IN AN ODDLY PHRASED PRESS release, County Executive Ron Sims recently thanked “the state auditor for giving King County a clean opinion” on the county’s financial condition. That suggests all’s well with the taxpayers’ buck. In fact, the January 23 review raises concerns about how the county spends and tracks (or loses) funds with its balky computer systems—a situation that won’t be resolved for years. A closer reading of the audit shows that millions of dollars in county assets and funds are regularly lost in space, due to the incompatibility of the two computer systems. Additionally, “significant” internal-control weaknesses caused the county to make almost $100,000 in duplicate payments to vendors and catch only $25,000 of them—an error rate the state finds “extraordinary,” but which the county disputes. Some county money and equipment appear to have been stolen as well, including $3,300 in cash from a police evidence safe. County officials think these are just greatly exaggerated record-keeping conflicts: “There was no loss of taxpayer dollars,” says Rudy Caluza, manager of the county’s financial management division.

Do they know for sure? According to the state’s 1997 audit for the 1996 fiscal year, the county could not initially account for $10.9 million in fixed assets, in part because of irreconcilable computer lists—an accounting gap the state encountered in previous annual audits. Some county equipment had not been properly listed, while other assets were surplused but never removed from property records. Caluza says all has been accounted for. But questionable practices continue: The audit found that of a sample 21 new computers and peripherals bought last year, none had been entered into fixed-asset records and one has already been stolen.

The county also could not reconcile $12.7 million in cash-account balances because of the incompatible computer systems, called ARMS and IBIS. The county inherited IBIS in the 1994 merger with Metro’s transit and wastewater divisions. The two mainframes cannot properly communicate with each other, leaving officials sometimes tracing records manually. “For various reasons,” the audit found, “the data transfer from ARMS to IBIS is inaccurate or incomplete, resulting in the imbalance” between the computers. The county insists it comes out in the end: “Cash is reconciled to the bank on a routine basis,” says Caluza, and the books balance there.

KING COUNTY IS nowdecentralizing its accounting system, hoping to improve it by handing more responsibility to individual departments. But state auditor Brian Sonntag found problems there, too. He says department managers do not follow uniform practices, and systemic oversight is lacking. That’s one of the reasons the county missed the double payments to vendors, the auditor reports; its accounting system “unnecessarily increases the risk of errors, fraud, and abuse.” “County departments are still reviewing each of these [payment] items,” Caluza says, “and therefore we cannot affirm at this time whether duplicate payments are involved and to what extent.” And any criminal fraud charges would be “premature” until the review is complete.

The state audit notes that in recent years the county has tossed out equipment once worth $2.1 million, including $255,000 in bus-engine spare parts, a $107,000 vacuum system at Metro’s Ryerson Base, and $1.1 million in outdated bus radios. Caluza says tossing these out is common practice: “The net $2.1 million represents the original cost of the assets purchased many years ago,” and they were sold or discarded after their value depreciated to almost nothing. Auditors also determined that the police evidence room stored large amounts of cash for inexplicably long periods—in one case holding more than $64,000 in a safe rather than a bank for eight months; $3,376 of that was missing, and police are investigating. Additionally, “significant internal-control weaknesses” at the county’s Sixth and Jefferson parking lot prevented auditors from determining just how much cash is actually collected there.

Sims calls most of the findings “weaknesses that normally creep into any organization as big and complex as King County.” He hopes the county will correct the problems with a new $40 million computerized accounting system. But that won’t be completed for three years. For now, says spokesman Caluza, “any payment made in error with taxpayer dollars is not acceptable, [but] no system is perfectly error-free.”