BILL REQ. #: H-4201.1
State of Washington | 62nd Legislature | 2012 Regular Session |
READ FIRST TIME 02/07/12.
AN ACT Relating to creating efficiencies for institutions of higher education; amending RCW 43.19.1906, 43.88.160, and 41.04.240; reenacting and amending RCW 39.29.011 and 28B.10.029; and creating a new section.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 43.19.1906 and 2011 1st sp.s. c 43 s 210 are each
amended to read as follows:
Insofar as practicable, all purchases and sales shall be based on
competitive bids, and a formal sealed, electronic, or web-based bid
procedure, subject to RCW 43.19.1911, shall be used as standard
procedure for all purchases and contracts for purchases and sales
executed by the director and under the powers granted by RCW 43.19.190
through 43.19.1939. This requirement also applies to purchases and
contracts for purchases and sales executed by agencies, including
educational institutions, under delegated authority granted in
accordance with provisions of RCW 43.19.190 or under RCW 28B.10.029.
However, formal sealed, electronic, or web-based competitive bidding is
not necessary for:
(1) Emergency purchases made pursuant to RCW 43.19.200 if the
sealed bidding procedure would prevent or hinder the emergency from
being met appropriately;
(2) Direct buy purchases and informal competitive bidding, as
designated by the director of enterprise services. The director of
enterprise services shall establish policies annually to define
criteria and dollar thresholds for direct buy purchases and informal
competitive bidding limits. These criteria may be adjusted to
accommodate special market conditions and to promote market diversity
for the benefit of the citizens of the state of Washington;
(3) Purchases which are clearly and legitimately limited to a
single source of supply and purchases involving special facilities,
services, or market conditions, in which instances the purchase price
may be best established by direct negotiation;
(4) Purchases of insurance and bonds by the risk management office
under RCW 43.19.769;
(5) Purchases and contracts for vocational rehabilitation clients
of the department of social and health services: PROVIDED, That this
exemption is effective only when the director of enterprise services,
after consultation with the director of the division of vocational
rehabilitation and appropriate department of social and health services
procurement personnel, declares that such purchases may be best
executed through direct negotiation with one or more suppliers in order
to expeditiously meet the special needs of the state's vocational
rehabilitation clients;
(6) Purchases by universities for hospital operation or biomedical
teaching or research purposes and by the director of enterprise
services, as the agent for state hospitals as defined in RCW 72.23.010,
and for health care programs provided in state correctional
institutions as defined in RCW 72.65.010(3) and veterans' institutions
as defined in RCW 72.36.010 and 72.36.070, made by participating in
contracts for materials, supplies, and equipment entered into by
nonprofit cooperative hospital group purchasing organizations;
(7) Purchases for resale by institutions of higher education to
other than public agencies when such purchases are for the express
purpose of supporting instructional programs and may best be executed
through direct negotiation with one or more suppliers in order to meet
the special needs of the institution;
(8) Purchases by institutions of higher education under RCW
43.19.190(2), direct buy purchases, and informal competitive bidding,
as designated by the director of enterprise services; ((and))
(9)(a) Purchases by institutions of higher education less than one
hundred thousand dollars. However, for purchases of ten thousand
dollars or more and less than one hundred thousand dollars, quotations
must be secured from at least three vendors to assure establishment of
a competitive price and may be obtained by telephone or written
quotations, or both. For purchases of ten thousand dollars or more and
less than one hundred thousand dollars, each institution of higher
education must: Post the purchasing opportunity on the institution's
web site or the common vendor registration and bid notification system
for thirty days prior to an award or the minimum length of time
otherwise required for notices posted on the common vendor registration
and bid notification system; and invite at least one quotation each
from a certified minority and a certified woman-owned vendor that
otherwise qualifies to perform the work. A record of competition for
all such purchases of ten thousand dollars or more and less than one
hundred thousand dollars must be documented for audit purposes.
(b) Each year, each institution of higher education must post on
its web site the following information about purchases of ten thousand
dollars or more and less than one hundred thousand dollars in the
previous fiscal year:
(i) The total number and total dollar amount of these purchases;
(ii) The total number and total dollar amount of these purchases
from small businesses, and a percentage of the total number and dollar
amount of purchases under (b)(i) of this subsection; and
(iii) The total number and total dollar amount of these purchases
from certified minority and women-owned vendors, and a percentage of
the total number and dollar amount of purchases under (b)(i) of this
subsection; and
(10) Off-contract purchases of Washington grown food when such food
is not available from Washington sources through an existing contract.
However, Washington grown food purchased under this subsection must be
of an equivalent or better quality than similar food available through
the contract and be able to be paid from the agency's existing budget.
This requirement also applies to purchases and contracts for purchases
executed by state agencies, including institutions of higher education,
under delegated authority granted in accordance with RCW 43.19.190 or
under RCW 28B.10.029.
