PRESS RELEASE

February 2, 2005

House passes restrictive performance audit bill

OLYMPIA—Despite the efforts of Rep. Mark Miloscia (D-Federal Way), Speaker Frank Chopp (D-Seattle), Rep. Mike Armstrong (R-Wenatchee), and a long list of bi-partisan House members, the House today approved a bill (74-22) that falls short of granting the state auditor the authorization to conduct independent and comprehensive performance audits of state government without having to first gain approval from an unelected citizen board.

U.S. General Accountability Office standards for auditing (often referred to as "yellow book" standards) require auditors be independent both in fact and appearance from personal, external, and organizational impairments to independence. The citizen board as structured in HB 1064 serves as an organizational impairment to independence.

"While the House made some strides today toward meaningful accountability, changes are still needed to assure truly independent and comprehensive performance audits are conducted by the state auditor," said Jason Mercier, budget analyst for the Evergreen Freedom Foundation. "It is up to the Senate now to make the necessary changes so that a people's initiative is unnecessary."

Though renamed from the "citizen oversight board" to the "citizen advisory board," the board, not the state auditor, is charged with establishing the criteria for any performance audits in the bill adopted today. The state auditor is a non-voting member of the ten person board and is prohibited from serving as chair.

An amendment to HB 1064 was offered by Rep. Armstrong to authorize the state auditor alone be able to determine the scope of any performance audits, but it failed on a vote of 47-49.

Last year, fifty-three Representatives signed a performance audit pledge sponsored by the Evergreen Freedom Foundation, which read in-part: "I pledge to support independent comprehensive performance audits of state agencies. The scope of performance audits should be established by the elected state auditor, not an unelected group of citizens appointed by the governor and legislature."

Though the current role of the board needs changing, HB 1064 as passed with an amendment by Rep. Kathy Haigh (D-Shelton):

• requires the final performance audit reports be made available to the public and posted on the internet;

• authorizes the state auditor to conduct performance audits of local governments using local funds if a local government requests such a review;

• requires two one-hundredths of one percent of the state's total general fund state budget each biennium be set aside to fund the performance audits (approximately $5 million for the 2005-07 biennium);

• does not sunset the performance audit authorization; and

• establishes an annual agency scorecard system to grade agencies on their performance.

"The proposed board is well suited to carry out the agency score card requirements of the bill, but should not be allowed to serve as a gatekeeper on the types of performance audits the state auditor can do," said Mercier. "While we appreciate the hard work of the House in moving this reform forward, we are hopeful the Senate will be able to change the role of the board to truly one of advice versus oversight."

Additional Information
EFF performance audit pledge signers in the House: Representatives Ahern, Anderson, Appleton, Armstrong, Buck, Buri, Campbell, Chase, Chopp, Clibborn, Condotta, Crouse, Curtis, DeBolt, Dunn, Dunshee, Ericks, Ericksen, Haler, Hinkle, Holmquist, Hunter, Kilmer, Kretz, Kristiansen, Lantz, McCoy, McCune, McDonald, Miloscia, Moeller, Morrell, Newhouse, Nixon, O'Brien, Orcutt, Pearson, Priest, Roach, Roberts, Rodne, Schindler, Sells, Serben, Shabro, Strow, Sullivan, Talcott, Tom, Wallace, Walsh, Williams and Woods.

EFF performance audit pledge signers in the Senate: Senators Benson, Benton, Carrell, Delvin, Esser, Honeyford, Kastama, McCaslin, Mulliken, Parlette, Rasmussen, Roach, Schoesler, Sheldon, Stevens, Swecker and Zarelli.

Contact: 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