Digital equity groups say Commerce Department owes $3.6 million in reimbursements

Tears of frustration welled behind Sharonne Navas’ glasses, her shoulders slumped slightly forward.

“Even up until this week, I was just like, ‘Well, no. It’s the government. They have to pay,’” she told McClatchy in late July.

Navas, the executive director of the Seattle-based Equity in Education Center (EEC), contends that Washington’s Department of Commerce is withholding $3.6 million in grant money for a digital-literacy state initiative. The EEC was a grantee of the Digital Navigator Program, which offered computer training, broadband access and other digital-literacy skills to people in marginalized communities. 

The organization was chosen by the Department of Commerce in 2023 to help distribute millions of dollars in digital-equity grants to dozens of BIPOC nonprofits, operated for and by people of color, PubliCola first reported. 

But in January, the state stopped sending reimbursements — leading some of EEC’s 39 sub-grantees to furlough staff or face closure. 

Department of Commerce Director Joe Nguyen, a former state senator, started leading the agency that same month.

McClatchy contacted the department to request an interview with Nguyen. But a spokesperson said that, because the EEC has filed a formal contract dispute, the department can’t grant an interview until the dispute is resolved.

However, Nguyen previously told PubliCola that the EEC was always supposed to use its own funds to pay sub-grantees first — then send pertinent documentation and receipts to receive reimbursement. That statement is consistent with a new state audit on the department that examined the program’s grantee expenditures.

“I don’t understand why they can’t produce some of these basic receipts,” Nguyen told PubliCola. “It’s all on a reimbursement basis — you submit the receipts, we pay you back.”

Yet Navas insists that the EEC and sub-grantees have diligently worked to provide all the asked-for proof. Despite producing “a little over one terabyte of receipts and invoices,” the two sides remain at odds.

Prior to Nguyen’s tenure, Navas said her group had not been informed that it would need to pay sub-grantees up front. She added that she was told as long as the work was done — and there were invoices, receipts and accounting to prove it — they’d be reimbursed.

“What Commerce is doing now is simple — and cruel: They’re diverting attention from their own incompetence by manufacturing a villain,” she wrote in an Aug. 22 email to McClatchy. “And who better than a POC-led nonprofit that got the work done when the state could not?”

Digital Navigator furloughs, closures

Navas said via text on Aug. 21 that her organization has furloughed 14 of 18 staff because of the lack of reimbursement from Commerce. Seven organizations are on lines of credit, four are a couple months from closing, and three are filing dissolution papers by Nov. 1, she said.

Since October 2023, Navas’ coalition has serviced more than 290,000 “interactions” in over 80 languages through the Digital Navigator Program, she said in the Aug. 22 email.

Such interactions with groups and individuals help bridge the digital divide for underserved communities with hurdles to accessing information. Tablets and laptops were provided to students from low-income communities and communities of color during the pandemic, for instance, to aid the shift to online learning.

Of the money that the EEC says is owed, 90% is meant to pay wages for nearly 200 people, Navas said in July. One Digital Navigator has had to couch surf with her two autistic kids as a result of the payments going dry, she said.

Navas said she’s personally spent thousands of dollars on food for still-unpaid Digital Navigators who didn’t have money for meals.

“I think the hard part is that it’s a betrayal of what we thought was a progressive Washington state, to not get paid,” she said.

The Digital Navigator Program had been scheduled to sunset this summer. While state lawmakers extended the program in the 2025-27 budget, Gov. Bob Ferguson eliminated it via line-item veto, citing federal government funding cuts and the state’s significant financial difficulties, PubliCola reported.

State audit dings Commerce — twice

Two state audits released within a year of one another came down on Commerce over the Digital Navigator Program.

In the newer audit published Aug. 11, the Office of the Washington State Auditor said the department didn’t have proper internal controls over — and failed to ensure that — reimbursements for the program were properly supported and allowed. 

