Senate Budget Sub1 — 2026-04-07

This is the follow-up informational hearing for the oversight of the State Library's implementation of the Statewide Imagination Library. Our first oversight hearing over this issue was held on March 12, 2026. Since this hearing, we have received several documents, including invoices, additional bank statements, service agreements, and other backup documentation. The goal and the intent of the original state investment of $68.2 million in 2022 was to promote early literacy by increasing the number of young children receiving books through Dolly Parton's Imagination Library and providing a state share to cover the cost of the books. Under the stewardship of the State Library in the first two years of the available $68.2 million, only $1.5 million went to the Dollywood Foundation, which invoices show was used to pay for more than $1 billion books for children, and $4.8 million went to the Strong Reader Partnership, a tax-exempt nonprofit organization. The 2024 budget redirected the original investment to the Dollywood Foundation to develop the statewide Imagination Library. Yet, even after the 2024 budget action, the state library did not allocate the full amount as directed by law, and the Strong Reader Partnership continued to spend state funds. The bank statements and the financial expenditure detail report that we received helped paint a fuller picture of how $1.1 million was spent by the Strong Reader Partnership. However, the set of documents we received raised deeper questions about what the funds were spent on. We requested the participation of representatives from the Strong Reader Partnership and the State Library for this follow-up hearing today, as well as the participation of a few vendors who received state funds, including Shipyard, Lotus Financial Solutions, and United Way California Capital Region. I know we have representatives from both the Strong Reader Partnership and the State Librarian, and Greg Lucas have both agreed to join us today. And we have representatives, Sonia Harris, Jackie Wong, and Laura Fink from the Strong Reader Partnership. So I want to first of all thank you all for being here today. And I would like to start by first asking our state librarian, Mr. Lucas, if he could come forward for some questions. And then after that, we will speak with the Strong Reader Partnership.

We won't be doing opening statements just for purposes of time. We only have this room for a set amount of time since this is a special hearing. Okay. Well, thank you, Mr. Lucas. First of all, I want to acknowledge that you did send a demand letter to SRP last month in March, which helped us to receive the documents that we have today that we've been able to review, and I appreciate you doing that and taking action. I know committee staff has also reached out and requested documents from the State Library six times over not just this year but last year as well And so I wanted to know how many other demand letters did you send to the SRP nonprofit in order to receive these documents

And how were those communications done? Was that all via email? Were there phone calls?

You know, I'm a little troubled that it took us having a committee hearing in order for you to send a demand letter. I guess, you know, at what point did you begin to escalate behavior in order to express the urgency of receiving those documents?

I also wanted to ask you about the final program narrative report that you had provided to us. So the Strong Reader Partnership stated that the State Library provided guidance to the partnership in October 2024, that the $4.8 million that it already allocated to the partnership was not subject to redirection. Do you remember or recall providing this communication to the Strong Reader Partnership?

So you sought an opinion from Ledge Council that the $4.8 million that was allocated to them was not subject to redirection. Is that correct?

An opinion by the State Library's Council. And what was the direction and guidance that the State Library provided to the Strong Reader Partnership on AB 157 and how the $4.8 million should be spent?

Do you know how many books do you estimate, Mr. Lucas, were provided to children on behalf of the Strong Read of Partnership, a nonprofit that you oversaw?

but was there any sort of accounting that you had of the number of books that were purchased by the Strong Reader Partnership?

Now, the State Library did not redirect at least 90% of the Imagination Library investment to the Dollywood Foundation, even though it was required by law in AB 157. Why was that the case, Mr. Lucas?

I want to highlight something, Mr. Lucas, as we're having this conversation. I think both the last time that you had attended a hearing as well as during this discussion, that there seems to be this constant issue coming up with the nonprofit strong reader partnership that you're overseeing, not meeting the deadlines that you're laying out, whether it's this 45-day deadline in order to redirect 90% of the finances, whether it's providing you with invoices or other documentation that you're requesting in a timely manner. It concerns me because you are the agency providing oversight to them. So at what point were you communicating what the consequences would be, what the urgency would be to follow the law that's laid out in a bill such as AB 157 in order to meet these demands that are not just a rule that you're laying out. This is a law that the state legislature has passed and implemented and signed by the governor.

And I understand that you had a misunderstanding about the million and what the bill was stating versus the advice that you were given by counsel But what I pointing out here is that you just acknowledged that SRP did not meet the 45 timeline that was laid out And in terms of these timeline issues, this is a chronic issue, right? And ensuring a nonprofit that you're overseeing is following the law, providing you documents in a timely manner, returning funds in a timely manner, and that is an issue of concern. I'm going to move on now to a letter that we received from you, Mr. Lucas, dated April 2nd, 2026, that states that the State Library received the final program narrative and the final financial expenditure detail report on Friday, November 7th, 2025, and that after assessing the filings, the State Library requested additional information on November 12, 2025 from the Strong Reader Partnership to better connect the financial expenditure detail to the activities conducted under the grant as described in the program narrative. You know, I want to start off by first highlighting, you know, Mr. Lucas, by the time that we received this report from you, it was actually last month. We received this report from you in March of 2026. But you were saying that you received these documents in November of 2025, which is almost five months after you received the documents. So why did the State Library not provide these documents to the committee after it received them?

And we followed up with, as the demand letter, right, that we sent the other day says,

But at what point, Mr. Lucas, did you think that it would be necessary to let committee staff know that you had received the final program narrative and that you received some documentation? I don't think that committee staff even had any idea that you had received a final program narrative and that you were seeking out additional documentation. That's almost five months that you were sitting on a report from the nonprofit before you provided it to committee staff.

I speak to this, Mr. Lucas, because, again, the State Library is acting as the overseer of this, right? And so when staff is requesting this information from you, if you're not communicating back, then we don't know what information that you've received. Our staff is depending on you to act as the facilitator of these conversations. Now, what information, additional information, did the State Library receive to better connect the financial details to the activities described in the program narrative? Was it all the invoices that we received last month? Is that what you were seeking out?

And is it your opinion that you received an adequate response to those requests, that that information helped to connect the expenditure details to the grant activities?

Now, Mr. Lucas, I want to speak to an issue that I noticed as I was going through the documents. Do you acknowledge that the contract between the Strong Reader Partnership and State Library explicitly stated that grant funds will not be used for lobbying or otherwise attempting to influence legislation.

Well, and your staff also acknowledged this as well, right? On October 13th of 2025, I believe that they also provided information to staff. I actually have the email here from one of your staff members that also acknowledged this as well. Is that correct?

Well, and that's, I think, part of my concern here, Mr. Lucas, because when I look at the Changecraft charges in particular, I find that the timeline of events appears that it is lobbying services. So it's $14,500 that were paid to Changecraft. The billing period on that invoice was for a period of six days. Beginning on August 24th, 2024, which coincides with the date that AB or SB 157 went into print. And it ended on August 29th, 2024, which coincides with the date that AB 157 was approved by the legislature. In addition to that, I also have emails here that Changecraft sent to budget staff on August 25th of 2024, attempting to influence AB 157 and expressing concerns about the bill. Have you had an opportunity to look at any of these documents related to the Changecraft communication?

is it still your opinion that this is not engaging in lobbying or attempting to influence legislation?

