[atlas:bill]

AN ACT Relating to performance audits; adding new sections to chapter 43.09 RCW; and making an appropriation.

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.

Washington state's economic and competitive position in the world and in the United States has a direct correlation to having efficient management and oversight functions of state government. Inefficient and wasteful government operations place an unacceptable burden on the ability of Washington state to compete. The use of performance audits to identify improvements and grade government operations will increase business competitiveness, reduce tax burdens, improve unwieldy regulatory oversight, and increase the success of all businesses, large and small, in the highly competitive marketplace.

The intent of this act is to create the governor's performance audit standards and scorecard commission. A strong, objective, and independent commission is necessary to develop, oversee, and direct a performance audit system for all government to ensure that 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 shall facilitate, teach, motivate, and direct all organizations to develop the management expertise to continuously improve through self-audit.

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 shall be appointed by the governor. The governor shall ask for nominations of individuals who demonstrate knowledge and expertise in auditing, performance management, quality management, or a closely related field. Nominations shall be sought from professional auditing, financial management, quality management, and business management groups, associations, and businesses. The governor shall select nine individuals from the list of nominations and appoint a chair and a vice-chair. The state auditor shall provide the staff and resources necessary for implementing sections 1 through 5 of this act.

(2) Appointed members shall serve for terms of four years, with the terms expiring on June 30th on the fourth year of the term. However, in the case of the initial members, four members shall serve four-year terms, three members shall serve three-year terms, and two members shall serve two-year terms, with each of the terms expiring on June 30th of the applicable year. Appointees may be reappointed to serve more than one term.

(3) Nonlegislative 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. Legislative members of the commission shall be reimbursed in accordance with RCW 44.04.120.

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. 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. Audit criteria shall be distributed at least six weeks before an audit;

(2) Conducting performance audits of state agencies and institutions of higher education;

(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 November 30th of each year;

(4) Conducting post audits on all audit findings and tracking agency implementation of suggested corrective action;

(5) Providing and approving grants to agencies for the purpose of implementing corrective actions; and

(6) Forming a committee to collect, disseminate, and share best practices to state agencies and institutions of higher education.

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

For purposes of sections 1 through 6 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 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:

The governor's performance audit standards and scorecard commission shall conduct performance audits or may contract performance audits to public or private independent professional and technical experts qualified to conduct performance audits.

NEW SECTION. Sec. 6. A new section is added to chapter 43.09 RCW to read as follows:

As established in sections 3 through 5 of this act, the state auditor may conduct performance audits by the governor's performance audit standards and scorecard commission.

NEW SECTION. Sec. 7. The sum of one million dollars, or as much thereof as may be necessary, is appropriated from the general fund to the state auditor for the fiscal year ending June 30, 2003, solely for costs associated with the governor's performance audit standards and scorecard commission.