Legislators: Restoring voter trust is simple - Model performance audit legislation

Prepared by Bob Williams, President and Senior Research Analyst (360) 956-3482
Evergreen Freedom Foundation


Legislators said they understood the message voters sent with the defeat of Referendum 51 last November: No more taxes without accountability. Period.

As a result, "accountability" is the new buzzword in Olympia. Several bills have been passed this year with the title "performance audits," but a close look shows the bills don't measure up. True accountability will only come with independent, comprehensive performance audits that meet nationally recognized standards. Defined by the U.S. General Accounting Office Auditing Standards (a.k.a. Yellow Book), those standards include:

" Independence. Auditors must be independent (both in fact and appearance) from personal, external, and organizational impairments to independence.

" Sufficient, competent, and relevant evidence must be obtained. Self assessments do not count.

" Efficiency, economy and effectiveness (program audits) are the three standards that define performance audits. They form a three-legged stool.

" Comprehensive written reports must be communicated to designated authorities in a timely fashion.

" All performance audits should follow generally accepted government auditing standards.

If legislators are truly interested in true performance audits, they might consider this simple model legislation:

Model Performance Audit Legislation

Fair, independent, performance audits of state agencies by the State Auditor are essential to improving the economy, efficiency and effectiveness of state government.

Review of State Agencies
(a) 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.

(b) 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.

(c) 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.

(d) State 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.

(e) The performance audits shall be funded by 2/100 of a percent (.02%) of the total general fund budget.

This simple authorization for performance audits works. Similar legislation in Texas has allowed their independently elected Comptroller (auditor) to identify $19 billion in savings over the last decade, $9 billion of which was adopted on a bipartisan basis.

Prepared by Bob Williams, President and Senior Research Analyst (360) 956-3482

Evergreen Freedom Foundation
A Non-Profit Public Policy Organization
PO Box 552, Olympia, WA 98507
(360) 956-3482, www.effwa.org

Policy Highlighter
Volume 13, Number 21
April 21, 2003

Contact: Jason Mercier, Budget Research Analyst
(360) 956-3482


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