HB 1794
In CommitteeHouse
OFM, eliminating
Eliminating the office of financial management.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill eliminates the Office of Financial Management and transfers its responsibilities to three other state agencies. It also seeks to recover about $27.8 million of the $30 million that OFM misallocated in the current budget cycle, reducing general fund spending accordingly.
- Eliminates the Office of Financial Management (OFM) as a standalone agency.
- Transfers all OFM powers, duties, and functions—including budget preparation, fiscal analysis, and financial management—to the Department of Revenue, State Auditor’s Office, and State Treasurer’s Office.
- Requires that all OFM records, property, funds, contracts, and pending business be transferred to the receiving agencies.
- Repeals 21 specific statutes (RCW 43.41.030 through 43.41.970) that establish OFM’s structure, authority, and operations.
- Redirects approximately $27.8 million of the $30 million OFM misallocated in the 2023–2025 budget cycle to the receiving agencies for ongoing functions.
Who is affected
- Office of Financial Management staff and leadership — The Office of Financial Management (OFM) as an independent agency will be dissolved; its staff and operations will be absorbed by other state agencies.
- Department of Revenue, State Auditor’s Office, and State Treasurer’s Office — These agencies will take over OFM’s core responsibilities, including budget analysis, fiscal reporting, and financial oversight.
- State agencies that work with OFM on budget and financial matters — State agencies that previously submitted budget and fiscal data to OFM will now report to the receiving agencies, potentially changing reporting processes.
- Washington taxpayers and general fund budget — The state’s general fund will see a net reduction in spending due to eliminated OFM operations and recovered misallocated funds.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
Recovering $27.8 million in misallocated funds directly strengthens the state’s general fund balance, reducing the need for future tax increases or service cuts—benefiting everyday Washingtonians who rely on stable public services and face inflationary pressures on household budgets.
FinancialPeopleRef: Sec. 1 (‘approximately $27.8 million of the $30 million the office of financial management misallocated… be recovered’); Sec. 4 (effective date: 2026-07-01)Eliminating OFM as a standalone agency reduces bureaucratic overhead and may streamline interagency coordination if the receiving agencies effectively absorb functions—potentially accelerating budget cycles and reducing redundant reporting for local governments that submit data to the state.
Local GovernmentLean peopleRef: Sec. 2(1); Sec. 1 (‘general fund — state expenditures will be reduced by $27.8 million’)Transferring OFM’s fiscal analysis and financial management functions to the State Auditor’s Office could strengthen accountability and oversight—especially if the Auditor’s office gains new authority to audit budget submissions and enforce fiscal discipline, reducing opportunities for future misallocations.
Public SafetyPeopleRef: Sec. 2(1); Sec. 2(2)(a); Sec. 2(3)Recovering misallocated funds and eliminating a standalone agency that failed to properly manage the state budget reinforces constitutional principles of fiscal responsibility and legislative oversight—helping ensure taxpayer dollars are used transparently and equitably, especially for vulnerable populations.
Rights & LibertiesPeopleRef: Sec. 1 (‘purpose… to partially recover the $30 million that the office of financial management misallocated’); Sec. 2(4)Consolidating OFM functions into existing agencies may reduce duplication and simplify compliance for businesses that interact with the state—particularly if the receiving agencies adopt standardized reporting and reduce bureaucratic friction in permit processing, licensing, or grant applications.
Business & EmploymentPeopleRef: Sec. 2(1); Sec. 2(2)(a); Sec. 2(3)
Potential Concerns (5)
Consolidating OFM’s budget analysis and fiscal reporting functions into three separate agencies (DOR, Auditor, Treasurer) may reduce coordination efficiency and increase complexity for state and local agencies that rely on a single, centralized source of fiscal guidance—potentially delaying budget submissions, increasing administrative burden, and causing inconsistent fiscal interpretations across agencies.
Local GovernmentPeopleRef: Sec. 2(1); Sec. 4 (effective date: 2026-07-01)The $27.8 million in recovered funds will be redirected to the receiving agencies for ‘ongoing functions’, but the bill does not specify that these funds will be used to maintain or expand public safety services—instead, they may be absorbed into general operations, potentially weakening oversight capacity (e.g., reduced auditing depth, less rigorous fiscal analysis), indirectly affecting public safety through diminished accountability.
Public SafetyPeopleRef: Sec. 2(1); Sec. 1 (‘$27.8 million reduction in general fund expenditures’)Transitioning OFM’s records, contracts, and pending business to three agencies may cause temporary disruptions in contract processing, procurement support, and regulatory compliance assistance for small businesses and state contractors that rely on OFM’s centralized services—especially if the receiving agencies lack capacity to absorb the volume or complexity of pending work.
Business & EmploymentLean peopleRef: Sec. 2(2)(a); Sec. 2(3)While the bill redirects unspent OFM funds to support education-related functions (e.g., K–20 network, data centers), the dissolution of OFM eliminates a dedicated agency focused on long-term education fiscal modeling and cost analysis—potentially weakening future policy decisions around school funding equity, teacher retention, and higher education affordability.
EducationPeopleRef: Sec. 1 (‘$27.8 million reduction in general fund expenditures’); Sec. 2(1)The bill repeals statutes governing health care cost containment (RCW 43.41.160) and Medicaid/Basic Health enrollment monitoring (RCW 43.41.260), and transfers those duties to other agencies—raising concerns that fragmented oversight could reduce consistency in tracking health program costs and outcomes, especially for low-income and rural populations.
HealthcareLean peopleRef: Sec. 2(1); Sec. 2(4)
Who Is Most Affected
OFM staff and leadership face job displacement or reassignment; while some may transition to the receiving agencies, leadership roles are likely reduced, and many may face early retirement or layoffs—especially those in specialized budget modeling or fiscal analysis roles.
The Department of Revenue, State Auditor’s Office, and State Treasurer’s Office gain new responsibilities and funding, but must absorb complex functions (e.g., budget preparation, fiscal analysis) without the same institutional expertise—creating short-term strain but potential long-term gains if leadership successfully integrates functions.
State agencies that previously submitted budget and fiscal data to OFM will now report to three different entities, potentially increasing administrative burden and requiring new workflows—though improved oversight from the Auditor’s Office may reduce long-term errors.
Taxpayers benefit from the $27.8 million recovery and reduced general fund spending, which could lower future tax burdens or preserve services—but may also face risks if consolidated oversight weakens accountability or service quality.
Local governments may benefit from simplified reporting if the receiving agencies standardize data requests—but could be harmed if fragmented oversight leads to inconsistent guidance on budget compliance, revenue forecasting, or grant eligibility.