King County names a fraud watchdog as nonprofit contracts face audits

The King County Council in Washington state appointed Stuart Robinson on Tuesday, October 6, as the county's first inspector general, for a five-year term. He will lead a new Inspector General Division within the Office of Public Complaints, with authority to investigate reports of financial fraud and abuse, issue subpoenas and pursue recovery of misspent funds, the council said.

Robinson spent the past nine years as director of investigations for the Palm Beach County, Florida, Office of Inspector General, after a year at the Broward County office. Before that he was a special agent and supervisory special agent with the FBI, focused on financial crimes, fraud against the government, public corruption and civil rights. "A 26-year FBI veteran is exactly the kind of candidate we hoped to attract when we created this office," said Councilmember Reagan Dunn.

What came before

The council said the office builds on a reform package it approved last year to overhaul oversight of taxpayer-funded grants. That followed an audit and an ongoing investigation by the county's Office of the Ombuds, which identified widespread oversight failures and potential fraud in county contracts. MyNorthwest reported on October 8 that a review released by the Ombuds office in May found nearly $700,000 in questionable costs across 16 community organizations that receive county money.

The newest case involves Urban Family, a nonprofit doing gun-violence prevention work under the county's Regional Office of Gun Violence Prevention. An internal county review found nearly $261,000 in potentially duplicative salary and rent billing, with the same expenses possibly billed to both the county and the City of Seattle, MyNorthwest reported on October 7. The review also flagged a possible conflict of interest, inadequate documentation for cash transfers and disbursements, and transfers to accounts reviewers could not identify.

The review found that Urban Family lost its nonprofit status in May and had not provided financial records its contract required, according to MyNorthwest. The county suspended Urban Family's Regional Peacekeepers Collective contract effective October 5 and halted payment on invoices for July, August and September until the group met the contract's requirements. Based on the initial findings, the county and the City of Seattle suspended their contracts with the group and started a joint audit.

"As Urban Family expanded to meet growing community needs, the financial and reporting demands of managing multiple public contracts grew with it, at times outpacing our administrative infrastructure. We recognize our responsibility to strengthen those systems wherever needed. If mistakes are identified, we will address them. Accountability is something we believe in, not something we are trying to avoid," a spokesperson for Urban Family said in part, in a statement quoted by MyNorthwest.

What changes for grantees

The division must issue written findings and recommendations when it identifies fraud, waste or abuse, and send an annual report to the council and the county executive. The same ordinance creates a centralized King County Fraud Hotline and requires standardized inspection language in county contracts and grants.

"Ultimately, this is about effective, transparent government and the King County Council's dedication to providing it," Robinson said.

In our view, any nonprofit that holds several public contracts should take three steps now.

1. Map every shared cost. When one salary or one lease is split across funders, keep a written allocation that shows no dollar is billed twice.
2. Check your exempt status every year. A lapse can surface in a contract review long after it happens. Three missed annual filings in a row are enough to lose federal exemption.
3. Read the inspection clause. New county contracts will carry standard language on inspections, so know what records you must hand over and how fast.