Audit finds recent surge in state payments to vendors to be valid 

When payments to a government vendor rise unusually fast, it can create concerns about possible fraud or improper payments. However, steep increases in vendor payments can also be legitimate and appropriately approved, as a new performance audit found to be the case at one of Washington’s largest state agencies.  

The Office of the Washington State Auditor found that rapid growth in vendor payments at the Department of Social and Health Services (DSHS) was largely supported by documentation and explained by program-specific factors like increased housing assistance and translation caseloads. 

The Office of the Washington State Auditor examined vendor payments across DSHS and found total spending increased by roughly 50 percent between 2021 and 2025, from about $5.7 billion to $8.6 billion. Within that growth, about 1,000 of the department’s more than 17,000 vendors showed patterns of exponential or otherwise high spending increases.  

Such rapid increases in vendor payments can be a sign of fraud, waste, abuse or improper payments. Auditors reviewed 11 vendors in depth, and found the selected payments were supported by adequate documentation and reasonable explanations for increased spending, with minor exceptions. Vendors billed for services that aligned with contract agreements, and were appropriately coded and calculated, also with minor exceptions. 

Auditors identified several factors driving increased spending. Eight vendors increased their billing rates or product prices. For example, a vendor providing maintenance and inspection services at care facilities raised its hourly rates from $100 an hour to $135 between 2021 and 2025. 

Six vendors saw increased caseloads, including higher demand for translation services. In four cases, DSHS contracted vendors for improvement projects with increasing costs, such as creating a streamlined process for Washington residents to apply for services. In two cases, DSHS provided vendors with significantly increased funding to expand their programs, including a housing rental subsidy program. 

And one vendor saw a spike in payments, from about $250,000 in the first year of its contract, to about $650,000 during the second year, and more than $2.4 million for the third and final year. DSHS staff said they developed a new payment schedule and approved these expenses because the vendor’s work remained within the scope of the contract. 

The full report and summary documents are available on the State Auditor’s Office website: Assessing Vendor Growth at DSHS.

Media inquiries: Assistant Director of Communications Adam Wilson, Adam.Wilson@sao.wa.gov, 564-999-0799.