HOUSE BILL REPORT
ESHB 1064
As Amended by the Senate
Title: An act relating to improving government performance and accountability.
Brief Description: Improving government performance and accountability.
Sponsors: By House Committee on State Government Operations & Accountability (originally sponsored by Representatives Miloscia, Nixon, Haigh, Shabro, Green, Hunt, Priest, Linville, Armstrong, Simpson, Bailey, Kenney, Haler, Springer, Chase, Quall, Murray, Wallace, McDermott, Upthegrove, Kilmer, Moeller, Kessler, Appleton, Williams, McCoy, Blake, Dickerson, Conway, Tom, P. Sullivan, Kagi, Morris, Wood, McIntire, Lantz, Hudgins, Ericks, Darneille, Clibborn, Morrell, Takko, O'Brien, Ormsby, McDonald and B. Sullivan).
Brief History:
State Government Operations & Accountability: 1/18/05, 1/19/05 [DPS].
Floor Activity:
Passed House: 2/2/05, 74-22.
Senate Amended.
Passed Senate: 4/7/05, 30-19.
Brief Summary of Engrossed Substitute Bill |
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HOUSE COMMITTEE ON STATE GOVERNMENT OPERATIONS & ACCOUNTABILITY
Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. Signed by 8 members: Representatives Haigh, Chair; Green, Vice Chair; Nixon, Ranking Minority Member; Clements, Hunt, McDermott, Miloscia and Schindler.
Staff: James Allen/Marsha Reilly (786-7135).
Background:
Various state agencies and programs address government efficiency and accountability.
The Joint Legislative Audit and Review Committee (JLARC) employs the Legislative
Auditor and conducts performance audits, program evaluations, sunset reviews, and other
studies. The State Auditor audits public accounts in state agencies and local governments. In
addition, the State Auditor may conduct performance audits or performance verifications if
authorized to do so in the Budget Act or in JLARC's work plan.
Legislation was enacted in 1996 establishing a performance based budgeting system for state
agencies. Agencies are expected to: (a) establish mission statements and set goals; (b)
develop strategies to achieve goals; (c) set outcome based objectives; (d) provide continuous
self-assessment of each program; (e) link budget proposals with their mission statements and
goals; and (f) objectively determine the success in achieving goals. The Office of Financial
Management (OFM) assists agencies in developing strategic plans.
The Productivity Board was established to administer the employee suggestion program and
the teamwork incentive program. State agencies are authorized to make employee
recognition awards.
Governor Locke issued Executive Order 97-03 in 1997. The executive order directed all
agencies to develop and implement programs to improve the quality, efficiency, and
effectiveness of its public services using quality improvement, business process redesign,
employee involvement, and other quality improvement techniques.
Summary of Engrossed Substitute Bill:
Citizen Oversight Board
A Citizen Advisory Board (Board) is created to improve efficiency, effectiveness, and
accountability in state government. The Board consists of ten members as follows: the State
Auditor, the Legislative Auditor, and the Director of OFM, who are non-voting members,
four citizen members selected by the Governor from a list submitted by each major caucus in
the Senate and the House of Representatives, and three citizen members appointed by the
Governor. Citizen members may not be state employees and must have an understanding of
state government operations and knowledge and expertise in performance management,
quality management, strategic planning, performance assessments, or closely related fields.
The JLARC provides staff support to the Board.
Assessment and Performance Grading
The Board must establish and conduct an annual assessment and performance grading
program of all state agencies on a phased-in schedule. Areas to be assessed include quality
management, productivity and fiscal efficiency, program effectiveness, contract management
and oversight, internal audit, internal and external customer satisfaction, statutory and
regulatory compliance, and technology systems and on-line services. The results of the
annual assessment and grading program will be submitted to the Governor, the appropriate
legislative committees, and the public by December 15 of each year. Results will be posted
on the internet.
Performance Audits
The Board and the State Auditor must work together on performance audits of state
government. Performance audit criteria are established by the Board. Agencies shall be
audited using generally accepted government auditing standards, legislative mandates, and
performance objectives established by state agencies and the legislature. Using these
criteria, the State Auditor will contract for a statewide performance review as a preliminary
step to preparing a draft work plan for conducting performance audits. The review must be
completed in one year from the date of contracting.
In developing the draft work plan, the Board and the State Auditor must seek input from
citizens, state employees including front-line employees, state managers, chairs and ranking
members of the appropriate legislative committees, the JLARC, and public officials. Before
adopting a final work plan, the Board and the State Auditor must consult with the Legislative
Auditor to coordinate work plans and avoid audit duplication.
Performance audits will be contracted by the State Auditor. Areas that performance audits
may consider are listed, including:
The State Auditor is directed to solicit comments on preliminary performance audit reports
from the audited state agency, the Office of the Governor, OFM, the Board, JLARC, and the
chairs and ranking members of the appropriate legislative committees. All comments must
be incorporated into the final performance audit report. The State Auditor submits the final
audit report to the Board and the Governor. The Board and the State Auditor shall jointly
release the final audit reports to the citizens of Washington and the appropriate legislative
committees. Final performance audit reports will be posted on the internet.
