ENGROSSED SUBSTITUTE SENATE BILL 5121



State of Washington              52nd Legislature             1991 Regular Session


By Senate Committee on Governmental Operations (originally sponsored by Senators Metcalf, Talmadge, McCaslin, Owen, Thorsness, Vognild, Rinehart, Sellar, L. Smith, Sutherland, Roach, Amondson, Hayner, Rasmussen, Bailey, Moore, Barr, Oke, Wojahn, Nelson, von Reichbauer, Bauer, Gaspard, L. Kreidler, Johnson, Stratton, Skratek and Erwin).


Read first time February 19, 1991.Protecting whistleblowers.

     AN ACT Relating to improper governmental action; amending RCW 42.40.020, 42.40.040, 42.40.050, 49.60.210, 49.60.250, 43.09.050, and 43.88.160; adding a new section to chapter 43.09 RCW; prescribing penalties; and making an appropriation.




     NEW SECTION.  Sec. 1.      The legislature finds that the threat of retaliation to public employees acts as a deterrent to public employees who wish to report information to federal, state, or local agencies.  The purpose of this act is to protect public employees who make good-faith reports to appropriate governmental bodies and to provide remedies for such individuals who are subjected to retaliation for having made such reports.


     Sec. 2.  RCW 42.40.020 and 1989 c 284 s 1 are each amended to read as follows:

     As used in this chapter, the terms defined in this section shall have the meanings indicated unless the context clearly requires otherwise.

     (1) "Auditor" means the office of the state auditor.

     (2) "Employee" means any individual employed or holding office in any department or agency of state and local government.

     (3) (a) "Improper governmental action" means any action by an employee:

     (i) Which is undertaken in the performance of the employee's official duties, whether or not the action is within the scope of the employee's employment; and

     (ii) Which is in violation of any state or local law or rule, is an abuse of authority, is of substantial and specific danger to the public health or safety, or is a gross waste of public funds.

     (b) "Improper governmental action" does not include personnel actions including but not limited to employee grievances, complaints, appointments, promotions, transfers, assignments, reassignments, reinstatements, restorations, reemployments, performance evaluations, reductions in pay, dismissals, suspensions, demotions, violations of the state civil service law, alleged labor agreement violations, reprimands, or any action which may be taken under chapter 41.06 or 28B.16 RCW, or other disciplinary action except as provided in RCW 42.40.030.

     (4) "Use of official authority or influence" includes taking, directing others to take, recommending, processing, or approving any personnel action such as an appointment, promotion, transfer, assignment, reassignment, reinstatement, restoration, reemployment, performance evaluation, or any adverse action under chapter 41.06 or 28B.16 RCW, or other disciplinary action.

     (5) "Whistleblower" means an employee who in good faith reports alleged improper governmental action to the auditor, initiating an investigation under RCW 42.40.040.  For purposes of the provisions of this chapter and chapter 49.60 RCW relating to reprisals and retaliatory action, the term "whistleblower" also means an employee who provides information to the auditor in connection with an investigation under RCW 42.40.040 and an employee who is believed to have reported alleged improper governmental action to the auditor or to have provided information to the auditor in connection with an investigation under RCW 42.40.040.


     Sec. 3.  RCW 42.40.040 and 1989 c 284 s 3 are each amended to read as follows:

     (1) Upon receiving specific information that an employee has engaged in improper governmental action, the auditor shall, within five working days of receipt of the information, mail written acknowledgement to the whistleblower at the address provided.  For a period not to exceed thirty days, the auditor shall conduct such preliminary investigation of the matter as the auditor deems appropriate.  In conducting the investigation, the identity of the ((person providing the information which initiated the investigation)) whistleblower shall be kept confidential.

     (2) In addition to the authority under subsection (1) of this section, the auditor may, on its own initiative, investigate incidents of improper state governmental action.

     (3) (a) If it appears to the auditor, upon completion of the preliminary investigation, that the matter is so unsubstantiated that no further investigation, prosecution, or administrative action is warranted, the auditor shall so notify the ((person, if known, who provided the information initiating the investigation)) whistleblower.

     (b) The notification shall be by memorandum containing a summary of the information received, a summary of the results of the preliminary investigation with regard to each allegation of improper governmental action, and any determination made by the auditor under (c) of this subsection.

     (c) In any case to which this section applies, the identity of the ((person who provided the information initiating the investigation)) whistleblower shall be kept confidential unless the auditor determines that the information has been provided other than in good faith.

