BILL REQ. #:  H-1048.1 

READ FIRST TIME 01/31/03.   

     AN ACT Relating to performance audits of transportation-related agencies; adding a new section to chapter 44.40 RCW; adding a new chapter to Title 44 RCW; creating a new section; and declaring an emergency.

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

NEW SECTION.  Sec. 1   INTENT. It is essential that the legislature improve the accountability and efficiency of transportation-related agencies. Taxpayers must know that their tax dollars are being well spent to deliver critically needed transportation projects and services. To accomplish this, a system of transportation performance audits must be established to provide oversight and accountability of transportation-related agencies.

NEW SECTION.  Sec. 2   DEFINITIONS. The definitions in this section apply throughout this chapter.
     (1) "Economy and efficiency audit" has the meaning contained in chapter 44.28 RCW.
     (2) "Joint legislative audit and review committee" means the agency created in chapter 44.28 RCW, or its statutory successor.
     (3) "Legislative auditor" has the meaning contained in chapter 44.28 RCW.
     (4) "Legislative transportation committee" means the agency created in chapter 44.40 RCW, or its statutory successor.
     (5) "Performance audit" has the meaning contained in chapter 44.28 RCW.
     (6) "Performance review" means an outside evaluation of how a state agency uses its performance measures to assess the outcomes of its legislatively authorized activities.
     (7) "Program audit" has the meaning contained in chapter 44.28 RCW.
     (8) "Transportation-related agencies" means any agency, board, or commission that receives funding for transportation-related purposes.

NEW SECTION.  Sec. 3   REVIEWS OF TRANSPORTATION-RELATED AGENCIES.
(1) The joint legislative audit and review committee, in consultation with the legislative transportation committee, shall review the performance and outcome measures of transportation-related agencies. The purpose of these reviews is to ensure that the legislature has the means to adequately and accurately assess the performance and outcomes of those agencies and departments. Where two or more agencies have shared responsibility for functions or priorities of government, these reviews can also determine whether effective interagency cooperation and collaboration occurs in areas such as program coordination, administrative structures, information systems, and administration of grants and loans.
     (2) In conducting these reviews, the joint legislative audit and review committee shall work in consultation with the legislative transportation committee, as directed in subsection (1) of this section, the office of financial management, and other state agencies.

NEW SECTION.  Sec. 4   AUTHORIZATION TO RETAIN PROFESSIONAL EXPERTISE. (1) To the greatest extent possible, the legislative auditor shall contract with and consult with private independent professional and technical experts to optimize the independence of the reviews and performance audits. In determining the need to contract with private experts, the legislative auditor shall consider the degree of difficulty of the review or audit, the relative cost of contracting for expertise, and the need to maintain auditor independence from the subject agency or program.
     (2) The joint legislative audit and review committee may solicit the expertise of the state auditor in conducting reviews of transportation-related agencies.

NEW SECTION.  Sec. 5   REVIEW METHODOLOGY. (1) The joint legislative audit and review committee shall develop a schedule and common methodology for conducting these reviews. The performance and outcome measures of each agency or department must be reviewed at least every five years. In setting the schedule and the extent of these performance reviews, the joint legislative audit and review committee shall consider the timing and results of other recent state, federal, and independent reviews and audits, the seriousness of past findings, any inadequate remedial action taken by an agency or department, whether an agency or department lacks performance and outcome measures, and the desirability to include a diverse range of agencies or programs each year.
     (2) The legislative transportation committee must review and approve the schedule and methodology for conducting the performance review of transportation-related agencies.

NEW SECTION.  Sec. 6   SCOPE OF REVIEWS. The reviews must include at least:
     (1) A determination of whether the performance and outcome measures are consistent with legislative mandates, strategic plans, mission statements, and goals and objectives, and whether the legislature has established clear mandates, strategic plans, mission statements, and goals and objectives that lend themselves to performance and outcome measurement;
     (2) An examination of how agency management uses the measures to manage resources in an efficient and effective manner;
     (3) An assessment of how performance benchmarks are established for the purpose of assessing overall performance compared to external standards and benchmarks;
     (4) An examination of how an analysis of the measurement data is used to make planning and operational improvements;
     (5) A determination of how performance and outcome measures are used in the budget planning, development, and allotment processes and the extent to which the agency is in compliance with its responsibilities under RCW 43.88.090;
     (6) A review of how performance data are reported to and used by the legislature both in policy development and resource allocation;
     (7) An assessment of whether the performance measure data are reliable and collected in a uniform and timely manner;
     (8) A determination whether targeted funding investments and established priorities of government actually produce the intended and expected services and benefits; and
     (9) Recommendations as necessary or appropriate.