The review found that during Fiscal Year 2024, the state agency spent nearly $14.8 million on the program, 72% of which went to one grantee. That grantee, which isn’t explicitly named in the audit, received more than $10.7 million. (Later on, though, the audit references “grant terms between EEC and COM.”)

“The Department cannot be sure any of the funds paid to the grantee were used for their intended purpose,” the audit reads. “The vast majority of the $10,723,042 the Department paid to the grantee could not be verified as allowable because of a lack of sufficient documentation, and the expenses that had sufficient documentation were unallowable.”

The audit also flagged certain problematic reimbursements. That included more than $40,000 for “expenses such as first-class flights, meals, alcohol, catering, hotel reservations, subscriptions, floral arrangements, office and home décor, all-day beverage service at a resort, and a sponsorship for an out-of-state organization.”

Navas provided context for a couple of those expenses in an email. The flowers were condolences sent to two coalition partners with staff who’d endured significant personal losses within a day of each other, she said.

The first-class flight was to Spokane, and “the upgrade was paid for by miles,” she continued. She said the round-trip ticket was $400, which “would have been less than the round trip allowable mileage reimbursement to drive a car from Olympia to Spokane.”

“Now, instead of working with us to submit the information they claim to need, Commerce would rather starve our 39 partners — moving the goalposts again and again — proving, yet again, their ineptitude and disregard for the communities they say they serve,” Navas wrote.

She added that when “when we did submit an unallowable expenditure, our program officer let us know and we adjusted our invoice accordingly. Each. And. Every. Time.”

The audit noted that only one Commerce employee was responsible for the review and payment process on Digital Navigator reimbursement requests. 

“There was a lack of infrastructure in terms of how it was being handled before. There were not very good internal controls,” Nguyen told KUOW earlier this month. “One person was in charge of basically the whole thing, and that’s not quite how you should be doing it.”

Another state audit published in November also looked into the program. It recommended that the Department of Commerce properly review payments to make sure that they’re for allowable activities and to only give funding to Digital Navigators meeting all minimum, mandatory requirements.

Navas has acknowledged that the EEC made some mistakes at the start. It quickly grew from a $300,000 organization to nearly $13 million in eight months, thanks to the grant. 

But, she said that the EEC was never informed it had to pay $1.3 million each month up front before it could get its money back. 

“Commerce failed to provide clear rules — each of the last two audits call it out,” Navas said in the Aug. 22 email. “Commerce failed to provide consistent oversight, or even basic program stability.”

‘Tearing down communities of color’

Terrence Morgan is CEO of Fresh Start Professional Services, a nonprofit focused on breaking the cycles of poverty and incarceration.

Morgan told McClatchy in July that his organization has had to deplete its reserves to make sure it can serve the community with digital-literacy training. He estimated that Fresh Start is owed close to $400,000 dating back to January, resulting in layoffs. 

“It’s really heartbreaking for an agency to have a mission statement of ‘empowering community’ — speaking of Commerce — and here you are tearing down communities of people of color,” said Morgan, who is Black.

Ana Perera, CEO of Adonai Counseling & Employment Services of Tacoma, said her organization has also been hit hard.

Adonai offers re-entry assistance and other services throughout much of the state. Navas said in mid-July that Adonai was missing out on about $180,000 since the payments stopped.

Adonai’s Digital Navigators have worked with seniors, teens in rural areas and migrant laborers, Perera said. They’ve helped people learn how to use a computer and their phones, including how to connect with family members in their home countries through WhatsApp and FaceTime. 

Perera, Morgan and Navas say that Commerce has demanded ever-more proof for work already performed. They insist that they’ve provided payroll reports, receipts and additional documentation — everything they’ve been asked for. But it’s still not enough. 

Commerce wants to examine “every little individual thing,” Perera said — down to sub-grantees’ bank accounts. She said she’s had to tap her own salary to pay Adonai’s navigators. 

For Perera, the situation feels violating.

“The work was done. You got to brag on it. ... It was done,” she said. “Now pay for what we’ve done for you.”

Simone Carter

The Olympian

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