By: Ratliff S.B. No. 19
(In the Senate - Filed April 14, 2003; April 15, 2003, read
first time and referred to Committee on Government Organization;
April 28, 2003, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 7, Nays 0; April 28, 2003,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 19 By: Armbrister
A BILL TO BE ENTITLED
AN ACT
relating to audit and other related functions of the State Auditor
and of certain other state entities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 320.001, Government Code, is amended to
read as follows:
Sec. 320.001. DEFINITION [DEFINITIONS]. In this chapter,
"mandate"[:
[(1) "Interagency work group" means the unfunded
mandates interagency work group.
[(2) "Mandate"] means a requirement made by a statute
enacted by the legislature on or after January 1, 1997, that
requires a political subdivision to establish, expand, or modify an
activity in a way that requires the expenditure of revenue by the
political subdivision that would not have been required in the
absence of the statutory provision.
SECTION 2. Section 321.001, Government Code, is amended to
read as follows:
Sec. 321.001. DEFINITIONS. In this chapter:
(1) "Audit plan" means the outline of work approved by
the committee for the State Auditor's Office in a year for the
performance of audits and related services, including technical
assistance, data analysis, consulting and oversight functions,
investigations, and the preparation of audit reports and other
types of communications.
(2) "Audit working paper" means all documentary and
other information prepared or maintained in conducting an audit or
investigation, including all intra-agency and interagency
communications relating to an audit or investigation and all draft
reports or portions thereof.
(3) [(2)] "Committee" means the legislative audit
committee.
(4) [(3)] "Department" includes every state
department, agency, board, bureau, institution, or commission.
(5) "Risk assessment" means the process by which the
State Auditor analyzes risks to the state on the basis of, at a
minimum, the following:
(A) the identification of problems that can occur
in operational or program areas of departments, including
institutions of higher education, that are subject to audit by the
State Auditor;
(B) a determination of the potential adverse
effects from the problems; and
(C) a ranking of the risks associated with the
problems.
SECTION 3. Subsection (a), Section 321.012, Government
Code, is amended to read as follows:
(a) The committee directs and controls the expenditure of
any money appropriated to the office of the State Auditor and must
approve the State Auditor's appropriation requests and audit plan.
SECTION 4. Section 321.013, Government Code, is amended by
amending Subsections (c) and (f) and adding Subsection (j) to read
as follows:
(c) The State Auditor shall recommend the audit plan for the
state for each [fiscal] year to the committee. In devising the
plan, the State Auditor shall consider recommendations concerning
coordination of agency functions made jointly by representatives of
the Legislative Budget Board, Sunset Advisory Commission, and State
Auditor's Office. The State Auditor shall also consider the extent
to which a department has received a significant increase in
appropriations, including a significant increase in federal or
other money passed through to the department, and shall review
procurement activities for compliance with Section 2161.123. The
plan shall provide for auditing of federal programs at least as
often as required under federal law [once in each fiscal biennium]
and shall ensure that audit requirements of all bond covenants and
other credit or financial agreements are satisfied. The committee
shall review and approve the plan.
(f) The State Auditor may conduct financial audits,
compliance audits and investigations, and, with specific authority
from the committee, economy and efficiency audits, effectiveness
audits, and special audits[, and investigations] as defined by this
chapter and specified in the audit plan.
(j) In devising the audit plan under Subsection (c), the
State Auditor shall perform risk assessments as required by law.
The process of assessing risks to the state is the first stage of
auditing, and all records of risk assessment are part of the working
papers of the State Auditor. Accordingly, all documentation of
risk assessments by the State Auditor is exempt from disclosure
under Section 552.116.
SECTION 5. Subsections (b) and (g), Section 321.014,
Government Code, are amended to read as follows:
(b) The written report must include [a management letter
with] comments about internal controls, compliance with state or
federal laws, and recommendations for improving financial
operations or program effectiveness, as applicable. The report
must also include an opinion on fair presentation of financial
statements if the State Auditor considers an opinion to be
necessary.
(g) If a department or entity does not agree with a finding
or a recommendation contained in [implement a change recommended
by] the state auditor's report, the department or entity shall file
a report with the state auditor and the persons specified by
Subsection (c). The report must:
(1) identify the finding or the recommendation with
which the department or entity did not agree [implement]; [and]
(2) state the reason the department or entity did not
agree with the finding or [implement] the recommendation; and
(3) state whether the department or entity intends to
disregard the recommendation.
