Dozens of Digital Literacy Groups Funded Through a Statewide Grant Haven't Been Paid Since January. The State Says It Isn't to Blame.

As a state digital equity programs shuts down, the group that distributes state funds to dozens of small nonprofits and the State Department of Commerce are at an impasse, with millions in the balance

Image by Colin via Wikimedia Commons

By Erica C. Barnett

Terrence Morgan, the CEO of Fresh Start Professional Services, was excited to receive grant funding in 2023 through a state initiative called the Digital Navigator Program. For the first time, Fresh Start would be able to rent an office to hold digital literacy classes and provide a modest monthly subsidy for program participants—people from marginalized communities, including survivors of domestic violence and people coming out of prison or treatment, for whom computer training classes could provide a pathway to higher educat,ion or better-paying jobs.

For more than a year, the state money that paid for the program showed every month, as expected. But then, this past January, the funding stopped.

Fresh Start was able to keep its classes going for a while by spending down its reserves and canceling the stipends that made it feasible for many of its clients to participate in the program, Morgan said. By April, though, "we started really feeling the brunt of it, because our funds were depleted. Our funds are totally completely depleted now." After six months without any reimbursement for its work, Fresh Start has taken out a line of credit and laid off staff. Morgan and two other top staffers stopped taking pay three months ago.

"We're doing the bare minimum we can do" until the program ends this month, he said. At this point, he isn't convinced the state Commerce Department, which funds the Digital Navigator Program, has any intention of paying the dozens of groups that signed contracts for the funding in 2023. ""My guess is—and I’ve been saying this for the last four months—we ain’t never getting paid."

To understand why Fresh Start and the other organizations have gone unpaid for months requires some background on how the state's Digital Navigator Program works. In 2021, at the height of the pandemic, the Commerce Department began giving out grants to local organizations to distribute laptops, set up internet connections, and provide digital literacy training to people in underserved communities.

Since then, the Digital Navigator Program has expanded and evolved, granting tens of millions of dollars to dozens of organizations to pay for digital literacy classes, laptops, help lines, and internet service across the state. A dashboard on the EEC's website documents nearly 230,000 "interactions" made possible by the Digital Navigator Program, which include classes, home visits, calls to technical support lines, and other one-on-one encounters with people who participated in the program.

In 2023, the Commerce Department selected one of those grant recipients, the Seattle-based Equity in Education Center, to distribute more than $20 million in digital equity grants to 39 smaller nonprofits run by and for people of color in marginalized communities—a departure from the department's previous practice of distributing dozens of grants directly. The EEC headed up the largest of three such "consortiums"; the other two were run by the Community Health Network of Washington and the Nisqually Indian Tribe.

For the first year or so, EEC director Sharonne Navas said, the payments from the Commerce Department came regularly. "We'd submit [invoices] for January, get paid in February, and reimburse our subcontractors by the first week of March," she said. Last year, the state started asking for additional proof of how the organizations were spending their money, like payroll reports, bank statements, and copies of paper receipts. Navas said the EEC provided all the requested documentation, despite chafing at what they saw as shifting, sometimes arbitrary requirements.

Then, in November, a state audit found issues with 12 of the 62 digital navigator contracts with the organizations heading up the three consortiums. The Commerce Department, according to the audit, had failed to ensure that some forms had signatures, hadn't verified certain contract requirements, and had paid out a total of $1,510 for "food/snacks that were not approved," including energy drinks.

Shortly after the audit came out, then-Governor Elect Bob Ferguson appointed a new Commerce Director, former state senator Joe Nguyen, who started in January. That same month, the department stopped paying the EEC, telling the group in April that it was going back over every invoice they had submitted between August and December of 2024, and would start paying them again once they were satisfied that everything was in order.

After the checks stopped coming, Navas said, she was forced to first run through the EEC's reserves to pay her own staff and the subcontractors, and then to take out a line of credit, using her own house as collateral.

"We’ve floated nine payrolls. We’ve used up all our savings," Navas said in early June. "I had to furlough 11 staff, and then we had to let nine of them go this week, because we just don’t have the cash anymore." According to Navas, the state now owes the EEC more than $3 million, with no guarantee that the organization and its subcontractors will ever get paid.

The Commerce Department doesn't dispute that they haven't paid the EEC and its sub-grantees since January, but they say it's the EEC's fault—not theirs. According to Commerce Director Joe Nguyen, appointed by Governor Bob Ferguson in the EEC was always supposed to pay groups like Fresh Start out of its own funds, in advance, and then submit receipts and other documentation to the state to get reimbursement for the money, which amounts to about $1 million a month. To get paid, Nguyen said, all the EEC needs to do is show that it has paid each of the 39 organizations that are part of its consortium, then show the state exactly how each group spent the money.

In April, Nguyen told Navas in an email that "there is no freeze on the funds" and that "the delays and issues with reimbursement are not due to Commerce’s actions. We have expedited payment as soon as the proper documentation are submitted."

"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."

In a recent "listening session" with the organizations that contract with the EEC, Nguyen told the groups it was the EEC's fault, not the state's, that they haven't gotten paid this year. (PubliCola received a recording of the meeting, which was not public.) The old leadership at Commerce, Nguyen said, had been paying the EEC without proper documentation, which was out of line with state policy and law. All he was asking for, Nguyen said, was receipts and invoices—and for the EEC to pay everyone in advance, which he said they should have been doing all along.

Navas said there are two flaws in the state's position. The first, she said, is the Commerce Department keeps changing its requirements. When the program was set up under the agency's previous director, Mike Fong, subcontractors were only required to submit invoices showing how they spent their grant funding. When Nguyen took over, the requests grew more and more specific, and rejections more common. "We've shown proof of payment throughout this whole entire thing," Navas said. (PubliCola reviewed many of the documents the EEC submitted to Commerce and confirmed that they included receipts, payroll reports, and other detailed documentation.)

