BILL REQ. #:  S-1225.1 

Read first time 02/10/2003.   Referred to Committee on Highways & Transportation.

     AN ACT Relating to transportation-related performance audits; 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, the transportation performance audit board is created and a system of transportation performance audits is 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 performance audit board" or "board" means the board created in section 3 of this act.
     (9) "Transportation-related agencies" means any agency, board, or commission that receives funding for transportation-related purposes.

NEW SECTION.  Sec. 3   BOARD CREATED. (1) The transportation performance audit board is created.
     (2) The board will consist of four legislative members, four citizen members with transportation-related expertise, one ex officio member, and one at large member. The legislative auditor is the ex officio member. The majority and minority leaders of the house and senate transportation committees are the legislative members. The governor shall appoint the at large member to serve for a term of four years. The citizen members must be nominated by professional associations chosen by the board's legislative members and appointed by the governor for terms of four years, except that at least half the initial appointments will be for terms of two years. The citizen members will consist of:
     (a) One member with expertise in construction project planning, including permitting and assuring regulatory compliance;
     (b) One member with expertise in construction means and methods and construction management and administration;
     (c) One member with expertise in construction engineering services, including construction management, materials testing, materials documentation, contractor payments, inspection, surveying, and project oversight; and
     (d) One member with expertise in project management, including design estimating, contract packaging, and procurement.
     (3) The governor may not remove members from the board before the expiration of their terms unless for cause based upon a determination of incapacity, incompetence, neglect of duty, of malfeasance in office by the Thurston county superior court, upon petition and show cause proceedings brought for that purpose in that court and directed to the board member in question.
     (4) No member may be appointed for more than three consecutive terms.

NEW SECTION.  Sec. 4   PROCEDURES, COMPENSATION, SUPPORT. (1) The board shall meet periodically. It may adopt its own rules and may establish its own procedures. It shall act collectively in harmony with recorded resolutions or motions adopted by a majority vote of the members.
     (2) Each member of the board will be compensated from the general appropriation for the legislative transportation committee in accordance with RCW 43.03.250 and reimbursed for actual necessary traveling and other expenses in going to, attending, and returning from meetings of the board or that are incurred in the discharge of duties requested by the chair. However, in no event may a board member be compensated in any year for more than one hundred twenty days, except the chair may be compensated for not more than one hundred fifty days. Service on the board does not qualify as a service credit for the purposes of a public retirement system.
     (3) The board shall keep proper records and is subject to audit by the state auditor or other auditing entities.
     (4) Staff support to the board must be provided by the legislative transportation committee, which shall provide professional support for the duties, functions, responsibilities, and activities of the board, including but not limited to information technology systems; data collection, processing, analysis, and reporting; project management; and office space, equipment, and secretarial support. The legislative evaluation and accountability program will provide data and information technology support consistent with the support currently supplied to existing legislative committees.

NEW SECTION.  Sec. 5   REVIEWS OF TRANSPORTATION-RELATED AGENCIES.
(1) The board may 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 board may work in consultation with the legislative transportation committee, the joint legislative audit and review committee, the office of financial management, and other state agencies.

NEW SECTION.  Sec. 6   PROFESSIONAL EXPERTS. (1) To the greatest extent possible, or when directed by the legislative transportation committee, 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) If directed to contract for performance audit services, the legislative auditor or joint legislative audit and review committee will receive from the legislative transportation committee an interagency reimbursement equal to the cost of the contract.
     (3) The legislative transportation committee must review and approve the methodology for performance audits recommended by the board.

NEW SECTION.  Sec. 7   REVIEW METHODOLOGY. The performance and outcome measures of each agency or department may be reviewed at the discretion of the board. In setting the schedule and the extent of performance reviews, the board 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.

NEW SECTION.  Sec. 8   SCOPE OF REVIEWS. The reviews may include, but are not limited to:
     (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. 9   PRESENTATION AND PUBLICATION OF PERFORMANCE AUDITS. Completed performance audits must be presented to the board, 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 audits 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. 10   PERFORMANCE AUDITS--DETERMINATION OF NECESSITY. After reviewing the performance or outcome measures of an agency or department, or at any time it so determines, the board shall recommend to the legislative transportation committee whether a full performance audit of the agency or department, or a specific program within the agency or department, is appropriate. 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. 11   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 12 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. 12   SCOPE OF PERFORMANCE AUDIT. Under the direction of the board, the legislative auditor shall determine in writing the scope of the performance audit. The board 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 board, 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. 13   The board 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. 14   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 13 of this act).

NEW SECTION.  Sec. 15   Sections 1 through 13 of this act constitute a new chapter in Title 44 RCW.

NEW SECTION.  Sec. 16   Section captions used in this act are not part of the law.

NEW SECTION.  Sec. 17   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.