Legislative Auditor recommendations to the Legislature: 2025 status report
The Legislative Auditor includes recommendations in Joint Legislative Audit and Review Committee (JLARC) performance audit reports.
Read all recommendations
Recommendations aim to improve government programs and services. They can be directed to agencies or the Legislature.
Audit recommendationsLegislative action on 2021-25 studies
The Legislature took action on several programs that JLARC reviewed. For example:
Tax preferences
- Continued preferences for workforce training, food processing, and newspapers.
- Ended preferences for international services and precious metals.
- Allowed preferences for alternative fuel vehicles and manufacturing facilities, which had unclear legislative intent, to expire.
Program reauthorizations and sunsets
- Reauthorized programs that achieved legislative intent, improving public works contracts and Medicaid fraud reporting.
- Allowed a scholarship pilot program to sunset after it awarded only 64% of available funds and provided limited guidance to colleges.
Agency oversight
JLARC directed the Department of Health and the Liquor and Cannabis Board to present strategic management plans before the 2026 legislative session. The plans will help ensure the agencies implement key recommendations.
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Opportunities for future legislative action
Seven recent performance audits and 12 tax preference reviews offer recommendations for legislative action.
Labor and commerce
Paid family medical leave
Recommendation: Implement a forward-looking rate-setting approach that maintains a sufficient financial reserve for the PFML program. Actuarial best practices recommend incorporating trends in claim experience, potential future economic shifts, and demographic changes.
Report included three recommendations to the Employment Security Department
New jobs in rural counties and community empowerment zones
Recommendations: Continue the tax preference, which offers a tax credit for new jobs. Modify it to promote and increase family wage jobs (e.g., increase wage threshold) and increase the number of businesses using it.
Tax preference does not expire
Education and workforce development
Special education funding formulas
Recommendation: If the Legislature wants to align special education funding with the needs of students and district spending, it should consider changing the current funding approach.
The 2025 Legislature removed the enrollment cap and adopted a single excess cost multiplier. Additional opportunities to align funding and student needs may exist.
Unemployment insurance training benefits program
Recommendation: Eliminate or change ESD’s Training Benefits Program. It causes most participants to earn less than their peers over time, so it is not meeting the Legislature's stated goals.
Health care
Hospital data reporting, inspections, and complaints
Recommendation: Consider specifying the maximum amount of time allowed between acute care hospital inspections and clarify the basis for calculating the 18-month average. The Department of Health (DOH) does not complete inspections on time: 72% of hospital inspections were late, with nearly half overdue by 6 months or more.
Report makes five recommendations to DOH
Regulation of ambulatory surgical facilities
Recommendation: Consider allowing DOH to collect ambulatory surgical facility license fees each year. DOH collects license fees from ambulatory surgical facilities every three years. Collecting fees annually would provide revenue stability and allow it to respond more quickly to program and cost changes.
Report makes three recommendations to DOH
Nonprofit hospitals and cancer clinics
Recommendation: Clarify the Legislature’s objectives for this property tax exemption. Nonprofit hospitals and cancer clinics that benefit provide 99% of charity care statewide. The value of charity care exceeds tax savings.
Tax preference does not expire
Nonprofit outpatient dialysis facilities
Recommendation: Clarify the Legislature’s objectives for this property tax exemption. Preference provides tax relief to nonprofit outpatient dialysis facilities, which outperform for-profit counterparts on two standard measures.
Tax preference does not expire
State and local government
Office of privacy and data protection
Recommendation: Update the office’s mandate to align with its capacity and focus. This could include OPDP’s requirements for broadband equity reporting, public outreach, and required performance measures.
Report included one recommendation to OPDP
Business and economic development
Cannabis market
Recommendation: Consider ways to increase social equity in the cannabis industry beyond new producer licenses. Evidence indicates challenging market conditions for producers licensed through the Social Equity in Cannabis Program.
Report included one recommendation to the Liquor and Cannabis Board
Travel agents and tour operators
Recommendation: Clarify to add an objective and performance metrics. Savings for large beneficiaries are increasing, while those for small beneficiaries are decreasing.
Tax preference does not expire
Out-of-state businesses attending WA trade conventions
Recommendation: Continue the tax preference. Like other states, it offers exemptions to out-of-state businesses that attend only one Washington trade convention per year and do not make sales or take orders at the convention.
Tax preference expires 1/2027
Historic ships and vessels
Recommendation: Clarify the tax preference's goals and set evaluation metrics. Owners of eleven historic vessels saved an estimated $21,000 in 2023.
Tax preference does not expire
Housing and human services
Nonprofit low-income housing development
Recommendation: Decide whether to continue the tax preference: it helps nonprofits build homes but does not meet the criteria in law for continuation. If continued, focusing the metric on housing outcomes instead of spending would better reflect the Legislature's objectives.
Tax preference expires: No new applications after 12/2027; expires in 2038
Multipurpose senior citizen centers
Recommendation: Continue the preference, which provides a property tax exemption for nonprofit multipurpose senior centers. This meets the inferred objective.
Tax preference expires 1/2028
Local government impact fee deferral programs
Recommendations: Consider whether liens are necessary to ensure that deferred fees are paid. Either repeal Commerce's data collection requirement or identify the measures Commerce should collect for ongoing program oversight. The Legislature considered four related bills: HB 1468, HB 1362 (2024 session); SB 5614, SB 5748 (2025 session)
Report recommended that cities without a deferral program adopt one, and they have done so
Adapted housing for disabled veterans
Recommendation: Continue the tax preference and modify it to more effectively provide financial relief to eligible disabled veterans. Few eligible veterans claim the preference.
Tax preference expires 1/2028
Transportation
Natural gas used for transportation
Recommendations: Continue the three tax preferences, which reduce the cost of using natural gas as a transportation fuel. Modify the public utility tax exemption to require beneficiaries to report the amount of natural gas produced and sold.
Tax preference expiration dates: One expires 7/2028 and two do not expire
Interstate transportation
Recommendation: Clarify the objectives for the tax preferences, three of which were enacted in the 1930s. While they make Washington’s commercial transportation industry more competitive, they are no longer necessary to comply with the Constitution.
Tax preferences do not expire
Manufacturing
Aluminum smelters
Recommendation: The Legislature should allow four tax preferences to expire and terminate the other four. None of the eight preferences is used and all aluminum smelters in Washington have closed.
Tax preference expiration dates: Four expire January 2027 and four do not expire
Aerospace industry
Recommendation: Clarify the targets for aerospace industry employment. While the preferences meet legislative goals to lower costs, maintain industry presence, and encourage strong wages, employment has decreased since 2019. Also, consider whether JLARC should continue to review the preferences every five years or revert to the standard ten-year cycle.
Tax preferences expire July 2040
Agriculture
Agricultural crop protection products
Recommendation: Continue the preference, which provides tax relief for certain businesses that store pesticides. Consider new metrics or recategorize the preference as one intended to provide tax relief.
Tax preference expires January 2028
Agricultural fertilizer and seed wholesaling
Recommendation: Clarify whether the preference needs a tax preference performance statement. Currently, it has a performance statement with criteria for extension. However, there is no expiration, making the extension unnecessary.
Tax preference does not expire