((Beginning on July 1, 1995, and on July 1st of each succeeding
odd-numbered year, the dollar limits specified in this section shall be
adjusted as follows: The office of financial management shall
calculate such limits by adjusting the previous biennium's limits by
the appropriate federal inflationary index reflecting the rate of
inflation for the previous biennium. Such amounts shall be rounded to
the nearest one hundred dollars.))
As used in this section, "Washington grown" has the definition in
RCW 15.64.060.
Sec. 2 RCW 39.29.011 and 2011 1st sp.s. c 43 s 522 and 2011 c 358
s 4 are each reenacted and amended to read as follows:
All personal service contracts shall be entered into pursuant to
competitive solicitation, except for:
(1) Emergency contracts;
(2) Sole source contracts;
(3) Contract amendments;
(4) Contracts of less than twenty thousand dollars between a
consultant and an agency ((of less than twenty thousand dollars)) other
than an institution of higher education as defined in RCW 28B.10.016.
However, contracts of five thousand dollars or greater but less than
ten thousand dollars shall have documented evidence of competition.
Contracts of ten thousand dollars or greater, but less than twenty
thousand dollars, shall have documented evidence of competition, which
must include agency posting of the contract opportunity on the state's
common vendor registration and bid notification system. Agencies shall
not structure contracts to evade these requirements;
(5)(a) Contracts of less than one hundred thousand dollars between
a consultant and an institution of higher education as defined in RCW
28B.10.016. However, for contracts of ten thousand dollars or greater
but less than one hundred thousand dollars, institutions of higher
education must: Post the purchasing opportunity on the institution's
web site or the common vendor registration and bid notification system
for thirty days prior to an award or the minimum length of time
otherwise required for notices posted on the common vendor registration
and bid notification system; invite at least one quotation each from a
certified minority and a certified woman-owned vendor that otherwise
qualifies to do the work; and document evidence of competition.
((Agencies)) Institutions shall not structure contracts to evade these
requirements.
(b) Each year, each institution of higher education must post on
its web site the following information about contracts of ten thousand
dollars or more and less than one hundred thousand dollars in the
previous fiscal year:
(i) The total number and total dollar amount of these contracts;
(ii) The total number and total dollar amount of these contracts
from small businesses, and a percentage of the total number and dollar
amount of contracts under (b)(i) of this subsection; and
(iii) The total number and total dollar amount of these contracts
from certified minority and women-owned vendors, and a percentage of
the total number and dollar amount of contracts under (b)(i) of this
subsection; and
(((5))) (6) Other specific contracts or classes or groups of
contracts exempted from the competitive solicitation process by the
director of the department of enterprise services when it has been
determined that a competitive solicitation process is not appropriate
or cost-effective.
Sec. 3 RCW 43.88.160 and 2006 c 1 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 the plans, except
that for the following agencies no amendment or alteration of the 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 employee
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 the number or the 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 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
equipment maintenance providers or 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)) enterprise services 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 twelve months after such payment
except that institutions of higher education as defined in RCW
28B.10.016 may make payments in advance for equipment maintenance
services to be performed up to sixty 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)) rules 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 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.
(((g))) In addition to the authority given to the state auditor in
this subsection (6), the state auditor is authorized to conduct
performance audits identified in RCW 43.09.470. Nothing in this
subsection (6) shall limit, impede, or restrict the state auditor from
conducting performance audits identified in RCW 43.09.470.
(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.
Sec. 4 RCW 41.04.240 and 1977 ex.s. c 269 s 1 are each amended to
read as follows:
(1) Except with regard to institutions of higher education as
defined in RCW 28B.10.016, any official of the state or of any
political subdivision, municipal corporation, or quasi-municipal
corporation authorized to disburse funds in payment of salaries and
wages of employees is authorized upon written request of at least
twenty-five employees to pay all or part of such salaries or wages to
any financial institution for either: (((1))) (a) Credit to the
employees' accounts in such financial institution; or (((2))) (b)
immediate transfer therefrom to the employees' accounts in any other
financial institutions((: PROVIDED, That)).
(2) In disbursing funds for payment of salaries and wages of
employees, institutions of higher education as defined in RCW
28B.10.016 are authorized to require the following payment methods:
(a) For employees who have an account in a financial institution,
payment to any financial institution for either: (i) Credit to the
employees' accounts in such financial institution; or (ii) immediate
transfer therefrom to the employees' accounts in any other financial
institutions; and
(b) For employees who do not have an account in a financial
institution, payment by alternate methods such as payroll cards.
(3) Nothing in this section shall be construed as authorizing any
employer to require the employees to have an account in any particular
financial institution or type of financial institution. A single
warrant may be drawn in favor of such financial institution, for the
total amount due the employees involved, and written directions
provided to such financial institution of the amount to be credited to
the account of an employee or to be transferred to an account in
another financial institution for such employee. The issuance and
delivery by the disbursing officer of a warrant in accordance with the
procedure set forth herein and proper indorsement thereof by the
financial institution shall have the same legal effect as payment
directly to the employee.
