BILL REQ. #:  S-0685.2 

Read first time 01/20/11.   Referred to Committee on Human Services & Corrections.

     AN ACT Relating to the creation of the division of special investigations within the office of the state auditor; and adding new sections to chapter 43.09 RCW.

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

NEW SECTION.  Sec. 1   The definitions in this section apply throughout this section and sections 2 through 9 of this act unless the context clearly requires otherwise.
     (1) "Department" means the department of social and health services.
     (2) "Director" means the director of the division of special investigations within the state auditor's office.
     (3) "Disclosable information" means public information that (a) is not exempt from disclosure under chapter 42.17 RCW; (b) does not pertain to an ongoing investigation; and (c) has not previously been disclosed in a public record.
     (4) "Division" means the division of special investigations.
     (5) "Fraud or abuse" means any criminal or administrative misconduct by staff, contractors, vendors, or recipients in any program or service administered by the department. This does not include provider fraud as it relates to the department's administration of funds under Title XIX of the social security act, medicaid.

NEW SECTION.  Sec. 2   There is established in the state auditor's office a division of special investigations which shall:
     (1) Conduct and supervise independent and objective investigations relating to allegations of fraud or abuse in any program or service administered by the department;
     (2) Provide leadership and coordination in recommending policies and procedures designed to detect and prevent fraud and abuse; and
     (3) Make recommendations to the auditor and the legislature about vulnerabilities and deficiencies relating to the detection and prevention of fraud or abuse as may be discovered as a result of completed investigations conducted or coordinated by the division.

NEW SECTION.  Sec. 3   The director is the head of the division and is appointed by the auditor solely on the basis of integrity and demonstrated ability in law enforcement management, public administration, and conducting investigations. The director reports to and is under the general supervision of the auditor in all matters related to fraud and program integrity.

NEW SECTION.  Sec. 4   (1) It is the duty and responsibility of the director to:
     (a) Conduct, supervise, and coordinate fraud and abuse investigations and provide policy direction as it relates to program integrity and fraud and abuse;
     (b) Recommend policies for and coordinate activities carried out or financed by the department for the purpose of preventing and detecting fraud or abuse;
     (c) Recommend policies for, and conduct, supervise, and coordinate, relationships between the department and federal, state, and local governmental agencies, and nongovernmental entities, with respect to: (i) Matters relating to the prevention and detection of fraud or abuse in programs and operations administered by the department; or (ii) the identification of participants in the fraud or abuse; and
     (d) Keep the auditor and the legislature informed concerning the detection and prevention of fraud or abuse, and to make recommendations for improvement of the activities.
     (2) In carrying out the duties and responsibilities established in sections 1 through 9 of this act, the director must refer all investigations in which the director has found substantial evidence supporting a finding of a violation of federal or state criminal law to either the appropriate prosecuting authority or the attorney general's office for possible criminal prosecution.

NEW SECTION.  Sec. 5   (1) The director must submit a report summarizing the activities of the division to the appropriate committees of the senate and house of representatives by November 30, 2012, and biennially thereafter. The report shall contain only disclosable information, including:
     (a) A description of significant fraud or abuse, and of vulnerabilities or deficiencies relating to the prevention and detection of fraud or abuse, discovered as a result of investigations completed during the reporting period;
     (b) A description of corrective action taken by the department regarding fraud and abuse discovered as a result of investigations conducted by the division of fraud investigation;
     (c) Recommendations for improving the activities of the division with respect to the vulnerabilities or deficiencies identified under (a) of this subsection;
     (d) An identification of each significant recommendation described in the previous reports on which corrective action has or has not been completed; and
     (e) A summary of matters referred to prosecuting authorities during the reporting period and the charges filed and convictions entered during the reporting period that have resulted from referrals by the division.
     (2) The director must forward a draft of the report to the secretary of the department not less than twenty days before the date the report is to be issued.
     (3) Within sixty days after the transmission of the report by the director to the legislature, the auditor must make copies of the report available to the public on its web site.

NEW SECTION.  Sec. 6   (1) In carrying out the provisions of sections 1 through 9 of this act, the director is authorized to:
     (a) Have prompt access to all individuals, records, electronic data, reports, audits, reviews, documents, and other materials available to the department that relate to investigations of the division that are not otherwise prohibited from disclosure to the director;
     (b) Request information or assistance as is necessary for carrying out the duties and responsibilities provided by sections 1 through 9 of this act from a federal, state, or local governmental agency or unit of a governmental agency;
     (c) Issue subpoenas for witnesses, documents, information, and other data necessary in the furtherance of an investigation conducted by the division. The subpoenas are enforceable under RCW 34.05.588. Prior to issuing subpoenas to a state agency, the director must first make a reasonable request to the agency for documents and information in possession of the agency;
     (d) Administer oaths and take testimony, when appropriate in the performance of the duties and responsibilities provided in sections 1 through 9 of this act, unless otherwise prohibited by law;
     (e) To the extent and in the amount as may be provided by appropriation, enter into contracts and other arrangements for audits, studies, analyses, and other services with public or private agencies, and make the payments necessary to carry out the provisions of sections 1 through 9 of this act, subject to compliance with civil service laws, collective bargaining agreements, and other applicable law.
     (2) The state auditor is authorized to:
     (a) To the extent and in the amount as may be provided by appropriation, select, appoint, and employ personnel as may be necessary to carry out the provisions of sections 1 through 9 of this act;
     (b) To the extent and in the amount as may be provided by appropriation, purchase or lease facilities, equipment, and supplies necessary to carry out the provisions of sections 1 through 9 of this act;
     (c) Delegate to the director any function of the state auditor under chapter 42.40 RCW.
     (3) Whenever information or assistance requested under subsection (1)(a) of this section is, in the judgment of the director, unreasonably refused or not provided, the director must report the circumstances to the auditor without delay.

