H-1627.1          _______________________________________________

                            SUBSTITUTE HOUSE BILL 1548

                  _______________________________________________

State of Washington              54th Legislature             1995 Regular Session

By House Committee on Financial Institutions & Insurance (originally sponsored by Representatives L. Thomas, Dellwo, Goldsmith, Rust, Wolfe, B. Thomas, Backlund, Kessler, Kremen, Robertson, Thompson, Huff, Elliot, McMorris, D. Schmidt, McMahan, Hickel, Schoesler, Clements, Cooke and Brumsickle; by request of State Treasurer)

Read first time 02/10/95.

Auditing the state investment board.

     AN ACT Relating to performance audits of the state investment board; and adding a new chapter to Title 43 RCW.

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

NEW SECTION. Sec. 1.  Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

     (1) "Board" means the state investment board.

     (2) "Auditor" means the state auditor.

     (3) "Performance audit" means:  (a) Identifying the appropriate statutory mandates and limitations that apply to the investment programs and practices of the board; (b) determining whether the board is complying with its statutory mandates; (c) recommending corrective action, if necessary; (d) identifying appropriate standards for management practices and operations regarding investments; (e) determining the extent to which the board is complying with such standards; and (f) recommending ways for the board to improve its level of compliance.

NEW SECTION. Sec. 2.  The auditor, in consultation with the legislative budget committee, is responsible for the conduct of performance audits of the board.  The auditor shall conduct performance audits at least once every four years, but not more frequently than every two years unless requested to do so by the governor to address serious concerns that arise.  The auditor shall establish and publish a schedule of regular performance audits and solicit public comment relative to the performance of the board at least three months prior to the conduct of a regularly scheduled performance audit.

NEW SECTION. Sec. 3.  The cost of performance audits conducted under section 2 of this act shall be payable from the funds managed by the board, proportional to the value of the assets of each fund.

NEW SECTION. Sec. 4.  The auditor, to the greatest extent possible, shall coordinate with the legislative budget committee, the office of financial management, and other state agencies as appropriate, when developing performance audit goals, objectives, and standards for the board.

NEW SECTION. Sec. 5.  The auditor shall, under chapter 39.29 RCW, obtain and utilize the services of private firms with sufficient professional staff possessing the education, training, and practical experience auditing private and governmental entities necessary to conduct the performance audits required by this chapter.

NEW SECTION. Sec. 6.  Sections 1 through 5 of this act shall constitute a new chapter in Title 43 RCW.

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