King County auditors find improper payments, recommend tighter controls for DCHS grants

King County Auditor Kimber Waltmanson told the Council Committee of the Whole on Aug. 26 that the county's Department of Community and Human Services made a series of oversight errors that led to improper payments and potential fraud in multiple local grant contracts.

Waltmanson, presenting the office's audit of DCHS contract management for 2023 and 2024, said DCHS distributed more than $1.5 billion during the audit period and "made a policy choice to focus on reducing barriers to county contracting for organizations without much government contracting experience." She added the agency implemented that policy "without installing a safety net to monitor whether the funds were being used appropriately." Principal auditor Megan Coe said the audit found examples of altered or forged supporting documents, cash-withdrawal receipts used as backup, and contracts paid without consistent detailed expense reports.

The findings prompted council members to press DCHS leadership and the auditor's office on next steps and resources. Kelly Ryder, director of the Department of Community and Human Services, said DCHS "takes these findings very seriously" and has organized an internal work group, will propose budget requests this fall to add compliance and finance staff and aims to implement most recommendations by mid-2026, with fuller internal-control work extending to 2027.

Why it matters

Auditors said the county asked DCHS to expand funding to smaller, less experienced nonprofit organizations but did not provide timely fiscal oversight, increasing the county's financial risk. The report singled out a hybrid payment model used for Best Starts for Kids (BSK)…