Scathing audit: WA program neglected basic ‘tenets of government accountability’
AI-generated summary reviewed by our newsroom.
- Auditor Pat McCarthy found major oversight failures in Digital Navigator Program.
- Jan. 27 performance audit flagged $11M in reimbursements lacking sufficient documentation.
- Commerce leadership pledged reforms: stronger controls, oversight and vetting processes.
The Washington state auditor’s office recently issued a searing review of a now-shuttered Department of Commerce program meant to improve digital equity.
“This performance audit report serves as a case study in how neglecting the fundamental tenets of government accountability can sabotage even the most noble goals,” State Auditor Pat McCarthy’s executive summary begins.
The audit findings, released Jan. 27, raise numerous red flags about how Commerce managed the Digital Navigator Program, which received $92.5 million over three years. The program, which awarded digital-equity grants to contractors, was created to broaden access to online services for underserved communities, such as people experiencing poverty, residents on Medicaid, English language learners and those looking for jobs.
Program operations stopped in July after Gov. Bob Ferguson, pointing to fiscal constraints, vetoed its funding from the 2025-27 operating budget. Still, McCarthy wrote that a review could help the department better handle the overall management of grants looking ahead.
Among the top concerns highlighted in the report: Nearly $11 million in reimbursements lacked sufficient documentation, as previously mentioned in an accountability audit published last year.
“Government accountability, including accountability for grantees, improves results and maintains public trust — trust that I am afraid will be undermined by the severity of the findings we must report here,” McCarthy wrote in the latest performance audit report.
Commerce has acknowledged the report’s findings and issued a statement detailing how the department plans to avoid repeating history.
Interim Director Sarah Clifthorne said in a news release that the department has moved to improve how it runs things, such as via new audit functions and internal controls.
“I’m proud of the work we’ve done over the past year and look forward to making our agency even stronger and more accountable to the public,” Clifthorne said in the release.
What did the audit find?
McCarthy’s office asserts that the Digital Navigator Program wasn’t being managed effectively, and that staff made dubious decisions about grants. In one example from fiscal 2024, Commerce considered 18 grant applications, which were ranked. Of those, applications 1, 8 and 18 were picked without adequate explanation, the audit says.
In addition, one subcontractor benefited from $500,000 before it closed down following a probe into possible financial mismanagement, the report found.
Other concerns in the audit included: a paucity of documentation, improper vetting of contractors and subcontractors, the flouting of state rules by then-agency executives, and unclear program contracts. Department leaders at the time allegedly dismissed staff concerns about grant decisions.
The performance of grant awardees was also not effectively tracked, according to the auditor’s office — leaving questions about whether the program’s intended beneficiaries were being helped or if its goals were being met.
McCarthy’s office added that it referred a potential violation of ethics law to the state’s Ethics Board. In that case, a former program manager took a job with a contractor despite having exited the agency two months prior; a two-year waiting period is required under state law.
The performance audit report, which covered October 2021 through last July, emphasized that it was referring to a couple department leaders in charge through December 2024. McCarthy wrote that she’s been encouraged by recent actions taken by new Commerce leadership.
In December 2024, Ferguson tapped Joe Nguyễn to helm the agency. Commerce noted in its news release that Nguyễn, who today heads the Seattle Metro Chamber, had instituted numerous changes after becoming agency director last January.
New staff now oversee such programs, Commerce said in the Jan. 27 news release. Certain reforms are underway, such as the creation of a division to help offer better supervision of the more than 8,000 contracts at the department.
The agency is also focused on improving vetting and competitive processes, contracting standards and oversight of reimbursements, the release states.
This story was originally published January 31, 2026 at 5:00 AM with the headline "Scathing audit: WA program neglected basic ‘tenets of government accountability’."
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