Private entity audits

AN ACT Relating to third-party audits of private entities 1
receiving public moneys; and adding a new section to chapter 43.09 2
RCW. 3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:4
NEW SECTION. Sec. 1. A new section is added to chapter 43.09 5
RCW to read as follows: 6
(1) Any private entity that receives public moneys through grants 7
must hire a third-party auditor to conduct an audit of the entity. 8
The third-party auditor must receive approval from the state auditor 9
to conduct the audit. An audit performed under this section must 10
include the following information: 11
(a) The total amount of state and federal moneys received by the 12
entity; 13
(b) Itemized accounting of how all public moneys were spent;14
(c) Evaluation of financial statements and budget reports of the 15
entity; 16
(d) Verification of proper allocation and use of public moneys;17
(e) Review of the effectiveness and outcomes of programs funded 18
by public moneys; 19
(f) Evaluation of whether the use of the public moneys achieved 20
the intended goals and objectives; and 21
H-2001.1
HOUSE BILL 2058
State of Washington 69th Legislature 2025 Regular Session
By Representatives Couture, Barnard, Penner, Stuebe, and Ley
Read first time 03/25/25. Referred to Committee on State Government
& Tribal Relations.
p. 1 HB 2058
(g) Determination of whether the use of public moneys has 1
community buy-in. 2
(2) Public moneys received by private entities through grants are 3
subject to the following limitations: 4
(a) Less than 15 percent of the public moneys received may be 5
used for administrative expenses of the private entity;6
(b) A grant may not be renewed or reissued unless an entity 7
reapplies for and is approved for the grant each year.8
(3) The expense of an audit completed under this section shall be 9
borne by the private entity that is being audited.10
(4) An audit completed under this section must be submitted to 11
the state auditor no later than six months after the close of the 12
fiscal year in which the public moneys were received. The state 13
auditor shall publish all audits on the website of the office of the 14
state auditor. 15
(5) The state auditor shall ensure that each private entity that 16
receives public moneys through grants is audited in compliance with 17
this section. 18
(6) For the purposes of this section, the following definitions 19
apply: 20
(a) "Community buy-in" means support of the local government, 21
through passage of a supporting resolution, or through other publicly 22
visible means. 23
(b) "Private entity" means any nonpublic individual firm, 24
corporation, association, partnership, consortium, joint venture, 25
nonprofit organization, and any other nonpublic entity.26
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p. 2 HB 2058