BILL REQ. #:  H-0757.1 

Read first time 01/17/2003.   Referred to Committee on Transportation.

     AN ACT Relating to performance audits of transportation-related agencies; amending RCW 44.28.005, 44.28.088, and 44.28.091; adding new sections to chapter 44.28 RCW; and creating a new section.

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

NEW SECTION.  Sec. 1   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 transportation accountability process must be established to provide oversight and accountability of transportation-related agencies. The transportation review and audit committee is created within the joint legislative audit and review committee.

Sec. 2   RCW 44.28.005 and 1996 c 288 s 2 are each amended to read as follows:
     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
     (1) "Legislative auditor" means the executive officer of the joint legislative audit and review committee.
     (2) "Economy and efficiency audits" means performance audits that establish: (a) Whether a state agency or unit of local government receiving state funds is acquiring, protecting, and using its resources such as personnel, property, and space economically and efficiently; (b) the causes of inefficiencies or uneconomical practices; and (c) whether the state agency or local government has complied with significant laws and rules in acquiring, protecting, and using its resources.
     (3) "Final compliance report" means a written document, as approved by the joint committee, that states the specific actions a state agency or unit of local government receiving state funds has taken to implement recommendations contained in the final performance audit report and the preliminary compliance report. Any recommendations, including proposed legislation and changes in the agency's rules and practices or the local government's practices, based on testimony received, must be included in the final compliance report.
     (4) "Final performance audit report" means a written document adopted by the joint legislative audit and review committee that contains the findings and proposed recommendations made in the preliminary performance audit report, the final recommendations adopted by the joint committee, any comments to the preliminary performance audit report by the joint committee, and any comments to the preliminary performance audit report by the state agency or local government that was audited.
     (5) "Joint committee" means the joint legislative audit and review committee.
     (6) "Local government" means a city, town, county, special purpose district, political subdivision, municipal corporation, or quasi-municipal corporation, including a public corporation created by such an entity.
     (7) "Performance audit" means an objective and systematic assessment of a state agency or any of its programs, functions, or activities, or a unit of local government receiving state funds, by an independent evaluator in order to help public officials improve efficiency, effectiveness, and accountability. Performance audits include economy and efficiency audits and program audits. A performance audit of a local government may only be made to determine whether the local government is using state funds for their intended purpose in an efficient and effective manner.
     (8) "Performance measures" are a composite of key indicators of a program's or activity's inputs, outputs, outcomes, productivity, timeliness, and/or quality. They are means of evaluating policies and programs by measuring results against agreed upon program goals or standards.
     (9) "Preliminary compliance report" means a written document that states the specific actions a state agency or unit of local government receiving state funds has taken to implement any recommendations contained in the final performance audit report.
     (10) "Preliminary performance audit report" means a written document prepared for review and comment by the joint legislative audit and review committee after the completion of a performance audit. The preliminary performance audit report must contain the audit findings and any proposed recommendations to improve the efficiency, effectiveness, or accountability of the state agency or local government audited.
     (11) "Program audits" means performance audits that determine: (a) The extent to which desired outcomes or results are being achieved; (b) the causes for not achieving intended outcomes or results; and (c) compliance with significant laws and rules applicable to the program.
     (12) "State agency" or "agency" means a state agency, department, office, officer, board, commission, bureau, division, institution, or institution of higher education. "State agency" includes all elective offices in the executive branch of state government.
     (13) "Transportation review and audit committee" means the committee created under section 3 of this act.

NEW SECTION.  Sec. 3   A new section is added to chapter 44.28 RCW to read as follows:
     The transportation review and audit committee is created, consisting of four senators and four representatives from the legislature. The president of the senate shall appoint the senate members of the committee, and must include the chairperson and ranking minority member of the senate standing committee on transportation. The speaker of the house of representatives shall appoint the house members of the committee, and must include the chairperson and ranking minority member of the house standing committee on transportation. Not more than two members from each house may be from the same political party. Members must be appointed before the close of each regular session of the legislature during an odd-numbered year. If before the close of a regular session during an odd-numbered year, the governor issues a proclamation convening the legislature into special session, or the legislature by resolution convenes the legislature into special session after the regular session, then appointments must be made as a matter of closing business of the special session.

NEW SECTION.  Sec. 4   A new section is added to chapter 44.28 RCW to read as follows:
     The procedures for terms of members, filling vacancies, and travel and committee expenses for the transportation review and audit committee must be consistent with RCW 44.28.020 through 44.28.050.

NEW SECTION.  Sec. 5   A new section is added to chapter 44.28 RCW to read as follows:
     The staffing and administration for the transportation review and audit committee must be provided under the direction of the joint legislative audit and review committee. The legislative auditor may hire a professional administrator and other staff necessary to support the transportation review and audit committee.

NEW SECTION.  Sec. 6   A new section is added to chapter 44.28 RCW to read as follows:
     (1) The transportation review and audit committee shall conduct performance audits of transportation-related agencies. For the 2003-2005 biennium, the projects, programs, services, and administration of the department of transportation will be the focus of performance audits. The committee must develop a work plan in future biennia that extends performance audits to other transportation-related agencies and providers.
     (2) The transportation review and audit committee shall develop a work plan to conduct performance audits required under subsection (1) of this section. The committee shall determine the scope of the audits and establish timelines for completing audits. The legislative auditor may contract with and consult with public and private independent professional and technical experts as necessary in conducting the performance audits. The legislative auditor should also involve front-line employees and internal auditors in the performance audit process to the highest possible degree.

Sec. 7   RCW 44.28.088 and 1996 c 288 s 13 are each amended to read as follows:
     (1) When the legislative auditor has completed a performance audit authorized in the performance audit work plan, the legislative auditor shall transmit the preliminary performance audit report to the affected state agency or local government and the office of financial management for comment. The agency or local government and the office of financial management shall provide any response to the legislative auditor within thirty days after receipt of the preliminary performance audit report unless a different time period is approved by the joint committee. The legislative auditor shall incorporate the response of the agency or local government and the office of financial management into the final performance audit report.
     (2) Before releasing the results of a performance audit to the legislature or the public, the legislative auditor shall submit the preliminary performance audit report to the joint committee for its review, comments, and final recommendations. Any comments by the joint committee must be included as a separate addendum to the final performance audit report. Upon consideration and incorporation of the review, comments, and recommendations of the joint committee, the legislative auditor shall transmit the final performance audit report to the affected agency or local government, the director of financial management, the leadership of the senate and the house of representatives, and the appropriate standing committees of the house of representatives and the senate and shall publish the results and make the report available to the public. For purposes of this section, "leadership of the senate and the house of representatives" means the speaker of the house, the majority leaders of the senate and the house of representatives, the minority leaders of the senate and the house of representatives, the caucus chairs of both major political parties of the senate and the house of representatives, and the floor leaders of both major political parties of the senate and the house of representatives.
     (3) Subsections (1) and (2) of this section apply to audits performed under the direction of the transportation review and audit committee.

Sec. 8   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 produce a preliminary compliance report on the agency's or local government's compliance with the final performance audit recommendations. The agency or local government may attach its comments to the joint committee's preliminary compliance report as a separate addendum.
     (2) Within three months after the issuance of the preliminary compliance report, the joint committee may hold at least one public hearing 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. The joint committee shall issue any final compliance report within four weeks after the public hearing or hearings. 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.
     (3) Subsections (1) and (2) of this section apply to audits performed under the direction of the transportation review and audit committee.