LEGISLATURE ‑- LEGISLATIVE BUDGET COMMITTEE ‑- AUTHORITY TO AUDIT WASHINGTON PUBLIC POWER SUPPLY SYSTEM

LEGISLATURE ‑- LEGISLATIVE BUDGET COMMITTEE ‑- AUTHORITY TO AUDIT WASHINGTON PUBLIC POWER SUPPLY SYSTEM

The Legislative Budget Committee is authorized, under RCW 44.28.085 and related statutes, to conduct ". . . a management survey, program review, and/or a performance audit . . ." of the Washington Public Power Supply System or any other such entity established pursuant to chapter 43.52 RCW.

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                                                                 August 10, 1979

Honorable Hubert F. Donohue
Chairman
Legislative Budget Committee
Rt. 2, Box 13
Dayton, Washington 99328

                                                                                                                 Cite as:  AGO 1979 No. 15

Dear Sir:

            By recent letter you requested our opinion on several questions which we combine and paraphrase as follows:

            Does the Legislative Budget Committee have the legal authority, under RCW 44.28.085 or any related statutes, to conduct ". . . a management survey, program review, and/or a performance audit . . ." of the Washington Public Power Supply System or any other such entity established pursuant to chapter 43.52 RCW?

            We answer the foregoing question in the affirmative for the reasons set forth in our analysis.

                                                                     ANALYSIS

            The Washington Public Power Supply System (WPPSS), as earlier explained in our letter of December 7, 1978, to State Senator King Lysen (copy enclosed), is a joint operating agency  [[Orig. Op. Page 2]] formed by several public utility districts and municipal utility departments under the authority of RCW 43.52.360 which reads, in material part, as follows:

            "Any two or more cities or public utility districts or combinations thereof may form an operating agency (herein sometimes called a joint operating agency) for the purpose of acquiring, constructing, operating and owning plants, systems and other facilities and extensions thereof, for the generation and/or transmission of electric energy and power.  Each such agency shall be a municipal corporation of the state of Washington with the right to sue and be sued in its own name.

            ". . ."

            In our opinion to Senator Lysen we were concerned with the applicability of the open public meetings act (chapter 42.30 RCW) to a meeting of the executive board of WPPSS.  Based upon the legislature's express labeling of such an agency as a "municipal corporation" we concluded as follows:

            ". . . The Washington Public Power Supply System, as a 'municipal corporation' under RCW 42.52.360, comes under the definition of 'public agency' in RCW 42.30.020(1)(b).  Likewise, the executive board comes under that same definition by reason of RCW 42.30.020(1)(c).  Therefore, the open public meetings act is applicable."

            As a consequence of this same legislative characterization, however, WPPSS has, over the years, been periodically audited by the Division of Municipal Corporations of the State Auditor's Office under RCW 43.09.260 (municipal audits) rather than by the Division of Departmental Audits under RCW 43.09.290 through RCW 43.09.340 (state agency audits).  Bearing that in mind, the next statute to be noted is RCW 44.28.085 which provides for the conduct of management surveys and program reviews by the Legislative Budget Committee and reads, in material part, as follows:

            "The legislative budget committee shall make management surveys and program reviews as to every public body, officer or employee subject to the provisions of RCW 43.09.290  [[Orig. Op. Page 3]] through 43.09.340.  The legislative budget committee may also make management surveys and program reviews of local school districts, intermediate school districts, and other units of local government receiving state funds as grants-in-aid or as shared revenues. . . ."1/

             In addition, two other more recent legislative enactments must also be noted before turning to your question.  First, by its enactment of § 1, chapter 220, Laws of 1979, 1st Ex. Sess., the legislature added a new section to chapter 43.52 RCW requiring the board of directors of ". . . any operating agency conducting or operating a thermal power plant . . ."2/ to conduct their own periodic management performance audits ". . . by at least one qualified independent firm . . ." and then further providing as follows:

            "In addition to the powers and duties conferred by chapter 44.28 RCW, the legislative budget committee shall evaluate such management audits as to adequacy and  [[Orig. Op. Page 4]] effectiveness of procedure and shall consult with and make reports and recommendations to the board.  The operating agency shall reimburse the legislative budget committee for all costs of furnishing such services.

            "The operating agency shall file a copy of each firm's reports, and the legislative budget committee shall file a copy of each of its reports or recommendations in a timely manner, prepared in accordance with this section, with the respective chairmen of the senate and house energy and utilities committees.  Upon the concurrent request of the senate or house energy and utilities committees, the operating agency shall report to the committees on a quarterly basis."

