Washington State Auditor’s Office
Accountability Audit Report

Department of Corrections
Audit Period
July 1, 2005 through June 30, 2006
Report No. 6565

Issue Date
December 8, 2006

Washington State Auditor
Brian Sonntag
December 8, 2006

Harold W. Clarke, Secretary
Department of Corrections

Report on Accountability for Public Resources
Please find attached our report on the Department of Corrections’ accountability for public resources and
compliance with state laws and regulations and its own policies and procedures.
In addition to this work, we perform an annual audit of the statewide basic financial statements as
required by state law (RCW 43.09.310). We also annually audit federal programs administered by the
state of Washington for compliance with federal laws and regulations. The results of these audits are
published in reports issued by the Office of Financial Management.
Sincerely,

BRIAN SONNTAG,CGFM
STATE AUDITOR

Insurance Building, P.O. Box 40021 y Olympia, Washington 98504-0021 y (360) 902-0370 y (866) 902-3900 y TDD Relay (800) 833-6388
FAX (360) 753-0646 y http://www.sao.wa.gov

Table of Contents
State of Washington
Department of Corrections
Audit Summary.............................................................................................................................................. 1
Description of the Department ...................................................................................................................... 2
Audit Areas Examined................................................................................................................................... 3

Audit Summary
State of Washington
Department of Corrections
ABOUT THE AUDIT
This report contains the results of our independent accountability audit of the Department of
Corrections for the period from July 1, 2005, through June 30, 2006.
We evaluated internal controls and performed audit procedures on the financial activities of the
Department. We also determined whether the Department complied with state laws and
regulations and its own policies and procedures. Our work focused on specific areas that have
potential for noncompliance, misappropriation or misuse of public resources.

RESULTS
In most areas, the Department complied with state laws and regulations and its own policies and
procedures.
However, we noted certain matters that we communicated to Department management. We
appreciate the Department’s commitment to resolving those matters.

RELATED REPORTS
Our opinion on the state of Washington’s basic financial statements is included in the state’s
Comprehensive Annual Financial Report (CAFR). That report is issued by the Office of Financial
Management in December of each year.
In accordance with the Single Audit Act, we annually audit major federal programs administered
by the state of Washington. Rather than perform a single audit of each agency, we audit the
state as a whole. The results of that audit are published in a report issued by the Office of
Financial Management.
In addition to these reports, we issued reports pursuant to the State Employee Whistleblower Act
(Chapter 42.40 RCW) which are available on our Web site.

CLOSING REMARKS
We thank Department management and personnel for their assistance and cooperation during
the audit.

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Description of the Department
State of Washington
Department of Corrections
ABOUT THE DEPARTMENT
The Department of Corrections was created in 1981 by the Washington State Legislature
(Chapter 72 RCW). Prior to 1981, the Department was a division of the Department of Social and
Health Services. The Department consists of the Office of the Secretary and three operating
divisions, each headed by a Deputy Secretary: the Prisons Division, the Community Corrections
Division and the Administrative Services Division.
The Department is a highly decentralized agency, employing approximately 8,000 men and
women to administer and supervise over 16,000 offenders housed in 15 institutions and 15 work
release locations. In addition, the Department provides oversight for more than 42,000 offender
field cases, of which over 26,000 are supervised offenders in the community. In 2003, the
Department began renting beds in local jails and other jurisdictions to address a shortage of
space in state prisons. Approximately 1,200 beds are rented from these other sources.
The Department also operates Correctional Industries, a business enterprise, at several of its
institutions. Correctional Industries is committed to maintaining and expanding offender
work/training programs which develop marketable job skills, instill and promote a positive work
ethic among offender workers and to reduce the tax burden of corrections. Correctional
Industries includes, but is not limited to, furniture and clothing manufacturing, food processing
and printing.
The 2005-07 budget for the Department totals $2.015 billion, with $1.476 billion allocated to
operations and $539 million allocated to capital projects.

AUDIT HISTORY
We audit the agency annually. The past five audits of the agency have reported three findings in
two areas of concern. The 2002 and 2003 audit contained a finding involving the Trust
Accounting System’s access controls while the 2004 audit reported weaknesses in internal
controls over pharmaceutical inventories. No findings were reported in 2005.

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Audit Areas Examined
State of Washington
Department of Corrections
In keeping with general auditing practices, we do not examine every portion of the Department of
Corrections' financial activities during each audit. The areas examined were those representing the
highest risk of noncompliance, misappropriation or misuse. Other areas are audited on a rotating basis
over the course of several years. The following areas were examined during this audit period:

ACCOUNTABILITY FOR PUBLIC RESOURCES
We evaluated the Department’s accountability and compliance with certain state laws and
regulations and its own policies in the following areas:
•

Purchasing at Business Service Centers:
Eastern Region
Northwest Region
Southwest Region
West Central Region
• Fixed Assets:
Airway Heights Corrections Center
McNeil Island Corrections Center
Monroe Corrections Center

•

Restricted Funds 651 and 800:
Headquarters
Airway Heights Corrections Center
Eastern Region Business Service Center
• Trust Accounting System

FINANCIAL
We perform an annual audit of the statewide basic financial statements as required by state law
(RCW 43.09.310). These financial statements are included in the Comprehensive Annual
Financial Report (CAFR) prepared by and available from the Office of Financial Management.
The CAFR reflects the financial activities of all funds, organizations, institutions, agencies,
departments and offices that are part of the state's reporting entity.
We tested the Department’s account balances and financial activity related to:
•

Depreciable assets (net of depreciation)

FEDERAL PROGRAMS
Federal grant audit work is performed on a statewide basis, in accordance with the revised Single
Audit Act. We select federal programs for audit using risk-based criteria set forth in the U.S.
Office of Management and Budget Circular A-133.
The Department has no major federal programs.

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