     (d) If it appears to the auditor that the matter does not meet the definition of an "improper governmental action" under RCW 42.40.020(3), or is other than a gross waste of public funds, the auditor may forward a summary of the allegations to the appropriate agency for investigation and require a response by memorandum containing a summary of the investigation with regard to each allegation and any determination of corrective action taken.  The auditor will keep the identity of the ((person who provided the information initiating the investigation)) whistleblower confidential.  Upon receipt of the results of the investigation from the appropriate agency, the auditor will notify the ((provider)) whistleblower as prescribed under (a), (b), and (c) of this subsection.

     (4) If it appears to the auditor after completion of the preliminary investigation that further investigation, prosecution, or administrative action is warranted, the auditor shall so notify the ((party, if known, who provided the information initiating the investigation)) whistleblower and either conduct further investigations or issue a report under subsection (6) of this section.  Within sixty days after the thirty-day period in subsection (1) of this section, the auditor shall complete the investigation and report its findings to the whistleblower unless written justification for the delay is furnished to the whistleblower.  In all such cases, the report of the auditor's investigation and findings shall be sent to the whistleblower within one year after the information was filed under subsection (1) of this section.

     (5) (a) At any stage of an investigation under this section the auditor may require by subpoena the attendance and testimony of witnesses and the production of documentary or other evidence relating to the investigation at any designated place in the state.  The auditor may issue subpoenas, administer oaths, examine witnesses, and receive evidence.  In the case of contumacy or failure to obey a subpoena, the superior court for the county in which the person to whom the subpoena is addressed resides or is served may issue an order requiring the person to appear at any designated place to testify or to produce documentary or other evidence.  Any failure to obey the order of the court may be punished by the court as a contempt thereof.

     (b) The auditor may order the taking of depositions at any stage of a proceeding or investigation under this chapter.  Depositions shall be taken before an individual designated by the auditor and having the power to administer oaths.  Testimony shall be reduced to writing by or under the direction of the individual taking the deposition and shall be subscribed by the deponent.

     (6) (a) If the auditor determines that there is reasonable cause to believe that an employee has engaged in any improper activity, the auditor shall report the nature and details of the activity to:

     (i) The employee and the head of the employing agency; and

     (ii) If appropriate, the attorney general or such other authority as the auditor determines appropriate.

     (b) The auditor has no enforcement power except that in any case in which the auditor submits a report of alleged improper activity to the head of an agency, the attorney general, or any other individual to which a report has been made under this section, the individual shall report to the auditor with respect to any action taken by the individual regarding the activity, the first report being transmitted no later than thirty days after the date of the auditor's report and monthly thereafter until final action is taken. If the auditor determines that appropriate action is not being taken within a reasonable time, the auditor shall report the determination to the governor and to the legislature.

     (7) This section does not limit any authority conferred upon the attorney general or any other agency of government to investigate any matter.


     Sec. 4.  RCW 42.40.050 and 1989 c 284 s 4 are each amended to read as follows:

     (1) Any ((employee)) whistleblower (a) who provides his or her name and specific information to the auditor on any matter which is found to warrant further investigation or other action, or which is provided by the ((employee)) whistleblower in good faith, as determined by the auditor, whether or not further action is warranted and (b) who is subjected to any reprisal or retaliatory action ((undertaken during the period beginning on the day after the date on which the specific information is received by the auditor alleging improper governmental action,)) may seek judicial review of the reprisal or retaliatory action in superior court, whether or not there has been an administrative review of the action.  In such ((an)) action, the reviewing court may award costs and reasonable ((attorney's)) attorneys' fees to the prevailing party.  The provisions of RCW 4.92.060 through 4.92.075 shall apply to judicial proceedings and proceedings before the human rights commission under this chapter.

     (2) ((The employee who provided specific information shall notify the state auditor in writing if any changes in the employee's work situation exist which are related to the employee's having provided information.  If the auditor has reason to believe that such a change in work situation has occurred, the auditor shall investigate and report on the matter in accordance with this chapter)) A whistleblower or perceived whistleblower having reason to believe that he or she has been subjected to retaliatory action may make, sign, and file a complaint with the human rights commission in accordance with RCW 49.60.230.  The human rights commission shall investigate and pass upon the complaint in accordance with chapter 49.60 RCW.  The auditor shall provide a record of its investigation under RCW 42.40.040 to the human rights commission.  The human rights commission shall have exclusive administrative jurisdiction over complaints alleging reprisal or retaliatory action under this chapter and any fine, order, or other action issued by the human rights commission or any action taken by an appointing authority on order of the human rights commission shall not be subject to consideration, review, or alteration by any other state agency or board.

