BP BHEAD INT H

AN ACT Relating to the citizen whistleblower act; amending RCW 42.17.310 and 43.88.160; adding a new chapter to Title 42 RCW; creating a new section; prescribing penalties; and providing an effective date.

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

NEW SECTION. Sec. 1. PURPOSE. The purpose of this chapter is to encourage individuals with knowledge of false claims against state government to provide that information to the state and bring civil actions against violators without fear of reprisal or retaliatory action. This chapter is intended to deter persons from knowingly causing or assisting in causing state government to pay claims that are false and to provide remedies for obtaining treble damages and civil penalties for state government.

NEW SECTION. Sec. 2. DEFINITIONS. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Agency" means any official, officer, commission, board, authority, council, committee, or department of the executive branch of state government.

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

(3) "Claim" includes any request or demand, under a contract or otherwise, for money, property, or services, that is made to any employee, officer, or agent of an agency, or to any contractor, grantee, or other recipient if the agency provides any portion of the money or property requested or demanded, or if the agency will reimburse the contractor, grantee, or other recipient for any portion of the money or property requested or demanded.

(4) "Knowing" or "knowingly" means, with respect to information, that a person: (a) Has actual knowledge of the information; (b) acts in deliberate ignorance of the truth or falsity of the information; or (c) acts in reckless disregard of the truth or falsity of the information. No proof of specific intent to defraud is required. Innocent mistake is a defense to an action under this chapter.

(5) "State government" means the government of the state or any department, division, bureau, office, institution, commission, board, authority, agency, or other instrumentality of the state and does not include any local governmental entity.

NEW SECTION. Sec. 3. FALSE CLAIMS‑-LIABILITY. (1) A person is liable to the state for a civil penalty of not less than five thousand dollars and not more than ten thousand dollars and for treble the amount of damages the agency sustains because of the act or omission of that person if the person:

(a) Knowingly presents or causes to be presented to an officer or employee of an agency a false claim for payment or approval;

(b) Knowingly makes, uses, or causes to be made or used a false record or statement to get a false or fraudulent claim paid or approved by an agency;

(c) Conspires to submit a false claim to an agency or to deceive an agency for the purpose of getting a false or fraudulent claim allowed or paid;

(d) Has possession, custody, or control of property or money used or to be used by an agency and, intending to deceive the agency or knowingly conceal the property, delivers or causes to be delivered less property than the amount for which the person receives a certificate or receipt;

(e) Is authorized to make or deliver a document certifying receipt of property used or to be used by an agency and, intending to deceive the agency, makes or delivers the receipt without knowing that the information on the receipt is true;

(f) Knowingly buys or receives, as a pledge of an obligation or a debt, public property from an officer or employee of an agency who may not sell or pledge the property lawfully; or

(g) Knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to an agency.

(2) The court may reduce the treble damages authorized under subsection (1) of this section if the court finds one or more of the following specific extenuating circumstances:

(a) The person committing the violation furnished officials of the agency responsible for investigating false claims violations with all information known to the person about the violation within thirty days after the date on which the person first obtained the information;

(b) The person fully cooperated with any official investigation of the violation;

(c) At the time the person furnished the agency with the information about the violation, no criminal prosecution, civil action, or administrative action had commenced under this section with respect to the violation, and the person did not have actual knowledge of the existence of an investigation into the violation.

(3) If the court reduces the treble damages as provided in subsection (2) of this section, the court shall award no less than two times the amount of damages sustained by the agency because of the act of the person.

(4) If treble damages are reduced as provided in subsection (2) of this section, the court shall set forth in a written order its findings and basis for reducing the treble damages award.

NEW SECTION. Sec. 4. CIVIL ACTIONS. (1) The auditor may investigate violations under section 3 of this act. If the auditor finds that a person has violated or is violating section 3 of this act, the auditor may refer the matter to the attorney general. Upon review of the investigation, the attorney general may bring a civil action under this chapter.