"The goalposts have moved so much that I don’t think they want to pay us," Navas said. "Personally, I think that they want to show that we’re incompetent and then show that the new leadership at Commerce has saved the state $6 million."

The second issue, Navas said, is that the EEC can't pay people out of money it doesn't have. "This grant was created during COVID, when nobody had any money," she said. "The reimbursement process that we were under was, okay, let's just be a little bit more flexible with this grant, because we have promised to give out 10,000 laptops and pay 200 digital navigators, and there is no organization that can do that and upfront all the money."

What Commerce is asking now, Navas said, "is that I pay people before they pay us, and I can’t because I have used all my money to keep the organization open. ... It is genuinely impossible" to pay out $1 million a month without having the money in hand, she said.

Nguyen said his only goal is to get the Digital Navigator Program in compliance with state standards that apply to all other contracts. "We have an obligation at the state to adhere to the State Administrative and Accounting Manual," he said. "We want to make sure that any time people work with Commerce, we are being as supportive as possible, but we literally have [laws] and rules we have to follow."

During the listening session, which did not include EEC representatives, Nguyen said he was trying to find a way to pay each of the 39 contractors individually, rather than through their contracts with EEC—a deal that would require each contractor to independently cut ties with the Equity In Education Center and hope that they'd stand a better shot of getting paid by working with Commerce directly. So far, none of the groups have taken him up on his offer.

Emails between Commerce and the EEC throughout 2025 show that the relationship between the two is strained, if not broken. The two sides seem unlikely to resolve their impasse by the time the Digital Navigator program ends on June 30. Meanwhile, the nonprofits that received funding through the program are scrambling to figure out how to make up their losses.

Mission Africa, a Federal Way-based organization that provides case management, mentorship, job training, and other services to immigrant and refugee women and youth, used its Digital Navigator grant to provide broadband access and digital literacy skills to a wide range of participants, from kids in high school to recent immigrants who didn't need to have computer skills in their home countries.

Since 2022, when Mission Africa first applied for a Digital Navigator grant under an earlier iteration of the program, digital navigation has grown to be the group's biggest program, according to its CEO, Ndudi Chuku.

"You have people who are medical doctors who come here and they’re not computer literate, maybe they have a serious language barrier. These are the people who are coming her, and we say, 'This is a mouse. This is a desktop,'" Chuku, who is from Nigeria, said. "And these people end up getting good jobs, and they get a living wage to take care of their families." In addition to basic digital literacy, Mission Africa teaches classes to train young people in coding, SQL, robotics, and cloud computing—skills that help them access better-paying jobs in the tech sector.

Chuku never stopped paying her staff, she said—"I couldn’t tell them, 'We can’t pay you because we haven’t been paid,' because that’s not my agreement with them"—but the loss of regular funding from the state has been "very, very impactful."

Mission Africa, she said, has given the state no reason to believe they've been dishonest about how they've spent the money, and they've submitted meticulous invoices, including bank and payroll statements that include costs that have nothing to do with the Digital Navigator Program, which Chuku considers "an invasion of our privacy."

"We did good work, we did it well, with integrity and honesty. We did not cut corners in any way and we did not make up numbers," Chuku said. "For the past 18 months, Commerce has paid EEC for them to pay us. It has never been the other way around. I don't know why they won't pay us now."

Ana Perera, the CEO of Adonai Counseling and Employment Services, said the digital navigator program has funded four staffers, including one who works one-on-one with migrant workers and other Spanish speakers in Eastern Washington. The group has also provided broadband service to people who are "getting out of prison and going out to places like Omak or Clallam Bay," Perera said, teaching them how to access their medical records, look for job or entrepreneurship opportunities, and access digital services.

"The heart of our agency is reentry," Perera said, with a focus on employment, training, and behavioral health. The digital navigator funding has allowed Adonai to expand their work into 31 of the state's 39 counties, "with a huge focus on rural areas" where broadband access is sparse and where participants lack access to digital literacy and training programs.

Perera, who had to start paying staff out of her own salary, said she thinks Nguyen is trying to drive a wedge between the small community organizations like hers and the EEC, which was previously just one of many organizations receiving direct grants from the state.

"I felt like the listening session was there to make sure to create division among our group so it would break down—'This is all EEC's fault, they haven’t done thism they haven’t done that,'" Perera said.

Morgan, from Fresh Start, offered a similar assessment. "All they're doing is stall tactics to get to the end of the grant and say, 'You didn’t comply, you lost funding.' At the listening session, they said, 'We can't pay you because Sharonne was supposed to pay you all up front.' But she was paying us up front until you stopped paying her."

Navas said her organization "absolutely made mistakes," especially in the early days, when the EEC was a $300,000 organization that rapidly expanded to a budget of $13 million. But none of those errors, she said, justifies cutting off funding to so many small community organizations, including some whose staff have had to go on food assistance, couch surf, or take out personal loans in the months they haven't been paid.

"When it's a good day, [I think] it might just be new leadership, under a new governor, trying to come in and trying to enforce internal ways of doing things that should have always been in place," she said. "On a bad day, it’s hard to give people grace who have so much power, and flippantly say that they're not going to move any faster."

The state and the EEC have until July 7 to resolve their impasse. Although the state legislature included an extension of the Digital Navigator Program in its 2025-2027 budget, the governor eliminated the program through a line-item veto, citing "the state’s significant fiscal challenges and funding cuts from the federal government."