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Building Toward Effective Fraud Risk Management and Response

Feasibility: Inspector General, Qui Tam, and Contract Oversight

A joint study from the offices of the King County Auditor and Ombuds


March 18, 2026

Financial accountability and ethical conduct are necessary to promote trust in government. This study fulfills a request under King County Council Ordinance 19978 to support financial accountability by analyzing the feasibility of additional oversight functions. This report focuses on administrative oversight, not criminal investigation and prosecution. According to the International Public Sector Fraud Forum, governments generally lose 0.5 to 5 percent of their spending to fraud. There is little evidence to think King County is an exception. While the impetus for Ordinance 19978 was a contract management audit,1 fraud risk is not limited to contractors. As such, this report looks broadly at leading practice in fraud risk management and addresses gaps in county systems that relate to contracts, other third parties, and employees alike.

This study covers six gaps in county systems related to financial accountability:

  1. Lack of internal fraud investigation capacity
  2. Complex policy environment
  3. Gaps in independent contract oversight
  4. No clear reporting path
  5. Limited fraud and ethics awareness
  6. Limited information and analytics

These gaps can limit the effectiveness of efforts to prevent, detect, and respond to fraud and improper acts. We focus on gaps to identify where King County can bring energy and resources to create positive change. There are, however, many ways the County already supports financial accountability. For example, the County has ethics and whistleblower ordinances, empowers the Office of the Ombuds to conduct independent investigations, conducts centralized loss reporting in compliance with state law, and operates an enterprise risk management program.

For each gap in this study, we discuss the current state of county systems, leading practices, and actions the King County Council could take to close the gap. Per Ordinance 19978, we discuss inspector general positions (Gaps 1 and 4), qui tam provisions (Gap 2), and independent contract review (Gap 3). In appendix 2, we include a table summarizing feasibility of these forms of oversight, and our estimated costs and potential timelines for different implementation options. In appendix 3, we include a list of potential revisions to King County Code to support financial accountability by enhancing independent oversight.

While not quantified in this report, there are likely to be savings that offset investments in increased financial accountability, including new programs. For example, research by the Association of Certified Fraud Examiners (ACFE) found that dedicated fraud teams reduced median fraud losses by 41 percent, while hotlines reduced median fraud losses by half. This same report found that governments experienced a median fraud loss of $150,000 per case in 2024. In addition, research by the Center for Effective Public Management at Brookings found that most offices of inspector general are revenue-positive, with a median return of $6.38 for every $1 spent across 19 federal offices between 2010 and 2014.