SECTION 6. Section 325.008, Government Code, is amended by
adding Subsection (c) to read as follows:
(c) Work performed under this section by the state auditor
is subject to approval by the legislative audit committee for
inclusion in the audit plan under Section 321.013(c).
SECTION 7. Subsection (b), Section 325.012, Government
Code, is amended to read as follows:
(b) On the date the commission presents its report to the
legislature under Section 325.010, the commission shall present to
the state auditor the commission's recommendations that do not
require a statutory change to be put into effect. Based on a risk
assessment and subject to the legislative audit committee's
approval of including the examination in the audit plan under
Section 321.013, the [The] state auditor may [shall] examine the
recommendations and include[,] as part of the next approved
[scheduled] audit of the agency[, shall prepare] a report on
whether the [manner in which the] agency has implemented the
recommendations and, if so, in what manner.
SECTION 8. Subsection (d), Section 326.003, Government
Code, is amended to read as follows:
(d) Not later than one month after the date of a meeting, the
[The] committee shall submit its recommendations in writing to the
head of each agency and the members of the legislative audit
committee [not later than one month after the date of a meeting].
SECTION 9. Section 403.028, Government Code, is amended by
amending Subsection (a) and adding Subsection (f) to read as
follows:
(a) Except as provided by Subsection (f), the [The]
comptroller[, in consultation with the state auditor's office,]
shall conduct a study each biennium to determine:
(1) the number and type of potential fraudulent claims
for medical or health care benefits submitted:
(A) under the state Medicaid program, including
the Medicaid managed care program implemented under Chapter 533; or
(B) by or on behalf of a state employee and
administered by the attorney general under Chapter 501, Labor Code;
and
(2) the need for changes to the eligibility system
used under the state Medicaid program.
(f) The state auditor, based on a risk assessment and
subject to the legislative audit committee's approval of including
the state auditor's advisory function in the audit plan under
Section 321.013, may advise the comptroller in its conduct of the
study required under Subsection (a).
SECTION 10. Subsection (c), Section 403.031, Government
Code, is amended to read as follows:
(c) The comptroller, in consultation with the state auditor
and the attorney general, may develop standards and criteria to
account for or to reclassify receivables determined to be
uncollectible. The standards and criteria developed by the
comptroller must comply with generally accepted accounting
principles as prescribed or modified by the Governmental Accounting
Standards Board or its successors and must provide proper
accounting controls to protect state finances. The [state auditor
and the] attorney general shall review and approve the standards
and criteria for classification of receivables. Receivables may be
reclassified as collectible or uncollectible [according to the
process approved by the state auditor or] on a case-by-case basis as
determined or approved by the attorney general [that office]. The
classification of receivables as uncollectible under this
subsection does not constitute forgiveness of the debt, and any
person indebted to the state remains subject to Section 403.055.
SECTION 11. Section 403.250, Government Code, is amended to
read as follows:
Sec. 403.250. DUTIES OF STATE AUDITOR. The state auditor,
based on a risk assessment and subject to the legislative audit
committee's approval of including the audit in the audit plan under
Section 321.013, may [shall routinely] audit state agencies for the
proper use of petty cash accounts and promptly report shortages,
abuses, or unwarranted uses of petty cash accounts to the
legislature and the comptroller.
SECTION 12. Subsection (b), Section 403.272, Government
Code, is amended to read as follows:
(b) All personal property owned by the state shall be
accounted for by the agency that possesses the property. The
comptroller shall define personal property by rule for the purposes
of this subchapter. In adopting rules, the comptroller shall
consider the value of the property, its expected useful life, and
the cost of recordkeeping. [The comptroller shall consult with the
state auditor in drafting rules. The state auditor shall cooperate
with the comptroller by giving technical assistance and advice.]
SECTION 13. Subsection (h), Section 403.273, Government
Code, is amended to read as follows:
(h) The state auditor, based on a risk assessment and
subject to the legislative audit committee's approval of including
the examination in the audit plan under Section 321.013, may
[shall] periodically examine property records or inventory as
necessary to determine if controls are adequate to safeguard state
property.
SECTION 14. Subsections (c) and (d), Section 441.185,
Government Code, are amended to read as follows:
(c) The state records administrator and the state archivist
shall review the schedule and recommend the schedule's approval or
disapproval to the director and librarian and the state auditor.
The state auditor, based on a risk assessment and subject to
the legislative audit committee's approval of including the review
in the audit plan under Section 321.013, may review the schedule.
