Suggested photo caption: State Auditor Pat McCarthy converses with host Mike McClanahan on the set of The Impact at TVW. The interview covered recent audits into Medicaid duplication, multi-agency employment, and allegations of small town fraud.
OLYMPIA, Wash. — As lawmakers debate potential budget cuts and tax increases, making the most of available funding is a theme for the 2025 legislative session. There’s one state agency that exists to prioritize effective use of taxpayer dollars.
In a recent interview at TVW, Washington State Auditor Pat McCarthy weighed in on a variety of examinations from the last eight months.
The State Auditor’s Office reviews spending for large and small government entities and program effectiveness for state agencies. Many of the audits conducted by the agency are required by law, but others are launched at the State Auditor’s discretion.
“Our performance audits come from all sorts of sources. It could be something that’s very topical, that people are concerned about. It could be a group of just citizens saying we think this is something that should be looked into. It can be legislative driven. It could be organic and just come from staff on things that we believe are topics that are good for us to be looking at,” said McCarthy.
One recent audit focused on individuals enrolled in Medicaid programs in more than one state.
“We had $8.6 million a year, where people were receiving enrollment both from two states, if you will. And so it’s incumbent upon the federal government to make changes for us to be able to be able to monitor that. And we do have one of our senators and here in Washington state, Senator Gilden has a bill to implement the recommendations,” said McCarthy.
Another recent audit looked at the prevalence of state workers on the payroll of more than one agency. An example of dual employment might be a person working part-time for two different agencies, but in one instance the State Auditor flagged a remote worker who reportedly held two full-time jobs with a state agency and a private company for more than a year and claimed hundreds of hours of overtime.
The audit identified 93 cases of dual employment with an average of six months of overlapping payroll payments. Given that there are tens of thousands of state employees, McCarthy said dual employment is very uncommon.
“Appropriate in some cases and not in others and so agencies need to be clear,” said McCarthy.
State law requires all local governments in Washington to be audited at least once every three years.
“I am sad to say that we have had a spike of a number of small entities with fraud, that we found fraud,” said McCarthy.
She referenced a situation involving the loss of several hundred thousand dollars in Morton, a city in Lewis County.
“A small town or a city that we had made some recommendations to previously and weren’t followed to the point that $900,000 later, there was an issue of fraud that we were able to ascertain,” said McCarthy.
Another example came from the other side of the Cascades.
“The town of Cusick, which is in eastern Washington, had their city manager or city administrator pretty much take all the money out of their bank account, about $277,000. For a small town, that’s significant,” said McCarthy.
A third situation involved a state agency.
“One that we found for the Office of Administrative Hearings, a small or medium size agency here in state government, had one of their employees that had taken close to $900,000. He was able to control the amount of input that he could have with regards to doing this scam and he was able to accomplish it,” said McCarthy.