And because the change craft is not here, I won't get into naming names, but they reached out directly to budget staff in order to express their opposition to the bill. As I say, the grant agreement that we signed with the partnership prohibits lobbying. When the subcommittee asked us, what was this money spent for, we didn't have the contract in hand at that time.

Mr. Lucas, the state library is supposed to be overseeing this nonprofit, providing guidance, and in my opinion, should be providing some of these guardrails and stopping when it sees behavior that appears to be violating what was set out in state law. And what was very clearly set out in state law is that these funds were not to be used for lobbying. And so when you saw indicators that there was an appearance of lobbying, when you heard from committee staff that there was concern that funds were being used for lobbying, at what point did you or your staff think that it would be a good idea to reach out to SRP to express your concerns or to highlight that this is not the way that funds were intended to be used?

Mr. Lucas, moving forward, you know, I just want to highlight that it's my expectation that the state library, when they are overseeing a nonprofit, that they are providing tighter oversight and accountability around these issues. And if there are questions or concerns where it looks like a nonprofit entity that the state library is overseeing may be in violation of the contract or there's an appearance that there may be a violation of the contract, that you all are taking action to communicate with the nonprofit. And if there's uncertainty that you're working with staff to resolve some of those questions.

And I do want to highlight Mr Lucas I spent a lot of time going through these documents and I have to know there is a real lack of information throughout these invoices There details that are lacking And overall we still do not have any sort of numbers or accounting for the number of books that were ultimately purchased and given to children And that, to me, is really concerning. Now, we can speak to dollars that were given to the Dollywood Foundation, how those dollars actually led to books for children. But what I have yet to hear is how the Strong Reader Partnership delivered on its commitment to providing books to children. And you've shared with me that you don't appear to have that information either. Is that correct?

And that is the concern here. So I'm going to go ahead and see if Senator Grove has questions and turn it over to her now.

Senator?

Yes, that a number of state agencies contract with.

That was used to help establish the foundation, and the partnership could speak to this with more detail, but in reading the materials, the contract was designed to set up a statewide program to help expand the Imagination Library in California. Which would include a website and social media and things like that because they're an advertising outreach agency? I believe that was part of the marketing plan, yes. But as I say, the partnership can speak to that with more detail.

Of course. Any person who seeks a grant or money from the state library, right, fills out an application and says, here's what we're going to do with the money if you give it to us, right? We review that, and then we give them a portion of the money. We sign an agreement, and then there's benchmarks and progress reports that are established as part of signing that agreement, right? And if you don't meet them, we don't send you more money.

I don't know whether it was paid in increments or a lump sum. But based on your testimony that you just said, you give a portion of the total dollar amount to an organization who applies for this grant. Then they give you measurable goals that they say they're going to meet, and then you check to make sure they're meeting those goals, before you release more taxpayer dollars to them. Basically, that's what you just said. That is true.

The Strong Reader Partnership submitted an application for $19 million, which we approved. We sent them $4.8 million as an initial upfront payment. Of the $4.8, $3.7 was returned to the state, and they spent $1 million, of which a portion of the $1 million is that contract with Shipyard. Then we, at the end of the period, the grant period, they submit a final report and we look at that and see how the money was spent. I cannot tell you whether it was a lump sum payment to Shipyard or multiple payments. The partnership certainly can.

Would you feel the same way? Absolutely.

I consider Instagram. Yes, I suppose.

Senator, the funding that went to the partnership was to create the foundation for a statewide program. The administration of the program was shifted so that all the funding, 90% of the unspent funding, was to be sent to the Dollywood Foundation directly, which has happened. I understand.

Oh, well, I was just going to say, so the initial work that was done by the partnership never came to fruition because the money was returned to the state.

There was no return because they couldn't complete the work or begin doing what the grant, or to complete the work that they had in the grant program because the money was removed from them.

How much money was given to people to actually provide books to kids? Just the 1.1 million.

Yeah, I don't, that's, as I said, I don't believe any of it was, but the partnership can speak to that better. When we were working with the Dollywood Foundation prior to the establishment of the partnership, the book purchases are primarily done by the foundation. I don't know if that continued to be the case.

I don't know. They can answer that question for you, as I said. I don't think that the grant that they applied for was to establish a foundation for a statewide program that would expand the number of kids who would be getting books. They did not get to the second phase. They did not get to sort of turn the light switch on the work that they had done to establish that initial foundation or platform.

I did not. I was part of the, I was one of the authors of the bills. I recall.

You did, and it was under your authority to make sure that this program operated correctly.

The state librarian, which is you, shall coordinate with a nonprofit entity.

Senator, we did not create the nonprofit. We worked with the Dollywood Foundation. We provided them with the proposed bylaws. We worked in concert with them. The model that happened in California was one that the Dollywood Foundation has used in other states in implementing the Dolly Parton Library.

We've accounted for where the $1.1 million went.

We created it in the state of California, the state library working with the Dollywood Foundation and in conjunction with the legislature.

The intent of the legislation, Senator, as you know, you authored it. It was to expand the Dolly Parton Library into California and be cognizant of the things that make California unique.

As I understand it, the partnership was unable to provide additional grants because the money was transferred to send it directly to the Dollywood Foundation.

Yes. It is.

The two expenditures were for different things. So the Dollywood Foundation came to us and said we need some money to purchase these bilingual books, right? They had committed to providing books in both English and Spanish as part of the program, which is very cool.

There was a $19 million application from the Strong Reader Partnership, of which there were several phases. The first phase was to lay this foundation for a state program. Before that could come to fruition, the money was transferred away to the Dollywood Foundation. So the investment that was made in establishing a program, right, that would expand the Dolly Parton Library in California, I think was a sound investment. I think the partnership can better answer your question about the $5,000 grant and why there were not more.

There's about $600 million annually in grants that move through the state library.

Thank you, Senator Grove. Mr. Lucas, I first of all want to acknowledge that you did respond to our request, as I mentioned before, in helping to deliver these documents. but I am troubled and concerned that it took us having a committee hearing and going through a round of questions in order for us to receive these documents. I want to highlight what Senator Grove mentioned, which is you are leading a state agency, a massive state. The state library is no small endeavor, and you just acknowledge yourself. There's $600 million that you're overseeing and managing there. I recognize that this is a small program by comparison, but it is still your responsibility to provide oversight and accountability. There were two years of time that this money was allocated to the Strong Reader Partnership from 2022 until 2024. And in that time period, we do not have any sort of accounting for what books were provided to children. And there was $1.1 million spent, and you've said it's to lay the groundwork and foundation to set up this program. But you don't have any sense of the timeline of the work that they were doing, of when those deliverables were coming to fruition, whether or not there was a single book provided to a child. I also want to underscore something as well, because I decided to look into the $5,000 grant that was expended to the United Way at the California Capitol. And we requested that information specifically from United Way as well as from the Strong Reader Partnership. Have you looked at all into the $5,000 grant and to see how it was used or how that money was applied?

Well, did you see how those funds were actually used to meet the overall goal of the program, which was providing books to students?

