AN
ACT Relating to audit resolution reports; and amending RCW 43.88.160.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
43.88.160 and 1997 c 168 s 6 are each amended to read as follows:
This
section sets forth the major fiscal duties and responsibilities of officers and
agencies of the executive branch. The regulations issued by the governor
pursuant to this chapter shall provide for a comprehensive, orderly basis for
fiscal management and control, including efficient accounting and reporting
therefor, for the executive branch of the state government and may include, in
addition, such requirements as will generally promote more efficient public
management in the state.
(1)
Governor; director of financial management. The governor, through the director
of financial management, shall devise and supervise a modern and complete
accounting system for each agency to the end that all revenues, expenditures,
receipts, disbursements, resources, and obligations of the state shall be
properly and systematically accounted for. The accounting system shall include
the development of accurate, timely records and reports of all financial
affairs of the state. The system shall also provide for central accounts in the
office of financial management at the level of detail deemed necessary by the
director to perform central financial management. The director of financial
management shall adopt and periodically update an accounting procedures
manual. Any agency maintaining its own accounting and reporting system shall
comply with the updated accounting procedures manual and the rules of the
director adopted under this chapter. An agency may receive a waiver from
complying with this requirement if the waiver is approved by the director.
Waivers expire at the end of the fiscal biennium for which they are granted.
The director shall forward notice of waivers granted to the appropriate
legislative fiscal committees. The director of financial management may
require such financial, statistical, and other reports as the director deems
necessary from all agencies covering any period.
(2)
Except as provided in chapter 43.88C RCW, the director of financial management
is responsible for quarterly reporting of primary operating budget drivers such
as applicable workloads, caseload estimates, and appropriate unit cost data.
These reports shall be transmitted to the legislative fiscal committees or by
electronic means to the legislative evaluation and accountability program committee.
Quarterly reports shall include actual monthly data and the variance between
actual and estimated data to date. The reports shall also include estimates of
these items for the remainder of the budget period.
(3)
The director of financial management shall report at least annually to the
appropriate legislative committees regarding the status of all appropriated
capital projects, including transportation projects, showing significant cost
overruns or underruns. If funds are shifted from one project to another, the
office of financial management shall also reflect this in the annual variance
report. Once a project is complete, the report shall provide a final summary
showing estimated start and completion dates of each project phase compared to
actual dates, estimated costs of each project phase compared to actual costs,
and whether or not there are any outstanding liabilities or unsettled claims at
the time of completion.
(4)
In addition, the director of financial management, as agent of the governor,
shall:
(a)
Develop and maintain a system of internal controls and internal audits
comprising methods and procedures to be adopted by each agency that will
safeguard its assets, check the accuracy and reliability of its accounting
data, promote operational efficiency, and encourage adherence to prescribed
managerial policies for accounting and financial controls. The system
developed by the director shall include criteria for determining the scope and
comprehensiveness of internal controls required by classes of agencies,
depending on the level of resources at risk.
Each
agency head or authorized designee shall be assigned the responsibility and
authority for establishing and maintaining internal audits following the
standards of internal auditing of the institute of internal auditors;
(b)
Make surveys and analyses of agencies with the object of determining better
methods and increased effectiveness in the use of manpower and materials; and
the director shall authorize expenditures for employee training to the end that
the state may benefit from training facilities made available to state
employees;
(c)
Establish policies for allowing the contracting of child care services;
(d)
Report to the governor with regard to duplication of effort or lack of coordination
among agencies;
(e)
Review any pay and classification plans, and changes thereunder, developed by
any agency for their fiscal impact: PROVIDED, That none of the provisions of
this subsection shall affect merit systems of personnel management now existing
or hereafter established by statute relating to the fixing of qualifications
requirements for recruitment, appointment, or promotion of employees of any
agency. The director shall advise and confer with agencies including
appropriate standing committees of the legislature as may be designated by the
speaker of the house and the president of the senate regarding the fiscal
impact of such plans and may amend or alter said plans, except that for the
following agencies no amendment or alteration of said plans may be made without
the approval of the agency concerned: Agencies headed by elective officials;
(f)
Fix the number and classes of positions or authorized man years of employment
for each agency and during the fiscal period amend the determinations
previously fixed by the director except that the director shall not be
empowered to fix said number or said classes for the following: Agencies
headed by elective officials;
(g)
Adopt rules to effectuate provisions contained in (a) through (f) of this
subsection.
(5)
The treasurer shall:
(a)
Receive, keep, and disburse all public funds of the state not expressly
required by law to be received, kept, and disbursed by some other persons:
PROVIDED, That this subsection shall not apply to those public funds of the
institutions of higher learning which are not subject to appropriation;
(b)
Receive, disburse, or transfer public funds under the treasurer's supervision
or custody;
(c)
Keep a correct and current account of all moneys received and disbursed by the
treasurer, classified by fund or account;
(d)
Coordinate agencies' acceptance and use of credit cards and other payment
methods, if the agencies have received authorization under RCW 43.41.180;
(e)
Perform such other duties as may be required by law or by regulations issued
pursuant to this law.