(2) A private person may bring a civil action for violations of section 3 of this act for the person and the state. The complaint shall be filed in camera and shall remain under seal for at least ninety days. Immediately upon filing the complaint, a person bringing such an action shall serve upon the attorney general by registered mail, return receipt requested, a copy of the complaint and written disclosure of substantially all material evidence and information the person possesses. Before the court unseals the complaint under subsection (4) of this section, the action may be voluntarily dismissed by the person bringing the action only if the attorney general gives written consent to the dismissal and its reasons for such consent.

(3) The attorney general may elect to intervene and proceed with the action on behalf of the state within ninety days after receipt of both the complaint and material evidence and information. The attorney general may, for good cause shown, request the court to extend the time during which the complaint remains under seal under subsection (2) of this section. Any such motion may be supported by affidavits or other submissions in camera. The complaint shall not be served upon the defendant until the court so orders.

(4) Before the expiration of the ninety-day period or any extensions under subsection (3) of this section, the attorney general shall:

(a) Proceed with the action, in which case the action is conducted by the attorney general on behalf of the state; or

(b) Notify the court that the attorney general declines to take action, in which case the person bringing the action has the right to conduct the action.

(5) When a person brings an action under this section, no person other than the attorney general on behalf of the state may intervene or bring an action under this chapter based on the facts underlying the pending action.

(6) Any action under this section shall be filed in Thurston county superior court and conducted pursuant to the Washington rules of civil procedure.

NEW SECTION. Sec. 5. SUBPOENAS AND COMPULSORY PROCESS. The state auditor, his or her employees, and every person legally appointed to perform such service, may issue subpoenas and compulsory process and direct the service thereof by any constable or sheriff, compel the attendance of witnesses and the production of books and papers before him or her at any designated time and place, and administer oaths.

When any person summoned to appear and give testimony neglects or refuses to do so, or neglects or refuses to answer any question that may be put to him or her touching any matter under examination, or to produce any books or papers required, the person making such examination shall apply to a superior court judge of the proper county to issue a subpoena for the appearance of such person before him or her; and the judge shall order the issuance of a subpoena for the appearance of such person before him or her to give testimony; and if any person so summoned fails to appear, or appearing, refuses to testify, or to produce any books or papers required, he or she shall be subject to like proceedings and penalties for contempt as witnesses in the superior court. Willful false swearing in any such examination is perjury and punishable as such.

NEW SECTION. Sec. 6. RIGHTS OF PARTIES. (1) If the attorney general proceeds with an action under this chapter, the attorney general has the primary responsibility for prosecuting the action, and is not bound by any act of the person bringing the action. The person bringing the action may continue as a party to the action, subject to the limitations specified in subsection (2) of this section.

(2)(a) The attorney general may dismiss the action notwithstanding the objections of the person initiating the action if the person has been notified by the attorney general of the filing of the motion and the court has provided the person with an opportunity for a hearing on the motion.

(b) This chapter shall not be construed to limit the authority of the attorney general or the plaintiff to compromise a claim brought in a complaint filed under this chapter if the court determines, after a hearing, that the proposed settlement is fair, adequate, and reasonable under all the circumstances.

(c) Upon a showing by the attorney general that unrestricted participation during the course of the litigation by the person initiating the action would interfere with or unduly delay the attorney general's prosecution of the case or would be repetitious, irrelevant, or for purposes of harassment, the court may, in its discretion, impose limitations on the person's participation, including, but not limited to:

(i) Limiting the number of witnesses the person may call;

(ii) Limiting the length of the testimony of the person's witnesses;

(iii) Limiting the person's cross‑examination of witnesses; or

(iv) Otherwise limiting the participation by the person in the litigation.

(d) Upon a showing by the defendant that unrestricted participation during the course of the litigation by the person initiating the action would be for purposes of harassment or would cause the defendant undue burden or unnecessary expense, the court may limit the participation by the person in the litigation.

