(The Center Square) – In response to a recent audit by the county auditor, the King County Department of Community and Human Services has begun overhauling its operations, a process that has already uncovered one confirmed loss of public funds.
Audit findings from August revealed that DCHS distributed more than $1.5 billion in 2023 and 2024 combined, a 95% increase from $922 million in 2019 and 2020 combined. There were 19 flagged potential improper payments for DCHS to review that included the potential of fraud across multiple DCHS contracts, with the audit pointing to the department’s hybrid payment model, which sets monthly payments based on contract budgets. The audit found that the department’s oversight process, including its hybrid model for grants, failed to keep up, leading to improper payments.
The King County Council later approved Ordinance 2025-0266, which requires annual reviews of DCHS contractors, immediate site visits for any reports of fraud or waste, mandated in-person check-ins every three years, and a progress report to the county council by March 2026.
“The audit’s recommendations, along with the King County Council’s recent ordinance requirements, gave the department a clear roadmap, but we’re pushing beyond to implement change from the ground up for long-term results,” the department said in a blog post on Thursday.
The 19 cases of potential improper payments drew the most concern from county leaders. Since the audit, DCHS reported that it has completed a review of 11 out of 19 cases of potential improper payments flagged by the audit, with just one case where there was a loss of public funds or improper payments. DCHS did not respond to The Center Square’s request for details on the one confirmed case of lost funds.
The remaining eight are now being handled by an independent external investigator for transparency.
DCHS is still collecting documentation for the other eight cases.
DCHS also implemented a new contract compliance monitoring policy that aims to ensure compliance with contracts and to ensure they are achieving their intended purpose. It establishes clearer expectations for internal communication and collaboration between program and fiscal compliance staff.
As recommended by the audit, DCHS hired a contract management best practices manager, who will create a comprehensive staff training plan. This will help address a larger workload amid a period of rapid growth for the department that led to it handling 1,250 contracts with human service providers. In comparison to another highly-populated county, Los Angeles County – with over 10 million more residents than King County – has around 700 providers.
The department’s response to the 10 audit recommendations include a risk assessment of the hybrid payment model; ongoing anti-fraud training for staff; forming an inter-departmental workgroup with Public Health – Seattle & King County; and strengthening internal controls through a phased implementation strategy currently in progress.
Starting next year, agencies receiving more than $50,000 per biennium must complete required financial management training.
The due dates for the 10 recommendations range from as early as March 31, 2026 to June 30, 2027.
