King County is wasting over $78 million and missing up to $6.8 million in potential revenue each year, a report released by the state this morning shows. Conducted by the Washington State Auditor’s Office, the investigation focused on the county’s solid waste and wastewater treatment divisions. The county overcharged the departments and imposes “questionable fees for general government services,” says the report.

The 92-page report (.pdf) also finds utilities inefficiently manage overtime hours, exceed staffing needs, and inflate costs based on budget projections rather than actual costs. The state recommends several costs-cutting measures, such as increasing preventive maintenance instead of emergency repairs and billing based on actual operation costs.

But several King County Council Members are rumored to disagree with some of the recommendations. A proposal to recirculate drainage from the Cedar Hills Regional Landfill, a 920-acre facility in Maple Valley, is considered to be both environmentally hazardous and has the potential to create vile smells in a relatively populated area. [Update: A response form three county council members is here.]

The audit will no doubt become a political football in the King County Executive race. Republican Susan Hutchison, endorsed by the state auditor who conducted this report, Brian Sonntag, seized on an audit in June that found, among other inefficiencies, the county lacked accountability for road projects and expenses ran more than $26 million over estimates. Hutchison is certain to aim this new report like artillery at her Democratic rival in the race, County Council Member Dow Constantine, in an attempt to blame him for inefficient management as the council's chair. The questions is whether conservatives on the council will argue this audit’s accusations of waste are exaggerated.

The audit cost the state $1.3 million and used data from 2005 to 2008.