Legislative auditor recommendations to the Legislature: 2026 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. We update the status for all recommendations each fall.
Audit recommendationsLegislative action on 2022-26 studies
Improving hospital inspections
The 2026 Legislature passed SHB 2577. It specifies that the department must inspect acute care hospitals at least every 18 months. This gives Health a clear goal for improving inspection frequency.
JLARC directed the Department of Health to present a strategic management plan in 2025. It required an update in July 2026. The operating budget directs Health to implement the recommendations and update the Legislature on its progress by November 2026. These actions ensure the agency makes progress on the five recommendations.
Ensuring Paid Family and Medical Leave (PFML) solvency
The Legislature updated the method used to set premiums for the PFML program. The program will now use an actuarial approach, setting premiums at the lowest rate needed to maintain solvency. This should also make premiums more predictable.
Changing special education funding formulas
The 2025 Legislature removed the enrollment cap and adopted a single excess cost multiplier. Additional opportunities to align funding and student needs may exist.
Modernizing statutes
Modernized the Office of Privacy and Data Protection’s performance measures. The measures will track the effectiveness of data privacy trainings for state agencies, rather than simply counting activities. Legislation also removed duplicative reporting requirements.
Addressing ignition interlock device compliance
JLARC’s audit found that most drivers required to install an interlock device do not do so, and that no agency has responsibility for driver outreach or tracking compliance. The Legislature appropriated $200,000 to the Washington Traffic Safety Commission to improve interlock device compliance, based on our report and a pilot program in Yakima County.
Extending tax preferences
The Legislature extended the hazardous substance tax exemption for certain agricultural crop protection products until January 2038.
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Opportunities for future legislative action
Five recent performance audits and 18 tax preference reviews offer recommendations for legislative action.
Labor and commerce
Main Street program
Recommendation: Continue the preference beyond its expiration date because it meets the Legislature's goal. Overall, the number of businesses in Main Street communities has increased. There is variation between Main Street communities.
Tax preference expires January 2032
Equitable access to credit
Recommendation: Continue the preference beyond its expiration date. The preference appears to meet the Legislature's objective of encouraging investment in communities historically underserved by credit.
Tax preference expires July 2027
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 service delivery and access
Recommendation: If the Legislature wants to improve inclusion, it should state its public policy objective. Some parts of the funding formula imply that inclusion is a priority. If the Legislature sets an objective for inclusion, it could direct OSPI to set performance metrics, develop a plan, and identify resource needs and options to achieve the objective.
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. The 2026 Legislature considered HB 2120 and SB 5879 to implement the recommendation; neither passed.
Health care
Drug take-back program
Recommendation (expedited review): The Legislature should amend the fee design to meet best practices and enable full cost recovery by DOH. Changes could include removing the fee cap and removing the association with program operator expenditures.
Recommendation (sunset review): Continue with changes to address ongoing challenges. It creates a single statewide program that is largely funded by manufacturers. However, the kiosk requirement may be unachievable as written, outcome studies are incomplete, and costs outpace fee revenue.
Nonprofit hospitals and cancer clinics
Recommendation: Clarify the Legislature’s objectives for this property tax exemption. The beneficiaries are nonprofit hospitals and cancer clinics that provide 99% of charity care statewide. The value of charity care exceeds tax savings.
Tax preference does not expire
State and local government
Department of Youth and Families (DCYF) juvenile rehabilitation programs
Recommendation: Consider addressing crowding issues at DCYF secure facilities to improve safety. Potential policy changes to address crowding at DCYF facilities could include creating additional facility capacity and changing or clarifying statutory criteria for who is served or transferred.
The report also included seven recommendations to DCYF. Addressing any one of these challenges without attention to the others would likely be insufficient.
Environment
Landfill biogas equipment
Recommendation: Continue the preference beyond its expiration date. It meets the Legislature's goal to increase the production of renewable natural gas in Washington. Also, modify it to require more detailed reporting about use of the preference and production of renewable natural gas.
Tax preference expires in January 2029
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 January 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
Rehabilitated historic properties
Recommendation: Continue the preference because it is meeting its objective to promote historic property revitalization. Property owners saved $56.8 million over the past 10 years, primarily in King County and for commercial properties. While preference use has declined, use increased 6% between 2020 and 2022.
Tax preference expires January 2031
Housing and human services
Automotive adaptive equipment 
Recommendation: Continue the preference beyond its expiration date. It is meeting the Legislature's intent to provide financial relief to injured veterans and remove a perceived competitive disadvantage.
Tax preference expires July 2028
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. The 2026 Legislature passed HB 2610, which expanded the preference but did not extend its expiration date.
Tax preference expires: No new applications after December 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. The 2026 Legislature introduced HB 2133 and SB 5970 to address the recommendation; they did not pass.
Tax preference expires January 2028
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. The 2026 Legislature introduced HB 2135 to address the recommendation; it did not pass.
Tax preference expires January 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. A bill to repeal these tax preferences was introduced during the 2026 session.
Tax preference expiration dates: One expires July 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
Airplane modifications 
Recommendation: The Legislature should continue the preference beyond its July 2031 expiration. It meets the Legislature's goals and its criteria for extension by supporting jobs and increasing the state’s net tax revenue.
Tax preference expires July 2031
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. The 2026 Legislature introduced HB 2730 to address these recommendations; it did not pass.
Tax preferences expire July 2040
Agriculture
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