POLICY HIGHLIGHTER

Volume 14, Number 17
August 4, 2004

Performance reviews (audits) top DLC priority

Each year the Democratic Leadership Council (DLC) puts together a play book for Democrats to use in their campaigns and policy recommendations. The DLC describes these recommendations as "a ‘menu' of effective, field-tested New Democrat policy proposals from which you can model initiatives in your own states, cities and communities." Under the DLC's budget section for the 2004 campaign, performance reviews (audits) are the DLC's top priority.

This recommendation bodes well for the prospect of Washington state finally adopting and authorizing independent performance audits on a bi-partisan basis. In fact, Washington's Speaker of the House, Frank Chopp, has signed the Evergreen Freedom Foundation's (EFF) performance audit pledge and has encouraged other House Democrats to do the same. Republican gubernatorial candidate Dino Rossi has also signed EFF's audit pledge. This bi-partisan support should translate into overwhelming majorities of both parties in both houses signing the pledge.

Below is EFF's performance audit model language state officials have been asked to support:

The State Auditor shall periodically review and analyze the economy, efficiency and effectiveness of the policies, management, fiscal affairs, and operations of state government. These performance audits shall be conducted in accordance with the U.S. General Accounting Office Government Auditing Standards. The State Auditor may contract out any performance audits. The scope for any performance audits shall not be limited.

The State Auditor shall report the findings of the review and analysis to the Governor, Senate Majority Leader, Speaker of the House and post it on the State Auditor's web page.

The legislature must consider the State Auditor reports in connection with the legislative appropriations process. An annual report will be submitted by the Joint Legislative Audit Review Committee by July 1 of each year detailing the status of the legislative implementation of the State Auditor's recommendations. Justification must be provided for recommendations not implemented. Details of other corrective action must be provided as well.

The term government means a state agency, department, office, officer, board commission, bureau, division, institution, or institution of higher education. This includes individual state agencies and programs, as well as those programs and activities that cross agency lines. State government includes all elective offices in the Executive Branch of government and includes the Judicial and Legislative Branches.

Funding for these performance audits shall be equal to 2/100 of one percent (.02 percent) of the state's total general fund state budget for each biennia.

The DLC describes the importance of such performance reviews this way:

Tough budgetary decisions will likely be a reality for state and local officials for the foreseeable future. Many are therefore looking at unpleasant spending cuts in both the short and long terms. In the long run, however, cutting just to cut can be quite expensive, producing inefficiencies, losses of matching revenues from other sources, and fostering unmet needs. Looking instead for better and smarter ways to deliver services produces savings that are lasting and real. Of course, many governmental efforts are unnecessary, out-dated, or duplicative, and these should be cut. By focusing on government through a practical rather than an ideological lens, many state and local leaders are finding creative ways to identify performance improvements that save money-or bring in additional non-tax revenues from the federal government.

One technique for making such improvements is a performance review, which systematically identifies ways to save money and move government in the right direction. Performance reviews originated in Texas under Democratic Gov. Ann Richards and State Comptroller John Sharp as a way to pull the state out of the worst fiscal crisis it had ever faced – without raising taxes. Sharp undertook the first review with a staff specifically dedicated to questioning the premises of every agency and program in Texas. The effort produced 1,000 recommendations and resulted in $4 billion in savings in its first budget. Since then, the Texas Performance Review has been institutionalized, and has produced total savings over the last decade of $13 billion. — NDOL Balancing Budgets Responsibly May 10, 2004

A state budget based on core functions and Priorities of Government (POG) coupled with an institutionalized process of annual independent performance audits provides the basis for a transparent and accountable government. Taxpayers and clients of government services deserve nothing less. With support for EFF's performance audit pledge ranging from Republican gubernatorial candidate Dino Rossi to Democratic Speaker of the House Frank Chopp, hopefully 2004 will finally be the year Washington joins with the rest of the nation in authorizing the peoples' independently elected state auditor to review the performance and efficiency of state government.

Prepared by: Jason Mercier | Budget Research Analyst | 360-956-3482

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org