BILL REQ. #:  Z-1164.1 

Read first time 01/23/2006.   Referred to Committee on Government Operations & Elections.

     AN ACT Relating to government performance and accountability; amending RCW 43.09.430, 43.09.435, 43.09.450, 43.09.455, and 43.09.460; adding new sections to chapter 43.41 RCW; adding a new section to chapter 44.28 RCW; creating a new section; recodifying RCW 43.09.430, 43.09.435, 43.09.455, 43.09.460, and 43.09.450; and repealing RCW 43.09.440, 43.09.445, and 43.88.162.

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

NEW SECTION.  Sec. 1   The legislature finds that:
     (1) An independent citizen advisory board is necessary to ensure that government services, customer satisfaction, program efficiency, and management systems are world class in performance. A citizen advisory board will ensure that efforts to improve performance are coordinated across state government and prioritized to prevent duplication of effort and achieve the highest value for taxpayer dollars; and
     (2) Essential tools for improving the efficiency and effectiveness of government include fair, independent, and professional performance audits of state agencies, performance reviews, a performance-based budgeting process, and quality assessments.

Sec. 2   RCW 43.09.430 and 2005 c 385 s 2 are each amended to read as follows:
     For purposes of RCW 43.09.435 through 43.09.460 (as recodified by this act):
     (1) "Board" means the citizen advisory board created in RCW 43.09.435 (as recodified by this act).
     (2) (("Draft work plan" means the work plan for conducting performance audits of state agencies proposed by the board and state auditor after the statewide performance review.
     (3) "Final performance audit report" means a written document jointly released by the citizen advisory board and the state auditor that includes the findings and comments from the preliminary performance audit report.
     (4) "Final work plan" means the work plan for conducting performance audits of state agencies adopted by the board and state auditor.
     (5) "Performance audit" means an objective and systematic assessment of a state agency or any of its programs, functions, or activities by an independent evaluator in order to help public officials improve efficiency, effectiveness, and accountability. Performance audits include economy and efficiency audits and program audits.
     (6) "Preliminary performance audit report" means a written document prepared after the completion of a performance audit to be submitted for comment before the final performance audit report. The preliminary performance audit report must contain the audit findings and any proposed recommendations to improve the efficiency, effectiveness, or accountability of the state agency being audited.
     (7))) "Performance review" means an objective evaluation of an agency's results and outcomes in light of its mission, availability of resources, and statewide priorities.
     (3) "State agency" or "agency" means a state agency, department, office, officer, board, commission, bureau, division, institution, or institution of higher education. "State agency" includes all offices of executive branch state government elected officials.
     (4) "Work plan" means a report produced annually in which the board makes performance-related recommendations to the governor. The plan may address performance reviews and performance-based budgeting and may identify state agencies that the board recommends undergo a performance audit.

Sec. 3   RCW 43.09.435 and 2005 c 385 s 3 are each amended to read as follows:
     (1) The citizen advisory board is created to improve efficiency, effectiveness, and accountability in state government.
     (2) The board shall consist of ((ten)) nine members as follows:
     (a) ((One member shall be the state auditor, who shall be a nonvoting member;
     (b) One member shall be the legislative auditor, who shall be a nonvoting member;
     (c) One member shall be the director of the office of financial management, who shall be a nonvoting member;
     (d) Four of the members shall be selected by)) The governor shall appoint four members as follows: Each major caucus of the house of representatives and the senate shall submit a list of three names. The lists may not include the names of members of the legislature or employees of the state. The governor shall ((select)) appoint a person from each list provided by each caucus; and
     (((e))) (b) The governor shall ((select three)) appoint five citizen members who are not state employees, including but not limited to representatives from private sector business and industry, labor unions, and public interest organizations.
     (3) The board shall elect a chair. ((The legislative auditor, the state auditor, and the director of the office of financial management may not serve as chair.))
     (4) Appointees shall be individuals who have a basic understanding of state government operations with knowledge and expertise in performance management, quality management, strategic planning, performance assessments, or closely related fields.
     (5) Members ((selected under subsection (2)(d) and (e) of this section)) shall serve for terms of four years, with the terms expiring on June 30th on the fourth year of the term. However, in the case of the initial members, two members shall serve four-year terms, two members shall serve three-year terms, and one member shall serve a two-year term, with each of the terms expiring on June 30th of the applicable year. In the case of the two additional members added under chapter . . ., Laws of 2006 (this act), one member shall serve a two-year term and one member shall serve a four-year term. Appointees may be reappointed to serve more than one term.
     (6) The office of ((the state auditor)) financial management shall provide clerical, technical, and management personnel to the board to serve as the board's staff.
     (7) The board shall meet at least once a quarter and may hold additional meetings at the call of the chair or by a majority vote of the members of the board.
     (8) The members of the board shall be compensated in accordance with RCW 43.03.220 and reimbursed for travel expenses in accordance with 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:
     (1) The role of the citizen advisory board is to advise the governor on:
     (a) Improving state government efficiency and effectiveness, including best practices from public and private sectors;
     (b) Ensuring that efforts to improve performance are coordinated and prioritized across state government to achieve the highest value for taxpayer dollars;
     (c) Increasing the accountability of state government through effective communication to citizens;
     (d) Ensuring that performance improvement efforts by state agencies, the state auditor, and the legislature are fair, independent, and professional; and
     (e) Engaging citizens to assist in identifying priorities.
     (2) The board shall review and evaluate the performance of state agencies. The board shall develop a schedule and common methodology for conducting these reviews. Performance reviews include, but are not limited to:
     (a) Identifying those agencies, programs, functions, or activities that warrant further review in either the performance review forum, the performance-based budgeting process, or as potential areas to recommend for performance audits;
     (b) Reviewing whether agency performance standards, measures, efforts, and initiatives are internally consistent;
     (c) Recognizing best practices in performance measurement efforts by state agencies; and
     (d) Identifying areas for increased collaboration and consistency in performance improvement efforts by the governor, legislature, state auditor, and state agencies.
     (3) The legislative auditor and the state auditor shall report to the board on at least an annual basis as to the status of their audit work plans to avoid duplication of effort in conducting performance reviews.
     (4) Representatives from the governor's performance review process, the performance-based budgeting process, and the state quality assessment process shall report to the board on at least an annual basis on the status of each performance initiative and on potential recommendations for the board's work plan.
     (5) Through application of its work plan, the board will develop recommendations to the governor and provide such recommendations on an annual basis. These recommendations can include:
     (a) Identification of agencies that may benefit from a performance audit;
     (b) Identification of programs and services of state government that may benefit from increased attention through the performance review process; and
     (c) Identification of state budgeting and purchasing decisions requiring increased attention in the performance-based budgeting process.
     (6) The board may establish subcommittees, including a subcommittee to serve as members of the guidance team for the performance-based budgeting process.
     (7) For the purposes of this section:
     (a) "State agency" or "agency" means a state agency, department, office, officer, board, commission, bureau, division, institution, or institution of higher education. "State agency" includes all offices of executive branch state government elected officials.
     (b) "Work plan" means the biennial work plan through which the board will develop recommendations to the governor on performance- related matters, including performance reviews and performance-based budgeting and identifying state agencies that the board recommends undergo a performance audit.

