Only nine of 44 rural areas selected for the upgrade would have high-speed Internet by the target date of 2015, and some could also miss a revised 2017 target, the report by the National Audit Office said.
The report raised concerns BT would be the only firm likely to win contracts and would benefit from $1.8 billion in public funds as a result, the BBC reported Friday.
"The rural broadband project is moving forward late and without the benefit of strong competition to protect public value," Auditor General Amyas Morse said.
The government announced in 2011 90 percent of rural areas would have access to Internet speeds above 24 megabits per second by May 2015. The Treasury revised its target last week, saying 95 percent would have access to superfast broadband by the end of 2017.
However, the audit office report said, past experience suggested the "government is not strong at taking remedial action to guard against further slippage."