State health officials last week terminated millions of dollars worth of grant agreements and awards for Nevada’s only statewide nonprofit dedicated to increasing the state’s low immunization rates, citing noncompliance with federal grant regulations, inadequate financial management and “possible fraudulent activities.”

The termination letter, sent last Friday, followed a December site visit report obtained by The Nevada Independent via a records request, which revealed a financial discrepancy: The organization received nearly $403,000 in state grant funding to reimburse vendors that it evidently never paid.

Though the nonprofit has paid down some of its outstanding debt to vendors, state records show the organization still owes $292,000 to a vendor. Those financial troubles, coupled with a lack of processes to ensure proper management of federal grants (coming amid a complete turnover among about nearly 20 employees during an eight-month period), and an “inadequate” response from the nonprofit in a plan to address the issues, led to the termination of the relationship and all current/future grants.

“Due to the findings and the inadequate [Immunize Nevada] responses, the [Division of Public and Behavioral Health] will no longer fund [the nonprofit] for the active subgrants,” said the termination letter signed by Julia Peek, the deputy administrator of the community health services section of the Division of Public and Behavioral Health, adding that all payments made to the nonprofit for reimbursements must be paid back to vendors or the state “immediately.”

Immunize Nevada is a largely grant-funded nonprofit that for more than a decade has partnered with the state to coordinate vaccine outreach with local health partners and help increase the state’s immunization rate, which stands at 44th lowest in the country. 

In total, Immunize Nevada had access to more than $11 million in grant funding allocated by the state since 2020. The site visit report identified five instances of noncompliance with federal regulations surrounding the funding. The state canceled about $4 million allocated to Immunize Nevada, and other unspent funds tied to previous awards were reverted to the state.

The termination letter also indicated that the state would notify the Department of the Treasury and the Nevada Attorney General’s Office of the “possible fraudulent activities” outlined in the site visit report.

Immunize Nevada Director Sherilyn Duckworth said in a nearly 80-minute interview with The Nevada Independent on Wednesday that the organization — which brought in $1 million or $2 million a year pre-pandemic — was not equipped to handle the amount of grant money the state had allocated to it for projects in the wake of the COVID-19 pandemic. 

“The place where Immunize Nevada is now could have 100 percent been avoided,” Duckworth said. “The decision made was to pay payroll, operating expenses and other bills. Is that the right thing to do? Was it the right thing to do? Absolutely not. It’s done now. And unfortunately, it is what it is and we can’t change that.”

She rebutted the state’s report about unpaid vendors and provided The Nevada Independent with bank documents Saturday that indicated Immunize had paid two of the vendors in full but still owed more than $322,000 to a third vendor.

Division of Public and Behavioral Health officials said they met with Immunize Nevada on March 25 to discuss the needed documentation and received proof of the payments that Duckworth also provided to The Indy. Officials noted that $292,000 is still outstanding.

“The Division cannot speak to any outstanding debt that is outside of the scope of the Division,” officials wrote in a Friday email to The Nevada Independent.

She charged that financial problems stemmed back from before she started at the organization.

“I put way too much trust in the system that was here before I was,” she said.

Officials responded to Duckworth’s allegation by saying that any financial issues that may have taken place before Duckworth assumed the role of executive director were not communicated to the state and that the contract gave guidance on payment procedures.

Duckworth said she’s been “stressed” and “depressed” since January when the state sent the site visit report to the organization, because Immunize Nevada provides “crucial” health care services.

“It means fewer immunizations. It means a lack of educated advocates who advocate for these people. It means the cease of educational materials in English, Spanish and we’ve also started doing educational materials in Vietnamese,” she said. “It’s like a domino effect.”

Role in the community

Though Immunize Nevada did not directly provide vaccines to the community, it served as a statewide coordinator between various health entities to share vaccine information, as well as organize and promote vaccination clinics ahead of the school year and for underserved communities. 

Founded in 1995 by a group concerned about Nevada’s low immunization rates, Immunize Nevada registered as a 501(c)(3) nonprofit in 2013 and, by 2015, through mergers with similar groups, became the state’s primary nonprofit focused on connecting the public with information and resources needed to get vaccinated. Nevada ranks 49th for its influenza vaccination rate in children ages 6 or older.

Immunize Nevada served as the state’s main vaccine marketing arm, coordinating the “3 million reasons COVID-19 vaccine campaign,” a media campaign to support vaccination across Nevada. The organization also partnered with providers to organize vaccine clinics and worked with news media to spread accurate vaccine information. 

The site visit report said state officials had “significant issues” obtaining accurate documentation to support Immunize´s requests for reimbursements; a November 2022 state report identified “work deficiencies” and other problems within the organization; and state officials were notified by a contractor last April that it had not been paid for services it provided to the nonprofit even though Immunize Nevada requested and received reimbursements from the state that the contractors had sought through invoices.

Though the state has known about some of the organization’s problems since 2022, Peek said that terminating about $4 million in unspent funds took more than a year because the state wanted to ensure Immunize Nevada had every opportunity to make itself whole. She said Immunize did not adequately respond to requests for a plan explaining how it would fix identified issues. 

“Fundraising is our plan,” Duckworth said.

State officials said they responded to Duckworth “stating the information provided was not sufficient and asking additional clarifying questions.”

In an hourlong interview last Friday, Peek said that the state is still figuring out its plan to address vaccine hesitancy and what coordinating various health partners in the vaccine space will look like without Immunize.

Officials said the mission is to ensure equitable access and the promotion of vaccine confidence across the state, emphasizing that vaccines work and the program will continue to collaborate with partners statewide.