Because the documents that were provided to us as a $5,000 grant via check was for net paid media MEDA ad placements. Now, I'm very familiar with MEDA ads because I've ran for office. So MEDA ads actually stay online for about 10, 15 years. You can see my ads from when I ran for city council. You can see my ads when I ran for this seat. And you can also see ads that were deleted. I went to the ad library. Anybody can access it by just going onto Facebook. And there are only three ads that have ever been posted by United Way, California, Capital Region. And the last live advertisement was in 2024. This program was supposed to go into effect in June of 2025. So the intended purpose that was stated in this document, which is that this was to be used for advertising for this program, it never even came to fruition. There's no receipt of it online.

And I understand that, Mr. Lucas, but as was mentioned before, as somebody that is in an appointed position who is overseeing a program, who's trusted with overseeing taxpayer dollars, there needed to be more oversight and accountability here. And the fact that you are not able to provide us with answers and you don't have a better understanding of what happened with this program, I think is really concerning. And I know there's numerous other programs that the State Library manages and oversees. And I think it's our priority to make sure that those taxpayer funds are being used responsibly. And I hope you can understand and agree with that, Mr. Lucas.

Thank you. I appreciate you being here, Mr. Lucas. I appreciate you assisting with getting us these documents. Thank you. So next I'd like to call up the members of the Strong Reader Partnership that we have with us here today. And that includes Ms. Jackie Wong, Ms. Sonia Harris, and Ms. Laura Fink. Hi, I thank you all for being here and appreciate you joining us. I'll start off by asking a round of questions and then again we'll turn it over to Senator Grove. First and foremost, I think it would be helpful for us to understand what was the process for the Strong Reader Partnership used to select the vendors that it worked with. I know that we have several vendors that you all worked with here. Shipyard who was hired, it looks like, for both communications as well as web and digital services, $581,000, $326,000 to Sage Strategies, as well as $110,000 to Lotus Financial Solutions. So what was the process that you all used to select these vendors and ultimately to determine who you'd be working with?

So I was appointed by former pro tem Senator Tony Atkins, and we were all appointed to the board from various legislatures and other places. So our charge was audacious. Our job was to get books in the hands of 2.2 million kids and to develop an agency and an institution that was longstanding and self-sustaining. We needed to be self-sufficient over the course of the year, so our job was to lay the groundwork and infrastructure. So part of that, as a working board, obviously, we were in startup mode, and so we were able to evaluate contracts collectively together and make those choices with all of the members of the board present. We met regularly, frequently, and evaluated contracts based on that mission and building that infrastructure.

I understand. My name is Laura Fink. I am a board member of the Strong Reader Partnership appointed by Senator Tony Atkins, former pro tem. My name is Jackie Wong. I am the chair of the Strong Reader Partnership, and I was appointed by the governor of California State Labor. Good morning, Senators. My name is Sonia Harris. I'm the former executive director of Strong Reader Partnership, and I also serve as the chief executive officer of Sage Strategies. No, of course, Senator Grove.

Which vendor are you speaking about?

No, there's not a different process. We would meet collaboratively as a board and discuss and receive the documentation, and we also were able to interview potential contractors as well. Multiple vendors.

I'm happy to speak to that, Senator. Lotus Financial served as intended to serve as the back of house for the operation. So as stated earlier the grant in total contemplated a million program that did include hard costs associated with book purchases as well as all of the operations of the nonprofit So Lotus was intended to be a financial services back of house. The three additional vendors were identified to support that work. With regard to the Intuit-related expenditures, typically we would want to own the data that were housing related to you know expenses and such so that was why QuickBooks was utilized the second vendor all about taxes was used for tax preparation services while Lotus did have the responsibility for financial back of house as well as 1099 preparation similar to what would be you know a W-2 of sorts and actually preparing the documents for the tax person to then prepare the 990 filing. The last that you called out was an independent auditor. Per requirements, organizations, 501c3s that receive more than $2 million in revenue in any given year typically would undergo an audit to ensure that all of the appropriate controls were in place. On balance, the four vendors were also chosen to ensure we had some checks and balances on different vendors to make sure, of course, accountability of funds.

Thank you for the question, Senator. As I mentioned, Lotus was intended to be the back of house to keep all expenditures, and that was separate from actual tax preparation services, tax preparation and submission.

Thank you for the question. The actual tax preparation and submission was outside of their scope of work.

That's correct.

We were aware of state libraries interaction with us, which we've detailed in line item all of the communications that we had with the state library over that period.

Okay, we appreciate the question and we understand the concern. As stated earlier by the State Library, we're in the midst of transition and we wanted to make sure that we actually had a complete set of documents for which you have now, and we appreciate your patience and grace as we collected those documents.

We're in the middle of transition and had to cancel a lot of our vendors and our support, and so we were a working board that no longer had those supports available to us. And so it took a bit of time to ensure that we collected those invoices that you had requested. So, again, we appreciate your grace and your patience as we were collecting and wanting to make sure that we had a comprehensive set of documentation that you now have. And I would also say some of the documents were outside the scope. I wanted to sort of separate the financial vendors from the documents that were requested. So, for example, one was a bank statement. It was a bank statement we hadn't received yet, so we waited to receive it from the bank, and we submitted that bank statement. Invoices that we, as was mentioned earlier, Sonia was on leave. We were a volunteer board that had been defunded, and so we were all working to collect that documentation, all of the individual invoices from all of the vendors, all of the documentation that was required. So, again, we regret the lack of timeliness, but we hope that you have what you need today. And we've worked with alacrity in the last several weeks to ensure that you do.

In 2023.

I'm happy to answer that, and I believe that our grant application is in there. So what we knew is that we needed to build an institution that was financially and independently self-sustaining. Our priority was to build a program that embraced California's diverse multilingual communities. In every single aspect of our work, we have been committed to enrolling the hardest-to-reach kids, right, the multilingual kids, those hardest to reach. The Dolly Parton Imagination Library Program model, I think it's important to understand, required that our expansion be exclusively through a network of local CBOs and public entity partners. These local organizations would be tasked with local outreach and enrollment, as well as financing half the cost of the books. So local, again, the locals had to build a match that was up to $60 million. Our role essentially was to support that local infrastructure, help communities meet the requirements and build towards a long-term sustainability after the state's initial investment. Our work was intended not only to support implementation during the state's five-year investment, as I said, but also to strengthen that local capacity so the program could continue beyond the duration of the state funding because this is a really locally driven program. It's not one entity. It was not just us. It wasn't just Dollywood Foundation. It wasn't just a library. The model itself is a collective impact model where all of us needed to get behind the local communities to support sustainability. And get these books into the hands of kids because there is a real hard cost to the locals, a $1 per $1 match.

Senator, that's correct. But I will say this. We provided every document, we met every requirement of the California State Library. When we submitted our report in September, we answered every question that the State Library asked of us and provided every document that they requested of us at that time. So we have been in compliance, as far as we know, in our communication with the California State Library. And, you know, and it is our... Jackie, did you want to say something? And that's a very fair question. We were in regular communication with the California State Library. We had verbal communication. We had email communication. We requested forms because states have regular reporting forms and requested those of the State Library in the course of the time we existed.

Respectfully, Senator, we did request for reporting structure and documentation from the California State Library, and we were not given the mechanism by which to report quarterly.

Stakeholder engagement and communications. I also want to clarify the record is that Changecraft did not bill us for their communications with the subcommittee. And I'm not sure if they're here today. I know you invited folks to talk about that, but that was not part of our contract.

You know, I don't want to speculate, but I would imagine that they have other clients as well that may have been interested in that advocacy. And generally, I understand that they do this because they're passionate about the issue.

