Pamela Taylor, director of the Clay County Development Corp (CCDC), which provides services to poor and elderly residents, drew international condemnation after her comment last month about Obama went viral.
She resigned in November but was reinstated last month, prompting West Virginia to review its contracts with the nonprofit.
Democratic Governor Earl Ray Tomblin's office said the state had secured an agreement under which the Appalachian Area Agency on Aging will manage the CCDC for six months.
"Following the state's request for specific assurances that the CCDC is following anti-discrimination policies, we have been assured that Pamela Taylor has been removed from her position as CCDC director," Tomblin's office said in a statement.
Taylor could not be reached for comment.
The nonprofit in Clay, West Virginia, a small town about 20 miles (32 km) northeast of Charleston, the state capital, receives state and federal funding.
After the Nov. 8 election, Taylor went on Facebook to praise the switch from Obama to former model Melania Trump, the wife of President-elect Donald Trump, a Republican.
"It will be refreshing to have a classy, beautiful, dignified first lady back in the White House. I'm tired of seeing an ape in heels," she wrote.
Beverly Whaling, Clay's mayor, resigned after coming under fire for replying to Taylor's comment: "Just made my day Pam."
The Charleston Gazette-Mail has reported that the nonprofit received about $1.5 million in federal funding and $363,000 in state funding in 2014.
West Virginia non-profit director, who called Michelle Obama an 'Ape in heels' in racist Facebook post, is fired
The director of a West Virginia nonprofit whose racist post about Michelle Obama in November got her suspended from her position has been fired four days after she returned to work.
'It will be refreshing to have a classy, beautiful, dignified First Lady in the White House. I'm tired of seeing a [sic] Ape in heels,' Clay County Development Corporation director Pamela Ramsey Taylor wrote after Donald Trump was elected as president.
Her suspension was set to expire on December 23, but Governor Earl Ray Tomblin's office said Tuesday that she had been fired.
She was removed from the nonprofit, which helps low-income and aged people in Clay County, following an agreement with its board of directors.
Taylor's racist social media comments were not directly mentioned as the reason, but the state requested 'specific assurances' that the nonprofit is following anti-discrimination policies, Tomblin spokeswoman Jessica Tice said.
It was assured that Taylor is gone as director, she added.
The Appalachian Area Agency on Aging will manage the nonprofit daily for six months while the Clay County organization makes any changes needed for compliance as a state contractor.
West Virginia's Bureau of Senior Services and the Bureau for Medical Services have been reviewing the nonprofit's state contracts following the furor.
The state also asked for guarantees that Taylor had not discriminated against recipients of state services.
On November 14, the state bureau’s commissioner, Robert Roswall, warned the non-profit's staff that 'any discrimination of staff or the customers [they] serve' could lead to federal and state funding being cut, the Charleston Gazette-Mail reported earlier this month.
That letter was sent around the same time that Taylor's post began to receive major media attention.
Taylor's racist post also had consequences for Clay Mayor Beverly Whaling, who 'liked' it, and added the comment 'Just made my day Pam'. She resigned from her position on November 16.
The post was deleted, but not before it was shared hundreds of times on social media. Taylor also suspended her Facebook account.
The two women apologized for their remarks after controversy began to build.
'My comment was not intended to be racist at all,' Whaling said in a statement to The Washington Post.
'I was referring to my day being made for change in the White House! I am truly sorry for any hard feeling this may have caused! Those who know me know that I'm not of any way racist!
'Again, I would like to apologize for this getting out of hand!'
Pamela Ramsey Taylor also said sorry on her Facebook account, which she set to private.
The racist post wasn't the first time Taylor, who had worked at the CCDC since the late '90s and became director in 2007, had seen trouble there, the Gazette-Mail said.
She was dismissed in 2002 after being accused of taking fundraising money, but then hired back again shortly after, according to a lawsuit deposition seen by the Gazette-Mail.
It wasn't clear which suit that deposition was for, but Taylor was sued in 2007 by a former employee for wrongful dismissal.
Brenda Baird, a bookkeeper there from 2000-2007, claimed she was unfairly fired by Taylor in 2007 for questioning how money was spent in the organization.
Baird said that she spotted discrepancies on Taylor's tax forms - discrepancies that Baird claims she was told to ignore. She received a written reprimand after arguing with an employee about the issue.
Then, in 2007, Baird questioned the board of directors about employees apparently getting double the typical raises, and receiving bonus checks.
That complaint was passed on to Taylor, who accused Baird of 'trying to her get fired' according to the suit.
Baird was dismissed for 'gross misconduct and insubordination', but said she hadn't been formally reprimanded for insubordination since 2002.
Taylor said in her own deposition that Baird had tried to make her look incompetent, and was the one who signed off on the bonus checks. It was settled out of court for an unspecified amount in 2009.
At the time, the comments by Taylor and Whaling sparked a huge furor in the small county, with many branding the post 'racist' and 'vile' and demanding that both officials stand down.
Tinna-Jamie Conner, addressing the two officials, said in a Facebook post: 'Here's a news flash for you deplorable classless beings.
'OUR First Lady, Michelle Obama personifies and exudes beauty, grace, class, intelligence, humility, strength, patience, passion and HOPE.
'Neither of you idiots could hold a candle to her on your hottest day. Say what you will, but your hate and racism is ugly.'
Dianne Degen Joyce added that Taylor's comments was not only 'vile' but incorrect.
Others agreed: 'That goes without saying. Michelle Obama is the epitome of class, grace and style,' Celeste DuMas Reinhard said.
Some Facebook users pointed out that president-elect Trump's wife Melania had previously stripped off for modelling jobs, while Michelle Obama had been involved in politics.
Others simply demanded Taylor and Whaling be fired.
Robin Brown said: 'Women can and SHOULD make them lose those jobs. They should be publicly humiliated.'
In 2014, the CCDC, which services and financial assistance to Clay County's low-income and elderly residents, received about $1.5 million in federal funding and $363,000 in state funding.
Nonprofit Head Who Posted Michelle Obama 'Ape in Heels' Comment Is Fired
A West Virginia nonprofit group has fired its director after she wrote a Facebook post referring to first lady Michelle Obama as an "ape in heels."
Gov. Earl Ray Tomblin's office said Tuesday that Pamela Ramsey Taylor, executive director of the Clay County Development Corp., was removed following an agreement with the nonprofit's board of directors.
Taylor's racist social media comments were not directly mentioned as the reason. She had been placed initially on a six-week leave that was scheduled to end last Friday.
However, the state requested "specific assurances" the nonprofit is following anti-discrimination policies and has been assured Taylor is gone as director, Tomblin spokeswoman Jessica Tice said.
The Appalachian Area Agency on Aging will manage the nonprofit daily for six months while the Clay County organization makes any changes needed for compliance as a state contractor, Tice said.
The nonprofit provides services to elderly and low-income residents in Clay County.
West Virginia's Bureau of Senior Services and the Bureau for Medical Services have been reviewing the nonprofit's state contracts following the furor. The state also asked for guarantees that Taylor had not discriminated against recipients of state services.
Clay Mayor Beverly Whaling was criticized for responding to Taylor's post: "Just made my day Pam." Whaling said later that she was referencing the change in the White House and wasn't racist. She resigned following the backlash.