"The authority did not comply with state laws regarding the conduct of business by local governments in several areas," wrote Sonntag. For one, the audit says the PDA loaned $2 million of its credit to SafeHarbor so the company could purchase furniture, fixtures and equipment for the Satsop office—which it was hoped would generate a windfall of jobs in rural Grays Harbor. That same equipment was subsequently used as collateral for a loan obtained by SafeHarbor. Such actions were reported as being in violation of the state's constitution.

Later, the PDA contracted privately to construct a second building for SafeHarbor, which now occupies a total of 91,000 sf of flexible use space at Satsop. The contractor on the project, Wood Holdings, built the property, then sold it to the PDA for $6.3 million. In the audit, Sonntag asserts, "We believe the authority entered into a complex financing arrangement to avoid the state bid laws."

A spokeswoman for the Auditor's office tells GlobeSt.com that it is not the office's job to make any recommendations as to consequences for the violations. "We're not an enforcement agency, we're a reporting agency only." The spokeswoman says at present there is an amicable relationship between the Auditor's office and the PDA. "Over the course of the next audit, we'll follow up to see what kinds of corrections have been made regarding the violations. We're in there (the PDA office) now, and our next audit will be out sometime the end of this year or the beginning of the next." At deadline, GlobeSt.com had been unable to reach a spokesperson for SafeHarbor or the Grays Harbor PDA for comment.