wa-law.org > bill > 2025-26 > HB 2058 > Original Bill

HB 2058 - Private entity audits

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Section 1

  1. Any private entity that receives public moneys through grants must hire a third-party auditor to conduct an audit of the entity. The third-party auditor must receive approval from the state auditor to conduct the audit. An audit performed under this section must include the following information:

    1. The total amount of state and federal moneys received by the entity;

    2. Itemized accounting of how all public moneys were spent;

    3. Evaluation of financial statements and budget reports of the entity;

    4. Verification of proper allocation and use of public moneys;

    5. Review of the effectiveness and outcomes of programs funded by public moneys;

    6. Evaluation of whether the use of the public moneys achieved the intended goals and objectives; and

    7. Determination of whether the use of public moneys has community buy-in.

  2. Public moneys received by private entities through grants are subject to the following limitations:

    1. Less than 15 percent of the public moneys received may be used for administrative expenses of the private entity;

    2. A grant may not be renewed or reissued unless an entity reapplies for and is approved for the grant each year.

  3. The expense of an audit completed under this section shall be borne by the private entity that is being audited.

  4. An audit completed under this section must be submitted to the state auditor no later than six months after the close of the fiscal year in which the public moneys were received. The state auditor shall publish all audits on the website of the office of the state auditor.

  5. The state auditor shall ensure that each private entity that receives public moneys through grants is audited in compliance with this section.

  6. For the purposes of this section, the following definitions apply:

    1. "Community buy-in" means support of the local government, through passage of a supporting resolution, or through other publicly visible means.

    2. "Private entity" means any nonpublic individual firm, corporation, association, partnership, consortium, joint venture, nonprofit organization, and any other nonpublic entity.

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