NEW SECTION.  Sec. 7   PRESENTATION AND PUBLICATION OF PERFORMANCE REVIEWS. Completed performance measure reviews must be presented to the legislative transportation committee and the joint legislative audit and review committee, and published in the same manner as prescribed for performance audits in RCW 44.28.088. Published performance reviews must be made available to the public through the joint legislative audit and review committee's web site and through customary public communications. Final reports must also be transmitted to the appropriate policy and fiscal standing committees of the legislature.

NEW SECTION.  Sec. 8   PERFORMANCE AUDITS--DETERMINATION OF NECESSITY. After reviewing the performance or outcome measures of an agency or department, the legislative transportation committee shall recommend whether a full performance audit of the agency or department, or a specific program within the agency or department, is appropriate, and publicly post those recommendations. The legislative transportation committee shall solicit input from the public at a subsequent hearing to decide whether and how to proceed with a full performance audit. If the legislative transportation committee decides by a majority vote that a full performance audit of an agency or department, a specific program within an agency or department, or multiple agencies is appropriate, the legislative transportation committee shall direct the joint legislative audit and review committee to add that audit to its biennial performance audit work plan under RCW 44.28.080 and 44.28.083.

NEW SECTION.  Sec. 9   CONTENTS OF AUDIT REPORT. When conducting a full performance audit of an agency or department, or a specific program within an agency or department, or multiple agencies, in accordance with section 10 of this act, the legislative auditor shall solicit input from appropriate industry representatives or experts. The audit report must make recommendations regarding the continuation, abolition, consolidation, or reorganization of each affected agency, department, or program. The audit report must identify opportunities to develop government partnerships, and eliminate program redundancies that will result in increased quality, effectiveness, and efficiency of state agencies.

NEW SECTION.  Sec. 10   SCOPE OF PERFORMANCE AUDIT. The legislative auditor shall determine in writing the scope of the performance audit. The joint legislative audit and review committee and the legislative transportation committee must review and approve the final scope of the audit. Before approving the final scope of the performance audit, the legislative auditor, the joint legislative audit and review committee, and the legislative transportation committee shall consider inclusion of the following elements in the scope of the audit:
     (1) Identification of potential cost savings in the agency, its programs, and its services;
     (2) Identification and recognition of best practices;
     (3) Identification of funding to the agency, to programs, and to services that can be eliminated or reduced;
     (4) Identification of programs and services that can be eliminated, reduced, or transferred to the private sector;
     (5) Analysis of gaps and overlaps in programs and services and recommendations for improving, dropping, blending, or separating functions to correct gaps or overlaps;
     (6) Analysis and recommendations for pooling information technology systems;
     (7) Analysis of the roles and functions of the agency, its programs, and its services and their compliance with statutory authority and recommendations for eliminating or changing those roles and functions and ensuring compliance with statutory authority;
     (8) Recommendations for eliminating or changing statutes, rules, and policy directives as may be necessary to ensure that the agency carry out reasonably and properly those functions expressly vested in the department by statute; and
     (9) Verification of the reliability and validity of department performance data, self-assessments, and performance measurement systems as required under RCW 43.88.090.

NEW SECTION.  Sec. 11   The legislative auditor shall take steps to ensure that the department of transportation is the first agency subject to the performance review and audit process established in this chapter.

NEW SECTION.  Sec. 12   A new section is added to chapter 44.40 RCW to read as follows:
     The legislative transportation committee or its successor shall work with the joint legislative audit and review committee to review and audit transportation-related agencies, as directed in chapter 44.-- RCW (sections 1 through 11 of this act).

NEW SECTION.  Sec. 13   Sections 1 through 11 of this act constitute a new chapter in Title 44 RCW.

NEW SECTION.  Sec. 14   Section captions used in this act are not part of the law.

NEW SECTION.  Sec. 15   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately.