6601.E

AN ACT Relating to government performance and accountability; amending RCW 43.88.020 and 43.88.090; reenacting and amending RCW 43.88.160; adding a new chapter to Title 43 RCW; creating a new section; repealing 1993 c 406 s 1 (uncodified); and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. STATEMENT OF PURPOSE. The state of Washington expects to be the most effective and best performing state government in the United States, measured in terms of quality of customer service, accountability for cost-effective services, and productivity.

NEW SECTION. Sec. 2. STATEMENT OF INTENT. It is the intent of the governor and the legislature to accomplish the purpose of section 1 of this act through a commitment to continuous improvement of Washington state government and not through a one-time or short-term effort that would largely serve to redefine problems rather than identify solutions.

The governor, the legislature, and the public expect Washington state government to focus on the citizens of Washington as valued customers of state government. State government will accomplish what its citizens truly expect of it, and operate as its customers expect.

Washington state government will be a government where state employees are recognized as our most valuable improvement resource in solving problems and delivering quality services, where employees play the most significant role in developing and implementing strategies to accomplish the purposes of this chapter, and where people want to work and are proud to serve. Washington state government will place a high priority on investment in its employees and the systems necessary to support those people.

We will have a state government where, regardless of the different responsibilities assumed under the constitutional separation of powers, the governor and the legislature operate in partnership to improve the whole of state government, including themselves and their processes; where the governor and legislature act in partnership with state employees and employee organizations; and where all government officials and employees act in partnership with the citizens of Washington, who are the customers for state government.

Washington state government will have clear measures of performance that will result in quality customer service, accountability for cost-effective services, and improved productivity. Quality and performance standards will improve service delivery from all suppliers of government services.

NEW SECTION. Sec. 3. PERFORMANCE PARTNERSHIP COUNCIL‑-ESTABLISHED‑-POWERS AND DUTIES. (1) The Washington performance partnership council is established. The council shall consist of:

(a) The governor;

(b) The majority leader of the senate;

(d) The minority leader of the senate;

(e) The minority leader of the house of representatives; and

(f) Two state-wide elected officials to be appointed by the governor.

(2) To the extent necessary to accomplish the purposes of this chapter, the council shall meet monthly. The council shall invite the chairs and ranking minority members of the senate committee on ways and means and the house of representatives committee on appropriations to attend and participate in the meetings of the council as necessary and appropriate. The council may also invite the chairs of other legislative committees to participate in meetings of the council.

(3) The governor, majority leader of the senate, and speaker of the house of representatives shall serve as cochairs of the council.

(4) The council shall work in partnership to assure that the purposes and intent of this chapter are being met. The council shall establish clear expectations and measures of performance regarding implementation of the purpose and intent of this chapter. The council has decision-making authority to authorize programs to accomplish the purposes of this chapter. The council will review recommendations from the operating committee established under section 4 of this act and make appropriate recommendations regarding statutory changes to the legislature.

(5) The council shall have the authority and responsibility to provide adequate resources to accomplish the objectives of this chapter, including the hiring of staff or the reassignment of existing staff. Decisions to reallocate existing staff from any agency shall be made only with the approval of the director of the agency.

(6) Within forty-five days of the effective date of this act, the council will appoint a full-time person to coordinate and facilitate the effort.

NEW SECTION. Sec. 4. PERFORMANCE PARTNERSHIP OPERATING COMMITTEE‑-ESTABLISHED‑-POWERS AND DUTIES. (1) Within thirty days of the effective date of this act, the performance partnership council shall appoint the performance partnership operating committee, with no more than twelve members, comprised of:

(a) The director of financial management;

(b) Directors of state agencies, including independent agencies and agencies that report directly to the governor;

(d) Representatives of the legislature; and

(e) Representatives of the private sector with expertise in organizational improvement strategies.

(2) Representatives of the private sector shall be appointed in equal number to representatives of the public sector. The director of financial management and a representative of the private sector, to be selected by the council, shall serve as cochairs of the operating committee.

(3) The operating committee shall focus on the day-to-day operations of the improvement process and the allocation of necessary staff resources. The committee shall assure the planning, initiation, and implementation of the functions necessary to accomplish the purposes of this chapter, monitor assigned tasks, and consider and recommend short- and long-term improvement strategies to the performance partnership council.

(4) The operating committee shall ensure that the strategies and recommendations to accomplish the purposes of this chapter are developed primarily by front-line state employees and the customers of state government services. That assurance will be provided, in part, by facilitating work teams and design teams comprised of state employees, state employee organizations, customers, managers, legislators or legislative employees, and experts from outside government to develop the strategies and accomplish the tasks required under sections 5, 6, and 7 of this act.

