Waste of the Day: Utah CEO Used Grants for Snorkeling, More
Topline: The CEO of iMpact Utah, a business consulting nonprofit, resigned in late July after an audit found he used up to $2.8 million of federal and state grants on a trip to Hawaii, massages, political donations and more.
Key facts: The money came from the Manufacturing Extension Partnership, a federal program that aims to boost the productivity of America’s manufacturers. States supplement the federal grants with matching funds, and “the majority” of Utah’s total cash was sent to iMpact Utah to offer training to other businesses. The nonprofit reported $3.8 million in government grants on its 2023 tax return.
A recent report from the Utah State Auditor found that iMpact Utah transferred $2 million in grant money to Vereo Impact, a for-profit consulting company where iMpact Utah’s CEO is the majority shareholder.
Vereo Impact then used $103,408 of the funds to pay off its own debt, $26,165 to buy new assets, and $400,000 to purchase an entirely new company, according to the audit. In total, auditors estimated that Vereo "inappropriately" used $1 million to $2 million of taxpayer funds. Some of the money may have been used for the training classes the grants were meant for.
The money that stayed in iMpact Utah’s bank account was not used correctly either. The CEO — who is not named in the report — spent at least $35,175 on vacations with his wife to Hawaii, Florida, Las Vegas and more. The couple billed taxpayers for meals, airfare, rental cars, a helicopter tour, a snorkel cruise and more, the audit found.
The CEO also used iMpact Utah’s credit card for $2,563 of personal expenses like a massage, a haircut, exercise equipment and Amazon purchases. Another $9,958 was spent making donations to four different political campaigns, which is illegal for a nonprofit, according to the audit.
The CEO’s salary averaged $518,823 per year from 2022 to 2024, which the audit called an “exorbitant” amount that is more than double the average CEO salaries at similar nonprofits.
Search all federal, state and local salaries and vendor spending with the world’s largest government spending database at OpenTheBooks.com.
Background: Utah State University and Gov. Spencer Cox’s Office of Economic Opportunity managed the grant money. The audit blamed both groups for their poor oversight of the grant funds, claiming they did not review iMpact Utah’s financial statements or “perform basic due diligence” on the nonprofit.
The Office of Economic Opportunity had a payroll of $9.2 million last year, with one employee earning $574,888, according to payroll records obtained by OpenTheBooks. Utah State University paid 87 people at least $200,000 from its $331.7 million payroll last year.
Summary: Even if taxpayers never recover the money wasted by iMpact Utah, hopefully the state will learn to oversee its grant funding more carefully in the future.
The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com
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