[atlas:bill]

AN ACT Relating to performance audits; and adding new sections to chapter 43.41 RCW.

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

NEW SECTION. Sec. 1. A new section is added to chapter 43.41 RCW to read as follows:

The legislature finds that public confidence in government is essential and that programs to improve quality, efficiency, and effectiveness of public functions must be enhanced. The legislature recognizes that all Washington state agencies must transform the way they operate and deliver services to respond to severe, ongoing budget shortfalls and declining revenues.

The intent of this act is to establish an independent ongoing performance audit and yearly scoring program in the office of financial management for the conduct of independent performance audits and scoring for state government entities to ensure all are world class in management, program outcomes, customer satisfaction, and efficiency. The office of financial management, in consultation with the governor's performance audit standards and scorecard commission shall audit and score government entities in order to assist them in developing the management expertise to continuously improve through continuous performance review and management leadership.

NEW SECTION. Sec. 2. A new section is added to chapter 43.41 RCW to read as follows:

(1) The director of financial management shall establish a program and strategic plan for the conduct of independent performance audits and yearly performance scoring of state agencies and their programs and functions.

(2) The office of financial management may contract with public or private entities that have expertise in the conduct of public sector reviews to perform the audits and performance scoring. Staff of the office of financial management or other agency staff may also conduct the audits.

(3) In consultation with the governor's performance audit standards and scorecard commission, the office of financial management shall develop an implementation plan for a phased-in audit schedule for a program and periodic audit and scoring of all state government agencies, including higher education.

(4) The director of financial management shall submit the results of the performance audits, performance scoring, and any necessary implementing legislation to the governor and the legislature by November 1st of each year, and shall release audit results and performance scoring to the public and provide public recognition for outstanding effort.

(5) In consultation with the governor's performance audit standards and scorecard commission, the office of financial management shall collect, disseminate, and share best practices to all state agencies and institutions of higher education.

(6) The director of financial management, in consultation with the governor's performance audit standards and scorecard commission, shall contract for a performance audit of the audit and performance scoring program described in this section by a private professional by November 1, 2004.

NEW SECTION. Sec. 3. A new section is added to chapter 43.41 RCW to read as follows:

The governor's performance audit standards and scorecard commission is established.

(1) The commission consists of seven citizen members appointed to staggered terms by the governor. The citizen members shall demonstrate professional knowledge and expertise in performance management, quality management, auditing, or a closely related field.

(2) The office of financial management shall provide the staff and resources necessary for implementing sections 1 through 4 of this act.

(3) Except for initial members, commission members shall serve for terms of four years, with the terms expiring on June 30th on the fourth year of the term. Members may serve more than one term.

(4) Members of the commission shall be compensated in accordance with RCW 43.03.220 and reimbursed for travel expenses under RCW 43.03.050 and 43.03.060.

NEW SECTION. Sec. 4. A new section is added to chapter 43.41 RCW to read as follows:

The governor's performance audit standards and scorecard commission shall:

(1) Assist in the development of criteria for performance audits and a scoring system for grading overall agency performance. In developing criteria and a scoring system, the commission shall consult with and seek input from elected officials and professionals with a background in performance management. Audit criteria shall be distributed at least six weeks before an audit. The governor's performance audit standards and scorecard commission shall consider already developed best practices and audit criteria used by government or nongovernment organizations;

(2) Advise the governor and the director of financial management on the conduct of the performance audit program;

(3) Develop recommendations for the director of financial management on the subjects of performance audits and the audit schedule; and

(4) Evaluate audit findings and performance scoring in order to identify opportunities to develop government partnerships and eliminate program duplications and redundancies resulting in increased quality, effectiveness, and efficiency of state agencies.

NEW SECTION. Sec. 5. A new section is added to chapter 43.41 RCW to read as follows:

For purposes of sections 1 through 5 of this act, "performance audit" means an objective systematic assessment, survey, or directed self-assessment of state agencies, programs, functions, or activities to provide for public accountability. Initial performance audits and performance scoring shall include, but are not limited to: (1) Quality and process management practices; (2) independent and internal audit functions; (3) internal and external customer satisfaction; (4) program effectiveness; (5) fiscal productivity and efficiency; (6) regulatory and procedural compliance; and (7) any other areas as appropriate.