That is correct.

Thank you for the question, Senator. I would have to go back to double check records to ensure that they were not. But in the instance that you mentioned, I was communicating on behalf of the board as we understood the dollars would be redirected.

I was a consultant before I came into this role. I had the pleasure of working on Prop 1. I've worked for California Calls and with other agencies. And so in that process have had to produce my own invoices. And I am a little surprised by the lack of description. All you have here is a first initial, last name, date, and then hours, and that's it.

Yes, over the course of different contract terms, typically the individual, the total hours worked, hourly rate.

The invoice that you referenced, Senator, encompasses all of the work for the month and administering all the day-to-day activities on behalf of the board.

Thank you, Senator. Again, the documentation involves all of the day-to-day management, and as directed by the board, I did submit information to the committee.

including from the first five, California, which I understand Ms. Jackie Wong represents as well. United Way of California Capital Region, as well as Read to Me Stockton, and the San Diego Council on Literacy, in opposition to AB 157.

I would need to go back to double check, Senator.

January of 2024. I'm sorry, 2025.

In routine conversations with the board, as Laura mentioned, in being a working board, we had regular communication on the work product over the period of time of the contract. But is any of that information documented?

I believe we've responded with what was asked.

Doesn't matter? Okay, I'll start. You can finish. Go ahead. Well, as I mentioned earlier, we were a working board, so we were involved in the day-to-day operations. We were deeply aware of the work that our contractors were doing. We were deeply aware, in particular, of Sage Strategies and the support that they were providing. So because we had so much input and oversight, we felt apprised of all of the work. We were working hand-in-hand together with Sonia and her team to execute and to do the work that was required of us. So this was a true partnership and one in which I would say it was more than financial oversight. We had more involvement than most nonprofit boards would have with their executive director and with the team. Adding on to that level of engagement, on a regular basis with the entire board, we felt that the invoicing was sufficient.

And how did this work further implement the statewide Imagination Library to deliver books to children? That's a very fair question, so we appreciate it, so thank you very much. During that time, we needed to get clarification from the State Library about how to proceed. And that is the work that Sage Strategies was doing on behalf of the board.

I think that was certainly part of it, and we would have to go back to our records to examine and discuss the work that was done. I would say, in particular, that transition was difficult. It came sort of out of the dark that our funding was revoked, and we had relationships with local partners. We had evaluations. We had a lot of work that needed to be sustained in the interim. And I also want to add that we worked in parallel and in partnership with the Dolly Parton Imagination Library. So we were working alongside them for every book that was delivered. And so I think we want to be clear that our role really was in a supportive capacity, in a capacity expansion, in building infrastructure. And we didn't want to pause all of that with the revocation of funding. And part of that was actually meeting with the Dolly Parton Imagination Library to ensure that whatever transition needed to take place was smooth and was efficacious.

And to speak to that and in agreement with that we did not coordinate with local partners without Dolly Parton involvement the Imagination Library involvement We worked in lockstep with them, and I think that is reflected in the comments.

Well, Jackie, do you want to take that one? Yeah, no, no, that is a fair question. And the model itself is, as you know, Dolly Parton publishes their own books and manufactures their own books, and they actually require that local match, which requires the local direct agreement with the Dollywood Foundation. That's how they do the one-for-one match. So that is true, that they do have those relationships directly with the local partners, in which our role is to actually help the locals understand the collaborative model. And so we affirm that to be true from the Dollywood Foundation. We had regular meetings with them. We can go back to our records often. And I do believe that you have documentation that actually provides the updates of the regular updates of when and how we were engaging and talking with the foundation. Yeah, and I think to provide a little more detail, the grant as originally submitted sort of contemplated one structure, which then was conformed after sort of the shifts of funds directly to the Dollywood Foundation. Following that, as the board members mentioned, we did engage regularly with leadership of the Dollywood Foundation to really understand how the work could be complementary and additive. I think it was a priority of the board as well as a directive of the library to ensure that that close coordination was happening. We did receive requests to ensure that tight coordination. There were communications that were drafted together to make sure that the local program partners, as mentioned, Typically, their relationship is governed by two different agreements. One is a memorandum of understanding between the Dollywood Foundation and then that local nonprofit. It sort of underscored data privacy-related issues, how to use and not use the book order system, for example. That's kind of the underlying information technology system that Dolly Parton administers and kind of one of their core roles. So negotiating the books, selecting the books, producing the books, sort of administrating the mailing list functionally. So that's how they sort of house what I would consider a primary key performance indicator, as you've indicated. You know, how many books are going where to what counties to what zip codes under what partners construct. The second agreement that each of those local partners engage in is related to a licensing agreement. Obviously, Imagination Library with Dolly Parton is a very important brand to uphold, which we understood very clearly in our onboarding sessions directly with the marketing team there. And so I give you a little bit of that framework because yes, sort of the legal related issues in relation to using the actual program or conforming it to the California sort of geography. That's certainly the case. I think where we were really enjoying close collaboration with the Dollywood Parton Foundation was really around our expertise in sort of that multilingual California approach And so in that instance we were working with them to identify you know there were a handful of counties that they had actually submitted where local entities needed a little extra capacity or may want to be considered for additional funds similar to the United Way example that you provided to support sort of their overall work to distribute books to children.

No. They were collaborative working agreements. So they were verbal. We have regular cadence of meetings. Happy to provide those. And when we're able to produce the minutes, you will see the regular cadence of meetings and conversations we do have.

which we never were able to execute. It was one of our challenges. I mean, throughout, you can imagine that there were significant challenges outside forces that impeded our progress, frankly. And that's difficult for us to say. But one of them was inking an agreement with the Dolly Parton Imagination Library was not done. And that was not because we did not want one.

There are financial separation, and we are an independent nonprofit with aligned goals. But when we say we worked collaboratively with them, the frequency of meetings and the amount of time that we spent in concert with them, we used their entire model and were committed to it. our work was done through the lens of the Dolly Parton model that has been successful across multiple states. Our job was to ensure that it was translated to California's unique population. And our goal, as I said in the opening, was audacious. It is incredibly difficult to establish an institution, the groundwork and the infrastructure that needs to be laid, not just so that we can get books into the hands of kids now, but so that it's self-sustaining, so that the local nonprofits are able to have the enrollment capacity and the fundraising capacity to ensure that we don't take the state's dollars and spend them on direct services with no ability to ensure that books will be able to be delivered in the future. And I think in particular, we really focused on ensuring that we wanted to build an infrastructure that would find and target California's hardest to reach kids in the most underserved areas. So a lot of the work was done to be strategic and to have a planning process to ensure not just a year worth of books but an institution that would last for decades Ms Fink you say that you all utilize the framework that the Dolly Parton Foundation had been using that the Dolly Parton Imagination Library had been using.

Well, our job was not to directly provide books for children. Our job was to ensure that we built an infrastructure that enabled that. So, for example, we didn't purchase books, the Dolly Parton Imagination Library, and I'll let my colleagues speak to the details there, but our job was to ensure that the local nonprofits were able to boost their enrollment numbers, to expand into new counties, ensure that we had local partners that were available and able to be brought online, because that in the end is how the books end up getting delivered. And so I think the number that you're, I don't know that I'm going to satisfy your question because the number that you're looking for is different than the way in which we operated in alignment with that Dolly Parton model.