(3) If the attorney general elects not to proceed with the action, the person who initiated the action may conduct the action. If the attorney general or the state auditor so requests, it shall be served, at the requesting agency's expense, with copies of all pleadings and motions filed in the action and copies of all deposition transcripts. If a person proceeds with the action, the court, without limiting the rights of the person initiating the action, may nevertheless permit the attorney general to intervene and take over the action on behalf of the state at a later date upon showing of good cause.

(4) Whether or not the attorney general proceeds with the action, upon a showing by the attorney general that certain actions of discovery by the person initiating the action would interfere with an investigation by state government or the prosecution of a criminal or civil matter arising out of the same facts, the court may stay such discovery for a period of not more than ninety days. Such a showing shall be conducted in camera. The court may extend the ninety‑day period upon a further showing in camera by the attorney general that the criminal or civil investigation or proceeding has been pursued with reasonable diligence and any proposed discovery in the civil action will interfere with an ongoing criminal or civil investigation or proceeding.

(5) The application of one civil remedy under this chapter does not preclude the application of any other remedy, civil or criminal, under this chapter or any other provision of law. Civil remedies under this chapter are supplemental, not mutually exclusive. Any finding of fact or conclusion of law made in such other proceeding that has become final shall be conclusive on all parties to an action under this section. As used in this subsection, the term "final" means not subject to judicial review.

(6) The auditor or the attorney general may intervene on its own behalf as a matter of right.

NEW SECTION. Sec. 7. AWARDS. (1) If the attorney general proceeds with and prevails in an action brought by a person under this chapter, except as provided in subsection (2) of this section, the court shall order the distribution to the person of at least fifteen percent but not more than twenty-five percent of the proceeds recovered under any judgment obtained by the attorney general in an action under section 3 of this act or of the proceeds of any settlement of the claim, depending upon the extent to which the person substantially contributed to the prosecution of the action.

(2) If the attorney general proceeds with an action that the court finds to be based primarily on disclosures of specific information other than that provided by the person bringing the action relating to allegations or transactions in a criminal, civil, or administrative hearing; a legislative, administrative, or state auditor report, hearing, audit, or investigation; or from the news media, the court may award such sums as it considers appropriate, but in no case more than ten percent of the proceeds recovered under a judgment or received in settlement of a claim under this chapter, taking into account the significance of the information and the role of the person bringing the action in advancing the case to litigation.

(3) If the attorney general does not proceed with an action under this section, the person bringing the action or settling the claim shall receive an amount that the court decides is reasonable for collecting the civil penalty and damages. The amount shall be not less than twenty-five percent and not more than thirty percent of the proceeds recovered under a judgment rendered in an action under this chapter or in settlement of a claim under this chapter.

(4) Following any distributions under subsection (1), (2), or (3) of this section, the agency injured by the submission of a false claim shall be awarded an amount not to exceed its compensatory damages. Any remaining proceeds, including civil penalties awarded under section 3 of this act, shall be deposited in the citizens' whistleblower account.

(5) Any payment under this section to the person bringing the action shall be paid only out of the proceeds recovered from the defendant.

(6) Whether or not the attorney general proceeds with the action, if the court finds that the action was brought by a person who planned and initiated the violation of section 3 of this act upon which the action was brought, the court may, to the extent the court considers appropriate, reduce the share of the proceeds of the action that the person would otherwise receive under this section, taking into account the role of the person in advancing the case to litigation and any relevant circumstances pertaining to the violation. If the person bringing the action is convicted of criminal conduct arising from his or her role in the violation of section 3 of this act, the person shall be dismissed from the civil action and shall not receive any share of the proceeds of the action. Such dismissal does not prejudice the right of the attorney general to continue the action.

NEW SECTION. Sec. 8. EXPENSES‑-ATTORNEYS' FEES‑-COSTS. (1) If the attorney general initiates an action under this chapter or assumes control of an action brought by a person under this chapter, the attorney general shall be awarded its reasonable attorneys' fees, expenses, and costs.

(2) If the court awards the person bringing the action proceeds under this chapter, the person shall also be awarded an amount for reasonable attorneys' fees and costs. Payment for reasonable attorneys' fees and costs shall be made in addition to the recovered proceeds before the distribution of any award.

