Compliance Audit of Historic Preservation Funding

King County complied with legislative mandates in implementing House Bill 1386 by properly accounting for revenues generated from the increased recording surcharge and using the discretionary portion of surcharge revenues for authorized purposes. The county used surcharge revenues to complement, rather than replace, existing funding for historic preservation and heritage programs. However, these funds were not restricted and “historic preservation” was not well defined.

We recommended that the Historic Preservation Surcharge Account be restricted to ensure that surcharge revenues are used exclusively for historic preservation purposes. We also recommended that an annual financial plan be developed to promote transparency for the expended and unused balance of the account. In addition, we recommended that the King County Council consider adopting legislation, or directing the County Executive to develop policies and procedures, for defining and using the Current Expense Fund portion of surcharge revenues to promote accountability and transparency.

As of 2008, heritage organizations and historic preservation programs represented only 15 percent of the cultural agencies that have been historically funded by the county and received proportionally less funding than art programs. House Bill 1386 established a new and significant source of revenue for heritage organizations and historic preservation programs in King County, generating approximately $1.7 million in new revenues between 2005 and 2008.