Jackie, do you want to talk about the specifics? You can talk about the meetings you had, the community outreach.

Yeah, I appreciate your question, Senator, of course. With regard to sort of what I can speak to, kind of in the first phase of the work that we were doing, once the grant was received, through sort of what I'll call just the second phase of the nonprofit itself, we were focused on establishing sort of Imagination Library of California, the statewide sort of presence. We were focused on a variety of different regions, meeting with individuals that would be prospective partners in San Diego, for example, to sort of move beyond the zip codes, the limited zip codes that were there to expand to the entire county, meeting with different organizations in Fresno. Very similarly, how can we continue to bolster and expand the program, either to move partial counties to full counties or to bring online new counties. We had some conversations in Los Angeles with regard to sort of the service areas that are typical. I had a chance to work on Census 2020 outreach and knowing sort of the geographic expanse, but also the demographics of Los Angeles required sort of maybe a different fit approach there. so in the first phase we worked through sort of identifying where were some of those areas that we could proactively be going to partners to be working with, et cetera and And then in the second phase, very similarly, the board asked for a very specific and targeted approach. So there were a handful of areas that we focused on, Fresno, Sacramento, San Diego, I think were the four that we had active conversations with. in looking at expansion in San Joaquin County, for example, what sort of services might help them move to their expansion. In that particular instance, one of the oldest local program partners had a smaller zip code geography that they were expanding to the whole county, and so they were in need of specifically some data management personnel support as just an example. The statistics that are actually outlined in the agenda, so I appreciate it. And over the course of the time, over 3 million, close to 3 million books have been delivered. And again, it's not solely, I want to be clear that it's actually not solely one organization. It requires the commitment from the locals to do that. And what Ms. Harris just outlined is that work, that commitment, that long-term commitment. We also are not in competition with the Dolly Parton Imagination Library. We are in alignment with them. And so their success and our success are dovetailed. Every time Sonia takes a meeting in the counties that we're looking to build outreach to, and in those meetings with the nonprofits, as the best practices are shared, additional books go out to kids. And so while we were in the foundation-laying stage throughout the time that we had funds, that work is reflected in the increase in numbers as well.

Senator, I'm sorry, could you repeat the time period to which you were referring?

Of last year? Of last year. Well, that was the closeout period. So when we take our relationship and our oversight of taxpayer dollars seriously as well, and when we received notice that there was a rescission of funds, we worked within the parameters of our grant agreement, which requires a 45-day period in which the money is returned and grant reporting requirements are met, And we were able to submit that on time, answering every question and submitting every document that was requested at that time. And as you will note, every dollar that was in our possession was returned to the state. In furtherance of that, we asked the State Library for clarification because we were a little bit surprised of the notice. But understand that as stewards of the state budget and taxpayer dollars, that was the request. And so if we could continue to bill the grant, and they confirmed that we could as we closed out, canceled contracts, potential agreements with locals, et cetera. So we did seek clarification of whether or not we were allowed to continue to use the grant for closeout activities, and that was confirmed. This was also during the time period when our staff began requesting some of this financial reporting rate.

In order to produce that, we would need a structure and a grant reporting requirements and deliverables. And we did not receive those. We requested them. We did not receive them. But we agree, that would have been helpful. And so the totality of this work during this period was so that you could produce and close out the nonprofit and end some of these contracts and move some of these funds. Is that correct?

And all of the quarterly financial reporting that was supposed to be done on a regular three-month basis was basically done during this time period during the last few months because none of it was done previously. We received our initial, I can't remember the date that we received the final closeout grant reporting requirements, but we received them from the state library during that time period after the rescission, and we completed them within our contractually required window within that 45 days.

Those are fair questions and observations. We were rapidly trying to remit the tax dollars that were left back to the state of California, and they were in some cases rushed, as you saw in your staff report that outlined some errors or over-reporting and under-billing.

I would disagree because we approve these invoices.

We were pleased to have the opportunity after collecting the documents, reporting within that 45-day window, which is for multiple years of accounting work, is a short time period. We definitely regret that there were reconciliation errors, and we have resolved them. We're grateful to the committee and to the state library for helping us do so, and we're also pleased to see that, in fact, the discrepancies were resolved in the state's favor.

I think we referred to our—we approached Shipyard as we approached other vendors previously, and the goal in hiring them was to ensure that we boosted our enrollment numbers, which I'm hearing is a concern, was a concern of ours as well. And in order to do that, we needed to have professional help in terms of targeting and outreach, something that the local nonprofits and the Dolly Parton Imagination Library also was work that was not being performed. And so we were really working on a long-term investment and strategy to create institutional knowledge and understanding and resources so that they could be used not just in one county by one nonprofit but we really wanted to provide strategic and effective support to ensure that we worked to enroll kids And you see the beginning of that work happened And actually we had an entire campaign prepared In addition, we have multiple assets. And hearing earlier in the hearing, there are many, many assets that were just on the precipice of being deployed when the rescission came in. And so we're deeply disappointed that all of that work and investment was abandoned. But we do have those assets, and we hope that the Imagination Library and whoever is continuing with this program will leverage that research and all of those graphic assets and strategy.

Thank you, Senator. I'm happy to answer that question. I appreciate the reference that you provided. I'm not necessarily familiar with that, but I can speak to the work that Shipyard was doing at the time. The plan, as mentioned earlier, was to deploy a multilingual outreach and education campaign that would meet the needs of many families throughout the state of California. They did build sort of the back end of the website. As you referenced, we did have a phased approach that intended to build with the program over time. This did include both English and Spanish sort of website architecture. In addition, there's typically advanced work that must be completed in order to develop and deploy the website, both in the wireframe and the user experience to make sure that we're driving whomever is visiting the site to core places as quickly as possible.

It's in English. We're happy to ensure that the committee has the aggregation of assets. I also, I'm not fully understanding the $125,000 connection to simply the website. There was an overarching body of work that Shipyard performed that would institute this statewide multilingual campaign, and it involved, it's a persuasion effort. And so research has to be done in order to engage in that persuasion effort so that we ensure that it's as effective as possible. And then the individual assets need to be developed and where we stopped. And that was all done over months through engagement with the board. with Sonia's team and where we stopped was deploying those assets, was going live, which is why you see that the social media does not have followers, because we were arrested and we were unable to launch. And our timeline, it almost coincided exactly with when we were planning to launch.

We can go back and look at that particular line item and provide you with additional documentation and understanding. I don't have those resources in front of me at this time. So there are additional documents that you will have that you've not provided to the committee.

Forgive my misspeaking. We can get back to you on that line item after we have reviewed it, and we can talk about all of the allocations of dollars in a more specific detail. And as Ms. Fink outlined, we actually do have the assets that were not requested, but happy to produce those assets and what that looked like, the full web design, the multilingual pages, etc., the research that may be helpful to better getting a more complete understanding of what that work looked like.

I would also say we would love to present the work because the work is substantial. I think it's valuable, and I think we would love to see it utilized.

We acknowledge that the assets are not included in your documentation. We're responding to specific requests about receipts and invoices and financial information. So we acknowledge that the deliverables and the product are not included. We understand that would have been good to have, but yet not requested of us from the State Library when we were closing out. And we will gladly provide the assets. And we will confirm that we had shared the assets with the State Library and they were aware of this work product.

