By:  Shapiro                                           S.B. No. 770
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to state agency internal auditing.
 1-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-3           SECTION 1.  Section 2102.006, Government Code, is amended by
 1-4     amending Subsection (a)  and adding Subsection (d) to read as
 1-5     follows:
 1-6           (a)  The governing board of a state agency [or its designee,]
 1-7     or the administrator of a state agency without a governing board[,]
 1-8     shall appoint an internal auditor.
 1-9           (d)  The governing board of a state agency or the
1-10     administrator of a state agency without a governing board shall
1-11     review the staffing and budget of the agency's program of internal
1-12     auditing to determine whether the agency has resources adequate to
1-13     address in a reasonable amount of time the risks identified in the
1-14     agency's annual risk assessment.
1-15           SECTION 2.  Subsection (a), Section 2102.007, Government
1-16     Code, is amended to read as follows:
1-17           (a)  The internal auditor shall:
1-18                 (1)  report directly to the state agency's governing
1-19     board;
1-20                 (2)  develop an annual audit plan;
1-21                 (3)  conduct audits as specified in the audit plan and
1-22     document deviations;
1-23                 (4)  prepare audit reports;
1-24                 (5)  conduct quality assurance reviews in accordance
 2-1     with professional standards and periodically take part in a
 2-2     comprehensive external peer review in accordance with standards
 2-3     described by Section 2102.011; and
 2-4                 (6)  conduct economy and efficiency audits and program
 2-5     results audits as directed by the state agency's governing board.
 2-6           SECTION 3.  Section 2102.008, Government Code, is amended to
 2-7     read as follows:
 2-8           Sec. 2102.008.  APPROVAL OF AUDIT PLAN AND AUDIT REPORT.  The
 2-9     annual audit plan developed by the internal auditor must be
2-10     approved by the state agency's governing board [or its designee,]
2-11     or by the administrator of a state agency without a governing
2-12     board.  Audit reports must be reviewed by the state agency's
2-13     governing board and the administrator.
2-14           SECTION 4.  Section 2102.009, Government Code, is repealed.
2-15           SECTION 5.  This Act takes effect September 1, 1999.
2-16           SECTION 6.  The importance of this legislation and the
2-17     crowded condition of the calendars in both houses create an
2-18     emergency and an imperative public necessity that the
2-19     constitutional rule requiring bills to be read on three several
2-20     days in each house be suspended, and this rule is hereby suspended.