Washington Auditors Flagged the Same $92.5M Program Three Years
Summary
Three consecutive Washington State Auditor reports -- covering fiscal years 2023, 2024, and a January 2026 performance audit -- found the Department of Commerce's $92.5 million Digital Navigator program couldn't prove its grant money was spent as intended. The first found $6.1 million paid to 12 grantees who never met the program's own eligibility rules; the second found the Department paid a single grantee $10.7 million, most of it in advance and in violation of its own reimbursement-only contract, and could confirm almost none of it was allowable; the third, after the program had already shut down, found a $500,000 subgrantee that collapsed under a fraud investigation and a former program manager whose new job at the lead grantee triggered an ethics referral.
Year one: paying grantees who never qualified
The Legislature created the program in 2019⧉ inside the Washington State Broadband Office, seeding it with a $50 million appropriation to fund third-party "Digital Navigators" who would help residents with limited internet access find jobs, education and health services online. By fiscal year 2023 the Department was paying $36.4 million to 32 Digital Navigators⧉ a year. That year's accountability audit sampled 27 of them and found 12 -- missing signatures, undisclosed prior state contracts, incomplete business references -- didn't meet the program's own minimum and mandatory requirements to participate. The Department paid those 12 ineligible grantees $6,093,512⧉ anyway, 16.7% of that year's total program spending. A separate payment sample turned up smaller, plainer violations: $1,510 in unapproved food and snacks, and $80 for a phone case.
Year two: paying in advance, and almost nothing could be verified
The eligibility problem from FY2023 was still only "partially corrected" when the next audit began. In FY2024, the Department spent $14.8 million on the program⧉; 72% of it, $10,723,042, went to a single grantee. Auditors reviewed the Department's own file for that payment and found $8,608,981 lacked any detailed breakdown⧉ of the services or supplies the grantee actually provided -- a reimbursement form existed, but nothing behind it. Going straight to the grantee for better records didn't fix the problem: auditors confirmed $244,890 of what remained was outright disallowed⧉ -- duplicate payments, costs from before the contract even started, and expenses including first-class flights, alcohol, floral arrangements and a resort's all-day beverage service.
Worse, $8,380,736 of the $10.72 million had been paid to the grantee in advance⧉ of it spending the money at all -- a direct breach of a contract that required reimbursement only, after services were delivered. One employee, untrained for the role and unsupervised, handled the entire review-and-payment process alone. Auditors' verdict: "the Department cannot be sure any of the funds paid to the grantee were used for their intended purpose."
View data as table
| Lacked detailed documentation | $8.61M | 80% of the $10.72M paid |
|---|---|---|
| Documented but disallowed | $0.24M | duplicates, pre-grant costs, luxury items |
| Properly supported | $1.87M | the remainder |
Year three: the audit that asked how this kept happening
By the time the January 2026 performance audit⧉ examined how Commerce actually ran the program, it found the grant-selection process itself was compromised: of 18 qualified applications for the FY2024 cycle, Commerce chose the ones ranked 1st, 8th and 18th⧉. The score sheet explained why the runners-up ranked 2nd through 7th lost out -- but gave no explanation for seven of the other nine rejected applicants, or for why the lowest-scored applicant of all 18 got funded.
Auditors also found at least one contract amended and expanded without competition⧉ in ways the agency's own contracts office flagged as a violation -- including an extra $40,000 a division Assistant Director approved in May 2023 after being warned the contract had already breached the rules. When program staff withheld a payment pending documentation, the former Broadband Office director issued a memo ordering it paid anyway⧉, directly violating the contract's ban on advance payments.
A subgrantee collapse and an ethics referral
Because Commerce never built a procedure to vet subgrantees, one that had been awarded $500,000 closed down⧉ after its own internal investigation into suspected financial mismanagement. And in July 2024, a former Digital Navigator program manager took a job with the program's lead grantee⧉ just two months after leaving Commerce -- inside the two-year cooling-off period state ethics law requires -- and the State Auditor referred the matter to the state's Ethics Board.
None of it mattered to the program's survival: Gov. Bob Ferguson had already vetoed its funding⧉ out of the 2025-27 budget on fiscal grounds, and the program closed July 1, 2025. Commerce agreed with all nine of the performance audit's recommendations and says it has hired a CPA firm to re-review the FY2024 payments and decide what, if anything, to try to recapture⧉.
- Three audits, three years, the same conclusion. FY2023 found $6.1 million paid to ineligible grantees; FY2024 found the Department could verify almost none of a $10.7 million payment to its lead grantee and had paid 78% of it in advance; the January 2026 performance audit found the underlying grant-management system -- selection, vetting, contracting, oversight -- was never built in the first place.