(d) If the director and librarian, and the state auditor, if
the state auditor reviewed the schedule under Subsection (c),
approve the schedule, the schedule may be used as the basis for the
lawful disposition of state records under Section 441.187 for a
period to be determined by the commission.
SECTION 15. Section 441.203, Government Code, is amended by
adding Subsection (k) to read as follows:
(k) Participation by the state auditor under Subsection (a)
is subject to approval by the legislative audit committee for
inclusion in the audit plan under Section 321.013(c).
SECTION 16. Subsection (d), Section 445.012, Government
Code, is amended to read as follows:
(d) The state auditor, based on a risk assessment and
subject to the legislative audit committee's approval of including
the review in the audit plan under Section 321.013, may [shall
annually] review the annual report on the fund, and any information
used in preparing the report as the auditor determines necessary,
and shall report any findings or recommendations to the museum and
the legislative audit committee.
SECTION 17. Section 651.007, Government Code, is amended by
amending Subsections (b) through (e), (g), and (h) and adding
Subsection (j) to read as follows:
(b) Each state agency shall conduct an exit interview with
an employee who leaves employment with the agency. The state agency
shall conduct the exit interview by having the employee access the
questionnaire posted on the state auditor's Internet site and
electronically submit the completed questionnaire to the state
auditor. The questionnaire must state that the employee has the
option of having the employee's questionnaire furnished to the head
of the agency or the governor's office.
(c) The state agency shall conduct the exit interview in a
manner that allows the employee alone to describe the employee's
reason for leaving employment. The state agency may not alter the
description stated by the employee. The state agency may not have
access to the questionnaire unless it is provided by the employee
under Subsection (b).
(d) Subject to Subsection (j), the [The] state auditor shall
develop the exit interview questionnaire. In developing the
questionnaire under this subsection, the state auditor shall
consult with the comptroller and representatives designated by the
comptroller from small, medium, and large state agencies.
(e) Not later than the 15th day following the end of the
calendar quarter, the state auditor shall submit, subject to
Subsection (j), a report to each state agency containing the
responses to the exit interview questionnaire submitted by each
former employee of the agency during the preceding quarter. The
state auditor's report may not contain the name of an employee or
any other information identifying the employee.
(g) The responses to an exit interview questionnaire are
confidential and not subject to disclosure under Chapter 552,
including responses to a questionnaire furnished to an entity
listed under Subsection (b). The responses may be disclosed only to
a law enforcement agency in a criminal investigation or on order of
a court.
(h) Subject to Subsection (j), the [The] state auditor may
audit each state agency's records to determine whether the agency
is complying with the requirements of this section.
(j) Work performed under this section by the state auditor
is subject to approval by the legislative audit committee for
inclusion in the audit plan under Section 321.013(c).
SECTION 18. Section 654.037, Government Code, is amended to
read as follows:
Sec. 654.037. SALARY STUDIES AND RECOMMENDATIONS. (a) The
classification officer shall:
(1) make periodic studies of salary rates in other
governmental units and in industry for similar work performed in
state government; and
(2) report the classification officer's findings from
the studies made under Subdivision (1) [and recommendations for
adjusting state salary ranges] to the governor's budget office and
the Legislative Budget Board not later than October 1 preceding
each regular session of the legislature.
(b) The classification officer shall conduct, before
September 1 of each even-numbered year, a survey of local law
enforcement departments that employ more than 1,000 commissioned
law enforcement officers to gather information about the total
compensation provided by the departments to law enforcement
officers. Before January 1 of each odd-numbered year, the
classification officer shall analyze the findings of the most
recent survey conducted in accordance with this subsection and
shall submit to the legislature a report on the findings of the
survey and analysis. The report must identify the five local law
enforcement departments that provide the highest average total
compensation to local law enforcement officers who have been
employed by the local law enforcement departments for at least 30
years.
SECTION 19. Section 654.041, Government Code, is amended to
read as follows:
Sec. 654.041. EXAMINATION FOR COMPLIANCE BY STATE AUDITOR;
REPORTS. The state auditor, subject to a risk assessment and to the
Legislative Audit Committee's approval of including the
examination in the audit plan under Section 321.013, may [shall]:
(1) examine or cause to be examined, in periodic
postaudits of their expenditures and by methods the auditor
considers appropriate and adequate, whether departments and
agencies are in compliance with this chapter; and
(2) report the findings to the governor, the
comptroller, and the Legislative Audit Committee.
