H-2157

AN ACT Relating to performance audits; amending RCW 43.88.090 and 44.28.091; and creating a new section.

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

NEW SECTION. Sec. 1. The legislature finds that it is important to maintain public confidence in the various legislative oversight processes, and that this confidence will be enhanced by the establishment of a uniform procedure for compliance reviews of performance audits. Such a uniform procedure will help ensure that compliance reviews of performance audits are conducted, that they will be conducted in an even-handed manner, and that there will be greater opportunities for citizens to provide input regarding how well they are being served by their government.

The legislature also finds that performance audit findings may include the identification of potential cost savings and ways to improve service delivery. The legislature recognizes that these findings can be very meaningful when agencies are developing their budget estimates. The legislature strongly believes that agencies should consider these potential methods for becoming more efficient and effective when developing their budget estimates. Therefore, it is the intent of the legislature to require preliminary compliance reviews of performance audits and to require performance audit recommendations to be considered by agencies when they are preparing their budget estimates.

Sec. 2. RCW 43.88.090 and 1996 c 317 s 10 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. The estimates must reflect that the agency considered any alternatives to reduce costs or improve service delivery identified in the findings of a performance audit of the agency by the legislative auditor of the office of the joint legislative audit and review committee. Nothing in this subsection requires performance audit findings to be published as part of the budget.

(2) Each state agency shall define its mission and establish measurable goals for achieving desirable results for those who receive its services and the taxpayers who pay for those services. Each agency shall also develop clear strategies and timelines to achieve its goals. This section does not require an agency to develop a new mission or goals in place of identifiable missions or goals that meet the intent of this section. The mission and goals of each agency must conform to statutory direction and limitations.

(3) For the purpose of assessing program performance, each state agency shall establish program objectives for each major program in its budget. The objectives must be consistent with the missions and goals developed under this section. The objectives must be expressed to the extent practicable in outcome-based, objective, and measurable form unless an exception to adopt a different standard is granted by the office of financial management and approved by the legislative committee on performance review. The office of financial management shall provide necessary professional and technical assistance to assist state agencies in the development of strategic plans that include the mission of the agency and its programs, measurable goals, strategies, and performance measurement systems.

(4) Each state agency shall adopt procedures for continuous self-assessment of each program and activity, using the mission, goals, objectives, and measurements required under subsections (2) and (3) of this section.

(5) It is the policy of the legislature that each agency's budget proposals must be directly linked to the agency's stated mission and program goals and objectives. Consistent with this policy, agency budget proposals must include integration of performance measures that allow objective determination of a program's success in achieving its goals. The office of financial management shall develop a plan to merge the budget development process with agency performance assessment procedures. The plan must include a schedule to integrate agency strategic plans and performance measures into agency budget requests and the governor's budget proposal over three fiscal biennia. The plan must identify those agencies that will implement the revised budget process in the 1997-1999 biennium, the 1999-2001 biennium, and the 2001-2003 biennium. In consultation with the legislative fiscal committees, the office of financial management shall recommend statutory and procedural modifications to the state's budget, accounting, and reporting systems to facilitate the performance assessment procedures and the merger of those procedures with the state budget process. The plan and recommended statutory and procedural modifications must be submitted to the legislative fiscal committees by September 30, 1996.

(6) 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. 3. RCW 44.28.091 and 1996 c 288 s 14 are each amended to read as follows:

(1) No later than nine months after the final performance audit has been transmitted by the joint committee to the appropriate standing committees of the house of representatives and the senate, the ((~~joint committee in consultation with the standing committees may~~)) agency or local government shall produce a preliminary compliance report on ((~~the agency's or local government's~~)) its compliance with the final performance audit recommendations and submit it to the joint committee. ((~~The agency or local government may attach its comments to the joint committee's preliminary compliance report as a separate addendum.~~)) The agency or local government shall provide the joint committee updates to the preliminary compliance report every three months until the joint committee determines that the agency or local government has complied with the final performance audit recommendations to the joint committee's satisfaction.

(2) ((~~Within three months after the issuance of the preliminary compliance report,~~)) The joint committee may hold ((~~at least one~~)) public hearings and receive public testimony ((regarding the findings and recommendations contained in the preliminary compliance report. The joint committee may waive the public hearing requirement if the preliminary compliance report demonstrates that the agency or local government is in compliance with the audit recommendations)) if the agency or local government is not making satisfactory progress in achieving compliance. The joint committee shall issue ((~~any~~)) a final compliance report ((~~within four weeks after the public hearing or hearings~~)) after an agency or local government has satisfactorily complied with the final audit recommendations. The legislative auditor shall transmit the final compliance report in the same manner as a final performance audit is transmitted under RCW 44.28.088.