Department of Administration Director Teresa Luna told the Senate Education Committee the federal agency that had agreed to provide three-fourths of the network funding is still trying to determine if the department's contract is illegal.
Education Networks of America and CenturyLink received the split contract in 2009, but a lawsuit brought by another company, Syringa Network, says it was unfairly tinkered with by former Department of Administration director Mike Gwartney.
The Federal Communication Commission launched its own investigation, and has withheld funding since March 2013 as the lawsuit is pending. Legislators didn't find out about that until the beginning of the session in January.
Lawmakers have asked why they weren't alerted that federal money was nine months late, but Luna said she believed the funding would be forthcoming after a routine check-in from the feds.
Still, she acknowledged the department kept some people in the dark.
"We have heard loud and clear from IEN Program Resource Advisory Council that they were not happy with the communication," she said. "We've put processes in place to make sure that doesn't happen again, but at the time we had every reason to believe the funds would be released."
If the government refuses to pay, ENA could demand Idaho make up the $13.3 million in back payments money the state never expected to have to deliver.
The FCC could also refuse to enter into any new contracts with Idaho even if the state rebids for new contractors. That could spell lights out for the network currently providing high-speed broadband to Idaho high schools.
"I don't know what they would do," said Merlyn Clark, the state's attorney in the Syringa lawsuit. "They'd have the ability to debar the state or school from any further funding."
Senate Education Chairman Sen. John Goedde warned lawmakers against turning Monday's question-and-answer session into "a witch hunt." Still, more questions than answers remain on how the state can extricate itself a task made more difficult when the department elected to extend ENA's contract a year early, without lawmakers' sign-off. That decision saved the state $175,000 a month more if it had waited to renew, but also ties Idaho to the contested provider until 2019, unless a court declares the contract void.
Luna told the committee there was a possibility Idaho could qualify for an FCC waiver, meaning they would not have to pay back the federal government's share even if the contract is determined illegal. That's because the state isn't accused of losing the money through fraud, waste or abuse.
"That is our most likely avenue to not only not have to pay back the funds, but to get a waiver moving forward with the contracts," Luna said.
Gov. C.L. "Butch" Otter has asked the Legislature to approve about $7 million more to keep the school's system up and running, but lawmakers have not yet said whether they will back that plan.
Goedde said he supports keeping the IEN running, even if the path forward is still unclear.
"I think everyone realizes we need to keep the system to further education in this state," he said. "It's just how we do it."