For the purposes of this section "financial institution" means any
bank or trust company established in this state pursuant to chapter 2,
Title 12, United States Code, or Title 30 RCW, and any credit union
established in this state pursuant to chapter 14, Title 12, United
States Code, or chapter 31.12 RCW, and any mutual savings bank
established in this state pursuant to Title 32 RCW, and any savings and
loan association established in this state pursuant to chapter 12,
Title 12, United States Code, or Title 33 RCW.
Sec. 5 RCW 28B.10.029 and 2011 1st sp.s. c 43 s 303 and 2011 c
198 s 1 are each reenacted and amended to read as follows:
(1)(a) An institution of higher education may exercise
independently those powers otherwise granted to the director of
enterprise services in chapter 43.19 RCW in connection with the
purchase and disposition of all material, supplies, services, and
equipment needed for the support, maintenance, and use of the
respective institution of higher education.
(b) Property disposition policies followed by institutions of
higher education shall be consistent with policies followed by the
department of enterprise services.
(c)(i) Except as provided in (c)(ii) of this subsection, purchasing
policies and procedures followed by institutions of higher education
shall be in compliance with chapters 39.19, 39.29, and 43.03 RCW, and
RCW 43.19.1901, 43.19.1906, 43.19.1911, 43.19.1917, 43.19.1937,
43.19.685, 43.19.700 through 43.19.704, and 43.19.560 through
43.19.637.
(ii) Institutions of higher education may use all appropriate means
for making and paying for travel arrangements including, but not
limited to, electronic booking and reservations, advance payment and
deposits for tours, lodging and other necessary expenses, and other
travel transactions based on standard industry practices and federal
accountable plan requirements. Such arrangements shall support
student, faculty, staff, and other participants' travel, by groups and
individuals, both domestic and international, in the most cost-effective and efficient manner possible, regardless of the source of
funds.
(d) Purchases under chapter 39.29, 43.19, or 43.105 RCW by
institutions of higher education may be made by using contracts for
materials, supplies, services, or equipment negotiated or entered into
by, for, or through group purchasing organizations.
(e) The community and technical colleges shall comply with RCW
43.19.450.
(f) Except for the University of Washington, institutions of higher
education shall comply with RCW 43.19.769, 43.19.763, and 43.19.781.
(g) If an institution of higher education can satisfactorily
demonstrate to the director of the office of financial management that
the cost of compliance is greater than the value of benefits from any
of the following statutes, then it shall be exempt from them: RCW
43.19.685 and 43.19.637.
(h) Any institution of higher education that chooses to exercise
independent purchasing authority for a commodity or group of
commodities shall notify the director of enterprise services.
Thereafter the director of enterprise services shall not be required to
provide those services for that institution for the duration of the
enterprise services contract term for that commodity or group of
commodities.
(2) The council of presidents and the state board for community and
technical colleges shall convene its correctional industries business
development advisory committee, and work collaboratively with
correctional industries, to:
(a) Reaffirm purchasing criteria and ensure that quality, service,
and timely delivery result in the best value for expenditure of state
dollars;
(b) Update the approved list of correctional industries products
from which higher education shall purchase; and
(c) Develop recommendations on ways to continue to build
correctional industries' business with institutions of higher
education.
(3) Higher education and correctional industries shall develop a
plan to build higher education business with correctional industries to
increase higher education purchases of correctional industries
products, based upon the criteria established in subsection (2) of this
section. The plan shall include the correctional industries'
production and sales goals for higher education and an approved list of
products from which higher education institutions shall purchase, based
on the criteria established in subsection (2) of this section. Higher
education and correctional industries shall report to the legislature
regarding the plan and its implementation no later than January 30,
2005.
(4)(a) Institutions of higher education shall set as a target to
contract, beginning not later than June 30, 2006, to purchase one
percent of the total goods and services required by the institutions
each year produced or provided in whole or in part from class II inmate
work programs operated by the department of corrections. Institutions
of higher education shall set as a target to contract, beginning not
later than June 30, 2008, to purchase two percent of the total goods
and services required by the institutions each year produced or
provided in whole or in part from class II inmate work programs
operated by the department of corrections.
(b) Institutions of higher education shall endeavor to assure the
department of corrections has notifications of bid opportunities with
the goal of meeting or exceeding the purchasing target in (a) of this
subsection.
NEW SECTION. Sec. 6 By January 1, 2017, institutions of higher
education as defined in RCW 28B.10.016 must report to the legislature
and the governor on: (1) The amount of savings resulting from use of
the higher education provisions of sections 1 through 5 of this act;
and (2) the manner in which such savings were used to promote student
academic success.