State Auditor 2022 Audits Including HAPO Center Managment Services Contract Finding

For the recently completed Washington State Auditor Accountability and Financial Audit Reports, click on the documents here:

Accountability Audit Report for the period January 1, 2023, through December 31, 2023

Financial Statements and Single Audit Report for the period January 1, 2023, through December 31, 2023

The County lacked internal controls and procedures over contract monitoring to ensure safeguarding of public resources (accountability audit.) 

Background 

Franklin County serves more than 96,000 residents in southeast Washington. An elected, three-member Board of Commissioners governs the County, which had an annual budget of about $47 million in 2023. The County contracts for the management and operation of the HAPO Center, an event center in Pasco, for food and commissary services, and medical services at the Franklin County Jail. The County is responsible for establishing contracts that align with state law and ensuring compliance with contract terms. Inadequate internal controls can hinder the County’s ability to ensure contracted parties send all funds they owe and provide services as agreed.

HAPO Center Management Services Contract The County contracted with two third-party management companies to manage the financial and operational activities at the HAPO Center during 2022 and 2023. In 2022, the County entered into a three-month contract with a company and approved a contract amendment for $100,000 that extended services through June 30, 2023. In June 2023, the County performed a request for proposal process and selected a new contractor to provide management services beginning in October 2023. The new contract included a term of five years and was valued at $1,446,000. 

Description of Condition 

HAPO Center Management Services Contracts The 2022 contract required the management company to collect and remit all revenues from the HAPO Center to the County and to provide all supporting documentation. Additionally, the contract indicated the County was responsible for paying the contractor a monthly management fee of $12,500 and reimbursing the contractor for expenses related to the HAPO Center activity. The County paid the management company $37,500 and $180,722 in 2022 and 2023, respectively, for its management services. The County did not ensure the contract terms were followed and instead allowed the management company to manage all the financial activity and only provide profit and loss statements throughout the year. Although the County selected a new contractor in 2023 and entered into new contract terms that resolved most items noted above, the County was also unable to demonstrate it monitored the new contract terms during the audit period

Cause of Condition 

HAPO Center Management Services Contract Staff in the County Administrator’s Office are responsible for monitoring the activity at the HAPO Center. The County experienced staff turnover in its Administrator's Office and did not appropriately monitor the contracts.

Effect of Condition 

HAPO Center Management Services Contract The 2022 contract was not in compliance with state law, which requires the County to make all deposits at least once every 24 hours and all expenditures of the County to be supported. The County was unable to provide documentation supporting the revenues and expenditures the HAPO Center management company reported. The County was also unable to provide evidence that it was monitoring financial activity at the HAPO Center for either of the two contracts in place during the period. Without effective monitoring processes and support for the reported revenues and expenditures, the County cannot ensure it receives all amounts it is due and that all expenditures are for an allowable purpose. As a result, we were unable to opine on the reported financial activity of the HAPO Center presented in the fiscal year 2023 financial statements. 

Recommendation 

We recommend the County strengthen its oversight and monitoring over contracts to ensure contract terms comply with state law and are followed. We further recommend the County continue to seek support for 2022 and 2023 HAPO operating activity and seek repayment of any amounts still owed for both HAPO and commissary sales. Lastly, we recommend the County review its jail medical services contract to determine if funds need to be recouped.  

HAPO Center Management Services Contract: 

The County agrees with the State Auditor’s Office and has made the necessary changes to address their recommendations. A competitive process resulted in selecting an experienced management group that has addressed the internal control and reporting deficiencies. The County has engaged the former vendor and requested that they supply the documentation and records they contractually agreed to compile and report to account for all public funds properly. We appreciate the State Auditor’s Office's recommendations and the opportunity to address the identified issues. We look forward to working with the State Auditor's Office to ensure continued progress and compliance with all applicable laws and regulations.

