Click here to skip to main content.
scenic picture from Washington state
Subjects › Management › Performance Audits - Initiative 900
Updated 11/2010

Performance Audits - Initiative 900

Contents

Overview of Initiative 900

Initiative 900, (Adobe Acrobat Document) passed in the November 2005 General Election, proposed that all state and local government entities undergo performance audits to ensure accountability and guarantee that tax dollars are spent as cost-effectively as possible. The performance audits are to be conducted by the state auditor in accordance with the United States General Accounting Office auditing standards.

The initiative includes nine specific elements to be included in each performance audit: (1) identification of cost savings; (2) identification of services that can be reduced or eliminated; (3) identification of programs or services that can be transferred to the private sector; (4) analysis of gaps or overlaps in programs or services and recommendations to correct gaps or overlaps; (5) feasibility of pooling information technology systems within the department; (6) analysis of the roles and functions of the department, and recommendations to change or eliminate departmental roles or functions; (7) recommendations for statutory or regulatory changes that may be necessary for the department to properly carry out its functions; (8) analysis of departmental performance data, performance measures, and self-assessment systems; and (9) identification of best practices. This audit is in addition to the fiscal audits performed by the state on local governments.

This audit is in addition to the fiscal audits performed by the state on local governments. The initiative did not exempt smaller units of government audit nor did it acknowledge existing performance programs of local governments.

What is a Performance Audit?

  • Government Auditing Standards, by the Comptroller of the United States, 2003 Revision, U.S. General Accounting Office, GAO-03-673G June 2003
    Section 2.09 Performance audits entail an objective and systematic examination of evidence to provide an independent assessment of the performance and management of a program against objective criteria as well as assessments that provide a prospective focus or that synthesize information on best practices or crosscutting issues. Performance audits provide information to improve program operations and facilitate decision making by parties with responsibility to oversee or initiate corrective action, and improve public accountability. Performance audits encompass a wide variety of objectives, including objectives related to assessing program effectiveness and results; economy and efficiency; internal control;11 compliance with legal or other requirements; and objectives related to providing prospective analyzes, guidance, or summary information. Performance audits may entail a broad or narrow scope of work and apply a variety of methodologies; involve various levels of analysis, research, or evaluation; generally provide findings, conclusions, and recommendations; and result in the issuance of a report. (See chapters 3, 7, and 8 for standards and guidance for auditors performing a performance audit in accordance with GAGAS.)
  • Definition in Ch. 385 Laws of 2005 (ESHB 1064) (Adobe Acrobat Document) - Relating to improving government performance and accountability
    "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.
  • RCW 44.28.005 - Definitions. (Joint Legislative Audit and Review Committee)
    (7) "Performance audit" means an objective and systematic assessment of a state agency or any of its programs, functions, or activities, or a unit of local government receiving state funds, 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. A performance audit of a local government may only be made to determine whether the local government is using state funds for their intended purpose in an efficient and effective manner.
    (8) "Performance measures" are a composite of key indicators of a program's or activity's inputs, outputs, outcomes, productivity, timeliness, and/or quality. They are means of evaluating policies and programs by measuring results against agreed upon program goals or standards.

Washington State Provisions for Performance Audits

In 1996 the state establishing a performance-based budgeting system for state agencies. State agencies were expected to : (a) establish mission statements and set goals; (b) develop strategies to achieve goals; (c) set outcome-based objectives; (d) provide continuous self-assessment of each program; (e) link budget proposals with their mission statements and goals; and (f) objectively determine the success in achieving goals.

  • State Auditor's Performance Audit Page
  • Joint Legislative Audit and Review Committee
  • Ch. 384 Laws of 2005 (Adobe Acrobat Document) - An act relating to improving government management, accountability, and performance. Requires that State agencies, within available funds, develop and implement a quality management, accountability, and performance system.
  • Ch. 385 Laws of 2005 (Adobe Acrobat Document) - This Act creates Citizen Oversight Board to improve efficiency, effectiveness, and accountability in state government. Areas to be assessed include quality management, productivity and fiscal efficiency, program effectiveness, contract management and oversight, internal audit, internal and external customer satisfaction, statutory and regulatory compliance, and technology systems and on-line services. The Board is to establish performance audit criteria consistent with criteria and standards followed by the JLARC. Criteria shall include, at a minimum, the auditing standards of the United States government accountability office, as well as legislative mandates and performance objectives established by state agencies and the legislature.

What Local Governments Are Doing

The principal focus of this page is what Washington local governments currently do to improve the quality, efficiency, effectiveness and accountability in their service delivery.

A number of Washington local governments have implemented various elements of Managing for Results (Government Accounting Standards Board Web) as a way to improve how they operate and how they are perceived. The approach to managing for results involves seven basic steps: planning for results (strategic planning); program (activity) planning; developing meaningful performance measures; budgeting for results; managing work processes; collecting data and using the data to manage; evaluating and responding to results; and reporting results to elected and appointed officials and constituents.

Measuring Performance - For information on the use of performance measures see MRSC's Web Page on Performance Measurement.

Budgeting for Results - In 2002 Governor Locke introduced a Priorities of Government(OFM Web) approach to state government budgeting that identified desired results as the basis for budget decision-making. Some of Washington's larger cities and counties, including the city of Spokane and Snohomish County are also using a similar approach to their budgeting systems. See, On the Money: Creating Budgets Based on Targeted Results, by Nikki Swartz American City and County,
Jun 2005.

Reporting on Performance - The Governmental Accounting Standards Board's Reporting Performance Information: Suggested Criteria for Effective Communication suggests criteria and good practices to guide the preparation of performance reports to effectively communicate the results of their operations. Recently Bellevue and King County Department of Natural Resources and Parks received a “Certificate of Excellence in Service Efforts and Accomplishments” (SEA) from the Association of Government Accountants (AGA) for performance reports that fulfilled GASB's suggested criteria for communicating results and thereby increasing public accountability. See samples of Performance Reports Below

Cities with Performance Audits

  • Bremerton
    • Bremerton City Charter Article III, Section 18 - Audit Committee
    • Bremerton Municipal Code Ch. 2.18- Audit Committee and City Auditor - Brings a systematic disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes as defined by the institute of Internal Auditors.
  • Lynnwood Municipal Code Ch. 2.70- Performance Measurements and Results
  • Seattle
  • Spokane Municipal Code Ch. 7.11 - Spokane Auditor
  • Tacoma

Counties with Performance Audits

  • Clark County
  • King County
    • King County Charter Section 250 - County Auditor () - Provides for financial and compliance audits, economy and efficiency audits, and program result audits for the purpose of reporting to the council regarding the integrity of the function of the financial management
      system, the quality and efficiency of agency management, and the effectiveness of programs.
    • King County Code Ch. 2.20 () - County Auditor See Section 2.20.035 - Types of Audits, and 2.20.040 - Scope of Authority
    • Performance Measurement - King County Auditor
  • Pierce County
  • Snohomish County
  • Whatcom County
    • Whatcom County Charter Section 1.51 - Performance and Strategic Planning - provides for long-term strategic planning to establish organizational structure, priorities, and performance measurements
    • Internal Audit Division

Special Purpose Districts with Performance Audits

Performance Reports

Reference and Further Reading

Archives - Initiative 900 Pros & Cons

Related MRSC Resources