C.S.H.B. 3024 78(R)    BILL ANALYSIS


C.S.H.B. 3024
By: Casteel
Government Reform
Committee Report (Substituted)



BACKGROUND AND PURPOSE 
Local governments, especially those with multiple state funding sources,
must comply with many state reporting and auditing requirements.  Over
time, these requirements have become duplicative and lack a coherent
underlying scheme to provide just the information that is necessary to
those who need to see it.  This bill is aimed at developing a more uniform
and logical reporting structure for local governments and, by doing so,
reducing cost and waste in the use of taxpayer dollars.  It encourages
pre-planning of audit requirements and greater reliance on single audits
by independent auditors of multiple programs within a local government. 


RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or
institution. 
 

ANALYSIS
SECTION 1. Amends Chapter 783, Government Code, by adding Section 783.010,
as follows: 

Sec. 783.010. STATE AGENCY REPORTING AND AUDITING COORDINATION.

(a) Mandates that state agencies requiring reports of local governments
must review those requirements every second year of the biennium to
simplify requirements and to eliminate unnecessary or overly burdensome
reports. 

(b) Based on the results of these reviews, requires these state agencies
to recommend to the Legislature statutory changes to minimize paperwork
and better utilize public funds. 

(c) Prohibits state agencies from requiring local governments to submit
reports not required by law, rule or performance measures. 

(d) Requires that, unless necessary to further protect public funds, state
agencies must: accept, and not duplicate with state funds, independent
audits of local governments performed by qualified personnel; specify any
unique auditing requirements placed on the local government when a
contract or grant is approved; and , as may be allowed by law or rule, pay
for costs incurred by a local government to comply with any unique or
special auditing requirements not commonly required. 

(e) Clarifies that the provisions of the bill are not intended to limit
the authority of a state agency to monitor or audit a local government's
expenditure of contract or grant funds. 

(f) Provides that the state auditor may audit for compliance with the bill.

SECTION 2.  Effective Date.


EFFECTIVE DATE
Upon passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2003. 


 COMPARISON OF ORIGINAL TO SUBSTITUTE
C.S.H.B. 3024 modifies the original version of the bill by requiring state
agencies to review reporting requirements that they place on local
governments from the additional perspective of simplifying the reporting
requirements.  The original version of the bill spoke only to determining
unnecessary, duplicative, or overly burdensome requirements. 

C.S.H.B. 3024 modifies the original version of the bill in several
locations by making a grammatical wording change to refer to "a state
agency," rather than "state agencies." 

C.S.H.B. 3024 modifies the original version of the bill by requiring state
agency recommendations resulting from a review of reporting requirements
to be forwarded to the Legislature.  The original version required
agencies to report the results of the review to the state auditor, along
with any statutory recommendations the agencies might have. 

C.S.H.B. 3024 modifies the original version of the bill by specifying that
provisions to achieve greater efficiency in the expenditure of audit funds
shall apply except when further protection of public funds is shown as
necessary.  The exception was not present in the original version. 

C.S.H.B. 3024 modifies the original version of the bill by specifying that
contract or grant provisions requiring payment of unique audit
requirements placed on a local government be incorporated "as may be
allowed by law or rule."  This limiting language was not contained in the
original bill.  In addition, the substitute clarifies that the payments
are for costs incurred by the local government in complying with unique
audit requirements.  The original bill did not specify that payments were
for these incurred costs. 

C.S.H.B. 3024 modifies the original version of the bill by adding a new
provision clarifying that none of the bill's provisions are intended to
limit a state agency's authority to monitor or audit a local government's
expenditure of state or federal grant funds. 

C.S.H.B. 3024 modifies the original version of the bill by stating that
the state auditor may audit for compliance with the bill's provisions.
The original version required the state auditor to report to the
Legislature and the Governor each biennium on state agency compliance with
the bill.