SRC-JLB S.B. 1694 78(R)   BILL ANALYSIS


Senate Research Center   S.B. 1694
By: Shapiro
Government Organization
4/1/2003
As Filed


DIGEST AND PURPOSE 

The statutory language describing internal audit standards is not in line
with current professional practice and guidance.  As proposed, S.B. 1694
aligns statutory standard requirements to reflect current professional
practice and guidelines; defines internal auditing, assurance services,
and consulting services; and modifies language which may compromise the
independence of internal auditing. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to
a state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 2102.002, Government Code, as follows:
 
Sec. 2102.002.  PURPOSE.  Provides that the purpose of this chapter is to
establish guidelines for a program of internal auditing to assist agency
administrators and governing boards by furnishing independent analyses,
appraisals, and recommendations about the adequacy and effectiveness of a
state agency's systems of internal control policies and procedures and the
quality of performance in carrying out assigned responsibilities.  Defines
"internal auditing."  

SECTION 2.  Amends Section 2102.007(a), Government Code, as follows:
 
Sec. 2102.003.  DEFINITIONS.  Defines "assurance services" and "consulting
services." Makes nonsubstantive changes. 

SECTION 3.  Amends Section 2102.006, Government Code, by adding Subsection
(d), to require the governing board of a state agency, or the
administrator of a state agency if the state agency does not have a
governing board, to periodically review the resources dedicated to the
internal audit program and determine if adequate resources exist to ensure
risks identified in the annual risk assessment are adequately covered
within a reasonable time frame. 
 
SECTION 4.  Amends Section 2102.011, Government Code, as follows:
 
Sec. 2102.011.  INTERNAL AUDIT STANDARDS.  Requires the internal audit
program to conform to the Standards for the Professional Practice of
Internal Auditing and the Code of Ethics contained in the Professional
Practices Framework as promulgated by the Institute of Internal Auditors,
and generally accepted government auditing standards. 
 
SECTION 5.  Effective date:  September 1, 2003.