Unpaid vendors

Peek said that the typical process for reimbursing grant money requires the grantee to submit invoices, implying that payment occurred. In Immunize Nevada’s case, she said the nonprofit submitted invoices but never paid the vendors. 

As for where the grant money went?

“Their records are not solid enough for us to do a deep dive into that,” Peek said. “My expectation was, they were probably using that for payroll because that seemed to be the biggest pain point for them.”

One employee laid off Tuesday said some team members haven't been paid since Feb. 12.

Unpaid vendor invoices detailed in the site visit report include more than $300,500 from the creative marketing agency Estipona Group, $100,000 to the Nevada Broadcasters Association, and about $315 to Safeway. 

State officials are requesting the organization provide proof that all vendors have been paid, and if the receipts do not arrive, Peek said the state will take all steps necessary to ensure vendors are paid.

“We would like our partners to stay whole,” Peek said.

Duckworth provided receipts after this story was published, showing the organization paid the Nevada Broadcasters Association and Safeway in full. The receipts showed Immunize had paid $10,500 to the Estipona Group, though the organization owes the Estipona Group more than $322,000, per records from the marketing agency. The state provided similar payment records to The Indy on Friday.

Estipona Group had worked as Immunize Nevada’s communications arm since 2014, creating graphics and strategizing how to best reach residents in a state with some of the lowest vaccination rates in the country. But as invoices to Immunize Nevada went unpaid, the company terminated the relationship on May 10, 2023. 

“[Terminating the agreement] was heartbreaking to me, because it was a lot of labor that has gotten us to this point. And we as a state have never had all these resources to put toward vaccination,” Edward Estipona, the founder, president and CEO of the Estipona Group, said in an interview last Friday. “But … I have a responsibility to my employees, I have to make sure that they get paid, that they can put food on the table.”

Financial troubles

Duckworth claimed Immunize’s financial issues began before she started. She said the issues escalated after she took over when the state clarified that reimbursements could only occur after the nonprofit paid vendors, something the organization didn’t have the cash flow to achieve.

State officials declined to comment on the cause of the financial problems.

Though audits are required to be submitted by nonprofit organizations that spend $750,000 or more in federal grant money in a fiscal year, Immunize Nevada did not submit an audit for the 2022 fiscal year ending in December. The organization’s 990 tax form that year shows more than $4 million in expenses, a net income of negative $635,000 and assets of negative $418,000. 

In 2022, the tax form shows that Duckworth received $102,280 in compensation. The previous director, Heidi Parker, received slightly more than $80,000 in compensation the previous fiscal year. 

About two months before The Estipona Group ended its contract with Immunize Nevada, Duckworth posted on her Facebook page that she had requested a 20 percent raise. Almost four months later, she posted that she had to lay off nine employees.

Duckworth said that though she asked for a 20 percent raise, she only received a 5 percent raise, and it was retroactively paid because the organization was waiting on state reimbursements. She said her compensation is commensurate with her Ph.D. in health education and promotion, a master's of public health and health care organization and policy and “12 years of nonprofit experience.” 

Duckworth said a third party is still finalizing the audit because of staff departures and changes in the organization’s accounting firms. 

In the last year, Duckworth said five board members have resigned. The board of Immunize Nevada is responsible for ensuring fiduciary oversight and meeting the organization’s ethical and legal obligations. 

State records of existing board members appear to be outdated. The annual report with the updated board membership is due to the secretary of state’s office by March 31, and Duckworth said that board members are appointing a chair this week.

Critics of Duckworth have raised questions about her seemingly simultaneous employment at a separate nonprofit in St. Louis, and property records that show she purchased a home in Tennessee at the end of December. Duckworth said her other position had no bearing on her ability to do her job leading Immunize Nevada, that the board agreed she could work remotely and that she also has a home in Nevada.

Maggie Harris, who contracted with Immunize Nevada from 2020 to 2022 as an organizational development consultant and leadership coach, said that the culture changed significantly after Duckworth took over, adding that she had expressed concerns to the executive director and two board members, but nothing came of it.

In a resignation email from a former Immunize employee obtained by The Nevada Independent, the ex-staffer said Duckworth displayed a lack of professionalism and understanding of Immunize Nevada’s mission.

“I’m not leaving to advance my career, to change my professional trajectory, or for the sole purpose of spending more time with my family,” wrote the former employee, who wished to remain anonymous for fear of retaliation. “I’m leaving because the conditions of my work environment working under Sherilyn Duckworth, our Executive Director, have made it impossible for me to stay.”

Duckworth said that when she started, several Immunize Nevada employees and officials at the state immunization program had already decided they wouldn’t work with her. 

“There was a ton of people pretending to work but not really working,” Duckworth said. “So when I started, I had to put a lot of new rules into place and of course, that means change. Change is not good for everyone. Everyone cannot accept change, and I’m OK with that.”

Duckworth said she’s doing a round of layoffs this week and is unsure what will happen next. State and federal funding is responsible for 90 percent of the organization’s budget, she said, noting that with a separate grant running out soon, the financial situation is dire.

“I really do hope that this state and Immunize Nevada can get on the same page, and move forward from this,” she said. “It is those who we serve who are impacted and they’re the most vulnerable.”

Peek said that the state will carry on Immunize’s work until it finds an organization that’s healthy enough to apply for federal and state grants.

“I think the message is more important than maybe who's delivering that message,” she said.

This story was updated on 3/26/2024 at 3:31 p.m. to include information in receipts provided by Immunize Nevada Executive Director Sherilyn Duckworth and a response from state officials about the payments. It was again updated on 3/29/2024 at 3:54 p.m. after the state confirmed the payments.