BILL REQ. #:  H-0758.1 

Read first time 01/20/2003.   Referred to Committee on State Government.

     AN ACT Relating to performance reviews; amending RCW 44.28.005; adding a new section 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   The legislature finds that the use of performance reviews, as well as outcome and performance measures, is necessary for demonstrating the accountability of state government to the public. The legislature also finds that performance measurement is integral to the efficient and effective management and operation of state agencies and programs, essential to the achievement of effective interagency cooperation and management, and integral to identifying priorities of government for purposes of funding biennial budgets. Thus, the legislature intends to expand its performance reviews to provide greater accountability to the public and to ensure that state government has effective measures for assessing and continuously improving performance. It is the intent of the legislature that outcome and performance measures used by state agencies and programs become a tool for the governor and the legislature in establishing priorities of government and developing biennial budgets.

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) "Performance review" means an outside evaluation of how a state agency uses its performance measures to assess the outcomes of its legislatively authorized activities.
     (10) "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))) (11) "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))) (12) "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))) (13) "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.

NEW SECTION.  Sec. 3   A new section is added to chapter 44.28 RCW to read as follows:
     (1) The joint committee shall review the performance and outcome measures of state agencies and departments that are under the authority of the governor, or under the authority of a board or commission. 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 ensure that 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 committee shall work in cooperation with the office of financial management and state agency personnel. The legislative auditor may contract with and consult with public and private independent professional and technical experts as necessary in conducting the reviews.
     (3) The joint committee shall develop a schedule and common methodology for conducting these reviews. The performance and outcome measures of each agency or department shall be reviewed not less than every five years. In setting the schedule and the extent of these performance reviews, the joint committee shall consider the timing and results of other recent reviews and audits conducted by the joint committee, 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 each year. The reviews shall include, but not be limited to, the following:
     (a) 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;
     (b) An examination of how agency management uses the measures to manage resources in an efficient and effective manner;
     (c) An assessment of how performance benchmarks are established for the purpose of assessing overall performance compared to external standards and benchmarks;
     (d) An examination of how an analysis of the measurement data is used to make planning and operational improvements;
     (e) 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;
     (f) A review of how performance data are reported to and used by the legislature both in policy development and resource allocation;
     (g) An assessment of whether the performance measure data are reliable and collected in a uniform and timely manner; and
     (h) Recommendations as necessary or appropriate.
     (4) Completed performance measure reviews shall be presented to the joint committee and published in the same manner as prescribed for performance audits in RCW 44.28.088. Final reports must also be transmitted to the appropriate policy and fiscal standing committees of the legislature.
     (5) If, after reviewing an agency's or department's performance or outcome measures, the joint committee decides by a majority vote that a full performance audit of the agency or department or multiple agencies or a specific program within an agency or department would be appropriate, the joint committee shall add that audit to its biennial performance audit work plan pursuant to RCW 44.28.080 and 44.28.083.
     (6) 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 subsection (5) of this section, the joint committee shall also make recommendations regarding the continuation, abolition, consolidation, or reorganization of each affected agency, department, or program.