Well, there are assets too. Like these are all, there's photographic assets, there's advertising assets, there's a significant portfolio of assets.

Yeah. The photos were taken in conjunction with preparing for our public launch of the first campaign and sort of phase two with specific reference to the narrative that we submitted. In addition to that, that was, we should add, is that the Dolly Parton Imagination Library wanted to announce Ms. Harris as the Executive Director of California, and these assets were a part of that.

You mean proactively to provide you with documentation? Which specific documentation? We did submit our final report to the library. The final report and the narrative were both submitted. But I'm just not understanding the question of what you're asking us about.

If I'm being direct, it didn't occur to me until right now that we should turn over those assets because the questions that were being asked of us were financial and invoices. And so we didn't, it just, it didn't occur to us until right now to actually offer up the assets, the website, and the bilingual. And we understand now that's what is missing. And we take responsibility for not being more proactive in producing those assets for the subcommittee without the direct questions. So we will take responsibility for that.

Yeah, I can talk about the work we did prior to the dissolution of our contract. We did engage directly with United Way and Shipyard. and we saw this as an opportunity to pilot and sort of a partnership with a local entity. In sort of the complete plan, it was contemplated that we would offer marketing support for specific organizations. And the formative research that we conducted directly with local program partners, it had been sort of indicated that there were specific capacity gaps. So, you know, perhaps a nonprofit, you know, maybe didn't have a full-time, you know, marketing team. Maybe you know they didn have a bilingual Spanish proficiency example and such And so you know the goal was really to take a step back and make sure that we were working with a local partner Our goal is never to come in and sort of wish something specific on them, but really do this in collaboration with them. What do you really need? So in this instance, we did work directly with United Way. I believe at the time they had a specific sort of campaign that they were doing to enroll children into the Dolly Parton Imagination Library program. And so this was intended to sort of do direct outreach to a specific population to drive enrollment.

I can't speak to that, Senator.

In the initial conversation, we did have discussions about the time period. I'd have to go back to get you that specific information. But after our contract was dissolved, I can't speak to what happened after that.

I appreciate your point of view, Senator.

I'm sorry, could you clarify what you mean by that?

I would say that during the term of our agreement, our job was to build an institution and infrastructure to deliver those books to kids. So our job was on the back end, was to create local partnerships, to expand into additional counties, to find local partners and ensure that they had the capacity to do the fundraising that was required of them and also to do outreach to ensure that we enrolled specifically the hardest to reach kids and in a multilingual fashion. And that was our work. That was the work of Sonia as our executive director. That was the work that we invested in specific to Shipyard with targeted enrollment so that statewide resources would be available for all of these smaller institutions to be used over time and for us to be able to build that infrastructure to make sure that it was embedded.

several times you reiterated almost the same thing that you're responsible for setting up a statewide program to help communities and counties with fundraisers to enroll individuals and non-profits into the program to establish books for California's most vulnerable, for hard to reach individuals, the hardest to reach kids. How many of those kids did you actually enroll?

I'm going to stop you right there because we're on a time string. We're on content. I have probably about 15 minutes left. I'm asking you a question. the Dolly Parton Imagination Library based on the information that Madam Chair provided they don't want you engaging with their local partners. I definitely can see why based on the email that they provided. So my question to you is is that I have the numbers in front of me that the Dolly Parton Imagination Library enrolled in each county helped fundraise in each county the students that participated in each of the 58 counties and what they did. I'm asking you what your numbers did, and based on the information that you provided the committee, you issued one $5,000 grant out of $1.1 million. Out of that grant how many children were enrolled in that process or books were delivered for that that you actually did give and used taxpayer dollars according to what the bill language wanted you to do I just want the numbers How many kids are enrolled based on what you did at the reader program I appreciate the question and I would say that based on the frequency of contact the I'm not asking you that. I'm asking you what you did. They say that you haven't participated with them. They didn't want you to participate. Who did you, who in what county, just give me Sacramento County, who did you engage with in Sacramento County with, thank you, Madam Chair. Who did you engage with other than the United Way? Or what individual did you engage with? And how many books were distributed based on that $5,000 grant? That's all I'm asking you.

Thank you, Ms. Harris. Can I just, I apologize.

Why did you think it was okay to set up a different program?

We did not set ourselves up. We did not set ourselves up.

Formerly, Senator. Formerly.

We were working with Dolly Parton Imagination Library. As the executive director of the Smart Reader Program,

We did work closely with them to identify areas of enrollment.

A lot of it was to different consultants for financial firms that can't provide us information other than, you know, initial and a first name or a name and a $43,000 bill. So, I mean, there's no data on those invoices, and you paid people to provide that to us. So I'm just trying to figure out what you did with your $1.1 million and how many of those dollars reached actual kids on the ground. Yeah, thank you, Senator. I think as Board Member Fink tried to outline, you know, really our understanding of the Dolly Parton Imagination Program, Imagination Library Program was to conform, and as you mentioned really help inspire the love of reading I think this is one of the things that I appreciated most about the program and sort of my history with books with my grandma She sent she got books sent directly to our home and you know it was a means that I could read with my mother especially while my father, you know, was on deployment in the Air Force. And, you know, I think that really called to me as a mother of two children as well. So I just want to express, I think, the deep appreciation that I have had personally, but I think the board, for the incredible program that the Dolly Parton Imagination Library team continues to expand incredibly internationally. As it relates to, I think, your specific question about book enrollment, I think what becomes nuanced is really who is responsible for that insofar as the local program partner. One of the things I also really appreciated having done statewide work across California in a variety of different sort of manners is they really, really honor, I think, the relationship with the local nonprofit.

I think this is where the –

To speak to the premise of the question first, which is that, as outlined earlier, that we worked through the Dolly Parton Imagination Library. So when a nonprofit –

Well, they did work with us.

Right, that is correct. And we honored that request. We honored that request, and we engaged in parallel to them. So when you see new counties sign up –

To your point exactly, we did not go and recruit independently. Our job was to work alongside them and in parallel and respectful of their guidelines and rules. They are an established, successful nonprofit, and we honored that throughout our relationship. We were an entrepreneurial nonprofit with a different charge.

We didn't see ourselves in competition. We saw ourselves in collaboration, and we worked in partnership together. I was appointed to the board by former Senate pro tem, Tony Atkins, in a volunteer capacity. Jackie Wong is also here. And we were tremendously excited several years ago. And obviously so much has gone on in between. But we were really moved to ensure that we built a long-lasting California solution. We, in fact, we believed that.

Sure.

I support the work of Dolly Parton Imagination Library.

We had ongoing conversations, and as I mentioned earlier, Senator.

In five particular counties. In San Diego, we were working with a variety of partners there.

I can speak to where that partnership is today How much money when you were the executive director did you help them raise for the dollar to dollar match We didn engage in the direct sort of ask I think the relationship that we were trying to build with the local partners was to bring together folks that we

you help raise for that dollar to dollar match and participate? I can speak to that, but I think we

director of the Smart Reader program, correct? Yes, ma'am. Okay. So working for the Smart Reader

agreement did prohibit lobbying. But for you or just the board? I understand the grant itself.

The grant outlines prohibitions.

Yes.

I did offer public testimony in a hearing.

