By Galloway                                     H.B. No. 2775

      75R8613 JRD-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to requiring a report by a private auditor as part of the

 1-3     sunset review process.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Chapter 325, Government Code, is amended by

 1-6     adding Section 325.0075 to read as follows:

 1-7           Sec. 325.0075.  REPORT BY PRIVATE AUDITOR.  (a)  Before

 1-8     October 1 of the odd-numbered year before the year in which a state

 1-9     agency subject to this chapter is scheduled to be abolished, the

1-10     state auditor shall issue a request for proposals from

1-11     nongovernmental entities that are engaged in the business of

1-12     auditing to audit the agency in accordance with this section. The

1-13     purpose of the audit is to provide information about a state agency

1-14     directly to the legislature for consideration during the regular

1-15     legislative session preceding the scheduled abolition date of the

1-16     agency.  The state auditor shall award the contract to the

1-17     nongovernmental entity that is capable of performing the work that

1-18     presents the proposal that is most advantageous to the state.

1-19           (b)  The auditor awarded the contract shall determine:

1-20                 (1)  whether the agency has received, obligated, spent,

1-21     and granted public money in accordance with the purpose for which

1-22     the money was appropriated or otherwise entrusted to the agency and

1-23     in accordance with any limitations, directions, or other conditions

1-24     imposed by law on the use of the money;

 2-1                 (2)  whether the agency is managing and using its

 2-2     resources, including money, personnel, property, equipment, and

 2-3     space, in an economical and efficient manner;

 2-4                 (3)  whether the agency is effectively and efficiently

 2-5     achieving the purposes for which the agency was created; and

 2-6                 (4)  any other matter relating to the agency that the

 2-7     commission directs the state auditor to include in the request for

 2-8     proposals.

 2-9           (c)  The auditor awarded the contract shall complete the

2-10     audit and publish its audit report not later than June 30 of the

2-11     even-numbered year before the year in which the state agency

2-12     subject to this chapter is scheduled to be abolished. The audit

2-13     report is public information subject to required public disclosure

2-14     in accordance with Chapter 552.

2-15           (d)  The auditor awarded the contract shall state in the

2-16     audit report the auditor's opinion about the financial statements

2-17     of the agency.  The auditor shall also comment in the audit report

2-18     on the agency's internal controls and compliance with state and

2-19     federal law and on ways in which the agency can improve its

2-20     operations and the effectiveness of its programs.

2-21           (e)  The auditor awarded the contract shall send the audit

2-22     report to the governor, the commission, the state auditor, the

2-23     Legislative Reference Library, the chair of the standing committee

2-24     of each house of the legislature that has subject matter

2-25     jurisdiction over the audited agency, and the presiding officer and

2-26     administrative head of the audited agency.

2-27           (f)  The state auditor periodically shall send a notice to

 3-1     each member of the legislature that states which reports or audits

 3-2     under this section have been completed most recently and are

 3-3     available.

 3-4           SECTION 2.  Section 325.008(a), Government Code, is amended

 3-5     to read as follows:

 3-6           (a)  Before September 1 of the even-numbered year before the

 3-7     year in which a state agency subject to this chapter and its

 3-8     advisory committees are abolished, the commission shall:

 3-9                 (1)  review and take action necessary to verify the

3-10     reports submitted by the agency under Section 325.007;

3-11                 (2)  consult the Legislative Budget Board, the

3-12     Governor's Budget and Planning Office, the State Auditor, and the

3-13     comptroller of public accounts, or their successors, on the

3-14     application to the agency of the criteria provided in Section

3-15     325.011;

3-16                 (3)  consider the audit report on the agency prepared

3-17     under Section 325.0075, conduct a performance evaluation of the

3-18     agency based on the criteria provided in Section 325.011, and

3-19     prepare a written report; and

3-20                 (4)  review the implementation of commission

3-21     recommendations contained in the reports presented to the

3-22     legislature during the preceding legislative session.

3-23           SECTION 3.  This Act takes effect September 1, 1997.

3-24           SECTION 4.  The importance of this legislation and the

3-25     crowded condition of the calendars in both houses create an

3-26     emergency and an imperative public necessity that the

3-27     constitutional rule requiring bills to be read on three several

 4-1     days in each house be suspended, and this rule is hereby suspended.