 

Franklin County Auditor Vindicated; Court Finds Former County Administrator Liable for Secret Recording

 Pasco, WA 5/16/2025

Spokane County Superior Court Judge Breann Beggs ruled May 6th that former County Administrator Mike Cronemeyer, aka Mike Gonzalez Cronemeyer, was liable for secretly recording Franklin County Auditor Matt Beaton while he was having a private conversation with Franklin County Commissioner Rocky Mullen and Gonzalez Cronemeyer.  Mr. Gonzalez Cronemeyer included six affirmative defenses, all of which were dismissed with prejudice.

 

Beaton, who has been the Franklin County Auditor since 2011, has often been maligned and misrepresented by the local media while reporting to the public the financial irregularities discovered by the Auditor's Office. After the recording, for reasons still unknown, Beaton and Mullen were investigated for wrongdoing, but not Gonzalez Cronemeyer. With no interviews with Beaton or Mullen, the Prosecuting Attorney Shawn Sant immediately declared it a criminal matter and requested a special investigator from Snohomish County. His actions denied Mr. Beaton the right to legal defense in his capacity as an elected official.  Snohomish County Special Prosecutor Elise Deschenes officially cleared Beaton of any wrongdoing (link) in September of last year.

With Judge Breggs' summary judgment (link)--also see original Order on Motions for Summary Judgment (link) for Beaton, the Auditor has not only been cleared but in fact has been vindicated entirely. This is just the latest in a string of recent events that have not only proven that the investigation launched into Beaton was out of line, but that Beaton has been accurate on the recent items in question. It was Beaton who discovered that former County Commissioners Brad Peck, Robert Koch, and Rick Miller had potentially violated the state constitution by voting for a pay raise for themselves. Once again, the local media portrayed Beaton as an overzealous ideologue with political grudges while Prosecutor Sant defended the unconstitutional self-enrichment. That narrative changed, however, when the Washington State Attorney General rendered their opinion (link), which was the same position Beaton had maintained from the onset.

County Auditors are often the target of other officials and the media due to the nature of their job. Auditing the financial aspects of any organization comes with inherent challenges. Just recently, members of Beaton’s staff were awarded damages in a judgment against Sheriff Jim Raymond (link) for what was determined by a Walla Walla County Superior Court judge to be defamatory comments, intimidation, and bullying. Beaton first gained attention in 2012 when he found, to that point, the largest county fraud case in Washington State history with the discovery of former Public Works Director Dennis Huston's 2.7-million-dollar, 20-year-long embezzlement scheme. Rather than spike the ball in the endzone, the Auditor delivered a measured message. "I want to be clear; these recent vindications aren't just for myself and my staff. The taxpayers of Franklin County deserve a government they can trust, and when they send their hard-earned tax dollars to Franklin County, our office cares about where those funds are spent and if they are spent legally. Because my staff and I are absolute in our mission, this hasn't always made me the most popular guy in the room. Facts can be stubborn things, and nobody likes to be told they did something that didn't pass muster.”

“With our office being proven right when it comes to the State Audit findings, the unconstitutional pay (link) for former Commissioners Peck, Koch, and Miller, auditing county travel and p-card policies, and now a summary judgment in this latest matter. I knew what I signed up for when I filed to run, and I am proud to stand up for the people of Franklin County when nobody else would. However, my family and the family of my staff have now had to put up with being accused of less than honorable actions that have not only been proven false, but in every example, we have been proven right.”

“As I said a year ago, when this phony crime and misrepresented facts (link) were 'leaked' to the media.  There are bad actors in Franklin County of and you can be assured, I hope people keep paying attention as good people, and an independent review will reveal the truth so the people can make up their own minds.”

“Finally, I will say this, the biggest vindication is for the people. We have proven that with persistence, determination, and courage, the truth wins out. Facts matter, and I can only hope this is the beginning of a new era at Franklin County that calls for accountability and responsible management of your taxpayer dollars.”—Matt Beaton, Franklin County Auditor

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