NEW SECTION.  Sec. 7   (1) In addition to the authority granted in RCW 43.09.165, the state auditor and the director may apply for and obtain a superior court order approving and authorizing a subpoena in advance of its issuance. The application may be made in the county where the subpoenaed person resides or is found, or the county where the subpoenaed records or documents are located, or in Thurston county. The application must: (a) State that an order is sought pursuant to this subsection; (b) adequately specify the records, documents, or testimony; and (c) declare under oath that an investigation is being conducted for a lawfully authorized purpose related to an investigation within the state auditor's authority and that the subpoenaed documents or testimony are reasonably related to an investigation within the state auditor's authority.
     (2) Where the application under this section is made to the satisfaction of the court, the court must issue an order approving the subpoena. An order under this section constitutes authority of law for the state auditor to subpoena the records or testimony.
     (3) The state auditor and the director may seek approval and a court may issue an order under this section without prior notice to any person, including the person to whom the subpoena is directed and the person who is the subject of an investigation.

NEW SECTION.  Sec. 8   (1) The director may receive and investigate complaints or information from an employee of the department or a citizen concerning the possible existence of an activity constituting fraud and abuse.
     (2) The director must not, after receipt of a complaint or information from a complainant, disclose the identity of the complainant without the consent of the complainant, unless the director determines that the disclosure is unavoidable during the course of investigation, except as otherwise provided by state law.
     (3) An employee who has authority to take, direct others to take, recommend, or approve a personnel action, must not, with respect to the authority, take or threaten to take an action against an employee as a reprisal for making a complaint or disclosing information to the director, unless the complaint was made with willful disregard for its truth or falsity.

NEW SECTION.  Sec. 9   (1) The director may enter into contracts or interagency agreements with other state agencies to conduct investigations into allegations of fraud and abuse in those agencies. The requesting agency must reimburse the division of special investigations for the cost of the investigation.
     (2) The director must provide the requesting agency a report of findings and may also file the findings with the appropriate prosecuting attorney or the attorney general's office.

NEW SECTION.  Sec. 10   (1) All powers, duties, and functions of the department of social and health services division of fraud investigation pertaining to the investigation of fraud and abuse and other duties set out under sections 1 through 9 of this act are transferred to the division of special investigations of the state auditor's office. All references to the division of fraud investigation in the department of social and health services in the revised code of Washington shall be construed to mean the director or the division of special investigations in the state auditor's office.
     (2)(a) All reports, documents, surveys, books, records, files, papers, and written material in the possession of the department of social and health services division of fraud investigations pertaining to the powers, functions, and duties transferred in sections 1 through 9 of this act shall be delivered to the custody of the division of special investigations of the state auditor's office.
     (b) Any appropriations made to the department of social and health services division of fraud investigation for carrying out the powers, functions, and duties transferred shall, on the effective date of this section, be transferred and credited to the division of special investigations of the state auditor's office.
     (c) All cabinets, furniture, office equipment, motor vehicles, and other tangible property employed by the division of fraud investigations within the department of social and health services in carrying out the powers, functions, and duties transferred shall be made available to the division of special investigations of the state auditor's office. All funds, credits, or other assets held in connection with the powers, functions, and duties transferred shall be assigned to the division of special investigations of the state auditor's office.
     (d) Whenever any question arises as to the transfer of any personnel, funds, books, documents, records, papers, files, equipment, or other tangible property used or held in the exercise of the powers and the performance of the duties and functions transferred, the director of financial management shall make a determination as to the proper allocation and certify the same to the state agencies concerned.
     (3) All rules and all pending business before the department of social and health services division of fraud investigation pertaining to the powers, functions, and duties transferred shall be continued and acted upon by the division of special investigations of the state auditor's office. All existing contracts and obligations shall remain in full force and shall be performed by the division of special investigations of the state auditor's office.
     (4) The transfer of the powers, duties, and functions of the department of social and health services division of fraud investigation shall not affect the validity of any act performed before the effective date of this section.
     (5)(a) Any appropriations made to the department of social and health services for the division of fraud investigation for carrying out the powers, functions, and duties transferred in this act shall, on the effective date of this section, be transferred and credited to the state auditor's office.
     (b) Any appropriations made to the department of social and health services for carrying out the powers, functions, and duties transferred shall, on the effective date of this section, be transferred to the state auditor's office through an interagency agreement.
     (6)(a) All employees of the division of fraud investigation within the department of social and health services engaged in performing the powers, functions, and duties transferred in this act are transferred to the jurisdiction of the division of special investigations in the state auditor's office. All employees classified under chapter 41.06 RCW are assigned to the division of special investigations to perform their usual duties upon the same terms as formerly, without any loss of rights, subject to any action that may be appropriate thereafter in accordance with the laws and rules governing state civil service.
     (b) Nothing in this section may be construed to alter any existing collective bargaining unit or the provisions of any existing collective bargaining agreement until the agreement has expired or until the bargaining unit has been modified by action of the public employment relations commission as provided by law.

NEW SECTION.  Sec. 11   Sections 1 through 10 of this act are each added to chapter 43.09 RCW.