(5) Within sixty days of the effective date of this act, the operating committee shall recommend to the council a work plan and budget to accomplish the purposes of this chapter, with particular detail regarding the first twelve months. The operating committee shall also develop a thorough and effective internal and external communication plan necessary to inform and activate the participants essential to the success of the effort.

NEW SECTION. Sec. 5. STATEMENT OF STRATEGIC INTENT. Working through the operating committee, the performance partnership council shall initiate a two-tracked process toward the long-term improvement of state government.

The first area of effort shall focus on clarifying and stating the strategic intent for Washington state government: What Washington state government should be doing at this current period in time. Included in the strategic intent for state government shall be a clear statement of the basic services that Washington state citizens desire, and the priorities and values which are centered on the customers of state government. The statement of intent, priorities, and values shall be developed within the context of revenue and expenditure limitations.

The council shall establish a process which effectively involves the customers and suppliers of state government services. The suppliers are primarily state employees, but might also include local government, private vendors of goods and services, and others as appropriate. The process shall be ongoing. The council shall prepare its initial statement of strategic intent for Washington state government by September 1, 1994, for recommendation to the 1995 legislature. The legislature shall either accept or reject, but cannot amend, the statement of strategic intent. The legislature shall take action on the initial recommendation by March 15, 1995. If the statement of strategic intent is not approved by the legislature, it shall be amended by the council and resubmitted.

The council shall recommend to the legislature an updated statement of strategic intent by September 1 of each even-numbered year for action by the legislature by March 15 in the following legislative session.

NEW SECTION. Sec. 6. IMPROVEMENT OF GOVERNMENT SERVICES‑-DESIGN TEAMS‑-INITIAL PROJECTS. (1) The second area of effort by the performance partnership council shall focus on continuous improvement of state government services by developing successful strategies to:

(a) Clearly identify the intended result of each state government service or program, and measure and communicate performance toward the intended result;

(b) Assess each activity and function of government to identify the value added toward the general strategic intent of state government and the specific result intended from the program or service, eliminate or redesign activities so that each function or activity makes a cost-effective contribution toward intended results, and design organizations that match the functions and processes of state government;

(c) Redesign the internal systems that support state government to be more consistent with a priority-driven, results-oriented, performance-based system of government, with highest priority to redesign of the budget system and the accounting system; and

(d) Identify and remove barriers to performance and create incentives for better performance and cost-effectiveness.

(2) The operating committee shall formulate design teams consisting of front-line employees, employee representatives, managers, customers, outside experts where appropriate, legislators or legislative staff, representatives of local government, vendors and other suppliers of state services, and any other persons deemed necessary or appropriate by the operating committee, to develop successful prototypes with application throughout the executive and legislative branches of government for implementation of the improvement principles described in subsection (1) of this section. The composition of the design teams shall be flexible and shall reflect the expertise required for the initial projects.

(3) Initial projects shall be undertaken to design strategies for successful implementation of each of the principles described in subsection (1) of this section and any others identified by the council as being essential to accomplish the purposes of this chapter. In developing successful strategies, the design teams shall also examine the best practices used in the public and private sectors to accomplish the objectives of subsection (1) of this section. The initial projects shall be designed to demonstrate definitive results, including effective methods for employee participation and empowerment techniques to facilitate and implement creative problem solving from all employees, effective means of customer involvement, consistent definitions and instructions, effective training plans and identification of resources required, successful project management strategies, and effective communication plans.

(4) The work plan described in section 4 of this act shall identify the initial projects to be undertaken. The initial projects shall be designed to develop effective performance improvement strategies that can be replicated in other areas of state government. Initial projects should be identified in an effort to demonstrate early success and immediate improvement in state government performance. It is not necessary at the outset to initiate projects for each of the principal government improvement strategies described in subsection (1) of this section. Rather, the work plan should describe an orderly schedule that will allow for integration of each of the initial projects in a way that will result in coordinated strategies for continuous improvement. The initial projects for improvement should be consistent with efforts to define the strategic intent for Washington state government.

(5) The council shall determine when an initiative has resulted in successful strategies that should be expanded to a broader portion, or the whole, of state government. The council shall recommend statutory changes to the legislature when such changes are required to accomplish the purposes of this chapter. The council shall also develop legislation to alter statutes, rules, and regulations necessary for initial agencies and programs to accomplish the purposes of this chapter, and to expand projects to a broader portion of state government at the appropriate time. The legislation shall be based on the work of project teams designed to identify and address barriers to performance and create incentives.