We understood that the funds would be leaving California, and so we voiced concern with that particular issue.

In the testimony, I opposed it.

Thank you, Senator. I would need to go back to check, but I believe we did drop off documentation in a couple offices.

I can just speak to dropping off the letters, Senator.

Thank you, Senator, for that. I think I can speak to drop. off the letters and, you know, in the course of the work that I do, you know, kind of, again, ensuring that the board's communication is facilitated in the day-to-day administration of the nonprofit. Okay.

Yes, Senator.

It was discussions in the board meeting.

So I'm not sure where you all have those and where you've all posted them, but we've not received or seen them.

We were responsible for day-to-day management, so yes, developing the minutes and presenting them to the board for review and adoption accordingly.

These are the bills that were given to us. These are the, I've authorized these bills, and then the board approves them, or is that just in your purview? I can defer to the board. The board approved and signed the checks. The board approved and our signatories on the checks. That is correct.

Correct.

Sage Strategies sent this organization, the reader program, a bill.

Absolutely. Our team would prepare and submit the invoice for.

Ultimately, I'm responsible for submitting.

Okay.

Are you also a principal? I'm sorry, I formerly was.

I am.

I am not. Sage Strategies is not? No. Are you sure you're listed as one?

A member of the collaborative. This is just a brief thing I was just curious about. So there is a collaborative of organizations and lobbying firms and organizations here in Sacramento that are a member of the collaborative. It was a KCRA interview that listed you as a member of the collaborative, and you're on a website. And that was recently some issues that happened within a group of people that are being investigated.

As Sage. I am not a member of the collaborative.

I can't speak to the reference.

to provide what kind of services to the Strong Raider program? Thank you, Senator, for that. I was retained by the board to serve as the executive director and the staff for the entity. This is as outlined in sort of the initial engagement. The idea or direction from the board was to help them sort of build the program and eventually hand it off to a full-time staff.

I can give you the billable breakdown hours. $216 an hour at roughly 1,524 hours. Yes.

And I appreciate that. I don't have a lot of confidence in that because you guys also authorized checks that bounced and you couldn't provide us invoices. and no detail. So I am aligned myself with the chair's comments that I'm very disturbed or alarmed by the way the whole system worked at the Strong Reader program. Just in comparison, and I'll ask you each separately, Madam Chair, and then I'll be done because I don't think we're getting the answers that we've been trying to get for, I don't know, several hours and several months now that you've been digging into this. For $1.1 million that this nonprofit, that you all represent, receive. For $1.1 million, you can't identify one book that was delivered to an at-risk kid or a kid that is under five years old in the state of California. You piggyback on the success of the Dolly Parton Imagination, Larry, but you as a nonprofit, you can't identify one book. You can't identify one enrollment. After countless meetings that you've personally testified for, saying that you had collaboration meetings, countless meetings, all these meetings with nonprofits and local entities to make this a statewide program. You specifically mentioned San Diego. You can't provide all but one that you gave $5,000 to who created a webpage that has two buttons. That's it. Two buttons. You could ask AI to do that in like 30 seconds. It wouldn't cost a lot, and you'd get a lot more than two buttons, and you'd probably get the photographs that you paid the photographer for to put them up online. There's no records. I can't say no records. The records you provided are severely lacking in detail. You have an invoice with someone you've billed, such as Sage Strategies or Shipyard, and you have a total dollar figure at the bottom of taxpayer dollars that's owed to that organization. That's not sufficient records for any nonprofit. and if you weren't working within the state parameters and you were actually out there being a real non and you performed that type of work you would probably have some type of charges against you I being serious because you have provided nothing and you spent million of taxpayer money In comparison to California's Dolly Parton Imagination Library, you got $1.1 million. They got $1.5 million. That's it. The difference is $400,000. They have over 1 million books distributed, 85,400 children enrolled. And while you say it's not a competition, I'm telling you that you severely lacked in performing what this legislation wanted you to do as a nonprofit to be able to deliver books and develop a foster or a love for reading for our zero to five-year-olds. I do have other questions, just out of curiosity. going back to the comments that you made at the hearing. You spoke intently about your exact comments and transcript. Permission to read, Madam Chair, do you mind? Good morning, Mr. Chair and members of the committee.

You think the Dolly Pardon Imagination Library has limited oversight? These are your words, not mine. Yes or no?

It's the transcribed testimony that you made on August, excuse me, on regarding AB 157 at 4.38 p.m. on August 26, 2024. I'm reading directly from a transcribed statement that you made. Your statement was that you oppose AB 157 because it takes $68 million of taxpayer money and sends it to a Tennessee-based organization. a Tennessee-based organization called the Dolly Parton Imagination Library or the Dolly Parton Foundation, Dollywood, okay, which has been successful in so many other states. But you're questioning that. You're questioning the fact that we're taking that money that was authorized for the Dolly Parton. It's called the Dolly Parton Imagination Library. And we're giving them $68 million of taxpayer money to establish a program here in California, and you opposed it based on your language. It takes $68 million of taxpayer money and sends it to a Tennessee-based organization with limited oversight and no accountability. Do you think the Dolly Parton Imagination Library has limited oversight and no accountability when they have been successful since 1995? Is that still your opinion today?

I can let you read it.

Do you want to read it? I can give you my phone. And I have the transcript right here. I'm happy to revisit the transcript at another time.

Who were your boots on the ground? And how many people have you connected with to deliver these books and provide services and raise money?

Why not just let the library, the Imagination Library, do what they've done in every other state to be successful?

I'm going back to your statement, Ms. Harris, in the next paragraph.

What 38 counties were you referencing? Because we can't find that anywhere.

With a Dolly Parton, imagine it. So they got them on board and you guys are taking credit for it?

Okay. That's evident based on the information that they provided, Madam Chair, that says they didn't want you to go to the counties and disrupt what they were doing.

Okay, continuing with your statement that you made at the committee hearing

It's your exact, and I know I don't speak, you know, it's just an exact translation. So not a lot of conversations that you've been having on these partners has really been around, period. How do we help you with some of what's fundraising and really make sure that you've got California children in mind?

Do you really think that California need to have that huge of oversight over an imagination library that has been successful in so many states? And I don't think Dolly Parton would tarnish her reputation, and it's been very successful. And I just don't understand. You say you didn't compete, but you did. You tried to set up something different. Based on your testimony that was read, and I can let you read it as well. I actually have it on a video that was just sent to me so we can listen to your own words if you'd like. But did you not think that you were lobbying or active? What were you doing in the executive director position in violation of the contract that you're under to not lobby for the legislation? You got up and publicly opposed it. You dropped off letters to senators or other assembly members. So in your mind, was that not in violation of the contract?

It was Ms. Harris's question, ma'am. Sorry.

