Who had to maintain and evaluate cost accounting at Washington public institutions in 1956?

Plain-English summary

The Washington AG concluded that the director of public institutions remained responsible for installing and maintaining cost accounting systems for institutions under that department's control. The 1955 creation of a separate department of general administration had moved several divisions but did not shift this responsibility. The AG assigned evaluation of the systems' effectiveness to the director of the budget because that official had duties involving efficiency surveys and pre-auditing.

The opinion states: “the director of the budget is responsible for evaluating the actions of the director in the discharge of his duties under such section.” (source).

Currency note

This opinion was issued in 1956. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did the new general administration department take over institution cost accounting?
A: No. The AG said the director of public institutions retained that statutory duty.

Q: Who assessed whether the systems worked?
A: The AG assigned that evaluation to the director of the budget, whose role included efficiency surveys and pre-audits.

Q: Why was this treated as budget oversight rather than a state auditor post-audit?
A: The opinion said the cost accounting duty aimed to avoid inefficient spending, while the auditor's post-audit concerned completed financial periods.

Background and statutory framework

The Legislative Budget Committee asked who implemented and assessed the cost accounting duty in RCW 43.19.160 after a departmental reorganization. The AG compared the state auditor's post-audit role in RCW 43.09.290 with the budget director's pre-audit and efficiency duties in RCW 43.31.020.

Source

• Landing page: https://www.atg.wa.gov/ago-opinions/cost-accounting-department-public-institutions

Original opinion text

Attorney General Don Eastvold

COST ACCOUNTING -- DEPARTMENT OF PUBLIC INSTITUTIONS

1. Director of Department of Public Institutions shall install and maintain cost accounting systems for the various institutions under his control.

2. Director of the budget is responsible for evaluating the effectiveness of said cost accounting systems.

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January 17, 1956

Honorable Ole H. Olson
Chairman
Legislative Budget Committee
Legislative Building
Olympia, Washington Cite as: AGO 55-57 No. 186

Dear Sir:

In your letter of December 20, 1955, you have asked two questions regarding the construction of RCW 43.19.160, § 43, chapter 7, Laws of 1921, which is set forth as follows:

"The director of public institutions shall install and maintain in the department a proper cost accounting system for each of the institutions under the control of the department, for the purpose of detecting and avoiding unprofitable expenditures and operations."

(1) Is the present director of institutions now responsible for the implementation of the duty set forth in such section?

(2) Who is responsible for determining whether or not the duties set forth have been discharged?

[[Orig. Op. Page 2]]

Our answer to question No. 1 is in the affirmative. Regarding question No. 2, it is our opinion that the director of the budget is responsible for evaluating the actions of the director in the discharge of his duties under such section.

ANALYSIS

The 1955 session of the legislature created through chapter 285 a state department of general administration. This was done by removing from the department of public institutions the division of banking, the division of savings and loan associations, the division of capitol buildings, the division of purchasing, and the division of veterans' loan insurance, and placing them under a single director to be known as the director of general administration. These functions were formerly, together with the department of public institutions, under a single administrative head. By so doing the legislature has obviously created a new department. The laws applicable to the department of public institutions are now administered by, as they were in the past, the director of that department.

With regard to your second question, you will note that in its 1941 session the legislature in chapter 196 provided for the auditing of state departments, commissions, etc. It specifically provided in § 1, the same being RCW 43.09.290, that the state auditor should make annual post-audits of the "books, records, funds, and financial transactions of a state department for a complete fiscal period; pre‑audit means all other audits and examinations; . . ."

RCW 43.31.020 sets forth the powers and duties of the director of the budget and provides that he shall

"(1) Exercise all the powers and perform all the duties prescribed by law with respect to the administration of the state budget law, the pre‑auditing of state departments, the approval of purchases of materials and supplies by state departments, and the approval of public printing bills;" (Emphasis supplied)

Subsection (2) of said section provides that the director of budget shall make efficiency surveys of all state departments and institutions and will make recommendations to overcome inefficiencies.

[[Orig. Op. Page 3]]

Since the section in question is designed for the purpose of avoiding inefficiencies and since it is not a post-audit, it would appear to fall directly within the terms of the powers and duties assigned to the director of budget.

We hope this information will be of service to you.

Very truly yours,

DON EASTVOLD
Attorney General

B. F. RENO, JR.
Assistant Attorney General