SECTION 20. Subsections (b) and (c), Section 660.030,
Government Code, are amended to read as follows:
(b) The comptroller [and the state auditor] periodically
shall examine the vouchers and other expense reimbursement forms
submitted by a state agency for payment of a travel expense payable
under this chapter to determine compliance with Section 660.003(e)
and:
(1) whether the travel expenses were incurred in the
conduct of official state business;
(2) whether the state-business-related activities
conducted during the travel were necessary to perform the state
business;
(3) whether the travel was necessary to perform the
state business conducted; and
(4) in a case in which vouchers or other expense
reimbursement forms have been submitted for more than one
individual for the same or similar travel, whether the number of
individuals traveling was necessary to perform the state business.
(c) The comptroller [and the state auditor each] shall
develop procedures for examining travel vouchers and other expense
reimbursement forms. [If the comptroller believes that the
criteria prescribed by Subsection (b) have not been satisfied, the
comptroller shall provide that information to the state auditor for
review.]
SECTION 21. Section 751.011, Government Code, is amended to
read as follows:
Sec. 751.011. BOARD DUTIES. [(a)] The board shall review
the office's priorities and strategies set forth in the annual
report and deliver to the director any suggested modifications.
[(b) The board shall review any interagency contract under
Section 751.012 and shall approve a contract only if the contract
meets the requirements of that section.]
SECTION 22. Subsection (d), Section 813.506, Government
Code, is amended to read as follows:
(d) As part of the audit of the Texas Department of Criminal
Justice by the state auditor in accordance with Chapter 321, the
state auditor may verify the accuracy of reports submitted to the
retirement system under this section. [The state auditor shall
review biennially the standards adopted by the department under
Subsection (a).]
SECTION 23. Section 2052.104, Government Code, is amended
to read as follows:
Sec. 2052.104. STATE AUDITOR'S POWERS AND DUTIES.
(a) Subject to Subsection (c), the [The] state auditor may audit a
state agency to ensure:
(1) the accuracy of information reported under this
subchapter; and
(2) compliance with this subchapter.
(b) The state auditor shall:
(1) [adopt rules for the manner in which a report must
be made under Section 2052.103;
[(2)] prepare annual [quarterly] summary reports from
[the] information provided in the reports filed under Section
2052.103; and
(2) [(3)] provide copies of the summary reports to:
(A) the Legislative Budget Board;
(B) the governor; and
(C) the comptroller.
(c) Work performed under this section by the state auditor
is subject to approval by the legislative audit committee for
inclusion in the audit plan under Section 321.013(c).
SECTION 24. Subsection (a), Section 2054.060, Government
Code, is amended to read as follows:
(a) A digital signature may be used to authenticate a
written electronic communication sent to a state agency if it
complies with rules adopted by the department. [Before adopting
the rules, the department shall consult with the comptroller, state
auditor, attorney general, secretary of state, and office of court
administration, and with representatives of county and municipal
governments, regarding the content of the rules. When adopting the
rules, the department shall consider factors that may affect the
reliability of a digital signature, including whether a digital
signature is:
[(1) unique to the person using it;
[(2) capable of independent verification;
[(3) under the sole control of the person using it; and
[(4) transmitted in a manner that will make it
infeasible to change the data in the communication or digital
signature without invalidating the digital signature.]
SECTION 25. Subsections (a) and (b), Section 2054.123,
Government Code, are amended to read as follows:
(a) The department, in consultation with the Texas Building
and Procurement [General Services] Commission, the state auditor,
and the comptroller, shall create an interagency panel of
representatives appointed by those agencies and officers to
coordinate and maintain [develop and establish] a training program
to assist state agencies in performing software audits, managing
software, and purchasing software and software licenses. Each
state agency shall cooperate with the panel in the evaluation of the
agency's needs for software management and shall donate agency
resources to the evaluation of the agency as the panel requires.
(b) The interagency panel initially shall concentrate on
the software purchasing and management needs of the 20 state
agencies that have the largest amounts budgeted for expenditures
related to software. The 20 state agencies shall send employees,
appropriately selected, to attend training programs developed
under this section.
SECTION 26. Subsection (b), Section 2054.253, Government
Code, as added by Chapter 342, Acts of the 77th Legislature, Regular
Session, 2001, is amended to read as follows:
(b) With the approval of the legislative audit committee, a
[A] representative of the state auditor shall advise the authority.