So I'm gonna, I think Madam Chair did a great job of pointing out all the lack of information and trying to get to the bottom of this. We spent a lot of time on this. I know she has spent a tremendous amount more time than I did. But the bottom line is that the Dolly Parton National Asian Library already was successful in working since 1995. And we didn't need the strong reader partnership to try to reinvent the wheel. That was not a smart move in any way, shape, or form to use that $1.1 million of taxpayer money, specifically providing a half a million dollars, just over a half a million dollars to an organization to provide you social media, and you have social media media accounts, and you have 14 followers. That's, I mean, if you take that $14 divided by $567,000, that is not a good use of taxpayer dollars. If you take the $5,000 that was given to the United Way and they used it for a website that's nonexistent that the chair found in 15 seconds, it's not a good use of taxpayer dollars. If you take the $367,000 that your firm, as a principal at that firm, and you are the executive director of the library, and your firm was charged of doing basically the same thing, and then used a substantial amount of money that the chair outlined in exact detail down to the penny for creating a website for $120,000 that doesn't exist and for invoices that don't have information, you have no success, none, that you can point out that you spent $1.1 million in taxpayer funds on in contrast to Dolly Parton's Imagination Library who spent $1.5 million and enrolled tens of thousands of kids

And thank you, Senator Grove, for joining us. I recognize that this is a very important program, both to Senator Grove as well as to our former pro tem, Tony Atkins. And it was something that they are very passionate about. And I think we can all agree on delivering books to children to improve literacy is, I think, a shared goal amongst most folks in the state. And it was really a bipartisan effort that was meaningful. And I think a large part of the reason why it has been so frustrating to continue to struggle to find answers to many of the questions that we've had. I want to take a moment just to kind of briefly overview, I think, a number of things outlined here that I'm troubled by. As was mentioned before, the payments that were made over $500,000 to ship yard, money that was spent for website other advertising fees things that we still don have evidence for And items frankly that never went live and that you all expended state taxpayer dollars for We still don have evidence of what that money was utilized for You're telling me that there's some sort of plans and other things behind the scenes that we have yet to see, but why is that not reflected already? Why was that not reflected in a website? Why was that not reflected?

Ms. Fink, I'll be honest with you. I have to completely disagree with you that you all had a good strategy in place. When you do not even realize whether or not the dollars that you allocated towards a specific nonprofit or agency, whether that's been put into implementation and we're almost over a year out from that money being expended, when you could find out with a simple Google search, that does not show good oversight on your part in making sure that this program's being delivered. You know, when we have a website that completely lacks information, that only has two buttons available on it, that does not have any sort of translations listed on it, you know, that is an issue. In addition to that, $300,000, over $300,000 that were allocated to Sage Strategies, a firm that you are the head of, Ms. Harris. And in addition to that, there are very strong inconsistencies. You communicated via documents that work was paused during several periods, but you continued to charge for work. It doesn't line up your documents that you've provided and what you all have stated is happening versus what you're invoicing for. Your invoices also completely lack details and information so that our committee can justify that what you are doing is actually, one, meeting the parameters of a nonprofit and its requirement and also following the state law. There's also, on several occasions, questions about whether or not you were lobbying and whether or not another firm that you all were engaged with, the name of which I have here, Changecraft, was also engaged in lobbying. And while you all have communicated that that not been the case you were very clearly trying to influence legislation and trying to stop and oppose a budget bill that was going to be removing funding from you all because funds were not expended towards the purpose of this program which was to provide books to children And then we have Lotus Financial Solutions and the three other financial agencies that were intended to help you all with managing your funds. Yet there were checks that had been bounced. Your financials are all over the place. There was $110,000 that was unaccounted for when you first provided documents to the committee. And when we asked you all for invoices six times through the state library, we did not receive it until they sent you a demand letter. And at one point, you had an attorney from Delfino Madden submit a letter to the state library questioning their authority to receive these documents from you all when the state library had direct oversight and accountability over your nonprofit. And I don't understand why any of you would think that you do not have to provide and answer their questions when they're asking for documents from you all, and why it had to get to the point of us having a budget subhearing to discover all of these documents. Finally, and I think what is most troubling about all of this, is that the intended purpose of this program, which was to provide books to children, was not executed upon. And I think over time, that's become much more clear. It was mentioned in a report that you provided to us that there were two pending obligations that were in process, one for the Sacramento program partner, another to read to me Stockton, both totaling $120,000. Yet we never actually see that those payments are made to either one of these partners. We thought at first that the United Way program was potentially a book program. That ended up not being a book program either. And so none of these programs were actually executed upon. When we speak to the Dollywood Foundation, they indicate that they do not rely on you all for partnerships, that they actually directly requested that you all not engage with their local partners without them being a part of it, that they are unfamiliar with all of the vendors that are listed here, and that they had no idea how you all were dispersing funds. And so all of these issues raise very serious concerns for us. And I recognize and comments have been made about the amount of money that this is and that it might be small relative to the budget, but for me, as a public servant, I take this very seriously, what's occurred here. that we need to ensure that when we're making a commitment to provide something as simple as books to children that we're actually delivering on that commitment. And each of you all had a responsibility. The State Library was supposed to be providing oversight and guidance to you all to make sure that you were executing on a program and delivering on the goals of the bill that both Senator Grove as well as Pro Tem Atkins enacted. But you all were supposed to provide oversight and accountability to the vendors that you all were hiring ensuring that they were delivering on all of the items that they were invoicing you for And that did not happen So I appreciate you all being here today trying to answer some of the questions that we raised I know there's still a number of outstanding questions and documents that you are still going to be provided to us. As I mentioned before, I have shared both with you all as well as with our state librarian, Greg Lucas, that I want you to retain all documents related to this matter as we continue to explore what's happened here and just appreciate you taking the time to be present today. I want to go ahead and turn it over to anybody that we might have in the audience that's here, members of the public that may want to provide public comment. We do have a mic here at the side. I'm not sure if we have any attendees. but I'll go ahead and take a pause. All righty. Okay. Yes, Senator Grove.

No, certainly, Senator Grove. And I was about to get to that point as well. And I want to let you know, Senator Grove, that I recognize that this bill was enacted in 2022 before I was elected to the legislature. And I recognize what a priority it is to you as well as our former pro tem. And so making sure that I'm continuing to communicate to you all and provide you with an update in terms of the directions of utmost importance to me.

Absolutely. The oversight hearings to date regarding the distribution of funds for a state literacy initiative administered by the State Library have raised legitimate questions about their use. These public dollars came with a clear obligation to be spent transparently, responsibly, and in a way that delivers results, particularly for children at a critical stage of learning to read. I want to underscore I appreciate the State Library and the Strong Readership Partnership Foundation for their participation in these public hearings and for providing some explanations. However, it should not have taken this process to obtain answers the Budget Sub-1 Committee has been seeking since last year. Important gaps still remain. Our rule does not end with this hearing, and we will continue to follow the facts as the Office of State Audits and Evaluations within the Department of Finance conducts an independent audit review and requests additional information where necessary. Until those findings are complete, this remains an open oversight issue for this committee. And just for purposes of the public, I want to note that at our request, the Department of Finance will be performing an independent audit draft and final reports detailing the audit results and findings will be provided to the State Library and the subcommittee. The audit is anticipated to be completed by December 31st, 2026. However, the completion timeline will be dependent on the audit scope and its objectives which we will work on, as well as the availability and complexity of the information subject to audit. is going to be issuing a summary of preliminary concerns based on the information that we have to date, and so we will be providing a summary based off of today's hearing. And as I mentioned before, this will remain an open oversight issue. I don't expect any additional hearings until we receive the audit findings, and so that will be dependent on when the audit is finished. I want to thank everyone today for their patience and their cooperation. We have concluded the agenda for today's hearing. The Senate Budget Subcommittee No. 1 on Education is adjourned. Thank you all.