(3) If the attorney general does not proceed with an action under this chapter and the defendant is the prevailing party, and the court finds that the claim of the person bringing the action was clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment, the court shall award the defendant reasonable attorneys' fees and costs against the person bringing the action.

(4) State government, the affected agency, and the attorney general shall not incur any liability for any expenses, attorneys' fees, or other costs incurred by any person in bringing or defending an action under this chapter.

NEW SECTION. Sec. 9. EXEMPTIONS TO CIVIL ACTIONS. (1) Courts shall not have jurisdiction over an action brought under this chapter against a member of the legislature, a member of the judiciary, or a senior executive branch official if the action is based on evidence or information known to the state government when the action was brought. For purposes of this subsection, "senior executive branch official" means any person employed in the executive branch of government holding a position in the Washington management service or other exempt employee.

(2) In no event may a person bring an action under section 4 of this act based upon allegations or transactions that are the subject of a civil action or an administrative proceeding in which the agency is already a party.

(3) Courts shall not have jurisdiction over an action brought under this chapter based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing; in a legislative, administrative, state auditor, or state treasurer report, hearing, audit, or investigation; or from the news media, unless the action is brought by the attorney general or unless the person bringing the action is an original source of the information. For purposes of this subsection, the term "original source" means an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the attorney general before filing an action under this chapter based on the information.

(4) Courts shall not have jurisdiction over an action where the person bringing the action under section 4 of this act is an employee or former employee of state government and the action is based, in whole or in part, upon information obtained in the course or scope of the employee's or former employee's regularly assigned responsibilities.

(5) Courts shall not have jurisdiction over an action where the person bringing the action under section 4 of this act obtained the information from an employee or former employee of state government who was not acting in the course or scope of the employee's or former employee's regularly assigned responsibilities.

NEW SECTION. Sec. 10. PROTECTION FOR EMPLOYEES. (1) Any person who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against because of lawful acts done by the person on behalf of the person or others in furtherance of an action under this chapter, including investigation for initiation of, testimony for, or assistance in an action filed or to be filed under this chapter has a private cause of action against the discriminating party. The attorney general may bring an action on behalf of a person acting lawfully under this chapter.

NEW SECTION. Sec. 11. LIMITATION OF ACTIONS. A civil false claim action by a private person under this chapter may not be brought:

(1) More than five years after the date on which the violation of section 3 of this act was committed; or

(2) More than two years after the date when facts material to the right of action are known or reasonably should have been known by the state official charged with responsibility to act in the circumstances, but in no event more than seven years after the date on which the violation is committed, whichever occurs last.

NEW SECTION. Sec. 12. BURDEN OF PROOF. In any false claim action brought under this chapter, the state or the plaintiff shall prove all essential elements of the cause of action, including damages, by a preponderance of the evidence.

NEW SECTION. Sec. 13. CITIZENS' WHISTLEBLOWER ACCOUNT. The citizens' whistleblower account is created in the state treasury. All money received under this chapter shall be deposited into the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only for administrative costs of the auditor's office and the office of the attorney general under this chapter. The office of the state auditor shall advise the state treasurer of the amount of funds in excess of the cash requirements appropriated plus six months' operating allowance as calculated by the office of the state auditor. A transfer to the general fund on or before June 30th of each year shall be made of the excess funds by the state treasurer's office.

Sec. 14. RCW 42.17.310 and 1995 c 267 s 6 are each amended to read as follows:

(1) The following are exempt from public inspection and copying:

(a) Personal information in any files maintained for students in public schools, patients or clients of public institutions or public health agencies, or welfare recipients.

(b) Personal information in files maintained for employees, appointees, or elected officials of any public agency to the extent that disclosure would violate their right to privacy.

(c) Information required of any taxpayer in connection with the assessment or collection of any tax if the disclosure of the information to other persons would (i) be prohibited to such persons by RCW 82.32.330 or (ii) violate the taxpayer's right to privacy or result in unfair competitive disadvantage to the taxpayer.

