Accountability Audit Report King County
107 Pages
English
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Accountability Audit Report King County

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Downloading requires you to have access to the YouScribe library
Learn all about the services we offer
107 Pages
English

Description

Washington State Auditor’s Office Accountability Audit Report King County Report Date June 1, 2009 Report No. 1001690 Issue Date June 22, 2009 Washington State Auditor Brian Sonntag June 22, 2009 County Council and Executive King County Seattle, Washington Report on Accountability Please find attached our report on King County‘s accountability and compliance with state laws and regulations and its own policies and procedures. In addition to this work, we also audit the County‘s financial statements and compliance with federal laws and regulations. The results of that audit will be included in a separately issued audit report. Sincerely, BRIAN SONNTAG, CGFM STATE AUDITOR Insurance Building, P.O. Box 40021  Olympia, Washington 98504-0021  (360) 902-0370  TDD Relay (800) 833-6388 FAX (360) 753-0646  http://www.sao.wa.gov Table of Contents King County June 1, 2009 Audit Summary .............................................................................................................................................. 1 Description of the County .............................................................................................................................. 5 Audit Areas Examined ................................... 7 Schedule of Audit Findings and Responses ............................... 10 Status of Prior Audit Findings...................................... ...

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Washington State Auditor’s Office

Accountability Audit Report






King County



Report Date
June 1, 2009


Report No. 1001690

Issue Date
June 22, 2009



Washington State Auditor
Brian Sonntag



June 22, 2009


County Council and Executive
King County
Seattle, Washington


Report on Accountability

Please find attached our report on King County‘s accountability and compliance with state laws and
regulations and its own policies and procedures.

In addition to this work, we also audit the County‘s financial statements and compliance with federal laws
and regulations. The results of that audit will be included in a separately issued audit report.

Sincerely,

BRIAN SONNTAG, CGFM
STATE AUDITOR


Insurance Building, P.O. Box 40021  Olympia, Washington 98504-0021  (360) 902-0370  TDD Relay (800) 833-6388
FAX (360) 753-0646  http://www.sao.wa.gov
Table of Contents

King County
June 1, 2009


Audit Summary .............................................................................................................................................. 1
Description of the County .............................................................................................................................. 5
Audit Areas Examined ................................... 7
Schedule of Audit Findings and Responses ............................... 10
Status of Prior Audit Findings...................................................................................................................... 74
Appendix A – Applicable Criteria, Laws and Regulations by Finding ......................... 77
Appendix B – Roles and Responsibilities ................................................................................................. 102




Audit Summary

King County
June 1, 2009


AUDIT RESULTS

This report contains the results of our independent accountability audit of King County.

Overarching Conclusion

The County operates with decentralized and autonomous departments and divisions.
Departments are managed by the King County Executive. The King County Council authorizes
the budgetary funding of County functions, establishes legislation and provides oversight of
County operations.

Our audit found County officials should improve oversight and safeguards over its cash receipts,
expenditures and assets. In many instances, oversight and safeguards were impaired by a lack of
sufficient monitoring to ensure policies are complete, followed and staff is adequately trained to
operate within those policies.

Further, County officials do not consistently provide or enforce performance measures or
expectations in holding staff accountable. As a result, the County exposes itself to greater risk of
loss, less ability to control expenditures, and increases the risk for non-compliance with laws,
regulations and contractual requirements. Consequently, our audit identified 12 findings. We also
noted certain issues we communicated to County management.

Overarching Recommendation

In order to resolve the conditions noted in our findings, County officials should improve their
oversight of departments and divisions. They should hold top management accountable for the
adherence to County policies and the oversight and safeguarding of cash receipts, expenditures
and assets.

In turn, top management should hold staff accountable to ensure policies and procedures are
followed, monitored and enforced.

In 2007, the County Auditor made a recommendation that the County re-establish its Audit
Committee which has not been pursued. We concur with this recommendation.

Summary of Findings

Our detailed recommendations are contained in the findings summarized below:

Executive (Policy Implementation, Operations and Administrative Management of Executive
Agencies)
Council (Policy Creation, Budget Adoption, Legislation, Oversight)
Construction Management

1. The lack of adequate performance measures and expectations prevent the King
County Executive and Council from providing adequate oversight of construction
activity.
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1A. King County does not have an adequate construction project
management information system.