Sec. 5   RCW 43.09.450 and 2005 c 385 s 8 are each amended to read as follows:
     By June 30, 2007, and each four years thereafter, the joint legislative audit and review committee shall contract with a private entity for a performance audit of the ((performance audit program established in RCW 43.09.440 and the board's responsibilities under the)) office of the state auditor's performance audit program.

Sec. 6   RCW 43.09.455 and 2005 c 385 s 9 are each amended to read as follows:
     (1) The ((audited agency is)) agencies are responsible for follow-up and corrective action on all performance ((audit findings and recommendations. The audited agency's plan for addressing each audit finding and recommendation shall be included in the final audit report. The plan shall provide the name of the contact person responsible for each action, the action planned, and the anticipated completion date. If the audited agency does not agree with the audit findings and recommendations or believes action is not required, then the action plan shall include an explanation and specific reasons)) reviews.
     (2) Periodic progress reports from agencies may be required as follows:
     (a) For agencies under the authority of the governor, the governor may require periodic progress reports from the ((audited)) agency ((until all resolution has occurred)) under review.
     (b) For agencies under the authority of an elected official other than the governor, the appropriate elected official may require periodic reports of the action taken by the ((audited)) agency ((until all resolution has occurred)) under review.
     (c) For all other agencies, the agency head or governing board of the agency may require periodic progress reports from the agency under review.
     (d) The board may request status reports on specific audits ((or)), findings, or review recommendations.

Sec. 7   RCW 43.09.460 and 2005 c 385 s 11 are each amended to read as follows:
     (1) Each biennium the legislature shall appropriate such sums as may be necessary((, not to exceed an amount equal to two one-hundredths of one percent of the total general fund state appropriation in that biennium's omnibus operating appropriations act)) for purposes of the ((performance review, performance audits, and activities of the board)) activities authorized by this chapter.
     (2) The board ((and the state auditor)) shall submit recommended budgets ((for their responsibilities under RCW 43.09.430 through 43.09.455 to the auditor, who shall then prepare a consolidated budget request, in the form of request legislation, to assist in determining the funding under subsection (1) of this section)) to the office of financial management.

NEW SECTION.  Sec. 8   RCW 43.09.430, 43.09.435, 43.09.455, and 43.09.460 are each recodified as sections in chapter 43.41 RCW.

NEW SECTION.  Sec. 9   RCW 43.09.450 is recodified as a section in chapter 44.28 RCW.

NEW SECTION.  Sec. 10   The following acts or parts of acts are each repealed:
     (1) RCW 43.09.440 (Performance audits -- Collaboration with joint legislative audit and review committee -- Criteria -- Statewide performance review -- Contracting out -- Release of audit reports) and 2005 c 385 s 5;
     (2) RCW 43.09.445 (Performance audits -- Local jurisdictions) and 2005 c 385 s 6; and
     (3) RCW 43.88.162 (State auditor's powers and duties--Performance audits) and 2005 c 385 s 7.