- The state may never get an accounting of where $10.7 million went. Auditors reviewed both the Department's files and the grantee's own records and still couldn't confirm the money was spent as intended; Commerce's own promised CPA re-review only began after the program had already shut down.
- Two individual failures reached beyond bookkeeping. A $500,000 subgrantee collapsed under a fraud investigation Commerce never required anyone to vet for, and a former program manager's move to the lead grantee, inside the state's ethics cooling-off window, is now with the state's Ethics Board.
All figures are from three Washington State Auditor's Office reports on the Department of Commerce's Digital Navigator program: the January 2026 performance audit (Report No. 1038354), the FY2024 accountability audit (Report No. 1037901, published August 11, 2025), and the FY2023 accountability audit (Report No. 1036021, published November 25, 2024) -- all read in full via direct PDF fetch and pdftotext extraction. An archive.org Save Page Now request was attempted for each document but the service was returning 'temporarily offline' throughout this iteration; no archived captures are attached, and the direct sao.wa.gov / portal.sao.wa.gov URLs serve as the one-click originals.
The 80.3% and 78.2% shares of the FY2024 payment, the 16.7% ineligible-spending share for FY2023, and the $1.87 million properly-supported remainder are this outlet's own arithmetic on the audits' own figures (methods and caveats in analysis.json); the reports state each underlying dollar amount individually but do not themselves state these derived percentages or the remainder. The FY2023 ineligible-grantee total and the FY2024 undocumented-payment total describe different categories of failure -- who received money versus whether the paperwork behind it holds up -- and are never added together in this piece. A blind adversarial verifier, working from the primary documents alone with no access to this draft, independently checked every itemized fact; see verification.json.
Sources(3) ▾
- Washington State Auditor's Office, Assessing the Department of Commerce's Management of the Digital Navigator Program (Performance Audit, Report Number 1038354) (2026-01-26) — The primary document: the State Auditor's performance audit of how the Department of Commerce managed the $92.5 million Digital Navigator program from October 2021 through July 2025. Source for the $92.5 million / $242.7 million funding-split figures, the program's closure after the governor's veto, the FY2024 grant-selection process that picked applicants ranked 1st, 8th and 18th of 18, the $500,000 subgrantee that closed under a financial-mismanagement investigation, the contract amended and expanded without competition (including the $40,000 May 2023 addition), the director's memo bypassing documentation requirements, and the ethics referral for the former program manager who took a job with the lead grantee. sao.wa.gov · original document
- Washington State Auditor's Office, Accountability Audit Report, Washington State Department of Commerce, For the Period July 1, 2023 Through June 30, 2024 (Report No. 1037901) (2025-08-11) — The FY2024 accountability audit, cited by name in the January 2026 performance audit as an underlying source. Source for the $14,798,999 total FY2024 program spending, the $10,723,042 (72%) paid to a single grantee, the $8,608,981 that lacked detailed supporting documentation, the $244,890 in confirmed-disallowed expenses (duplicate payments, pre-grant-date costs, ineligible items), the grantee-level review figures ($2,474,570 undocumented, $8,248,472 insufficiently detailed), the $8,380,736 paid to the grantee in advance of it spending the money, the single untrained employee handling the entire reimbursement process, and the finding's own conclusion that the Department 'cannot be sure any of the funds paid to the grantee were used for their intended purpose.' portal.sao.wa.gov · original document
- Washington State Auditor's Office, Accountability Audit Report, Washington State Department of Commerce, For the Period July 1, 2022 Through June 30, 2023 (Report No. 1036021) (2024-11-25) — The FY2023 accountability audit -- the earliest of the three audits, and the origin point of the program's documented oversight failures. Source for the $50 million original legislative appropriation, the $36,413,464 the Department paid to 32 Digital Navigators in FY2023, the finding that 12 of 27 sampled Digital Navigators didn't meet minimum and mandatory eligibility requirements while receiving $6,093,512 in program funds, and the $1,510 in unapproved food/snack payments plus $80 for an unapproved phone case found in a 48-payment sample. portal.sao.wa.gov · original document
Comments
Always open. Logged-in readers can annotate paragraphs in place.
For three straight years, the Washington State Auditor's Office⧉ has audited the Department of Commerce's Digital Navigator program -- a $92.5 million effort to help job seekers, English learners and Medicaid clients get online -- and found the same underlying failure: the state can't show its grant money did what it was supposed to do. The January 2026 performance audit⧉ is the third of three reports on the program, following two annual accountability audits that each found a different flavor of the same problem, unresolved.