     (3) For the purpose of this section "reprisal or retaliatory action" means but is not limited to:

     (a) Denial of adequate staff to perform duties;

     (b) Frequent staff changes;

     (c) Frequent and undesirable office changes;

     (d) Refusal to assign meaningful work;

     (e) Unwarranted and unsubstantiated letters of reprimand or unsatisfactory performance evaluations;

     (f) Demotion;

     (g) Reduction in pay;

     (h) Denial of promotion;

     (i) Suspension; ((and))

     (j) Dismissal;

     (k) Denial of employment; and

     (l) A supervisor or superior encouraging coworkers to behave in a hostile manner toward the whistleblower.


     Sec. 5.  RCW 49.60.210 and 1985 c 185 s 18 are each amended to read as follows:

     (1) It is an unfair practice for any employer, employment agency, labor union, or other person to discharge, expel, or otherwise discriminate against any person because he or she has opposed any practices forbidden by this chapter, or because he or she has filed a charge, testified, or assisted in any proceeding under this chapter.

     (2) It is an unfair practice for a state or local government manager or supervisor to retaliate against a whistleblower as defined in chapter 42.40 RCW.


     Sec. 6.  RCW 49.60.250 and 1989 c 175 s 115 are each amended to read as follows:

     (1) In case of failure to reach an agreement for the elimination of such unfair practice, and upon the entry of findings to that effect, the entire file, including the complaint and any and all findings made, shall be certified to the chairperson of the commission.  The chairperson of the commission shall thereupon request the appointment of an administrative law judge under Title 34 RCW to hear the complaint and shall cause to be issued and served in the name of the commission a written notice, together with a copy of the complaint, as the same may have been amended, requiring the respondent to answer the charges of the complaint at a hearing before the administrative law judge, at a time and place to be specified in such notice.

     (2) The place of any such hearing may be the office of the commission or another place designated by it.  The case in support of the complaint shall be presented at the hearing by counsel for the commission:  PROVIDED, That the complainant may retain independent counsel and submit testimony and be fully heard.  No member or employee of the commission who previously made the investigation or caused the notice to be issued shall participate in the hearing except as a witness, nor shall the member or employee participate in the deliberations of the administrative law judge in such case.  Any endeavors or negotiations for conciliation shall not be received in evidence.

     (3) The respondent shall file a written answer to the complaint and appear at the hearing in person or otherwise, with or without counsel, and submit testimony and be fully heard.  The respondent has the right to cross-examine the complainant.

     (4) The administrative law judge conducting any hearing may permit reasonable amendment to any complaint or answer.  Testimony taken at the hearing shall be under oath and recorded.

     (5) If, upon all the evidence, the administrative law judge finds that the respondent has engaged in any unfair practice, the administrative law judge shall state findings of fact and shall issue and file with the commission and cause to be served on such respondent an order requiring such respondent to cease and desist from such unfair practice and to take such affirmative action, including, (but not limited to) hiring, reinstatement or upgrading of employees, with or without back pay, an admission or restoration to full membership rights in any respondent organization, or to take such other action as, in the judgment of the administrative law judge, will effectuate the purposes of this chapter, including action that could be ordered by a court, except that damages for humiliation and mental suffering shall not exceed one thousand dollars, and including a requirement for report of the matter on compliance.

     (6) If a determination is made that retaliatory action, as defined in RCW 42.40.050, has been taken against a whistleblower, as defined in RCW 42.40.020, the administrative law judge may, in addition to any other remedy, impose a civil penalty upon the retaliator of up to three thousand dollars and issue an order to the state employer to suspend the retaliator for up to thirty days without pay.  At a minimum, the administrative law judge shall require that a letter of reprimand be placed in the retaliator's personnel file.  All penalties recovered shall be paid into the state treasury and credited to the general fund.

     (7) The final order of the administrative law judge shall include a notice to the parties of the right to obtain judicial review of the order by appeal in accordance with the provisions of RCW 34.05.510 through 34.05.598, and that such appeal must be served and filed within thirty days after the service of the order on the parties.

     (((7))) (8) If, upon all the evidence, the administrative law judge finds that the respondent has not engaged in any alleged unfair practice, the administrative law judge shall state findings of fact and shall similarly issue and file an order dismissing the complaint.

     (((8))) (9) An order dismissing a complaint may include an award of reasonable attorneys' fees in favor of the respondent if the administrative law judge concludes that the complaint was frivolous, unreasonable, or groundless.

     (((9))) (10) The commission shall establish rules of practice to govern, expedite, and effectuate the foregoing procedure.


