The Metropolitan King County Council unanimously voted Tuesday to require stricter fiscal oversight of the county's grant funding after a recent audit found unapproved payments and possible fraud within the Department of Community and Human Services' nearly billion-dollar-a-year grant program.
And the county's new proposed budget, released Tuesday, would allow the department to staff up to conduct that fiscal oversight.
A recent audit found DCHS has increased its grantmaking from $922 million in 2019-20 to $1.8 billion in 2023-34. At the same time, the department has awarded grants to more “high risk” organizations — those that have little history of working with government or little financial oversight in place — while failing to appropriately monitor their work.
The funding growth was fueled in large part by growth in voter-approved levies, specifically the Best Starts for Kids levy and the Veterans, Seniors and Human Services levy.
The audit largely looked at contractor organizations that serve youth by offering counseling and keeping them out of the legal system.
Councilmember Reagan Dunn, the lead sponsor of the legislation, said the goal was not to create too much unrest or uncertainty" among the grant recipients, "the overwhelming majority are doing a really good job."
Dunn, who initially requested the audit last year, said the new legislation, once implemented "will put us among the best counties in the nation in terms of effective transparency and oversight of our grant process."
The legislation passed Tuesday requires DCHS to perform a risk assessment of its contract agencies at least once a year and to visit each agency, in person, at least once every three years.
Those standards are already existing DCHS policy — although they hadn't been codified in law — but the department has failed to meet them. The standards call for the department to visit one-third of its grantees each year. This year it is on track to visit only 20%. Last year it visited 16%. In 2023, it visited just 1% of grantees, according to the audit.
The legislation also requires new financial management training for grantees and ongoing reporting from DCHS to track implementation and reform.
"The audit identified some serious gaps," Councilmember Sarah Perry said. "We have a lot of work to do in restoring public trust in the county's management of public funds."
Also Tuesday, County Executive Shannon Braddock said she was including $10 million in her two-year budget proposal to increase oversight at DCHS. The money would largely be spent on increased staffing.
DCHS, she said, has been "understaffed" in contract oversight.
"We did conscientiously take some risks to get money out the door quickly and in particular to get money out the door to some community organizations who aren't traditionally in the system to get those dollars," Braddock said. "The County Council made that choice, we made that choice."
Braddock's office said last week that DCHS continues to investigate 19 contracts flagged by the audit with potential issues and will report back to the auditor by the end of October.
Amy Enbysk, a Braddock spokesperson, said law enforcement is not currently involved but once the internal investigations is complete, "the county will ensure appropriate reporting requirements are followed and will involve law enforcement if necessary.
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