Law enforcement, state auditor to be pulled into King County fraud probe
After months of intense public scrutiny and multiple investigations uncovered potential fraud, King County now plans to pull in law enforcement and the state auditor to address suspicions of financial misdeeds by contractors.
A recent investigation by the county's independent ombuds found instances of "likely" fraud, waste or abuse by contractors. The agency plans to share its findings with the Washington State Auditor's Office.
The ombuds will also refer "possible fraud, forgery or attempted theft of funds" for potential criminal investigation, according to the investigative report released Tuesday.
The probe focused less on whether contractors misused tax dollars - a question that could be taken up by law enforcement or state investigators - and more on how the Department of Community and Human Services mishandled oversight.
DCHS, which has a budget of over $1 billion, has drawn sharp backlash for years of weak financial oversight, but the latest findings are the most scathing yet.
The ombuds determined that DCHS flagged questionable spending by contractors but approved payments anyway.
"In several instances, DCHS identified these costs but allowed them because they had been paid in previous fiscal years," the report reads. This included contractor cash withdrawals or stipend payments made without documentation explaining the transactions.
The investigation found problems dating back to 2021. The report pointed out $690,617 of "questioned costs across 179 transactions and 16 community partners." DCHS withheld or recovered some money from contractors but $446,703 in potential improper payments remain unresolved, according to the ombuds.
In a written response to the ombuds, DCHS challenged one of the investigation's key findings. The department said it had withheld more money than the report accounted for. The "total amount of potential improper payments is $320K-not $446K, as stated in the report," the response reads. DCHS also described the total as a "preliminary maximum" that may drop as more information about the payments is discovered. The department has already found documents and "circumstantial supporting evidence" justifying some spending, it told the ombuds.
"We ask that until law enforcement completes their investigation, that speculation not be made" about possible fraud, forgery or attempted theft, the department said in a statement to The Seattle Times.
More than half of contractors audited were flagged for investigation
Many grants overseen by King County's Department of Community and Human Services were designed to open doors for grassroots organizations that work directly with disadvantaged communities. Some of the organizations are considered "high risk," meaning they lack government contracting experience or have few financial resources or policies in place.
In March, a Times investigation detailed how department officials continued to pay organizations even after they were accused of diverting grants intended for disadvantaged communities.
The contractors scrutinized by the ombuds worked for programs that provide youth with educational support, mentorship and criminal justice guidance and rehabilitation.
Only two contractors had questionable transactions that exceeded $100,000. Most of the amounts ranged from $20,000 to $50,000 per contractor, according to the report.
The ombuds discovered that two contractors may have altered documents supporting their spending. The material "appeared to have been created or modified after the fact," the report reads.
The investigation also noted several conflicts of interest among contractors. For example, one nonprofit subcontracted with a company owned by the nonprofit's executive director.
The "most significant" conflict, however, involved a King County program manager. Although the report doesn't identify the employee, The Times reported last month that Yolanda McGhee, who ran a $10 million anti-racism initiative, oversaw more than $800,000 in payments to members of her family.
County officials had learned about McGhee's potential conflict of interest repeatedly in the six years before an investigation was launched, The Times found. McGhee, who was fired in January, denied having any conflicts of interest.
None of the county investigations so far have addressed whether contractors collected tax dollars without delivering services.
Neither the ombuds nor the auditor has the authority to investigate fraud. The ombuds is still determining which law enforcement agency to refer the findings to, an official from the office told The Times on Tuesday.
The ombuds findings aren't entirely new. They echo concerns previously raised by the King County auditor's office, which outlined poor financial oversight at DCHS in a report last year.
The auditor reviewed only 36 contractors, a tiny sample of the hundreds managed by DCHS. But that probe uncovered questionable spending by more than half of those contractors. The auditor then referred its findings to the ombuds, which led to this latest investigation.
Earlier this year, Metropolitan King County Councilmember Claudia Balducci pushed for a review of all the nearly 1,600 contracts between DCHS and community-based grantees. That review is currently underway.
Responding to the ombuds report, Balducci said in a statement that she's frustrated with the "slow trickle of revelations about fraud, waste, and abuse, and with how fragmented our efforts have been to uncover and to fix these problems."
Balducci called for a committee to "take the reins on these issues and hold those inside and outside of County government accountable."
In DCHS's response to the ombuds, the department acknowledged that the findings underscore a need to "strengthen internal controls, contracting policies and procedures, and financial stewardship."
Over the past year, the department has revised and reinforced a wide range of oversight and transparency rules.
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This story was originally published May 19, 2026 at 5:08 PM.