AN
ACT Relating to capital projects for social service organizations; adding a new
section to chapter 43.63A RCW; adding a new section to chapter 43.88 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 nonprofit organizations provide a variety of social
services that serve the needs of the citizens of Washington, including many
services implemented under contract with state agencies. The legislature also
finds that the efficiency and quality of these services may be enhanced by the
provision of safe, reliable, and sound facilities, and that, in certain cases,
it may be appropriate for the state to assist in the development of these
facilities.
NEW
SECTION. Sec. 2. A
new section is added to chapter 43.63A RCW to read as follows:
If
the legislature provides an appropriation to assist nonprofit organizations in
acquiring, constructing, or rehabilitating facilities used for the delivery of
nonresidential social services, the legislature may direct the department of
community, trade, and economic development to establish a competitive process
to prioritize applications for the assistance as follows:
(1)
The department shall conduct a state-wide solicitation of project applications
from local governments, nonprofit organizations, and other entities, as
determined by the department. The department shall evaluate and rank
applications in consultation with a citizen advisory committee using objective
criteria. At a minimum, applicants must demonstrate that the requested
assistance will increase the efficiency or quality of the social services it
provides to citizens. The evaluation and ranking process shall also include an
examination of existing assets that applicants may apply to projects. Grant
assistance under this section shall not exceed twenty-five percent of the total
cost of the project. The nonstate portion of the total project cost may
include, but is not limited to, land, facilities, and in-kind contributions.
(2)
The department shall submit a prioritized list of recommended projects to the
legislature by November 1st following the effective date of the appropriation.
The list shall include a description of each project, the amount of recommended
state funding, and documentation of nonstate funds to be used for the project.
The department shall not sign contracts or otherwise financially obligate funds
under this section until the legislature has approved a specific list of
projects.
(3)
In contracts for grants authorized under this section the department shall
include provisions which require that capital improvements shall be held by the
grantee for a specified period of time appropriate to the amount of the grant
and that facilities shall be used for the express purpose of the grant. If the
grantee is found to be out of compliance with provisions of the contract, the
grantee shall repay to the state general fund the principal amount of the grant
plus interest calculated at the rate of interest on state of Washington general
obligation bonds issued most closely to the date of authorization of the grant.
(4)
The department shall develop model contract provisions for compliance with
subsection (3) of this section and shall distribute its recommendations to the
appropriate legislative committees, the office of financial management, and to
all state agencies which provide capital grants to nonstate entities.
NEW
SECTION. Sec. 3. A
new section is added to chapter 43.88 RCW to read as follows:
(1)
Each state agency shall submit a report to the office of the state auditor
listing each nongovernment entity that received over three hundred thousand
dollars in state moneys during the previous fiscal year under contract with the
agency for purposes related to the provision of social services. The report
must be submitted by September 1 each year, and must be in a form prescribed by
the office of the state auditor.
(2)
The office of the state auditor shall select two groups of entities from the
reports for audit as follows:
(a)
The first group shall be selected at random using a procedure prescribed by the
office of the state auditor. The office of the state auditor shall ensure that
the number of entities selected under this subsection (2)(a) each year is
sufficient to ensure a statistically representative sample of all reported
entities.
(b)
The second group shall be selected based on a risk assessment of entities
conducted by the office of the state auditor in consultation with state
agencies. The office of the state auditor shall consider, at a minimum, the
following factors when conducting risk assessments: Findings from previous
audits; decentralization of decision making and controls; turnover in officials
and key personnel; changes in management structure or operations; and the
presence of new programs, technologies, or funding sources.
(3)
Each entity selected under subsection (2) of this section shall be required to
complete a comprehensive entity-wide audit in accordance with generally
accepted government auditing standards. The audit shall determine, at a
minimum, whether:
(a)
The financial statements of the entity are presented fairly in all material
respects in conformity with generally accepted accounting principles;
(b)
The schedule of expenditures of state moneys is presented fairly in all
material respects in relation to the financial statements taken as a whole;
(c)
Internal accounting controls exist and are effective; and
(d)
The entity has complied with laws, regulations, and contract and grant
provisions that have a direct and material effect on performance of the
contract and the expenditure of state moneys.
(4)
The office of the state auditor shall prescribe policies and procedures for the
conduct of audits under this section. The office of the state auditor shall
deem single audits completed in compliance with federal requirements to be in
fulfillment of the requirements of this section if the audit meets the
requirements of subsection (3)(a) through (d) of this section.
(5)
Completed audits must be delivered to the office of the state auditor and the
state agency by April 1 in the year following the selection of the entity for
audit. Entities must resolve any findings contained in the audit within six
months of the delivery of the audit. Entities may not enter into new contracts
with state agencies until all major audit findings are resolved.
(6)
Nothing in this section limits the authority of the state auditor to carry out
statutorily and contractually prescribed powers and duties.
