Watkins, a business development consultant, says he wishes Kelley well in filling the vacuum left by longtime auditor Brian Sontag, who is retiring.
With thousands of votes yet to count, Kelley, a state representative from Tacoma, is leading 52 to 48 percent.
Both Kelley and Watkins have a range of experience in the private and public sectors. Watkins ran unsuccessfully for Congress in 2010. Kelley was first elected to the state Legislature in 2006.