King County Ombuds forensic review of DCHS youth program contracts — Clark Nuber finds ~$690K in questionable costs, referrals to State Auditor and law enforcement

The King County Office of the Ombuds publicly released a forensic review on May 19, 2026 documenting roughly $690,617 in questionable costs across 19 DCHS-funded youth program contracts representing about $12 million in grant spending. The Ombuds will refer the findings to the Washington State Auditor’s Office and specific observations to law enforcement for review of possible fraud, forgery, and attempted theft.

What happened

This case is the public-facing escalation of the August 2025 DCHS systemic audit (KC-2025-001). The sequence of events:

• April 11, 2025. The King County Auditor met with DCHS and the Financial Business Operations Division (FBOD) to alert leadership to financial irregularities.
• May 14, 2025. The Auditor, DCHS, and the Ombuds met to discuss an investigation plan.
• June 16, 2025. The Auditor formally referred 19 items for DCHS internal investigation.
• July 11, 2025. DCHS engaged an investigator for ethics review.
• August 26, 2025. The King County Auditor published the formal DCHS Contracts Audit.
• August 8, 2025. DCHS set a deadline of September 30 to complete the first 4 of 19 items. That deadline was missed.
• September 16, 2025. Auditor meeting on the 4-of-19 review found the investigation incomplete and referred back to DCHS.
• October 7, 2025. Auditor meeting on draft ethics investigation found it incomplete; sent back to investigator.
• October 31, 2025. Auditor Kymber Waltmunson emailed County Executive Shannon Braddock’s office stating she was “deeply concerned” and recommending the investigation be transferred to the independent Office of the Ombuds. Councilmember Reagan Dunn sent a parallel letter the same day calling for the same transfer.
• November 28, 2025. Seattle Times reported the investigation had moved to the Ombuds Office, which would manage an external investigator.
• December 2025 - April 2026. Clark Nuber P.S. conducted the forensic review of the 19 contracts.
• January 27, 2026. Councilmember Claudia Balducci led Council passage of an amendment to the Auditor’s 2026-2027 work plan to expand the audit beyond the 2 percent of provider payments reviewed in the 2025 audit and conduct a full review of locally funded DCHS community grants.
• May 19, 2026. The Ombuds Office publicly released the Clark Nuber forensic review.

The Clark Nuber findings, per the Ombuds Office and the contemporaneous KOMO and FOX 13 coverage:

• $690,617 in questionable costs identified across 19 contracts representing approximately $12 million in grant spending.
• Specific cost categories flagged: stipends paid outside approved activities, unsupported cash withdrawals, money spent on alcohol, travel, car repairs, costs incurred outside contract periods, and insufficient documentation in expense reports.
• Seven categories of observed problems: questionable costs, potentially altered documents, conflicts of interest, documentation gaps, poor financial management, unauthorized subcontractors, and unauthorized budget changes.
• DCHS told KOMO it had identified approximately $370,000 of the questionable costs prior to payment, leaving approximately $320,000 in improperly paid funds under active review.
• The Ombuds Office will refer the Clark Nuber report to the Washington State Auditor’s Office and will refer specific observations involving “possible fraud, forgery or attempted theft of funds” to law enforcement.

Acting DCHS Director Susan McLaughlin sent a letter to Ombuds Director Jeremy Bell asking that “speculation about fraud should be avoided until the questionable spending is reviewed by law enforcement.”

What the primary source says

The Ombuds Office report, per its public release and the KOMO coverage directly quoting it: “The Ombuds will be referring the Clark Nuber report to the Washington State Auditor’s Office for review and any additional appropriate action. In addition, we will refer to law enforcement those specific observations within Clark Nuber’s report that indicate possible fraud, forgery or attempted theft of funds.”

Councilmember Reagan Dunn’s October 31, 2025 letter to County Executive Shannon Braddock states: “I share the concerns of the King County Auditor that specific cases are not being pursued in a timely manner and join her in calling for this investigation to be managed within the Office of the King County Ombuds, who will act independently, rather than being handled internally by DCHS.”

Status

Ombuds report publicly released and referred to the Washington State Auditor’s Office. Specific findings will be referred to law enforcement. DCHS has not publicly identified which law enforcement agency (local, state, or federal) will receive the criminal referrals. The Council-expanded full DCHS contracting audit ordered in January 2026 is in the Auditor’s 2026-2027 work plan but has not yet been completed.

Why it’s in the registry

This is the documented-tier successor to the August 2025 DCHS systemic audit (KC-2025-001) and the structural complement to the individually-named Yolanda McGhee self-dealing case (KC-2025-002) and the Willard Jimerson Ombuds ethics finding (KC-2024-002). The four cases together tell the chain that the registry was built to surface: structural audit finding (KC-2025-001), individual self-dealing inside it (KC-2025-002), parallel ethics violation in a related County department (KC-2024-002), and forensic accounting confirming the systemic dimension (this case).

Reform implication

The nine-month gap between the County Auditor’s June 2025 referral of the 19 contracts and the May 2026 Ombuds public release happened because DCHS was given the chance to investigate itself first, missed its deadlines, and only moved the investigation when the Auditor and a Republican Councilmember both formally requested it in late October 2025. That sequence is the strongest available case for moving oversight outside the executive branch. An independent Inspector General reporting to the County Council with subpoena authority would have taken the 19 referrals directly in June 2025, eliminating the months of executive-side internal review that did not complete on its own timelines. See [reform: independent_inspector_general] and [reform: subrecipient_monitoring].