BILL REQ. #:  H-3534.2 

Read first time 01/21/2004.   Referred to Committee on State Government.

     AN ACT Relating to government accountability; amending RCW 43.88.090 and 44.28.083; adding a new section to chapter 44.04 RCW; adding a new section to chapter 44.28 RCW; and creating new sections.

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

NEW SECTION.  Sec. 1   The legislature finds that: (1) Public confidence in government is essential. Public programs must continuously improve in quality, efficiency, and effectiveness in order to increase public trust;
     (2) Washington state government and other entities that receive tax dollars must continuously improve the way they operate and deliver services so citizens receive maximum value for their tax dollars;
     (3) State government must establish priorities for the delivery of governmental services and continually reassess the ability of state agencies, departments, programs, and activities to contribute to those priorities. The highest priority programs must be evaluated to determine if they are operating at maximum efficiency and effectiveness, while the lowest priority programs must be assessed to determine their continued relevance and viability;
     (4) Fair, independent, professional performance audits of state agencies are essential to improving the efficiency and effectiveness of government.

NEW SECTION.  Sec. 2   (1) The legislature finds that the highest priority functions of state government serve the following objectives:
     (a) Improve student achievement in elementary, middle, and high schools;
     (b) Improve the quality and productivity of, and respect for, the state's work force, including consideration of competitive compensation, realistic workloads, and recruitment and retention;
     (c) Improve the value of a state college or university education;
     (d) Improve the health of the state's citizens;
     (e) Improve the security of the state's vulnerable children and adults;
     (f) Improve the economic vitality of businesses and individuals;
     (g) Improve statewide mobility of people, goods, information, and energy;
     (h) Improve the safety of people and property;
     (i) Improve the quality of the state's natural resources;
     (j) Improve cultural and recreational opportunities throughout the state; and
     (k) Improve the overall efficiency and effectiveness of the operations of state government.
     (2) These priority functions of state government identified in this section shall form the basis of the management reviews identified under RCW 43.88.090.

