State auditors: Spokane police had millions in ‘unauthorized’ fund

Millions of dollars deposited into a Spokane Police Department drug enforcement fund since the late 1980s were not subject to public scrutiny, a Washington State Auditor’s Office report revealed Wednesday.

In the past 10 years, $4.6 million from drug seizures and forfeitures has been deposited into the Special Investigative Unit’s checking and savings accounts, which were set up independent of the city treasurer’s office.

The fund is considered “unauthorized” by the state. Spokane police Chief Anne Kirkpatrick brought the problem to the attention of the state officials last year, which prompted the audit.

Kirkpatrick called it a “systems failure.”

While the audit found no evidence of fraudulent use of funds, the department spent nearly $2 million on vehicles, video and electronic equipment without following competitive bidding requirements, the report says.

Another $600,000 spent by the Police Department’s drug unit in the past 10 years lacked documentation showing what the money paid for, the report states. Checks written to police vendors, such as those that provide equipment, are the only paperwork linked to the money. The purchases included fuel, vehicles, food and training, the report said.

Kirkpatrick said she assumed the fund – used exclusively for drug investigations, as required by state law – was already set up appropriately. She found out it was not when she wanted to tap the money make a purchase. “And the city said: ‘What account?’ ” she said.

“Unauthorized bank accounts, failure to follow state bid law and inadequate inventory procedures increased the risk that public funds could be misappropriated, lost or misused and not be detected in a timely manner,” wrote Cody Zimbleman, a state audit manager.

The audit also determined the Police Department owed the state $2,100, part of the 10 percent of seized property that agencies are required to pay to the state.

Kirkpatrick said that because the fund wasn’t overseen by the city’s treasurer, it didn’t receive appropriate scrutiny.

The Special Investigative Unit oversaw the fund, and “there were internal and external audits” by inside and outside officials, but there weren’t enough checks and balances, she said.

Now, all expenses and revenues will be documented through the city’s accounting system, Police Department officials said.

To address the appropriate bidding process, the commanders in the drug unit have been trained on the process.

“We have been satisfied with the initial changes,” Zimbleman said.

City officials commended Kirkpatrick’s administration for pointing out the problem.

“We recognize this is a rather complete failure, and we have taken steps to address it,” said Gavin Cooley, the city’s chief financial officer.