A Utah CEO spent state grant money on vacations, political donations, auditor says

The now-former head of a taxpayer-funded nonprofit spent public money on vacations to Hawaii, Florida and Las Vegas for him and his wife, paid for massages and exercise equipment, made prohibited political contributions and channeled nearly $2 million to a for-profit company where he is listed as the president and majority shareholder, the Utah state auditor alleges in a new report.

Auditor Tina Cannon recommended that the matter be referred to the Utah attorney general to potentially recoup the funds and possible legal action against the executive, who resigned from the nonprofit — iMpact Utah — in March, as the audit was beginning.

The alleged misappropriation, which occurred over the course of two years, went undetected because the Office of Economic Opportunity and Utah State University, which administered the taxpayer grants, had no oversight mechanisms in place. An anonymous whistleblower called the auditor’s tipline early this year, alerting them to the problems.

David Adams, a special projects senior auditor in Cannon’s office, said in an interview that, while the program was “well-intentioned … there’s just never been a mechanism there to have any accountability. … Because of that lack of oversight, the president there at iMpact Utah was able to do whatever he wanted with that money, unfortunately, and he chose to do inappropriate things.”

The Tribune is not naming the iMpact executive at this time because he has not had an opportunity to respond to the audit and has not been charged with a crime.

The Manufacturing Extension Partnership, created by the federal government to bolster the nation’s manufacturing sector, receives a mix of state and federal funding. The state funding of about $2.8 million annually was directed by the Legislature to pass through the Governor’s Office of Economic Opportunity (GOEO) to Utah State University, which awarded it to entities, including iMpact Utah, Inc.

The nonprofit offered subsidized training and business services designed to bolster Utah manufacturers. The services generated additional revenue for iMpact Utah.

But state auditors found that in 2023 and 2024, more than $2.1 million of public funds were paid to a private for-profit company, Vereo Impact, Inc. The former director and CEO of iMpact Utah is listed as the president of Vereo, and auditors said he is the majority shareholder.

Of those iMpact funds, $400,000 was used by Vereo, $103,409 was used to pay off a Vereo debt, $26,165 was used to purchase assets for the company and about $50,000 was used for operating expenses, said auditors.

Some of the Vereo employees were doing work for iMpact Utah, Adams said, but there were no invoices to document the work. And from 2022 to 2024, as head of iMpact, the former CEO received “exorbitant” bonuses, totaling $525,000 over a three-year period, auditors said, putting his annual compensation at $518,823 — more than double the average for similarly sized nonprofit executives.

There was no functional board of directors at the time to approve the compensation, said Cannon.

On top of that, the audit said, the iMpact Utah executive put $35,715 on his company credit card to pay for vacations to Hawaii, Las Vegas, Florida and elsewhere for himself and his wife. Charges on the card included airfare, snorkeling trips, luaus and Las Vegas shows.

He also put $2,563 on the card for other personal expenses, including massages, Amazon purchases, a haircut and exercise equipment, according to auditors. He also made nearly $10,000 in political donations to state candidates and one federal candidate, which nonprofits are prohibited from making under IRS regulations.

State campaign disclosure records reveal a portion of the total — $6,563 to Gov. Spencer Cox’s campaign and more than $517 to a challenger, Carson Jorgensen. The federal donation the auditors reported does not appear in federal campaign disclosures, although Cannon said they documented the contribution.

Laurel Price, Cox’s former campaign manager, noted two of the contributions were listed under the name of the executive, which would be allowed — unless the source of the money came from the nonprofit.

“If a donation came from a prohibited source, the Cox campaign’s policy is to return the funds immediately,” Price said.

Cannon’s office recommended that USU and GOEO work with the Utah attorney general’s office to attempt to claw back whatever funds possible and refer the matter to the appropriate law enforcement agencies. Both USU and GOEO agreed with the recommendation in written responses to the audit.

GOEO Director Jefferson Moss said that it has limited authority to oversee legislatively-directed funds once they pass to a sub-recipient — in this case, once they went from USU to iMpact Utah.

USU said in its response to the audit that nothing in the state contract directing the funds to iMpact Utah required monitoring of how the funds were used.

Cannon said that, because of the limited two-year window of the audit, it is possible that other funds were misappropriated before the malfeasance was brought to auditors’ attention.

“The biggest problem with an office with limited resources, is … we have to have a clear time period that we’re looking at,” Cannon said. “Could there be more? Yeah, you bet there could be more.”

It could also point to a larger problem in government, because the Legislature approves “lots” of directed grants — the exact number is unknown — and there is little oversight of those funds. Last year, the Legislature enacted a law requiring entities that disburse more than $25,000 in state funds to nonprofit entities to notify the auditor so there can be proper oversight.

The auditor’s office was not made aware of iMpact Utah’s issues until it received a whistleblower tip.

“I have oversight over government entities, but once it gets funneled to a not-for-profit, then there is less and less restriction and less and less oversight available in those types of situations,” Cannon said.

In a letter to legislators accompanying the audit, Cannon said that lawmakers directing grants to specific entities “contributed to the lack of oversight in this case” and is part of a growing pattern.

She recommended the Legislature apply similar requirements to state matching grants as are used for federal funds: conduct regular reviews of expenditures; track recipients’ compliance with IRS regulations; require recipients to report annually to the auditor’s office; and award funds as reimbursements for services rather than providing a lump sum up front.

Adams said that iMpact Utah is “not long for the world” at this point, with creditors “circling” to reclaim money they paid. Cannon said that the unfortunate part is that there were some good things happening at the nonprofit, but “when there’s a lack of oversight that allows this type of behavior, it will destroy not only his job, but the job of people who were actually doing a good job.”

Correction, 10:20 a.m. • This story has been updated to indicate that Jefferson Moss is the director of the Governor’s Officer of Economic Opportunity and has included a statement from Spencer Cox’s campaign manager.