Council approves sweeping DCHS grant oversight reform after troubling audit findings

September 23, 2025

The King County Council on Tuesday voted to approve a comprehensive reform package to overhaul oversight of taxpayer-funded grants within the Department of Community and Human Services (DCHS). The legislation, introduced by Councilmember Reagan Dunn and cosponsored by fellow Councilmembers Claudia Balducci, Sarah Perry, Girmay Zahilay, Jorge Barón, and De'Sean Quinn follows a scathing audit that revealed widespread oversight failures and potential fraud in County contracts.

“This audit was the worst I’ve ever seen, and unfortunately, it validated my long running concerns surrounding these community programs,” Dunn said. “However, through this legislation and the Council’s oversight function, we are putting in safeguards that will ensure we never see this level of waste or potential fraud again.”

The initial audit stemmed from repeated requests by Dunn for transparency regarding DCHS community partnerships, due to a troubled history of lack of oversight and minimal success. In 2024, he wrote to the King County Auditor requesting an audit of DCHS contracts, which was formally adopted by the full Council in the 2025 auditor workplan.

The Auditor’s report found that as DCHS’s contracting budget ballooned to more than $1.8 billion in 2023–24, safeguards failed to keep pace. Investigators uncovered improper payments, potential fraud, falsified invoices, and large cash disbursements with little or no tracking.

The new legislation, which included amendments crafted by Councilmembers Claudia Balducci, Girmay Zahilay, Sarah Perry, Jorge Barón, De'Sean Quinn, Rod Dembowski, and Pete Von Reichbauer expands the County’s oversight of contracts, requires stronger compliance practices, and adds more reporting requirements with the overall aim of restoring the public’s trust in County contracting and fiscal stewardship.

Key provisions of the legislation include:

• DCHS must follow best practices for contract compliance while maintaining supportive partnerships with agencies
• Annual risk assessments and site visits at least every 3 years per contract agency and sooner if waste or fraud is suspected
• New financial management training requirement for contract agencies
• 30-day reporting to council of substantial evidence of potential fraud
• Ongoing reporting to the County Council by March 2026 to track reform progress
  
  

Additionally, the Council, through the legislation and testimony, noted additional work would be taking place though the Council’s Biennial Budget process, future legislation, and ongoing reporting and monitoring.

DCHS must report back to Council:

• By October 20 to report on options for increasing financial training for contractors, feasibility of auditor recommendations, and feasibility of public dashboard
• By November 30 to report on the status of an implementation plan for the next executive to implement
• By March 31, 2026 to update Council, and annual reporting thereafter
  
  

Additional Quotes:

King County Council Chair Girmay Zahilay, cosponsor: “The audit made it clear that we must raise the bar for accountability and transparency in how public funds are managed. Today’s vote is an important first step in restoring trust in King County’s ability to manage public funds while continuing to provide essential services to our communities. While there’s more work to be done, I’m grateful for the quick action and collaboration from all involved, including Councilmember Dunn, the Executive’s office, DCHS, and our community partners. I am proud to support this legislation, add to it, and to ensure that this kind of failure never happens again. I will take further steps to promote accountability in this year’s budget process, including staffing up an office of internal audit.”

King County Councilmember Claudia Balducci, cosponsor: “Adopting Councilmember Dunn’s amended ordinance is an important step toward addressing the challenges raised in the recent audit and in rebuilding public trust as we continue to deliver critical services to our residents. But this must be just the beginning. We need a full review of human services and similar contracts to understand the scope of the problem and scale up solutions. The 2026–27 budget must include the financial support and oversight needed to set our nonprofit partners up for success and deliver the highest-quality services to King County residents. There’s more work ahead—but today was a strong start.”

King County Councilmember Sarah Perry, cosponsor: “As the Legislative Branch, the Council has a strong check-and-balance role to play in ensuring that DCHS responds quickly and decisively to this audit. I’m glad to stand with my colleagues as we take this important step forward to reaffirm our commitment to fiscal responsibility and restore our community members’ trust in King County’s financial management across each and every one of our agencies.”

King County Councilmember De’Sean Quinn, cosponsor: “King County needs to ensure new or small organizations that have a good idea have the expertise and staffing necessary to fulfill contract obligations, protect public resources, be transparent and accountable, and use best practices. Community organizations need to steward taxpayers’ resources carefully and provide services that benefit the public.”