Originally Published: 02 AUG 23 11:05 ET

By Macie Goldfarb and Steve Contorno, CNN

(CNN) — In the ongoing battle between Walt Disney World and Florida Gov. Ron DeSantis, Disney’s governing district – whose current board was hand-picked by DeSantis and took control of the district in February – abolished all of its diversity, equity and inclusion programs, the district said in a Tuesday news release.

The statement from the Central Florida Tourism Oversight District cited an internal investigation into the Reedy Creek Improvement District’s policies, claiming the district “implemented hiring and contracting programs that discriminated against Americans based on gender and race, costing taxpayers millions of dollars.”

“The so-called diversity, equity, and inclusion initiatives were advanced during the tenure of the previous board and they were illegal and simply un-American,” district administrator Glenton Gilzean said. “Our district will no longer participate in any attempt to divide us by race or advance the notion that we are not created equal.”

CFTOD will dissolve the district’s DEI committee and eliminate any job duties relating to DEI. District employees will also be prohibited from using staff time to pursue DEI initiatives, the statement said. However, this change affects only the government and not the companies that operate inside the district (i.e. Disney) and would seem to eliminate contracting protocols that in the past gave special consideration of women and minority owned businesses during the procurement processes.

According to the new oversight district, Reedy Creek “wasted taxpayer dollars” by entering into contracts based on race- and gender-driven goals and “aggressively” monitoring contractors’ race and gender practices under its Minority/Women Business Enterprise and Disadvantaged Business Enterprise programs. CFTOD said it estimates the previous district spent millions of dollars finding businesses who helped meet these DEI quotas.

DeSantis signed a bill establishing state power over Reedy Creek in February, almost a year after then-Disney CEO Bob Chapek apologized for declining to comment on Florida’s controversial bill, dubbed “Don’t Say Gay” by critics, to restrict certain classroom instruction regarding sexual orientation and gender identity, CNN previously reported. In response to pushback, Chapek said in an apology letter that the bill was “yet another challenge to basic human rights,” adding that Disney would increase its support for advocacy groups combating “similar legislation in other states” and create a new framework to ensure the company’s advocacy “better reflects” its values.

CNN has reached out to Walt Disney World for comment.

Disney is suing the board and DeSantis in federal court, arguing that the state retaliated against the company for exercising its First Amendment rights. The board has sued Disney in state court, where a Florida judge recently rejected Disney’s request to dismiss the case.