1-1     By:  Shapiro                                           S.B. No. 770
 1-2           (In the Senate - Filed March 1, 1999; March 3, 1999, read
 1-3     first time and referred to Committee on State Affairs;
 1-4     March 22, 1999, reported favorably by the following vote:  Yeas 9,
 1-5     Nays 0; March 22, 1999, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to state agency internal auditing.
 1-9           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-10           SECTION 1.  Section 2102.006, Government Code, is amended by
1-11     amending Subsection (a)  and adding Subsection (d) to read as
1-12     follows:
1-13           (a)  The governing board of a state agency [or its designee,]
1-14     or the administrator of a state agency without a governing board[,]
1-15     shall appoint an internal auditor.
1-16           (d)  The governing board of a state agency or the
1-17     administrator of a state agency without a governing board shall
1-18     review the staffing and budget of the agency's program of internal
1-19     auditing to determine whether the agency has resources adequate to
1-20     address in a reasonable amount of time the risks identified in the
1-21     agency's annual risk assessment.
1-22           SECTION 2.  Subsection (a), Section 2102.007, Government
1-23     Code, is amended to read as follows:
1-24           (a)  The internal auditor shall:
1-25                 (1)  report directly to the state agency's governing
1-26     board;
1-27                 (2)  develop an annual audit plan;
1-28                 (3)  conduct audits as specified in the audit plan and
1-29     document deviations;
1-30                 (4)  prepare audit reports;
1-31                 (5)  conduct quality assurance reviews in accordance
1-32     with professional standards and periodically take part in a
1-33     comprehensive external peer review in accordance with standards
1-34     described by Section 2102.011; and
1-35                 (6)  conduct economy and efficiency audits and program
1-36     results audits as directed by the state agency's governing board.
1-37           SECTION 3.  Section 2102.008, Government Code, is amended to
1-38     read as follows:
1-39           Sec. 2102.008.  APPROVAL OF AUDIT PLAN AND AUDIT REPORT.  The
1-40     annual audit plan developed by the internal auditor must be
1-41     approved by the state agency's governing board [or its designee,]
1-42     or by the administrator of a state agency without a governing
1-43     board. Audit reports must be reviewed by the state agency's
1-44     governing board and the administrator.
1-45           SECTION 4.  Section 2102.009, Government Code, is repealed.
1-46           SECTION 5.  This Act takes effect September 1, 1999.
1-47           SECTION 6.  The importance of this legislation and the
1-48     crowded condition of the calendars in both houses create an
1-49     emergency and an imperative public necessity that the
1-50     constitutional rule requiring bills to be read on three several
1-51     days in each house be suspended, and this rule is hereby suspended.
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