It
shall be unlawful for the treasurer to disburse public funds in the treasury
except upon forms or by alternative means duly prescribed by the director of
financial management. These forms or alternative means shall provide for
authentication and certification by the agency head or the agency head's
designee that the services have been rendered or the materials have been
furnished; or, in the case of loans or grants, that the loans or grants are
authorized by law; or, in the case of payments for periodic maintenance
services to be performed on state owned equipment, that a written contract for
such periodic maintenance services is currently in effect and copies thereof
are on file with the office of financial management; and the treasurer shall
not be liable under the treasurer's surety bond for erroneous or improper
payments so made. When services are lawfully paid for in advance of full
performance by any private individual or business entity other than as provided
for by RCW 42.24.035, such individual or entity other than central stores
rendering such services shall make a cash deposit or furnish surety bond
coverage to the state as shall be fixed in an amount by law, or if not fixed by
law, then in such amounts as shall be fixed by the director of the department
of general administration but in no case shall such required cash deposit or
surety bond be less than an amount which will fully indemnify the state against
any and all losses on account of breach of promise to fully perform such services.
No payments shall be made in advance for any equipment maintenance services to
be performed more than three months after such payment. Any such bond so
furnished shall be conditioned that the person, firm or corporation receiving
the advance payment will apply it toward performance of the contract. The
responsibility for recovery of erroneous or improper payments made under this
section shall lie with the agency head or the agency head's designee in
accordance with regulations issued pursuant to this chapter. Nothing in this
section shall be construed to permit a public body to advance funds to a
private service provider pursuant to a grant or loan before services have been
rendered or material furnished.
(6)
The state auditor shall:
(a)
Report to the legislature the results of current post audits that have been
made of the financial transactions of each agency; to this end the auditor may,
in the auditor's discretion, examine the books and accounts of any agency,
official, or employee charged with the receipt, custody, or safekeeping of
public funds. Where feasible in conducting examinations, the auditor shall
utilize data and findings from the internal control system prescribed by the
office of financial management. The current post audit of each agency may
include a section on recommendations to the legislature as provided in (c) of
this subsection.
(b)
Give information to the legislature, whenever required, upon any subject
relating to the financial affairs of the state.
(c)
Make the auditor's official report on or before the thirty-first of December
which precedes the meeting of the legislature. The report shall be for the
last complete fiscal period and shall include determinations as to whether
agencies, in making expenditures, complied with the laws of this state. The
state auditor is authorized to perform or participate in performance
verifications and performance audits as expressly authorized by the legislature
in the omnibus biennial appropriations acts or in the performance audit work
plan approved by the joint legislative audit and review committee. The state
auditor, upon completing an audit for legal and financial compliance under
chapter 43.09 RCW or a performance verification, may report to the joint
legislative audit and review committee or other appropriate committees of the
legislature, in a manner prescribed by the joint legislative audit and review
committee, on facts relating to the management or performance of governmental
programs where such facts are discovered incidental to the legal and financial
audit or performance verification. The auditor may make such a report to a
legislative committee only if the auditor has determined that the agency has
been given an opportunity and has failed to resolve the management or performance
issues raised by the auditor. If the auditor makes a report to a legislative
committee, the agency may submit to the committee a response to the report.
This subsection (6) shall not be construed to authorize the auditor to allocate
other than de minimis resources to performance audits except as expressly
authorized in the appropriations acts or in the performance audit work plan.
The results of a performance audit conducted by the state auditor that has been
requested by the joint legislative audit and review committee must only be
transmitted to the joint legislative audit and review committee.
(d)
Be empowered to take exception to specific expenditures that have been incurred
by any agency or to take exception to other practices related in any way to the
agency's financial transactions and to cause such exceptions to be made a
matter of public record, including disclosure to the agency concerned and to
the director of financial management. It shall be the duty of the director of
financial management to cause corrective action to be taken ((promptly))
within six months, such action to include, as appropriate, the
withholding of funds as provided in RCW 43.88.110. The director of
financial management shall annually report by December 31st the status of audit
resolution to the appropriate committees of the legislature, the state auditor,
and the attorney general. The director of financial management shall include
in the audit resolution report actions taken as a result of an audit including,
but not limited to, types of personnel actions, costs and types of litigation,
and value of recouped goods or services.
(e)
Promptly report any irregularities to the attorney general.
(f)
Investigate improper governmental activity under chapter 42.40 RCW.
(7)
The joint legislative audit and review committee may:
(a)
Make post audits of the financial transactions of any agency and management
surveys and program reviews as provided for in chapter 44.28 RCW as well as
performance audits and program evaluations. To this end the joint committee
may in its discretion examine the books, accounts, and other records of any
agency, official, or employee.
(b)
Give information to the legislature or any legislative committee whenever
required upon any subject relating to the performance and management of state
agencies.
(c)
Make a report to the legislature which shall include at least the following:
(i)
Determinations as to the extent to which agencies in making expenditures have
complied with the will of the legislature and in this connection, may take
exception to specific expenditures or financial practices of any agencies; and
(ii)
Such plans as it deems expedient for the support of the state's credit, for
lessening expenditures, for promoting frugality and economy in agency affairs,
and generally for an improved level of fiscal management.