1B. King County does not have standard construction management
procedures.

1C. King County construction management data, files, and records are not
consistently maintained and are not readily accessible for management
oversight and review purposes.

1D. King County does not provide resources that are adequate to enable the
Executive Audit Services to comply with County policy requiring
construction management audits.

2. The County did not comply with state law governing the use of Real Estate
Excise Tax proceeds.

Executive
Cash Management

3. King County Metro Transit lacks adequate controls over cash fares collected on
its buses and trolleys.

4. The King County Jail‘s Work Education Release Program‘s internal controls are
inadequate, creating the potential for a loss of public funds.

5. The Recorder‘s Office controls over cash-receipting are inadequate. This allowed
an employee to misappropriate public funds and destroy public documents.

Inventory Management

6. The County lacks adequate internal controls to safeguard drug inventory at public
health pharmacies.

7. The County lacks adequate controls to safeguard and account for small and
attractive assets.

Fleet Replacement Funding

8. The King County Fleet Administration Division reserve fund balance for vehicle
replacement is not adequately funded.

Assessor (Policy Implementation, Operations and Administrative Oversight)
Cash Management

9. King County Assessor‘s Office does not have adequate procedures to ensure the
validity of personal property tax refunds.

Sheriff (Policy Implementation, Operations and Administrative Oversight)
Inventory Management

10. The King County Sheriff‘s Office lacks adequate controls to safeguard and
account for inventory.


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Cash Management/Contract Management/Legal Compliance

11. The Sheriff‘s Office does not have adequate internal controls over citations,
forfeited vehicles, and reporting on seized and forfeited property.

District Court (Policy Implementation, Operations and Administrative Oversight)
Cash Management / Records and Systems Management

12. The King County District Court‘s internal controls over processing transactions
and reconciling bail were inadequate.

ABOUT THE AUDIT

We performed audit procedures to determine whether the County complied with state laws and
regulations and its own policies and procedures. We also examined County management‘s
accountability for public resources. Our work focused on specific areas that have potential for
abuse and misuse of public resources.

Areas examined during the audit were selected using financial transactions from July 1, 2007,
through June 30, 2008. For the audit of construction management, we examined from July 1,
2005 through June 30, 2008.

We audit the County‘s operations annually to ensure accountability for public resources and
compliance with laws and regulations. We choose the areas to look at based on public concerns,
prior audit issues, auditor knowledge of entity operations and the internal control environment.

We also selected construction management as a performance audit area as King County spent
approximately $244,817,000 on capital projects from 2005 through 2007. Using lists provided by
King County departments and divisions, we identified 2,046 projects with expenditures of $2.9
billion from July 1, 2005 through June 30, 2008.

Our primary objectives for the construction management audit were:

1. Over the most recent three years, has King County been effective, efficient and
economical at planning, designing and managing construction projects and contracts in
order to:

Minimize all costs associated with the projects, including but not limited to
engineering, land acquisition, environmental review, environmental mitigation,
permitting and construction?

Minimize unnecessary change orders and delays that result in extra costs?

Keep projects on schedule?

Minimize risk by identifying it, eliminating it, minimizing it or sharing it with the
contractor through good contract terms and contractor management?

Obtain the best quality, timeliness, and other value?

2. How effective has King County been at soliciting, procuring and managing engineering,
consulting and construction management contracts in order to minimize costs and
maximize the value and quality of services provided?

3. How effective has King County been at complying with state and county bidding
requirements?
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In January 2009, we terminated the performance audit of King County‘s construction
management practices because the County was unable to provide complete and timely access to
files and records related to construction projects that we had requested in July 2008. The
conditions noted in finding series 1 resulted in scope limitations that did not allow us to complete
the audit.

RELATED REPORTS

Our opinion on the County‘s financial statements and compliance with federal program
requirements will be provided in a separate report, which will include the County‘s financial
statements later in 2009.

