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