Department of Printing violates law, says watchdog group

Illegally retains and spends millions of taxpayer dollars 

Olympia, WA - A recent report from the State Auditor's office reveals that the state Department of Printing (DOP) has been illegally retaining and spending millions of dollars in excess state funds that should have been returned to the General Fund.

As an at-cost agency created to serve the needs of other agencies, the DOP is allowed to keep for working capital only 15% of the prior year's excess revenue. 

The audit report (Report No. 6179) shows the department kept an average of $4.5 million in excess funds (above the 15%) per year between 1997 and 1999. The department is also required to get direct approval from the governor for the purchase of any new equipment. Yet, in 1998, a department official used $2.7 million in excess funds to purchase and lease new equipment without getting approval from the governor. 

Instead, an employee in the governor's office signed the purchase request. DOP officials then ignored the illegally approved request and entered an unapproved sole-source contract with Xerox for leased copiers. 

This contract likely disregarded the state's competitive bidding laws. The audit report notes, "The agency has not developed policies and procedures to ensure compliance with state bid laws." 

While the violations were initially uncovered by the State Auditor's Office in 1998, release of the report was delayed until last November by officials in the DOP, Office of Financial Management, and Attorney General's Office. 

"This is a huge breach of taxpayers' trust," said Bob Williams, president of the Olympia-based Evergreen Freedom Foundation (EFF). "We're talking about an agency that knowingly broke the law, mishandled millions of taxpayer dollars, and then got help from higher officials to cover it up." 

EFF recommends the following enforcement actions: 

- The DOP should be required to return, with interest, all illegally retained funds to the General Fund. 

- OFM should require the DOP to refund any overcharged state agencies. 

- The AG should prosecute responsible individuals in the DOP and OFM. 

- The governor's office should investigate the employee who signed the unapproved equipment purchase request and take appropriate measures to stop such actions in the future. 

- The State Printer should be investigated for providing false information to the governor's office by acting outside its initial purchase request. 

- The state legislature should assume strict oversight measures of the DOP.