(6) The performance partnership council and operating committee shall ensure the work of the design teams is supported by committed leadership that provides clear vision and motivation and facilitates effective communication. State employees shall be recognized and supported as the single resource most effective in identifying and solving problems and delivering effective state government services. Employees shall be well supported by the provision of necessary resources, particularly an investment in employee training, and shall be provided with the flexibility and incentives necessary to successfully implement their assigned tasks. The ultimate goal of the design teams shall be to develop strategies to improve state government in regard to the customers' expectations for quality services delivered in the most cost-effective means possible.

NEW SECTION. Sec. 7. BUDGET PROCESS‑-PERFORMANCE MEASUREMENT. The current operating budget process for state government has been generally based on the presumption of continuing current service levels and giving careful consideration only to marginal changes. It is not well understood or supported by the public or state government policymakers. Consequently, work on initial projects for performance measurement and budget redesign must progress sufficiently to result in expansion to additional programs for the 1995-1997 biennium. Beginning no later than the 1997-1999 biennium, the state operating budget and the process used to develop that budget shall, to the fullest extent possible and based on the recommendations of the council, be redesigned to reflect an effective state-wide system of performance measurement, shall be based on a clear statement of state-wide priorities (strategic intent) as well as clear priorities within each agency, and shall incorporate incentives for performance and cost-effectiveness.

NEW SECTION. Sec. 8. COLLECTIVE BARGAINING AGREEMENTS. Nothing in this chapter shall supersede or modify in any manner the provisions of any public employee collective bargaining agreement under Title 41 RCW, or any rights established thereunder.

Sec. 9. RCW 43.88.020 and 1993 c 406 s 2 are each amended to read as follows:

(1) "Budget" means a proposed plan of expenditures for a given period or purpose and the proposed means for financing these expenditures.

(2) "Budget document" means a formal, written statement offered by the governor to the legislature, as provided in RCW 43.88.030.

(3) "Director of financial management" means the official appointed by the governor to serve at the governor's pleasure and to whom the governor may delegate necessary authority to carry out the governor's duties as provided in this chapter. The director of financial management shall be head of the office of financial management which shall be in the office of the governor.

(4) "Agency" means and includes every state office, officer, each institution, whether educational, correctional or other, and every department, division, board and commission, except as otherwise provided in this chapter.

(5) "Public funds", for purposes of this chapter, means all moneys, including cash, checks, bills, notes, drafts, stocks, and bonds, whether held in trust, for operating purposes, or for capital purposes, and collected or disbursed under law, whether or not such funds are otherwise subject to legislative appropriation, including funds maintained outside the state treasury.

(6) "Regulations" means the policies, standards, and requirements, stated in writing, designed to carry out the purposes of this chapter, as issued by the governor or the governor's designated agent, and which shall have the force and effect of law.

(7) "Ensuing biennium" means the fiscal biennium beginning on July 1st of the same year in which a regular session of the legislature is held during an odd-numbered year pursuant to Article II, section 12 of the Constitution and which biennium next succeeds the current biennium.

(8) "Dedicated fund" means a fund in the state treasury, or a separate account or fund in the general fund in the state treasury, that by law is dedicated, appropriated or set aside for a limited object or purpose; but "dedicated fund" does not include a revolving fund or a trust fund.

(9) "Revolving fund" means a fund in the state treasury, established by law, from which is paid the cost of goods or services furnished to or by a state agency, and which is replenished through charges made for such goods or services or through transfers from other accounts or funds.

(10) "Trust fund" means a fund in the state treasury in which designated persons or classes of persons have a vested beneficial interest or equitable ownership, or which was created or established by a gift, grant, contribution, devise, or bequest that limits the use of the fund to designated objects or purposes.

(11) "Administrative expenses" means expenditures for: (a) Salaries, wages, and related costs of personnel and (b) operations and maintenance including but not limited to costs of supplies, materials, services, and equipment.

(12) "Fiscal year" means the year beginning July 1st and ending the following June 30th.

(13) "Lapse" means the termination of authority to expend an appropriation.

(14) "Legislative fiscal committees" means the legislative budget committee, the legislative evaluation and accountability program committee, the ways and means committees of the senate and house of representatives, and, where appropriate, the legislative transportation committee.

(15) "Fiscal period" means the period for which an appropriation is made as specified within the act making the appropriation.

