LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  April 16, 1997
         
         
      TO: Honorable John Whitmire, Chair            IN RE:  Senate Bill No. 703
          Committee on Criminal Justice                              By: Nelson
          Senate
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on SB703 ( Relating 
to the consolidation of the fiscal and program audit functions 
of the Texas Department of Criminal Justice.) this office has 
detemined the following:
         
         Biennial Net Impact to General Revenue Funds by SB703-As Introduced
         
Implementing the provisions of the bill would result in a net 
positive impact of $2,864,800 to General Revenue Related Funds 
through the biennium ending August 31, 1999.
         
The bill would make no appropriation but could provide the legal 
basis for an appropriation of funds to implement the provisions 
of the bill.
         
 
Fiscal Analysis
 
The bill would amend the Government Code to statutorily create 
an internal audit division within the Texas Department of Criminal 
justice (TDCJ) that would conduct all internal audits, contract 
audits, and audits of community supervision and corrections 
departments.  The State Auditor's Office would be required to 
provide training and technical assistance to TDCJ related to 
the internal audit division until January 1, 2000.

The bill 
would also require all money collected or received by TDCJ, 
including money in the local inmate trust account, to be deposited 
in the General Revenue Fund of the state treasury. The bill 
would take effect September 1, 1997, and all TDCJ funds currently 
held outside of the state treasury would have to be deposited 
in the General Revenue Fund no later than October 1, 1997.
 
Methodolgy
 
Upon the transfer of local funds to the state treasury in accordance 
with provisions of the bill, TDCJ estimates $1,432,400 in interest 
earnings annually would become available for general appropriation 
purposes. The Comptroller of Public Accounts indicates additional 
administrative overhead costs would be incurred by their office 
upon transferring TDCJ's trust funds to the General Revenue 
Fund due to the large volume of transactions processed for those 
funds. The Comptroller Office further indicates it cannot estimate 
a total cost for the additional workload.  

Not included 
in this estimate are potential savings outlined in The Texas 
Performance Review (TPR) recommendation FR15 in Disturbing the 
Peace: The Challenge of Change in State Government.  TPR reports 
potential general revenue savings of $1,170,000 annually through 
implementation of the bill's provisions related to TDCJ's internal 
audit division and related functions. These estimated savings 
would be contingent upon a reduction in appropriations to TDCJ 
to reduce the number of fiscal and program audit staff by 26 
full-time positions. 
The probable fiscal implications of implementing the provisions 
of the bill during each of the first five years following passage 
is estimated as follows:
 
Five Year Impact:
 
Fiscal Year Probable Revenue   Probable Revenue   Probable           
            Gain/(Loss) from   Gain/(Loss) from   Savings/(Cost)                                          
            Other Funds        General Revenue    from General                                            
                               Fund               Revenue Fund                                            
            8042               0001               0001                                                     
       1998     ($62,995,314)       $62,995,314     ($61,562,914)                                    
       1998      (53,793,347)        53,793,347      (52,360,947)                                    
       2000      (53,793,347)        53,793,347      (52,360,947)                                    
       2001      (53,793,347)        53,793,347      (52,360,947)                                    
       2002      (53,793,347)        53,793,347      (52,360,947)                                    
 
 
         Net Impact on General Revenue Related Funds:
 
The probable fiscal implication to General Revenue related funds 
during each of the first five years is estimated as follows:
 
              Fiscal Year      Probable Net Postive/(Negative)
                               General Revenue Related Funds
                                             Funds
               1998           $1,432,400
               1999            1,432,400
               2000            1,432,400
               2001            1,432,400
               2002            1,432,400
 
Similar annual fiscal implications would continue as long as 
the provisions of the bill are in effect.
          
No fiscal implication to units of local government is anticipated.
          
   Source:            Agencies:   308   State Auditor's Office
                                         304   Comptroller of Public Accounts
                                         696   Department of Criminal Justice
                                         
                      LBB Staff:   JK ,CB ,JN