            Secondly, by § 4, chapter 270, Laws of 1979, 1st Ex. Sess. (the omnibus state appropriations act) the legislature made the following appropriation to the Legislative Budget Committee:

            "General Fund Appropriation..........$1,247,000

            "The appropriation contained in this section shall be subject to the following condition or limitation:  Not more than $70,000 shall be expended for the specific purpose of conducting a management survey, program review, and/or a performance audit, as defined in RCW 44.28.085 and 44.28.086, of the Washington public power supply system and any other joint operating agencies established pursuant to chapter 43.52 RCW."

            In the light of these several statutory provisions your question, here repeated for ease of reference as above paraphrased, asks:

            "Does the Legislative Budget Committee have the legal authority, under RCW 44.28.085 or any related statutes, to conduct ". . . a management survey, program review, and/or a performance audit . . ." of the Washington Public Power Supply System or any other such entity established pursuant to chapter 43.52 RCW?"

             [[Orig. Op. Page 5]]

            At first blush, notwithstanding the language in § 4, chapter 270,supra (the appropriation provision), a negative answer to this question might seem to be suggested.  To begin with, it seems clear that nothing in the first of the two 1979 legislative enactments (chapter 220,supra) referred to above can be said to vest the Legislative Budget Committee with the requisite substantive statutory authority to conduct its own management surveys and program reviews of a joint operating agency such as WPPSS.  Instead, all that statute does is to authorize the budget committee to review and evaluate those independent management audits which are to be conducted, through a qualified administrative auditor, by an operating agency such as WPPSS itself.

            Furthermore, there is the problem alluded to earlier arising from the fact that while WPPSS (and any other such joint operating agencies) are now audited by the State Auditor's Office, they are audited as municipal corporations under RCW 43.09.260 rather than as state agencies or departments under RCW 43.09.290 through RCW 43.09.340.  Therefore, such joint operating agencies do not come within the purview of the first sentence of RCW 44.28.085,supra, which, once again, reads as follows:

            "The legislative budget committee shall make management surveys and program reviews as to every public body, officer or employee subject to the provisions of RCW 43.09.290 through 43.09.340. . . ."

            And finally, because it is simply wording in an appropriations bill, the above‑quoted language of § 4, chapter 270, Laws of 1979, 1st Ex. Sess. does not, itself, constitute a grant of substantive legal authority to the Legislative Budget Committee.  Cf.,Flanders v. Morris, 88 Wn.2d 183, 558 P.2d 769 (1977).

            Nevertheless, it seems readily apparent to us from that appropriation provision3/ that the legislature intended to have  [[Orig. Op. Page 6]] just such a ". . . management survey, program review and/or performance audit, . . ." of WPPSS (and any other, similar, joint operating agencies) conducted by the Legislative Budget Committee during the 1979-81 biennium‑-for, presumably, its inclusion of that language in the appropriation was not intended to be a vain and useless act.  State v. Wanrow, 88 Wn.2d 221, 559 P.2d 548 (1977); Knowles v. Holly, 82 Wn.2d 694, 513 P.2d 18 (1973).  Therefore, let us go on now and examine the second sentence of RCW 44.28.085,supra, which reads as follows:

            ". . . The legislative budget committee may also make management surveys and program reviews of local school districts, intermediate school districts, and other units of local government receiving state funds as grants-in-aid or as shared revenues. . . ."

            In the context of this statutory language, you have stated, in your letter,

            ". . . that the municipalities of the State who are members of the Supply System all appear to be recipients of State funds as shared revenues. . . ."

            Also to be noted once more is the definition of "program reviews" in the fourth sentence of RCW 44.28.085, supra, earlier quoted in footnote 1, above, which reads as follows:

            ". . . Program reviews for the purpose of this section shall be an examination of stateor local government programs to ascertain whether or not such programs continue to serve their intended purposes, are conducted in an efficient and effective manner, or require modification or elimination: . . ."  (Emphasis supplied)

            In our opinion it is the further substantive authority which is both express and implicit in these two later provisions of RCW 44.28.085,supra, that the legislature had in mind in passing § 4, chapter 270,supra, and thereby earmarking a portion of its 1979-81 appropriation to the Legislative Budget Committee ". . . for the specific purpose . . . of conducting a management survey, program review and/or performance audit . . ." of WPPSS (and any other joint operating agencies) during the biennium for which that appropriation was made.  While the language of that appropriation provision cannot, itself, be treated  [[Orig. Op. Page 7]] as an amendment to the substantive authority contained in RCW 44.28.085, it most certainly can be viewed from the standpoint of a viable legislative interpretation of any ambiguous or uncertain language in that statute.  Accord,Anderson v. Seattle, 78 Wn.2d 201, 471 P.2d 87 (1970) and cases cited therein at page 203.