(16) "Primary budget driver" means the primary determinant of a budget level, other than a price variable, which causes or is associated with the major expenditure of an agency or budget unit within an agency, such as a caseload, enrollment, workload, or population statistic.

(17) "Stabilization account" means the budget stabilization account created under RCW 43.88.525 as an account in the general fund of the state treasury.

(18) "State tax revenue limit" means the limitation created by chapter 43.135 RCW.

(19) "General state revenues" means the revenues defined by Article VIII, section 1(c) of the state Constitution.

(20) "Annual growth rate in real personal income" means the estimated percentage growth in personal income for the state during the current fiscal year, expressed in constant value dollars, as published by the office of financial management or its successor agency.

(21) "Estimated revenues" means estimates of revenue in the most recent official economic and revenue forecast prepared under RCW 82.33.020, and prepared by the office of financial management for those funds, accounts, and sources for which the office of the economic and revenue forecast council does not prepare an official forecast including estimates of revenues to support financial plans under RCW 44.40.070, that are prepared by the office of financial management in consultation with the interagency task force.

(22) "Estimated receipts" means the estimated receipt of cash in the most recent official economic and revenue forecast prepared under RCW 82.33.020, and prepared by the office of financial management for those funds, accounts, and sources for which the office of the economic and revenue forecast council does not prepare an official forecast.

(23) "State budgeting, accounting, and reporting system" means a system that gathers, maintains, and communicates fiscal information. The system links fiscal information beginning with development of agency budget requests through adoption of legislative appropriations to tracking actual receipts and expenditures against approved plans.

(24) "Allotment of appropriation" means the agency's statement of proposed expenditures, the director of financial management's review of that statement, and the placement of the approved statement into the state budgeting, accounting, and reporting system.

(25) "Statement of proposed expenditures" means a plan prepared by each agency that breaks each appropriation out into monthly detail representing the best estimate of how the appropriation will be expended.

(26) "Undesignated fund balance (or deficit)" means unreserved and undesignated current assets or other resources available for expenditure over and above any current liabilities which are expected to be incurred by the close of the fiscal period.

(27) "Internal audit" means an independent appraisal activity within an agency for the review of operations as a service to management, including a systematic examination of accounting and fiscal controls to assure that human and material resources are guarded against waste, loss, or misuse; and that reliable data are gathered, maintained, and fairly disclosed in a written report of the audit findings.

(28) "Performance ((~~audit~~)) verification" means an ((audit that determines the following: (a) Whether a government entity is acquiring, protecting, and using its resources economically and efficiently; (b) the causes of inefficiencies or uneconomical practices; (c) whether the entity has complied with laws and rules applicable to the program; (d) the extent to which the desired results or benefits established by the legislature are being achieved; and (e) the effectiveness of organizations, programs, activities, or functions)) analysis that (a) verifies the accuracy of data used by state agencies in quantifying intended results and measuring performance toward those results, and (b) verifies whether or not the reported results were achieved.

(29) "Program evaluation" means the use of a variety of policy and fiscal research methods to (a) determine the extent to which a program is achieving its legislative intent in terms of producing the effects expected, and (b) make an objective judgment of the implementation, outcomes, and net cost or benefit impact of programs in the context of their goals and objectives. It includes the application of systematic methods to measure the results, intended or unintended, of program activities.

Sec. 10. RCW 43.88.090 and 1993 c 406 s 3 are each amended to read as follows:

(1) For purposes of developing budget proposals to the legislature, the governor shall have the power, and it shall be the governor's duty, to require from proper agency officials such detailed estimates and other information in such form and at such times as the governor shall direct. The estimates for the legislature and the judiciary shall be transmitted to the governor and shall be included in the budget without revision. The estimates for state pension contributions shall be based on the rates provided in chapter 41.45 RCW. Copies of all such estimates shall be transmitted to the standing committees on ways and means of the house and senate at the same time as they are filed with the governor and the office of financial management.

The estimates shall include statements or tables which indicate, by agency, the state funds which are required for the receipt of federal matching revenues. The estimates shall be revised as necessary to reflect legislative enactments and adopted appropriations and shall be included with the initial biennial allotment submitted under RCW 43.88.110.

(2) ((It is the policy of the state that each state agency define its mission and establish measurable goals for achieving desirable results for those who receive its services. This section shall not be construed to require an agency to develop a new mission or goals in place of identifiable missions or goals that meet the intent of this section. State agencies should involve affected groups and individuals in developing their missions and goals.