Audited agencies are responsible for follow-up and corrective action on all audit findings and
recommendations. Agency plans for addressing each audit finding and recommendation will
be included in the final audit report.
By June 30, 2007, and every four years following, JLARC must contract out for a
performance audit of the performance audit program and the Board's responsibilities under
the performance audit program.
The bill encourages the Administrative Office of the Courts to conduct performance audits of
the courts under the authority of the Supreme Court, in conformity with the methods
developed by the Board for Judicial Administration that have been approved by the Supreme
Court. The Board for Judicial Administration is encouraged by the bill to consider quality
improvement programs, audits, and scoring. The bill further encourages the judicial system
to submit results of these efforts to the Chief Justice of the Supreme Court.
The legislature shall appropriate an amount equal to the top two one-hundredths of one
percent of the total General Fund state appropriation each biennium to fund the performance
review, performance audits, and the activities of the board.
EFFECT OF SENATE AMENDMENT(S):
An intent is added to supplement the performance audit activities of the JLARC by making
fuller use of the State auditor's resources and capabilities. The State Auditor shall provide
staff to the Board, rather than the JLARC. A provision is removed to require annual
assessments and performance grading of state agency performance. The assessment and
performance grading program may be contracted or partnered with entities that have expertise
in developing public sector reviews applying fact-based objective criteria.
The purpose of the statewide performance reviews is to identify those agencies, programs,
functions, or activities most likely to benefit from performance audits and to identify likely
areas warranting early review, taking into account prior performance audits, if any, and prior
fiscal audits.
The provision requiring performance audits must be designed to be completed within a six-month period is changed to be completed as expeditiously as possible. Also, the provision is
removed to require the final work plan to be agreed upon by the Board and the State Auditor.
Performance audits for institutions of higher education must not duplicate and shall make
maximum use of existing audit records, accreditation reviews, and performance measures
required by the office of financial management, the Higher Education Coordinating Board,
and recognized accreditation organizations.
For agencies under the authority of an elected official other than the governor, the appropriate
elected official, rather than the State Auditor and Board, may require periodic reports on
corrective action.
The Board and the State Auditor must prepare and submit a consolidated budget request, in
the form of request legislation, to assist in determining the funding requirement of the bill.
Appropriation: None.
Fiscal Note: Preliminary fiscal note available.
Effective Date: The bill takes effect 90 days after adjournment of session in which bill is passed.
Testimony For: (In support of original bill) This bill improves government performance and
saves taxpayers money. Improved performance will come from a score card and grading of
agencies on how well they save money, follow state law, state regulations, and audit systems.
Businesses and organizations in the state already use quality management. A statewide
performance review is a best practice and it is common sense to look at government and its
systems comprehensively. Even though the State Auditor is elected, this bill is needed
because improving government needs to be a collaborative process to make sure results are
accomplished. Frontline employees are frustrated by waste and red tape. The frontline
employees would benefit from a solid, honest performance audit. Section 4's look at staffing
ratios is good because the workload of frontline employees has been increasing. The bill is
good, but needs more independent accountability, a focus on sustainability, biennium
assessments in line with the state budget, whistleblower protection, reviews of current tax
exemptions, and the Supreme Court should be required to participate. Initiative 900 is out
there now and is too extreme, so this bill is a better solution. The broad level of bi-partisan
support is impressive. The Governor, JLARC, and agencies can't provide the strong
perception of independence that the public demands and this bill provides. One idea for
improvement would be to consider shifting the Citizens Oversight Board from an oversight
board to an advisory board. The Washington State Quality Award is a great deal because the
cost of joining by an agency would be $500 to $5,000 and in return the Washington State
Quality Award process would provide $85,000 to $125,000 worth of services, as a result of
their sponsorship by others and their volunteer support. The process the Washington State
Quality Award uses is patterned after the Malcolm Baldridge National Quality Improvement
Act and improves customer satisfaction, employee productivity and satisfaction, and provides
additional benefits. It is important for quality to start at the top. The Washington State
Quality Award has a great team-building effect, plus it is a bargain.
(Neutral) The Governor does not yet have a position on this bill. It would be good to keep
working this bill and alternatives so that a bill can be formulated that the Governor and
Legislature can agree on. There is concern that comprehensive audits of every agency won't
reap savings, that they are expensive to conduct, that there needs to be an effort to ensure
bang for the buck, and that business doesn't use regular performance audits but instead uses
them in targeted ways. Also, performance audits aren't silver bullets, clear and disciplined
leadership is the most effective way to increase performance, and performance audits do not
build capacity to improve because they are too focused on the past.
Testimony Against: None.
Persons Testifying: (In support of the original bill) Representative Miloscia, prime sponsor.
Dennis Eagle, Washington Federation of State Employees; Steve Zemke, Taxpayers for
Washington's Future; David Goldstein, Taxsanity; and Gary B. Hills and Charles Bryan
Parrish, The Boeing Company.
(Neutral) Jennifer Sprecher, Washington State Quality Award; and Mary Campbell, Office of
the Governor.