King County, WA report recommends fraud investigation into youth programs

King County, WA DCHS under criminal investigation

A report released this week found serious compliance issues with King County's Department of Community and Human Services. The review found a need for the state's auditor's office to get involved.

SEATTLE - An independent investigation into four youth programs run by the King County Department of Community and Human Services (DCHS) stated that waste, fraud, or abuse likely occurred in some cases and could not be ruled out in others without further investigation.

The report, released to the public this week by the King County Office of the Ombuds, is referring its findings to the Washington State Auditor’s Office for review. Additionally, some findings are severe enough to be referred to law enforcement for possible criminal investigations into fraud, forgery, and attempted theft. The forensic review by accounting firm Clark Nuber P.S. looked into 19 community partners funded by the Department of Community and Human Services. The King County Auditor's Office released a report last summer on a fraction of the hundreds of contracts funded locally. The Ombuds Office began an independent and thorough review last fall and appointed the firm Clark Nuber as the investigator for this report. 

Investigation details and financial warning signs

The review pointed to DCHS's rapid growth of grant funding in recent years, noting that pressure to distribute money quickly during the COVID-19 pandemic contributed to the oversight gaps.

Key findings from the independent report include $690,617 in questionable costs, financial records related to spending that may have been changed or created after the fact, and possible conflicts of interest where internal relationships may have compromised contract integrity. Other concerns highlighted in the report include missing documents, where there were several cases in which necessary documentation was unavailable, as well as poor financial management, including inconsistent recordkeeping.

Response from DCHS

DCHS says over the past several months it has made meaningful progress in responding to the audit and building a culture rooted in responsible financial management, supported by stronger systems, and clearer controls, and more consistent oversight. 

"We are carefully reviewing the report to determine next steps and will work closely with the King County Department of Executive Services’ Finance and Business Operations Division to ensure accountability, including if funds need to be recovered and adhering to reporting requirements," DCHS said in a statement sent to FOX 13 on Wednesday.    

A letter sent to the Office of the Ombuds, which was included in the public documents made available this week, reminds the independent group that no fraud has been confirmed yet. DCHS said in its statement on Wednesday that until law enforcement completes its investigation, the department asks that speculation not be made. 

"We remain steadfast in our commitment to equity," the statement said. "Equity requires accountability and ensuring that funds are spent responsibly and reach the communities that need them most—no exceptions."

County officials disagree

In a response letter, DCHS pushed back on the report's conclusion about the amount that was "potentially improperly paid" and the true maximum exposure. The Ombuds Office rejected the department's request to recalculate that data and stood firmly behind the original numbers, stating the calculations were based on the exact records DCHS provided. The independent office also called on the County Council to expand the Ombuds Office's legal powers to subpoena records directly from county contractors in the future. 

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