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Spokane, Washington  Est. May 19, 1883

Review: Corrections center broke Washington state purchasing rules, inflated budget projections

The Cedar Creek Correctional Center near Olympia. (Mike Siegel / Seattle Times)
By Joseph O’Sullivan Seattle Times

OLYMPIA — When Washington state corrections officials announced a new superintendent for the Cedar Creek Corrections Center in late March, they made no mention of Douglas Cole, the superintendent being replaced.

But Cole’s reassignment to another corrections job came after an internal review found the facility inflated its budget projections and violated state purchasing guidelines, according to documents obtained by the Seattle Times through a public-records request.

Cedar Creek, located in Littlerock, Thurston County, is described by the Washington state Department of Corrections (DOC) as a minimum-security facility that houses nearly 500 prisoners.

The internal review documented that about $145,000 of the facility’s purchases since July 2016 were made outside of state guidelines. Failure to follow those guidelines could “severely compromise” the agency’s operations, the review said.

The review also found the facility inflated some of its projected expenditures. In budget documents, the excess money in those inflated numbers was referred to as “sprinkles.”

That maneuver appears “intended to hide/tuck money away to then purchase goods without the proper approvals,” according to a summary of the review.

Cole is now the subject of an active ethics investigation, said DOC spokesman Jeremy Barclay, but “there are no initial findings that suggest any criminal action.”

However, Cole has been advised to discuss the matter only with those “whom he has a legally privileged relationship,” Barclay wrote in an email to The Times.

A voicemail Friday seeking comment left at a phone number believed to be Cole’s was not returned.

The review found that Cedar Creek officials split purchases into incremental amounts at lower dollar numbers to avoid getting required approval by higher-ups or putting the purchases out to bid.

In one case, the purchases of multiple furnaces were spread over four separate billings that totaled $18,600, according to the review. That total cost would have required approval from DOC headquarters, which would have obtained bids for them.

The maneuver likely violated state purchasing guidelines, and DOC probably “would have received a reduced price” if the furnaces were purchased together.

In another example, Cedar Creek officials spent $14,200 on snow-removal equipment for a John Deere tractor, spreading the purchases across two separate billings.

That move appeared intended to avoid headquarters approval and a possible rejection because of budget constraints, the review said.

The snow-removal equipment also wasn’t compatible with the John Deere model for which Cedar Creek officials said it was needed.

Cedar Creek officials should have included that purchase and others on DOC’s “ready list,” which documents needed equipment that falls outside a facility’s budgeted funding.

In another case, Cedar Creek officials bought $24,000 worth of mattresses, which were not on the “ready list” and which exceeded Cole’s purchasing authority as superintendent. Cole was authorized to purchase up to $10,000 in “routine goods and services” at a time, the review said.

When asked whether DOC had accounted for all the purchases, Barclay in an email wrote that, “Purchased items are within the scope of the investigation.”

Before his transfer, Cole spent nearly eight years as Cedar Creek’s superintendent, where he earned $96,684 annually.

He now works as a performance adviser for the agency, earning $83,580 a year, according to Barclay.

According to the review, a DOC staffer in January alerted officials to missing information in Cedar Creek’s budget projections.

“When she asked the Superintendent if he had anything related to projections, she was handed a document and told that headquarters and budget did not know about it,” according to the summary.

The staffer “became very concerned that what was being done was not right,” according to the review, and “She felt that there was an unspoken expectation that she would continue the same practice.”

When that staffer tried to seek clarification about purchases, Cedar Creek’s plant manager attempted to intimidate her in emails, the review said.

Asked whether DOC has gotten a full explanation for the practice of creating “sprinkles” in the budget projections, Barclay wrote, “The term ‘sprinkles’ is not an official term sanctioned or used by the department.”