PROVO — The two companies that provide services over the iProvo network owe Provo more than $1 million, and the state auditor's office wants to know if they are seriously delinquent.

Delinquent payments by MStar and Veracity, which provide Internet, phone and television/video services to Provo residents who subscribe to iProvo, would add stress to the strained financial condition of the city's fiber-optic telecommunications network.

The iProvo network has more than 10,000 subscribers but is bleeding money. The City Council loaned iProvo more than $3 million over the past two years and is using sales-tax surplus to cover another $1.2 million in expected shortages this year.

Provo's annual financial report, issued last month, showed MStar and Veracity owed the city $1 million at the end of the fiscal year, which was June 30.

"I would anticipate it is higher than it was at the end of the year," Provo Finance Director John Borget said late Friday, "but I don't have the exact amount in front of me."

Veracity President Drew Peterson said his company is not behind.

"We are not in serious delinquency to iProvo in any fashion," Peterson said. "I don't know where that came from."

Provo and Veracity are involved in a dispute over how to bill for some customers, which could add to the total Provo believes it is owed. Peterson said the sides are close to a resolution.

"For the last year, I believe, we've made a payment every month," Peterson said. "I don't know if they've received our latest check, but even if we were 30 days past due, that's not serious delinquency by any stretch."

Attempts to reach MStar by telephone and e-mail were unsuccessful on Friday.

The state wants copies of all of iProvo's billing records for the past three years and tape recordings of closed Provo City Council meetings for the past six months, according to a letter sent to the city Dec. 20 by State Audit Director Deborah Empey.

The investigation was launched after a complaint was made through a hotline offered by the state auditor's office. The tip alleged that "accounts receivable related to iProvo service providers are in serious delinquent status," according to Empey's letter.

The hotline is designed to field complaints about actions with financial implications for local and state governments.

Provo considers many of its records regarding MStar and Veracity to be protected by confidentiality agreements.

"We respect the state auditor, but we have legal obligations we can't ignore," said Mayor Lewis Billings, referring to nondisclosure agreements with the companies.

Billings said the companies aren't drastically in arrears.