Sec. 3   RCW 43.88.090 and 1997 c 372 s 1 are each amended to read as follows:
     (1) For purposes of developing budget proposals to the legislature, the governor shall have the power, and it shall be the governor's duty, to require from proper agency officials such detailed estimates and other information in such form and at such times as the governor shall direct. The estimates for the legislature and the judiciary shall be transmitted to the governor and shall be included in the budget without revision. The estimates for state pension contributions shall be based on the rates provided in chapter 41.45 RCW. Copies of all such estimates shall be transmitted to the standing committees on ways and means of the house and senate at the same time as they are filed with the governor and the office of financial management.
     The estimates shall include statements or tables which indicate, by agency, the state funds which are required for the receipt of federal matching revenues. The estimates shall be revised as necessary to reflect legislative enactments and adopted appropriations and shall be included with the initial biennial allotment submitted under RCW 43.88.110. The estimates must reflect that the agency considered any alternatives to reduce costs or improve service delivery identified in the findings of a performance audit of the agency by the joint legislative audit and review committee. Nothing in this subsection requires performance audit findings to be published as part of the budget.
     (2) Each state agency shall define its mission and establish measurable goals for achieving desirable results for those who receive its services and the taxpayers who pay for those services. Each agency shall also develop clear strategies and timelines to achieve its goals. This section does not require an agency to develop a new mission or goals in place of identifiable missions or goals that meet the intent of this section. The mission and goals of each agency must conform to statutory direction and limitations.
     (3) For the purpose of assessing program performance, each state agency shall establish program objectives for each major program in its budget. The objectives must be consistent with the missions and goals developed under this section. The objectives must be expressed to the extent practicable in outcome-based, objective, and measurable form unless an exception to adopt a different standard is granted by the office of financial management and approved by the legislative committee on performance review. The office of financial management shall provide necessary professional and technical assistance to assist state agencies in the development of strategic plans that include the mission of the agency and its programs, measurable goals, strategies, and performance measurement systems.
     (4) Each state agency shall adopt procedures for continuous self-assessment of each program and activity, using the mission, goals, objectives, and measurements required under subsections (2) and (3) of this section.
     (5) It is the policy of the legislature that each agency's budget proposals must be directly linked to the agency's stated mission and program goals and objectives as related to the priorities of government. Consistent with this policy, agency budget proposals must include integration of performance measures that allow objective determination of a program's success in achieving its goals. The office of financial management shall ((develop a plan to)) merge the budget development process with agency performance assessment procedures and management reviews under subsection (6) of this section. ((The plan must include a schedule to integrate agency strategic plans and performance measures into agency budget requests and the governor's budget proposal over three fiscal biennia. The plan must identify those agencies that will implement the revised budget process in the 1997-1999 biennium, the 1999-2001 biennium, and the 2001-2003 biennium.)) In consultation with the legislative fiscal committees, the office of financial management shall recommend statutory and procedural modifications to the state's budget, accounting, and reporting systems to facilitate the performance assessment procedures and the merger of those procedures with the state budget process. ((The plan and recommended statutory and procedural modifications must be submitted to the legislative fiscal committees by September 30, 1996.))
     (6) The governor and the governor's executive cabinet shall develop a performance measurement system and conduct coordinated quarterly and annual management reviews of state agencies, departments, programs, and activities as related to the priorities of government using that system. The reviews shall include, but are not limited to, an assessment of cost measures, including unit cost where appropriate, quality measures, productivity measures, outcome measures, efficiency measures, timeliness of delivery of services, and comparative benchmarks.
     (7) The governor shall forward these management reviews to the legislative fiscal committees and the joint legislative audit and review committee and the appropriate sections of the reviews to the relevant policy committees of the legislature by January 1st of each year.
     (8) In the year of the gubernatorial election, the governor shall invite the governor-elect or the governor-elect's designee to attend all hearings provided in RCW 43.88.100; and the governor shall furnish the governor-elect or the governor-elect's designee with such information as will enable the governor-elect or the governor-elect's designee to gain an understanding of the state's budget requirements. The governor-elect or the governor-elect's designee may ask such questions during the hearings and require such information as the governor-elect or the governor-elect's designee deems necessary and may make recommendations in connection with any item of the budget which, with the governor-elect's reasons therefor, shall be presented to the legislature in writing with the budget document. Copies of all such estimates and other required information shall also be submitted to the standing committees on ways and means of the house and senate.

NEW SECTION.  Sec. 4   A new section is added to chapter 44.04 RCW to read as follows:
     All fiscal and policy committees of the legislature and the joint legislative audit and review committee shall receive copies of the quarterly and annual management review reports issued by the governor and the office of financial management under RCW 43.88.090. The fiscal committees of the legislature shall consider these management review reports when developing the operating, capital, and transportation budgets, and when developing revenue strategies. The policy committees of the legislature shall consider the relevant sections of these management review reports when developing policy for the state and shall make recommendations to the fiscal committees for appropriation of state funds that are consistent with state policy priorities. These recommendations shall focus on the integration of capital and operating expenditures and the alignment of appropriations with the state policy priorities.