In addition to these reports, our performance audit report regarding operations of King County‘s
solid waste and wastewater treatment operations will be issued later this year.


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Description of the County

King County
June 1, 2009


ABOUT THE COUNTY

With a population of approximately 1.8 million, King County is the most populous county in
Washington State and the 13th most populous in the country. The County covers 2,131 square
miles, giving it the 11th largest geographic area of Washington‘s 39 counties. It is the financial,
economic, transportation and industrial center of the Pacific Northwest.

The County operates under a Home Rule Charter, adopted by a vote of County citizens in 1968,
and is organized under an executive-council form of government. The Metropolitan King County
Council is the policy-making body of the County. The Executive is elected to four-year terms and
serves full time. The Council‘s nine members are elected by district to four-year, staggered terms.
They also serve full time. We have included an overview of Council and Executive responsibilities
in Appendix B.

The County provides public transportation, road construction and maintenance, water quality,
flood control, parks and recreation facilities, and agriculture. The County also provides court
services, law enforcement and criminal detention, coroner services. It assesses and collects
taxes, and provides fire inspections, planning, zoning, animal control public health and election
administration, treasury services and waste disposal services.

The County has approximately 17,000 full- and part-time employees and annual operating
expenses of over $3.2 billion.


AUDIT HISTORY

We audit the County annually. The past five accountability audits of the County have reported
some areas of concern. During that period, the number of findings totaled thirteen; three in 2002,
none in 2003, four in 2004, one in 2005 and five in 2007. Of these findings, some were repeats or
partial repeats of previous findings.



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ELECTED OFFICIALS

These officials served during the audit period:

Council:
District 1 Bob Ferguson
District 2 Larry Gossett
District 3 Kathy Lambert
District 4 Larry Phillips
District 5 Julia Patterson
District 6 Jane Hague
District 7 Peter von Reichbauer
District 8 Dow Constantine
District 9 Reagan Dunn
Executive Ron Sims
Prosecuting Attorney Dan Satterberg
Assessor Scott Noble
Sheriff Susan Rahr
Presiding Judge, King County Superior Court Bruce Hilyer
Presiding Judge, King County District Court Barbara Linde


APPOINTED OFFICIALS

County Administrative Office James Buck
Director of Finance Ken Guy
County Auditor Cheryle Broom
Executive Services Auditor Dave Lawson


ADDRESS

County 401 Fifth Avenue, Suite 300
Seattle, WA 98104
www.kingcounty.gov

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Audit Areas Examined

King County
June 1, 2009


In keeping with general auditing practices, we do not examine every portion of King County's financial
activities during each audit. The areas examined were those representing the highest risk of
noncompliance, misappropriation or misuse. Other areas are audited on a rotating basis over the course
of several years. The following areas of the County were examined during this audit period:


ACCOUNTABILITY

We evaluated the County‘s accountability and compliance with laws, regulations, contracts and
grant agreements in the following areas:

Construction management Surplus property/scrap sales
Procurement/bid laws equipment and State grants
services Open public meeting laws
Misappropriations Safeguarding of assets
Hotline referrals Bond covenant compliance
Restricted fund use Debt limitation
Investment pool Cash receipting and revenue for the
Purchases and payments including elections, records, licensing and parks
travel, procard, petty cash/imprest Divisions and the Sheriff‘s Office
funds Transit operations
Indirect cost allocation Public health operations
Fleet administration District Court operations
Side sewer replacement program King County airport operations
Payroll Follow-up over prior year audit findings
Sheriff‘s Office – citations, seized and and management letter items
forfeited property reporting, and One percent for Art program
ammunition inventory Taxes/assessments

Our work focused on specific areas that have potential for abuse and misuse of public resources
as follows:

Construction Management

King County consists of the following organizations that manage construction projects and
contracts:

Department of Natural Resources and Parks (DNRP),
Department of Transportation (DOT),
Department of Executive Services, Facilities Management Division (FMD)
Executive‘s Office, Office of Information Resources Management (OIRM)

The County reported capital expenditures total $244,817,000 from 2005 – 2007. The County‘s
total expenditures over the life of all projects that were open during the same period totaled
$2,908,991,977.

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