The Camas-Washougal Economic Development Association began with good intentions, to help its community recover from the Great Recession. But its resistance to public accountability allowed community tax dollars to go missing.
Our office reported recently that $19,000 was misappropriated by the association’s former executive director for personal use, spent on items such as home climate control. An additional $45,000 in spending was questionable — a lack of documentation made it unclear whether it was spent for personal or business reasons. Just as concerning for us at the State Auditor’s Office, the association kept none of the detailed financial records required for public funds. More than $1.2 million in tax money over more than eight years was unauditable.
This should serve as a warning to all taxpayers and all governments as we face what some economists say could be a slump as deep as the Great Depression. Especially when public programs like health care and emergency services are in high demand, accountability cannot be compromised for expediency.
In the best of times, independent public auditing is vital; during times of duress, it is even more important.
Local governments and state agencies are taking extraordinary steps to preserve public health and promote public welfare. As advocates of good government, we have been working very hard to provide guidance to local governments and state agencies as they navigate this pandemic. That guidance has centered on clearly documenting their decisions and actions.
Public transparency is required when so many tax dollars are involved. In a typical year, some $113 billion in public funds are subject to audit in Washington, flowing through 2,300 local governments and more than 100 state agencies.
Congress has dedicated more than $2.5 trillion in emergency funding to fighting the crisis nationwide. So far, that support includes $1.3 billion provided to Washington’s local governments and an additional $1.6 billion in funding to state agencies. Congress is considering even more aid to state and local governments for the future. This federal funding is in addition to the $400 million in supplemental support provided by the state.
With so much extraordinary funding coming in, there is a greater risk of misuse or abuse. The average cost of an audit by our office is less than one-tenth of 1 percent of a local government’s budget. Now more than ever, audits are an invaluable investment in the independent oversight of public monies.
Each day, the economic damage from the pandemic is becoming clearer, from Seattle to Walla Walla. The revenue our communities rely upon to fund everything from public hospitals to parks has declined sharply.
Governments in Washington must navigate historic cross-currents — a sudden influx of emergency federal funding and a steep drop in local tax revenue. These intense pressures reveal how valuable our limited public resources are. Transparency in how governments use these funds is all the more important.
The role of the State Auditor’s Office is to shine a light on how public money is spent before the crisis, during the crisis, and through our future recovery. We are up to the task. We will be there, and with the continued commitment of our colleagues in public service, so will Washington’s time-honored record of accountability.
Pat McCarthy is the Washington State Auditor.