NEW SECTION.  Sec. 5   A new section is added to chapter 44.28 RCW to read as follows:
     (1) The joint legislative audit and review committee shall review the performance and outcome measures of selected state agencies, departments, programs, and activities and the executive branch's performance management review and the metrics utilized by that system. The purpose of these performance measure reviews is to ensure that the legislature has the means to adequately and accurately assess the performance of those agencies, departments, programs, and activities and the outcomes of their performance. 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, loans, and vendor rates.
     (2) In conducting these reviews, the joint committee shall consult with the office of financial management and other state agencies. 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 work plan and common methodology for conducting these periodic reviews, which shall be accomplished in five-year cycles. In setting the work plan and the extent of these performance measure 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 remedial action taken by an agency or department, the executive branch's quarterly and annual management review reports, the adequacy of existing additional performance and outcome measures used by an agency, department, program, or activity, and the desirability of including a diverse range of agencies each year. The reviews may include, but are not limited to:
     (a) A determination of whether the executive branch's performance management system and the performance and outcome measures are consistent with legislative mandates, as well as agency strategic plans, mission statements, and goals and objectives;
     (b) A determination of whether the legislature has established clear mandates and policy directions that lend themselves to performance and outcome measurement;
     (c) An examination of how agency management uses the measures to manage resources efficiently and effectively;
     (d) An assessment of how the agency uses performance benchmarks for the purpose of assessing program or agency performance compared to external standards and benchmarks;
     (e) An examination of how performance and outcome measures are used to make planning and operational improvements;
     (f) 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;
     (g) An assessment of whether the performance and outcome measures 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. Published performance measure reviews shall be made available to the public through the joint 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.
     (5) Based on performance measure reviews authorized by subsection (1) of this section, and on priorities of the executive branch's quarterly and annual management review reports, authorized by RCW 43.88.090, the legislative auditor shall recommend full performance audits of specific agencies or departments, or specific programs or activities, within an agency or department, and publicly post those recommendations. The joint committee shall solicit input from the public to decide whether and how to proceed with a full performance audit. If the committee decides by a majority vote that a full performance audit of an agency or department, a specific program or activity within an agency or department, or multiple agencies is appropriate, the committee shall add that audit to its biennial performance audit work plan under RCW 44.28.080 and 44.28.083.
     (6) When conducting a full performance audit of an agency or department, or a specific program or activity within an agency or department, or multiple agencies, in accordance with subsection (5) of this section, the joint committee shall solicit input from appropriate representatives and experts in the field that is the subject of an audit. The joint committee shall make recommendations regarding the continuation, abolition, consolidation, or reorganization of each affected agency, department, program, or activity. The joint committee shall identify opportunities to develop government partnerships, and eliminate redundancies to improve the quality, effectiveness, and efficiency of state government.

Sec. 6   RCW 44.28.083 and 1996 c 288 s 12 are each amended to read as follows:
     (1) During the regular legislative session of each odd-numbered year, beginning with 1997, the joint legislative audit and review committee shall develop and approve a performance audit work plan for the subsequent sixteen to twenty-four-month period and an overall work plan that identifies state agency programs for which formal evaluation appears necessary. Among the factors to be considered in preparing the work plans are:
     (a) The results of the committee's reviews of the performance and outcome measures of selected state agencies, departments, programs, and activities as required by section 5 of this act, and the executive branch's quarterly and annual management review reports;
     (b) Whether a program newly created or significantly altered by the legislature warrants continued oversight because (i) the fiscal impact of the program is significant, or (ii) the program represents a relatively high degree of risk in terms of reaching the stated goals and objectives for that program;
     (((b))) (c) Whether implementation of an existing program has failed to meet its goals and objectives by any significant degree; and
     (((c))) (d) Whether a follow-up audit would help ensure that previously identified recommendations for improvements were being implemented.
     (2) The project description for each performance audit must include start and completion dates, the proposed approach, and cost estimates.
     (3) The legislative auditor may consult with the chairs and staff of appropriate legislative committees, the state auditor, and the director of financial management in developing the performance audit work plan.
     (4) The performance audit work plan and the overall work plan may include proposals to employ contract resources. As conditions warrant, the performance audit work plan and the overall work plan may be amended from time to time. All performance audit work plans shall be transmitted to the appropriate fiscal and policy committees of the senate and the house of representatives no later than the sixtieth day of the regular legislative session of each odd-numbered year, beginning with 1997. All overall work plans shall be transmitted to the appropriate fiscal and policy committees of the senate and the house of representatives.