(d) Specific intelligence information and specific investigative records compiled by investigative, law enforcement, and penology agencies, and state agencies vested with the responsibility to discipline members of any profession, the nondisclosure of which is essential to effective law enforcement or for the protection of any person's right to privacy.

(e) Information revealing the identity of persons who are witnesses to or victims of crime or who file complaints with investigative, law enforcement, or penology agencies, other than the public disclosure commission, if disclosure would endanger any person's life, physical safety, or property. If at the time a complaint is filed the complainant, victim or witness indicates a desire for disclosure or nondisclosure, such desire shall govern. However, all complaints filed with the public disclosure commission about any elected official or candidate for public office must be made in writing and signed by the complainant under oath.

(f) Test questions, scoring keys, and other examination data used to administer a license, employment, or academic examination.

(g) Except as provided by chapter 8.26 RCW, the contents of real estate appraisals, made for or by any agency relative to the acquisition or sale of property, until the project or prospective sale is abandoned or until such time as all of the property has been acquired or the property to which the sale appraisal relates is sold, but in no event shall disclosure be denied for more than three years after the appraisal.

(h) Valuable formulae, designs, drawings, and research data obtained by any agency within five years of the request for disclosure when disclosure would produce private gain and public loss.

(i) Preliminary drafts, notes, recommendations, and intra-agency memorandums in which opinions are expressed or policies formulated or recommended except that a specific record shall not be exempt when publicly cited by an agency in connection with any agency action.

(j) Records which are relevant to a controversy to which an agency is a party but which records would not be available to another party under the rules of pretrial discovery for causes pending in the superior courts.

(k) Records, maps, or other information identifying the location of archaeological sites in order to avoid the looting or depredation of such sites.

(l) Any library record, the primary purpose of which is to maintain control of library materials, or to gain access to information, which discloses or could be used to disclose the identity of a library user.

(m) Financial information supplied by or on behalf of a person, firm, or corporation for the purpose of qualifying to submit a bid or proposal for (i) a ferry system construction or repair contract as required by RCW 47.60.680 through 47.60.750 or (ii) highway construction or improvement as required by RCW 47.28.070.

(n) Railroad company contracts filed prior to July 28, 1991, with the utilities and transportation commission under RCW 81.34.070, except that the summaries of the contracts are open to public inspection and copying as otherwise provided by this chapter.

(o) Financial and commercial information and records supplied by private persons pertaining to export services provided pursuant to chapter 43.163 RCW and chapter 53.31 RCW.

(p) Financial disclosures filed by private vocational schools under chapter 28C.10 RCW.

(q) Records filed with the utilities and transportation commission or attorney general under RCW 80.04.095 that a court has determined are confidential under RCW 80.04.095.

(r) Financial and commercial information and records supplied by businesses or individuals during application for loans or program services provided by chapters 43.163, 43.160, 43.330, and 43.168 RCW, or during application for economic development loans or program services provided by any local agency.

(s) Membership lists or lists of members or owners of interests of units in timeshare projects, subdivisions, camping resorts, condominiums, land developments, or common-interest communities affiliated with such projects, regulated by the department of licensing, in the files or possession of the department.

(t) All applications for public employment, including the names of applicants, resumes, and other related materials submitted with respect to an applicant.

(u) The residential addresses and residential telephone numbers of employees or volunteers of a public agency which are held by the agency in personnel records, employment or volunteer rosters, or mailing lists of employees or volunteers.

(v) The residential addresses and residential telephone numbers of the customers of a public utility contained in the records or lists held by the public utility of which they are customers.

