By Shapiro                                             S.B. No. 770
         76R4924 JJT-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to state agency internal auditing.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Section 2102.006, Government Code, is amended by
 1-5     amending Subsection (a)  and by adding Subsection (d) to read as
 1-6     follows:
 1-7           (a)  The governing board of a state agency [or its designee,]
 1-8     or the administrator of a state agency without a governing board[,]
 1-9     shall appoint an internal auditor.
1-10           (d)  The governing board of a state agency or the
1-11     administrator of a state agency without a governing board shall
1-12     review the staffing and budget of the agency's program of internal
1-13     auditing to determine whether the agency has resources adequate to
1-14     address in a reasonable amount of time the risks identified in the
1-15     agency's annual risk assessment.
1-16           SECTION 2.  Section 2102.007(a), Government Code, is amended
1-17     to read as follows:
1-18           (a)  The internal auditor shall:
1-19                 (1)  report directly to the state agency's governing
1-20     board;
1-21                 (2)  develop an annual audit plan;
1-22                 (3)  conduct audits as specified in the audit plan and
1-23     document deviations;
1-24                 (4)  prepare audit reports;
 2-1                 (5)  conduct quality assurance reviews in accordance
 2-2     with professional standards and periodically take part in a
 2-3     comprehensive external peer review in accordance with standards
 2-4     described by Section 2102.011; and
 2-5                 (6)  conduct economy and efficiency audits and program
 2-6     results audits as directed by the state agency's governing board.
 2-7           SECTION 3.  Section 2102.008, Government Code, is amended to
 2-8     read as follows:
 2-9           Sec. 2102.008.  APPROVAL OF AUDIT PLAN AND AUDIT REPORT.  The
2-10     annual audit plan developed by the internal auditor must be
2-11     approved by the state agency's governing board [or its designee,]
2-12     or by the administrator of a state agency without a governing
2-13     board.  Audit reports must be reviewed by the state agency's
2-14     governing board and the administrator.
2-15           SECTION 4.  Section 2102.009, Government Code, is repealed.
2-16           SECTION 5.  This Act takes effect September 1, 1999.
2-17           SECTION 6.  The importance of this legislation and the
2-18     crowded condition of the calendars in both houses create an
2-19     emergency and an imperative public necessity that the
2-20     constitutional rule requiring bills to be read on three several
2-21     days in each house be suspended, and this rule is hereby suspended.