A recent audit by the State Auditor’s Office has uncovered widespread issues with Washington state’s handling of federal COVID-19 aid, with 11 state agencies found to have mismanaged over $1 billion in funds. The audit identified 86 issues with the agencies’ spending, including documentation deficiencies and questioned costs totaling $1.17 billion in the 2023 fiscal year.
The audit reviewed the state’s spending of over $29 billion in federal funds, with the questioned costs representing approximately 4.1% of the total amount spent. While the federal government has the legal authority to request repayment of mishandled funds, it is uncommon for them to do so.
Instead, federal agencies typically work with state counterparts to address concerns raised by audit findings, according to Adam Wilson, SAO Assistant Director of Communications. Each federal granting agency reviews independent audits of state programs receiving their funds, such as the U.S. Department of Health and Human Services reviewing audits of its funds provided to state agencies.
The audit highlighted several concerning findings, including the Office of the Superintendent of Public Instruction’s failure to properly track subcontractors, the Department of Commerce’s inability to ensure payments to subrecipients were allowable due to staff turnover, and the Washington state Department of Transportation’s failure to confirm subcontractors were paying prevailing wages.
The Department of Transportation’s audit found that 62% of certified payrolls were not submitted within the required seven-day timeframe, with an average delay of 23 days and 25 payrolls more than 30 days late. The department has promised to improve its process to show compliance with prevailing wage requirements, citing lower and less experienced staffing levels.
The U.S. Department of Labor was contacted regarding potential requests for repayment, but did not respond at the time of publication.
