KING COUNTY, Wash. — A new audit released Tuesday found that the King County Recorder's Office (KCRO) misallocated millions in prepaid funds, overbilling and lost revenue over the last six years.
The King County auditor said the KCRO suffered from a "lack of oversight" in its final operations. The new audit reviewed the KCRO's work from 2018-2023, finding that errors in prepaid account deposits misallocated nearly $7 million to the wrong customers. Auditors found invoices with duplicate and missing charges that included overbilling customers by $1 million and the commission of $17,000 in legitimate charges.
The KCRO's most popular services include online records search and marriage licensing, along with real estate deeds, mortgages, plats, surveys, and registered land (Torrens).
Auditors said the KCRO brings in more than $17 million a year in General Fund revenue and handles more than $1 billion in real estate excise tax revenue passed on to state and local governments. The office recorded nearly 300,000 documents in 2023.
“The County’s handling of taxpayer money needs to be above reproach,” said Kymber Waltmunson, King County auditor. “We look forward to seeing enhancements in the Recorder’s Office to reduce the risk of uncollected revenue, undetected fraud, non-compliance with laws and rules, and inaccurate financial reporting.”
According to the report, the KCRO forwent an estimated $91,000 in revenue due to bad checks because it lacked the processes to pursue collections on accounts that did not respond to notices. Businesses accounted for most bad checks written for more than $1,000, the auditors detailed in the report.
The report said the KCRO does not closely monitor prepaid accounts, increasing the risk for outstanding payments and impermissible credit for private parties. The office does not review invoices for accuracy either, the report said, making it more likely that customers receive bills with missing and duplicate transactions. Auditors said the KCRO did not send unpaid accounts to collections for returned checks, which reduces revenue. Inappropriately applied tax exemptions also mean customers can pay less in taxes than they owe, according to auditors.
Auditors in the report detailed 17 recommendations for improving processes at the KCRO, which is "at a greater risk for uncollected revenue, non-compliance, and potential fraud." The recommendations include reviewing deposits by customers, verifying daily customer statements, conducting a monthly review of invoices before mailing and starting a monthly review of errors.
The report said the KCRO has already taken action to correct some issues revealed during the audit.