     Sec. 7.  RCW 43.09.050 and 1979 c 151 s 91 are each amended to read as follows:

     The auditor shall:

     (1) Except as otherwise specifically provided by law, audit the accounts of all collectors of the revenue and other holders of public money required by law to pay the same into the treasury;

     (2) In his or her discretion, inspect the books of any person charged with the receipt, safekeeping, and disbursement of public moneys;

     (3) Investigate improper governmental activity under chapter 42.40 RCW;

     (4) Inform the attorney general in writing of the necessity for ((him)) the attorney general to direct prosecutions in the name of the state for all official delinquencies in relation to the assessment, collection, and payment of the revenue, against all persons who, by any means, become possessed of public money or property, and fail to pay over or deliver the same, and against all debtors of the state;

     (((4))) (5) Give information in writing to the legislature, whenever required, upon any subject relating to the financial affairs of the state, or touching any duties of his or her office;

     (((5))) (6) Report to the director of financial management in writing the names of all persons who have received any moneys belonging to the state, and have not accounted therefor;

     (((6))) (7) Authenticate with his or her official seal papers issued from his or her office;

     (((7))) (8) Make his or her official report annually on or before the 31st of December.


     Sec. 8.  RCW 43.88.160 and 1987 c 505 s 36 are each amended to read as follows:

     This section sets forth the major fiscal duties and responsibilities of officers and agencies of the executive branch.  The regulations issued by the governor pursuant to this chapter shall provide for a comprehensive, orderly basis for fiscal management and control, including efficient accounting and reporting therefor, for the executive branch of the state government and may include, in addition, such requirements as will generally promote more efficient public management in the state.

     (1) Governor; director of financial management.  The governor, through the director of financial management, shall devise and supervise a modern and complete accounting system for each agency to the end that all revenues, expenditures, receipts, disbursements, resources and obligations of the state shall be properly and systematically accounted for.  The accounting system shall include the development of accurate, timely records and reports of all financial affairs of the state.  The system shall also provide for central accounts in the office of financial management at the level of detail deemed necessary by the director to perform central financial management. The director of financial management shall adopt and periodically update an accounting procedures manual.  Any agency maintaining its own accounting and reporting system shall comply with the updated accounting procedures manual and the rules of the director adopted under this chapter.  An agency may receive a waiver from complying with this requirement if the waiver is approved by the director.  Waivers expire at the end of the fiscal biennium for which they are granted.  The director shall forward notice of waivers granted to the legislative fiscal committees.  The director of financial management may require such financial, statistical, and other reports as the director deems necessary from all agencies covering any period.

     The director of financial management is responsible for quarterly reporting of primary budget drivers such as applicable workloads, caseload estimates, and appropriate unit cost data.  These reports shall be transmitted to the legislative fiscal committees or by electronic means to the legislative evaluation and accountability program committee. Quarterly reports shall include actual monthly data and the variance between actual and estimated data to date.  The reports shall also include estimates of these items for the remainder of the budget period.

     In addition, the director of financial management, as agent of the governor, shall:

     (a) Make surveys and analyses of agencies with the object of determining better methods and increased effectiveness in the use of manpower and materials; and the director shall authorize expenditures for employee training to the end that the state may benefit from training facilities made available to state employees;

     (b) Report to the governor with regard to duplication of effort or lack of coordination among agencies;

     (c) Review any pay and classification plans, and changes thereunder, developed by any agency for their fiscal impact: PROVIDED, That none of the provisions of this subsection shall affect merit systems of personnel management now existing or hereafter established by statute relating to the fixing of qualifications requirements for recruitment, appointment, or promotion of employees of any agency.  The director shall advise and confer with agencies including appropriate standing committees of the legislature as may be designated by the speaker of the house and the president of the senate regarding the fiscal impact of such plans and may amend or alter said plans, except that for the following agencies no amendment or alteration of said plans may be made without the approval of the agency concerned:  Agencies headed by elective officials;

     (d) Fix the number and classes of positions or authorized man years of employment for each agency and during the fiscal period amend the determinations previously fixed by the director except that the director shall not be empowered to fix said number or said classes for the following:  Agencies headed by elective officials;

     (e) Provide for transfers and repayments between the budget stabilization account and the general fund as directed by appropriation and RCW 43.88.525 through 43.88.540;

     (f) Promulgate regulations to effectuate provisions contained in ((subsections)) (a) through (e) ((hereof)) of this subsection.

     (2) The treasurer shall:

     (a) Receive, keep and disburse all public funds of the state not expressly required by law to be received, kept and disbursed by some other persons:  PROVIDED, That this subsection shall not apply to those public funds of the institutions of higher learning which are not subject to appropriation;

     (b) Disburse public funds under the treasurer's supervision or custody by warrant or check;

     (c) Keep a correct and current account of all moneys received and disbursed by the treasurer, classified by fund or account;

     (d) Perform such other duties as may be required by law or by regulations issued pursuant to this law.

