Assessing Vendor Spending Growth at DSHS

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When payments to a government vendor rise unusually fast, it can signal potential fraud, waste or other concerns. Exponential growth in vendor payments can also be legitimate. We found the latter was the case in this innovative performance audit of the Department of Social and Health Services.

Using new data analysis tools, we found total vendor spending across the department increased by about 50% from 2021 to 2025. At the same time, about 1,000 of those vendors showed patterns of exponential or otherwise high spending growth. Because these patterns can represent areas of risk, we took a closer look at a selection of those payments.

To the agency’s credit, the payments we reviewed were supported with adequate documentation and reasonable explanations, such as increased vendor billing rates. The primary factors driving spending growth are detailed in this report.

Read a two-page summary of the report (PDF).

Report Number 1040422 Report Credits

Key results

Our Office examined a selection of DSHS vendor payments to see whether they were supported by proper documentation. This audit also sought to identify potential factors causing exponential and other high-growth vendor spending. The audit found:

  • Selected vendor payments were supported by adequate documentation and reasonable explanations for increased spending, with minor exceptions
  • Vendor payments were supported by documentation and aligned with contract agreements
  • Five primary factors contributed to increased vendor spending: increased service rates or product prices, increased caseload, improvement projects, program expansion, payment schedule adjustments

Background

DSHS delivers a wide array of services to residents across the state, ranging from health care to social services and economic support. More than 17,000 vendors deliver many of these DSHS services. Total vendor spending across DSHS increased by about 50% during a four-year period, from about $5.7 billion in 2021 to $8.6 billion in 2025.

About 1,000 vendors displayed patterns of exponential or other high-growth spending. Exponential growth in vendor payments can often have legitimate explanations like a greater need for vendor services or the rising cost of supplies. Nonetheless, exponential growth can also be a sign of fraud, waste, abuse or improper payments. For this reason, our Office examined a selection of vendor payments and sought to identify potential factors causing exponential and other high-growth vendor spending.

Payments were mostly supported

Selected vendor payments made by the Department of Social and Health Services were supported by documentation and aligned with contract agreements. More specifically, vendor payments we reviewed contained identifying information, were approved by staff and matched invoice amounts, with minor exceptions. Additionally, vendors billed for services that aligned with contract agreements, and were appropriately coded and calculated, again with minor exceptions. We found five primary factors that contributed to increased vendor spending, such as increased service rates and program expansion.

Factors for vendor spending growth

In most cases, multiple factors contributed to increases either in service scope or service rates, which can have an exponential effect. For the 11 reviewed vendors, higher service rates or product prices and increased caseloads were the most common factors contributing to rising vendor spending.

The five factors identified were: increased service rates or product prices, increased caseload, improvement projects, program expansion, payment schedule adjustments.

Recommendations

We have no recommendations for the Department of Social and Health Services.