Enrolled Bill Summary

House Bill 2485 amends the Texas Internal Auditing Act to make internal auditing requirements applicable only to executive branch state agencies that have more than 100 full-time equivalent employees as authorized by the General Appropriations Act, have an annual operating budget exceeding $10 million, or receive and process more than $10 million in cash per fiscal year. Other executive branch agencies that receive appropriations are not subject to internal auditing requirements but are required instead to conduct annual formal risk assessments consisting of an executive management review to evaluate the probability of certain risks, assess their likely effects, and rank those risks accordingly. An agency covered by that requirement must provide the state auditor a written risk assessment. Subject to the legislative audit committee's approval for inclusion of the work in the annual audit plan, the state auditor must evaluate each report, identify those agencies with significant risks, and recommend to the governor that the identified agencies obtain audits to address the significant risks. The governor may then order an identified agency to undergo an audit and audit response processes and may provide funds to pay the costs of the audits.