant completion," according to the quarterly report.On Thursday, Gianato said the state has submitted a revised "mitigation plan," to make up for lost construction time, and the NTIA has approved it.Frontier Communications, which is building the fiber network, said the company initially planned to complete construction by October, but now hopes to finish up by December -- "well ahead of the Feb. 13 deadline.""The original mitigation plan reviewed and approved by the NTIA included a built-in three-month cushion to accommodate unforeseen events, such as the June 29 storm," Frontier spokesman Dan Page said.Gianato also told federal grant officials that the state had to "redirect time and effort" after the federal inspector general started reviewing West Virginia's use of the $126.3 million in stimulus funds.The chairmen of two U.S. House energy committees asked for the investigation after the Gazette published a series of stories about the state's purchase of $24 million in Internet routers with the grant money.Auditors with the inspector general spent a week in Charleston last month, reviewing documents and inspecting sites where the state had installed routers, which cost $22,600 each.Gianato said the inspector general's review shouldn't cause future delays."The IG review caused a redirect of staff time away from working on the project," he said in an email Thursday. "That time has been made up by the respective members of our team, and the time lost has been made up. As of this quarter, this will be a negligible factor."In his quarterly report, Gianato also cited leftover funding as an additional "challenge" with the broadband project. Gianato estimated the state would have $9 million in unspent funds once the project is completed.He said the state would have to get the NTIA's approval to put the leftover grant money to another use. Also, it would be difficult to complete any new broadband-related projects that require environmental studies by Feb. 13, he said."Time is the most critical factor," he said Thursday.In the quarterly report, Gianato also told federal officials:• The $126.3 million project has created 131 jobs. Frontier has hired the bulk of workers for the broadband project, followed by Jane Lew-based Premier Construction, which is building microwave towers designed to improve emergency communications across West Virginia. In the state's application for the stimulus money, officials cited a Communications Workers of America report that predicted the project would create more than 2,000 jobs.• Premier has finished building nine microwave towers. The company plans to build eight additional towers -- three new ones and five that will replace existing towers that have structural defects.• Frontier has installed 570 miles of fiber cable, and plans to build an additional 166 miles. In West Virginia's application for the stimulus funds, state officials said Frontier would build 2,400 miles of fiber. The project was scaled back after the state discovered that many sites scheduled to receive high-speed fiber already had it.Reach Eric Eyre at email@example.com or 304-348-4869.