Washington State Auditor’s Office
Whistleblower Report

Department of Corrections

Report No. 1004415

Issue Date
October 11, 2010

WASH I N G T O N - - -

BRIAN SONNTAG
---STATE AUDITOR

Washington State Auditor
Brian Sonntag

October 11, 2010

Department of Corrections
Olympia, Washington

Report on Whistleblower Investigation
Attached is the official report on Whistleblower Case No. WB 10-042 at the Department of
Corrections.
The State Auditor’s Office received an assertion of improper governmental activity at the
Department. This assertion was submitted to us under the provisions of Chapter 42.40 of the
Revised Code of Washington, the Whistleblower Act. We have investigated the assertion
independently and objectively through interviews and by reviewing relevant documents. This
report contains the result of our investigation.
Questions about this report should be directed to Senior Investigator Sandy Miller at (360) 9020378 or Director of Special Investigations Jim Brittain at (360) 902-0372.
Sincerely,

BRIAN SONNTAG, CGFM
WASHINGTON STATE AUDITOR
BS: sym
cc:

Ms. Kathy Smith, Internal Audit Manager, Department of Corrections

Insurance Building, P.O. Box 40021  Olympia, Washington 98504-0021  (360) 902-0370  TDD Relay (800) 833-6388
FAX (360) 753-0646  http://www.sao.wa.gov

Whistleblower Investigation Report
State of Washington
Department of Corrections
ABOUT THE INVESTIGATION
On March 23, 2010, a whistleblower asserted to our Office that the administrator for
chemical dependency programs at the Department of Corrections inappropriately
contracted with a residential chemical dependency provider. The assertion stated the
contract guaranteed payment before services were provided and the subject terminated
contracts with other vendors to reduce competition for the vendor in question.
We referred the case to the Department to investigate. The Department reported back
its findings to our Office. We concur with the Department’s findings.

BACKGROUND
In 2007 the Department entered into an inter-agency agreement with the Department of
Social and Health Services to provide residential chemical dependency treatment
services to drug offenders under the Department’s supervision.
In March 2007, the Department asked vendors to indicate if they were interested in
providing beds for offenders needing residential, or in-patient, treatment for chemical
dependency. Of the five vendors that provide this service in Washington, two
responded. The Department awarded contracts for 50 beds each to those two vendors.
In 2009 one of the vendors lost its license to operate. The Department transferred that
vendor’s contract for 50 beds to the second vendor, which is the one named in the
assertion. In early 2010, the Legislature passed a bill that required the Department to
add 115 beds to accommodate additional offenders. The Department signed a contract
amendment with the vendor in June 2010 for the additional beds.

ASSERTIONS
1. The administrator for chemical dependency programs with the Department of
Corrections Division of Health Services did not use proper bid procedures when
awarding a contract to a vendor.
2. The administrator for chemical dependency programs with the Department of
Corrections Division of Health Services guaranteed contract payments prior to the
vendor providing services.

Washington State Auditor’s Office
1

RESULTS
Assertion 1
We found no reasonable cause to believe an improper governmental action occurred.
State law does not require agencies to solicit bids for client services contracts. The
Department, therefore, did not violate state contracting law.
The contracts reviewed during the investigation were signed by the Department
Secretary, Contracts Manager or Contracts Administrator. We found no documentation
to show the subject instructed the contract to be awarded to the vendor or authorized the
contract.
Assertion 2
We found no reasonable cause to believe an improper governmental action occurred.
The contract in place at the time of the assertion allowed the Department to pay the
vendor for up to 75 unoccupied beds for up to three months to cover the costs of
increasing capacity to 115 beds. An amendment dated June 23, 2010, extended the
contract’s length by one year and increased how much the Department can pay the
vendor for occupied beds. It does not contain language allowing the Department to pay
for unoccupied beds. Because the amendment supersedes the original contract, we
found no evidence the Department is paying the vendor for services not rendered.

STATE AUDITOR’S OFFICE REMARKS
We thank Department officials and personnel for their assistance and cooperation during
the investigation.

Washington State Auditor’s Office
2

Whistleblower Investigation Criteria
State of Washington
Department of Corrections
We came to our determination in this investigation by evaluating the facts against the criteria
below:
State Administrative and Accounting Manual, 16.10.25 Contract Procurement, states:
(a) Agencies need flexibility in selecting contractors to effectively and
efficiently meet the needs of state clients, Therefore, agencies may select
client service contractors by using procurement methods most
appropriate to their needs, e.g., competitive, non-competitive (direct
award) or sole source methods.
(b) Non-competitive or sole source award processes for client service
contracts are appropriate to use since competition is not required for
these services pursuant to RCW 39.29.040(6)
RCW 42.52.070, Special Privileges, states:
Except as required to perform duties within the scope of employment, no
state officer or state employee may use his or her position to secure
special privileges or exemptions for himself or herself, or his or her
spouse, child, parents, or other persons.

Washington State Auditor’s Office
3

Contacts
Washington State Auditor
Brian Sonntag, CGFM

brian.sonntag@sao.wa.gov

(360) 902-0360

Director of Special Investigations
Jim Brittain, CPA
jim.brittain@sao.wa.gov

(360) 902-0372

Deputy Director of Special Investigations
Kim Hurley, CPA
kim.hurley@sao.wa.gov

(360) 725-5352

Special Investigations Coordinator
Julie Cooper
julie.cooper@sao.wa.gov

(360) 902-0377

Investigators
Sandra Miller
Cheri Elliott

sandra.miller@sao.wa.gov
cheri.elliott@sao.wa.gov

(360) 902-0378
(360) 725-5358

Director of Communications
Mindy Chambers

mindy.chambers@sao.wa.gov

(360) 902-0091

Public Records Officer
Mary Leider

mary.leider@sao.wa.gov

(360) 725-5617

Main phone number

(360) 902-0370

Toll-free hotline for reporting government waste, efficiency

(866) 902-3900

Website

www.sao.wa.gov

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Americans with Disabilities
In accordance with the Americans with Disabilities Act,
this document will be made available in alternate formats.
Please call (360) 902-0370 for more information.