(w)(i) The federal social security number of individuals governed under chapter 18.130 RCW maintained in the files of the department of health, except this exemption does not apply to requests made directly to the department from federal, state, and local agencies of government, and national and state licensing, credentialing, investigatory, disciplinary, and examination organizations; (ii) the current residential address and current residential telephone number of a health care provider governed under chapter 18.130 RCW maintained in the files of the department, if the provider requests that this information be withheld from public inspection and copying, and provides to the department an accurate alternate or business address and business telephone number. On or after January 1, 1995, the current residential address and residential telephone number of a health care provider governed under RCW 18.130.140 maintained in the files of the department shall automatically be withheld from public inspection and copying if the provider has provided the department with an accurate alternative or business address and telephone number.

(x) Information obtained by the board of pharmacy as provided in RCW 69.45.090.

(y) Information obtained by the board of pharmacy or the department of health and its representatives as provided in RCW 69.41.044, 69.41.280, and 18.64.420.

(z) Financial information, business plans, examination reports, and any information produced or obtained in evaluating or examining a business and industrial development corporation organized or seeking certification under chapter 31.24 RCW.

(aa) Financial and commercial information supplied to the state investment board by any person when the information relates to the investment of public trust or retirement funds and when disclosure would result in loss to such funds or in private loss to the providers of this information.

(bb) Financial and valuable trade information under RCW 51.36.120.

(cc) Client records maintained by an agency that is a domestic violence program as defined in RCW 70.123.020 or 70.123.075 or a rape crisis center as defined in RCW 70.125.030.

(dd) Information that identifies a person who, while an agency employee: (i) Seeks advice, under an informal process established by the employing agency, in order to ascertain his or her rights in connection with a possible unfair practice under chapter 49.60 RCW against the person; and (ii) requests his or her identity or any identifying information not be disclosed.

(ee) Investigative records compiled by an employing agency conducting a current investigation of a possible unfair practice under chapter 49.60 RCW or of a possible violation of other federal, state, or local laws prohibiting discrimination in employment.

(ff) Business related information protected from public inspection and copying under RCW 15.86.110.

(gg) Financial, commercial, operations, and technical and research information and data submitted to or obtained by the clean Washington center in applications for, or delivery of, program services under chapter 70.95H RCW.

(hh) Information and documents created specifically for, and collected and maintained by a quality improvement committee pursuant to RCW 43.70.510, regardless of which agency is in possession of the information and documents.

(ii) Information and working documents obtained or prepared as part of a complaint or investigation under chapter 42.-- RCW (sections 1 through 13, 16, and 17 of this act).

(2) Except for information described in subsection (1)(c)(i) of this section and confidential income data exempted from public inspection pursuant to RCW 84.40.020, the exemptions of this section are inapplicable to the extent that information, the disclosure of which would violate personal privacy or vital governmental interests, can be deleted from the specific records sought. No exemption may be construed to permit the nondisclosure of statistical information not descriptive of any readily identifiable person or persons.

(3) Inspection or copying of any specific records exempt under the provisions of this section may be permitted if the superior court in the county in which the record is maintained finds, after a hearing with notice thereof to every person in interest and the agency, that the exemption of such records is clearly unnecessary to protect any individual's right of privacy or any vital governmental function.

(4) Agency responses refusing, in whole or in part, inspection of any public record shall include a statement of the specific exemption authorizing the withholding of the record (or part) and a brief explanation of how the exemption applies to the record withheld.

Sec. 15. RCW 43.88.160 and 1994 c 184 s 11 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 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 verifications only as expressly authorized by the legislature in the omnibus biennial appropriations acts. 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.

(g) Investigate violations under chapter 42.-- RCW (sections 1 through 13, 16, and 17 of this act).

(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. 16. SHORT TITLE. This chapter may be known and cited as the citizen whistleblower act.

NEW SECTION. Sec. 17. CONSTRUCTION. This chapter shall be liberally construed to effectuate its remedial and deterrent purposes.

NEW SECTION. Sec. 18. CAPTIONS NOT LAW. Captions used in this act do not constitute any part of the law.

NEW SECTION. Sec. 19. Sections 1 through 13, 16, and 17 of this act constitute a new chapter in Title 42 RCW.

NEW SECTION. Sec. 20. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 21. This act shall take effect January 1, 1997.