HOUSE BILL REPORT

SHB 732

BYHouse Committee on State Government (originally sponsored by Representatives H. Sommers, B. Williams and Belcher; by request of Office of State Auditor)

Revising provisions of the audit services revolving fund.

House Committe on State Government

Majority Report:     The substitute bill be substituted therefor and the substitute bill do pass.  (6)

     Signed by Representatives Peery, Vice Chair; Baugher, Chandler, Hankins, O'Brien and Sayan.

House Staff:Pam Madson (786-7135)

AS PASSED HOUSE MARCH 16, 1987

BACKGROUND:

A 1965 statute requires post-audits of state agencies performed by the state auditor to be paid for from the General Fund.  In 1981, the legislature centralized the funding of audits performed by the state auditor in an Auditing Services Revolving Fund; however, the conflicting 1965 statute was never repealed.

The state treasurer is directed to transfer funds on a quarterly basis to the Auditing Services Revolving Fund.

The state treasurer is required to adjust audit billing rates to reflect audit costs incurred during the previous six-month (or less) period.

SUMMARY:

A conflicting provision of state law requiring the use of General Fund appropriations to pay for post-audits of state agencies performed by the state auditor is repealed.

The interval at which the state treasurer must transfer funds to the Audit Services Revolving Fund is changed from quarterly to monthly.  The time period of audit costs on which the state auditor's billing rate is based is expanded from the previous six-month (or less) period to the previous and present biennia.  The following are specified as expenses of auditing public accounts:  Expenses related to training, maintenance of working capital including reserves for late and uncollectible accounts, and necessary billing adjustments.

Fiscal Note:    Not Requested.

House Committee ‑ Testified For:     Jack Heinricher, State Auditor's Office.

House Committee - Testified Against: None Presented.

House Committee - Testimony For:     The Office of State Auditor's cash flow problems would be alleviated by the more frequent transfer of monies to the Auditing Services Revolving Fund.  Great fluctuations in the state auditor's audit billing rate would be reduced by allowing billing out at a constant rate based on an expanded time period for audit costs incurred.  Certain administrative costs associated with the auditing of state agencies should be considered reimbursable auditing expenses.

House Committee - Testimony Against: None Presented.