(3) For the purpose of assessing program performance, each state agency shall establish program objectives for each major program in its budget. The objectives shall be consistent with the missions and goals developed under this section. The objectives shall be expressed to the extent practicable in outcome-based, objective, and measurable form unless permitted by the office of financial management to adopt a different standard.

(4) In concert with legislative and executive agencies, the office of financial management shall develop a plan for using these outcome-based objectives in the evaluation of agency performance for improved accountability of state government. Any elements of the plan requiring legislation shall be submitted to the legislature no later than November 30, 1994.

~~(5)~~)) In the year of the gubernatorial election, the governor shall invite the governor-elect or the governor-elect's designee to attend all hearings provided in RCW 43.88.100; and the governor shall furnish the governor-elect or the governor-elect's designee with such information as will enable the governor-elect or the governor-elect's designee to gain an understanding of the state's budget requirements. The governor-elect or the governor-elect's designee may ask such questions during the hearings and require such information as the governor-elect or the governor-elect's designee deems necessary and may make recommendations in connection with any item of the budget which, with the governor-elect's reasons therefor, shall be presented to the legislature in writing with the budget document. Copies of all such estimates and other required information shall also be submitted to the standing committees on ways and means of the house and senate.

Sec. 11. RCW 43.88.160 and 1993 c 500 s 7, 1993 c 406 s 4, and 1993 c 194 s 6 are each reenacted and 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 appropriate 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.

(2) The director of financial management is responsible for quarterly reporting of primary operating 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.

(3) The director of financial management shall report at least annually to the appropriate legislative committees regarding the status of all appropriated capital projects, including transportation projects, showing significant cost overruns or underruns. If funds are shifted from one project to another, the office of financial management shall also reflect this in the annual variance report. Once a project is complete, the report shall provide a final summary showing estimated start and completion dates of each project phase compared to actual dates, estimated costs of each project phase compared to actual costs, and whether or not there are any outstanding liabilities or unsettled claims at the time of completion.

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

(a) Develop and maintain a system of internal controls and internal audits comprising methods and procedures to be adopted by each agency that will safeguard its assets, check the accuracy and reliability of its accounting data, promote operational efficiency, and encourage adherence to prescribed managerial policies for accounting and financial controls. The system developed by the director shall include criteria for determining the scope and comprehensiveness of internal controls required by classes of agencies, depending on the level of resources at risk.

Each agency head or authorized designee shall be assigned the responsibility and authority for establishing and maintaining internal audits following the standards of internal auditing of the institute of internal auditors;

(b) 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;

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

(e) 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;

(f) 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;

(g) 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;

(h) Adopt rules to effectuate provisions contained in (a) through (g) of this subsection.

(5) 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) Receive, disburse, or transfer public funds under the treasurer's supervision or custody;

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

(d) Coordinate agencies' acceptance and use of credit cards and other payment methods, if the agencies have received authorization under RCW 43.41.180;

(e) 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 disburse public funds in the treasury except upon forms or by alternative means duly prescribed by the director of financial management. These forms or alternative means 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. 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. 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.

(6) 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. Where feasible in conducting examinations, the auditor shall utilize data and findings from the internal control system prescribed by the office of financial management. The current post audit of each agency may include a section on recommendations to the legislature as provided in (c) of this subsection.

(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 determinations as to whether agencies, in making expenditures, complied with the laws of this state. The state auditor is authorized to perform or participate in performance ((~~audits~~)) verifications only as expressly authorized by the legislature in the omnibus biennial appropriations acts. ((A performance audit for the purpose of this section is 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 state auditor, upon completing an audit for legal and financial compliance under chapter 43.09 RCW or a performance verification, may report to the legislative budget committee or other appropriate committees of the legislature, in a manner prescribed by the legislative budget committee, on facts relating to the management or performance of governmental programs where such facts are discovered incidental to the legal and financial audit or performance verification. The auditor may make such a report to a legislative committee only if the auditor has determined that the agency has been given an opportunity and has failed to resolve the management or performance issues raised by the auditor. If the auditor makes a report to a legislative committee, the agency may submit to the committee a response to the report. This subsection (6) shall not be construed to authorize the auditor to allocate other than de minimis resources to performance audits except as expressly authorized in the appropriations acts.

(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.

(7) 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 well as performance audits and program evaluations. 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.

(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. 12. 1993 c 406 s 1 (uncodified) is repealed.

NEW SECTION. Sec. 13. Captions as used in this act do not constitute any part of the law.

NEW SECTION. Sec. 14. Sections 1 through 8 of this act shall constitute a new chapter in Title 43 RCW.

NEW SECTION. Sec. 15. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect immediately.