[atlas:bill]

AN ACT Relating to performance audits; adding new sections to chapter 43.09 RCW; making an appropriation; and providing for submission of this act to a vote of the people.

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

NEW SECTION. Sec. 1. A new section is added to chapter 43.09 RCW to read as follows:

The legislature finds that public confidence in government at all levels is essential and that programs to improve quality, efficiency, and effectiveness of public functions must be enhanced.

The intent of this act is to create the governor's performance audit standards and scorecard commission and a process for accomplishing audits and improving results. A strong, objective, and independent commission is necessary to develop, oversee, and direct a performance management audit system for all government to ensure that all government-funded entities accomplish intended goals and are world class in management, program outcomes, customer satisfaction, and efficiency. The governor's performance audit standards and scorecard commission should facilitate, educate, direct, motivate, and monitor all government entities to develop the management expertise to continuously improve through internal audit and management leadership.

NEW SECTION. Sec. 2. A new section is added to chapter 43.09 RCW to read as follows:

The governor's performance audit standards and scorecard commission is established.

(1) Commission members are the governor, the state auditor, the secretary of state, and eight appointed members as follows:

(a) Two members from the senate, one from each major caucus, selected by caucus leadership;

(b) Two members from the house of representatives, one from each major caucus, selected by caucus leadership;

(c) Four citizen members, two appointed by the governor, one appointed by the secretary of state, and one appointed by the state auditor. The citizen members shall demonstrate professional knowledge and expertise in performance management, quality management, auditing, or a closely related field.

(2) The office of financial management shall provide the staff and resources necessary for implementing sections 1 through 5 of this act.

(3) Appointed citizen members shall serve for staggered terms of four years, with the terms expiring on June 30th on the fourth year of the term. Other members shall serve terms of two years, with the terms expiring on December 31st of the second year. Appointed members may serve more than one term.

(4) The members of the commission shall be compensated in accordance with RCW 43.03.220 and reimbursed for travel expenses under RCW 43.03.050 and 43.03.060.

NEW SECTION. Sec. 3. A new section is added to chapter 43.09 RCW to read as follows:

Duties of the governor's performance audit standards and scorecard commission include:

(1) Developing criteria for performance excellence and a scoring system for grading overall agency performance. Audit criteria shall be distributed at least six weeks before an audit. In developing criteria and a scoring system, the commission shall consult with and seek input from elected officials and professionals with a background in performance management. The governor's performance audit standards and scorecard commission shall consider already developed best practices or audit criteria used by government or nongovernment organizations. Criteria shall be distributed at least one year before an audit;

(2) Conducting performance audits of state agencies, local governments, institutions of higher education, and public and private entities that contract with the state or receive grants from the state;

(3) Releasing audit results to the public and providing public recognition for outstanding effort. The governor's performance audit standards and scorecard commission must report audit results to the legislature by January 10th of each year;

(4) Evaluating all audit findings and identifying opportunities to eliminate program duplications or redundancies and tracking agency implementation of suggested corrective action;

(5) Providing and approving grants to agencies and government entities for the purpose of planning and measuring corrective actions;

(6) Forming a committee to collect, disseminate, and share best practices to state agencies, local governments, institutions of higher education, private entities that have state contracts or grants, and other interested parties;

(7) Developing a strategic implementation plan for a phased-in audit schedule, and reporting it to the legislature; and

(8) Contracting a performance audit of the governor's performance audit standards and scorecard commission by a private professional.

NEW SECTION. Sec. 4. A new section is added to chapter 43.09 RCW to read as follows:

For purposes of sections 1 through 5 of this act, "performance audit" means an objective systematic assessment, survey, or directed self-assessment of state government or any of its agencies, programs, functions, or activities in order to help public officials demonstrate public accountability. Performance audits include, but are not limited to: (1) Quality and process management practices; (2) independent and effective internal audit functions; (3) internal and external customer satisfaction; (4) program and periodic program reviews; (5) financial and fiscal productivity and efficiency; and (6) regulatory and procedural compliance.

NEW SECTION. Sec. 5. A new section is added to chapter 43.09 RCW to read as follows:

(1) The governor's performance audit standards and scorecard commission may contract performance audits to public or private independent professional and technical experts qualified to conduct performance audits or may conduct performance audits using office of financial management staff, where appropriate.

(2) The office of financial management may conduct performance audits by the governor's performance audit standards and scorecard commission.

NEW SECTION. Sec. 6. The sum of one million dollars, or as much thereof as may be necessary, is appropriated from the general fund to the office of financial management for the fiscal year ending June 30, 2003, solely for costs associated with the governor's performance audit standards and scorecard commission.

NEW SECTION. Sec. 7. The secretary of state shall submit this act to the people for their adoption and ratification, or rejection, at the next general election to be held in this state, in accordance with Article II, section 1 of the state Constitution and the laws adopted to facilitate its operation.