     It shall be unlawful for the treasurer to issue any warrant or check for public funds in the treasury except upon forms duly prescribed by the director of financial management.  Said forms shall provide for authentication and certification by the agency head or the agency head's designee that the services have been rendered or the materials have been furnished; or, in the case of loans or grants, that the loans or grants are authorized by law; or, in the case of payments for periodic maintenance services to be performed on state owned equipment, that a written contract for such periodic maintenance services is currently in effect and copies thereof are on file with the office of financial management; and the treasurer shall not be liable under the treasurer's surety bond for erroneous or improper payments so made:  PROVIDED, That when services are lawfully paid for in advance of full performance by any private individual or business entity other than as provided for by RCW 42.24.035, such individual or entity other than central stores rendering such services shall make a cash deposit or furnish surety bond coverage to the state as shall be fixed in an amount by law, or if not fixed by law, then in such amounts as shall be fixed by the director of the department of general administration but in no case shall such required cash deposit or surety bond be less than an amount which will fully indemnify the state against any and all losses on account of breach of promise to fully perform such services:  AND PROVIDED FURTHER, That no payments shall be made in advance for any equipment maintenance services to be performed more than three months after such payment.  Any such bond so furnished shall be conditioned that the person, firm or corporation receiving the advance payment will apply it toward performance of the contract.  The responsibility for recovery of erroneous or improper payments made under this section shall lie with the agency head or the agency head's designee in accordance with regulations issued pursuant to this chapter.  Nothing in this section shall be construed to permit a public body to advance funds to a private service provider pursuant to a grant or loan before services have been rendered or material furnished.

     (3) The state auditor shall:

     (a) Report to the legislature the results of current post audits that have been made of the financial transactions of each agency; to this end the auditor may, in the auditor's discretion, examine the books and accounts of any agency, official or employee charged with the receipt, custody or safekeeping of public funds.  The current post audit of each agency may include a section on recommendations to the legislature as provided in (c) of this subsection (((3)(c) of this section)).

     (b) Give information to the legislature, whenever required, upon any subject relating to the financial affairs of the state.

     (c) Make the auditor's official report on or before the thirty-first of December which precedes the meeting of the legislature.  The report shall be for the last complete fiscal period and shall include at least the following:

     Determinations as to whether agencies, in making expenditures, complied with the laws of this state:  PROVIDED, That nothing in *this act shall be construed to grant the state auditor the right to perform performance audits.  A performance audit for the purpose of *this act shall be the examination of the effectiveness of the administration, its efficiency and its adequacy in terms of the programs of departments or agencies as previously approved by the legislature.  The authority and responsibility to conduct such an examination shall be vested in the legislative budget committee as prescribed in RCW 44.28.085 as now or hereafter amended.

     (d) Be empowered to take exception to specific expenditures that have been incurred by any agency or to take exception to other practices related in any way to the agency's financial transactions and to cause such exceptions to be made a matter of public record, including disclosure to the agency concerned and to the director of financial management.  It shall be the duty of the director of financial management to cause corrective action to be taken promptly, such action to include, as appropriate, the withholding of funds as provided in RCW 43.88.110.

     (e) Promptly report any irregularities to the attorney general.

     (f) Investigate improper governmental activity under chapter 42.40 RCW.

     (4) The legislative budget committee may:

     (a) Make post audits of the financial transactions of any agency and management surveys and program reviews as provided for in RCW 44.28.085 as now or hereafter amended.  To this end the committee may in its discretion examine the books, accounts, and other records of any agency, official, or employee.

     (b) Give information to the legislature or any legislative committee whenever required upon any subject relating to the performance and management of state agencies.

     (c) Make a report to the legislature which shall include at least the following:

     (i) Determinations as to the extent to which agencies in making expenditures have complied with the will of the legislature and in this connection, may take exception to specific expenditures or financial practices of any agencies; and

     (ii) Such plans as it deems expedient for the support of the state's credit, for lessening expenditures, for promoting frugality and economy in agency affairs and generally for an improved level of fiscal management.


     NEW SECTION.  Sec. 9.      A new section is added to chapter 43.09 RCW to read as follows:

     The expense of investigating improper local governmental activity as provided in chapter 42.40 RCW shall be borne by each entity subject to such investigation.  Procedures established by the division of municipal corporations concerning the municipal revolving fund shall be made applicable to these investigations and their expenses.


     NEW SECTION.  Sec. 10.     The sum of twenty thousand dollars, or as much thereof as may be necessary, is appropriated for the biennium ending June 30, 1993, from the general fund to the human rights commission for the purposes of this act.