SECTION 27. Section 2055.056, Government Code, is amended
to read as follows:
Sec. 2055.056. QUALITY ASSURANCE. (a) In coordination
with the [state auditor, the] Legislative Budget Board, [and] the
affected state agency, and, subject to Subsection (b), the state
auditor, the office shall provide quality assurance services to
monitor electronic government projects selected under Section
2055.101.
(b) Participation by the state auditor under Subsection (a)
is subject to approval by the legislative audit committee for
inclusion in the audit plan under Section 321.013(c).
SECTION 28. Section 2055.057, Government Code, is amended
by amending Subsection (a) and adding Subsection (c) to read as
follows:
(a) In coordination with the comptroller, the Governor's
Office of Budget and Planning, the [state auditor, and] Legislative
Budget Board, and, subject to Subsection (c), the state auditor,
the office shall develop a model for funding the office from a
portion of the money appropriated for projects selected under
Section 2055.101, including staff necessary for the office.
(c) Participation by the state auditor under Subsection (a)
is subject to approval by the legislative audit committee for
inclusion in the audit plan under Section 321.013(c).
SECTION 29. Section 2055.101, Government Code, is amended
by amending Subsections (a) and (c) and adding Subsection (d) to
read as follows:
(a) The office, in coordination with the governor, the
[state auditor, and] Legislative Budget Board, and, subject to
Subsection (d), the state auditor, shall develop selection criteria
for the type of electronic government projects that require direct
oversight by the office. The criteria must include:
(1) issues related to interagency cooperation and
implementation;
(2) costs, including reimbursement strategies;
(3) requirements for authentication and security
implications; and
(4) the state's strategic vision regarding electronic
government projects.
(c) Based on any selection criteria adopted under
Subsection (b) and in coordination with the governor, the [state
auditor, and] Legislative Budget Board, and, subject to Subsection
(d), the state auditor, the office may select proposed or existing
electronic government projects.
(d) Participation by the state auditor under Subsections
(a) and (c) is subject to approval by the legislative audit
committee for inclusion in the audit plan under Section 321.013(c).
SECTION 30. Section 2055.151, Government Code, is amended
by adding Subsection (e) to read as follows:
(e) In serving on the committee, the office of the state
auditor may not exceed the number of hours for the service that the
legislative audit committee approves for inclusion in the audit
plan under Section 321.013(c).
SECTION 31. Section 2055.153, Government Code, is amended
by amending Subsection (a) and adding Subsection (c) to read as
follows:
(a) In coordination with the quality assurance team of the
Legislative Budget Board and, subject to Subsection (c), the state
auditor, the office shall establish a state agency reporting system
that requires state agencies to report to the office on:
(1) electronic government projects selected under
Section 2055.101 so that the office may effectively monitor those
projects; and
(2) all other electronic government projects for that
agency.
(c) Participation by the state auditor under Subsection (a)
is subject to approval by the legislative audit committee for
inclusion in the audit plan under Section 321.013(c).
SECTION 32. Section 2102.012, Government Code, is amended
to read as follows:
Sec. 2102.012. PROFESSIONAL DEVELOPMENT. (a) Subject to
approval by the legislative audit committee, the [The] state
auditor may [shall] make available and [shall] coordinate a program
of training and technical assistance to ensure that state agency
internal auditors have access to current information about internal
audit techniques, policies, and procedures and to provide general
technical and audit assistance to agency internal auditors on
request.
(b) The state auditor is entitled to reimbursement for costs
associated with providing the services under the terms of
interagency cooperation contracts negotiated between the state
auditor and each agency. The costs may not exceed those allowed by
the General Appropriations Act. Work performed under this section
by the state auditor is subject to approval by the legislative audit
committee for inclusion in the audit plan under Section 321.013(c).
SECTION 33. Section 2104.0215, Government Code, is amended
by adding Subsection (e) to read as follows:
(e) Participation by the state auditor under Subsection (a)
is subject to approval by the legislative audit committee for
inclusion in the audit plan under Section 321.013(c).
SECTION 34. Section 2156.004, Government Code, is amended
to read as follows:
Sec. 2156.004. BID DEPOSIT. (a) The commission, as
considered necessary, may require a bid deposit in an amount
determined by the commission. The amount of the deposit, if any,
must be stated in the public notice and the invitation to bid.
(b) [The commission, with the cooperation of the state
auditor, shall establish and maintain a record of each bid deposit
and its disposition.
[(c)] On the award of a bid or the rejection of all bids, the
commission shall refund the bid deposit of an unsuccessful bidder.
(c) [(d)] The commission may accept from a bidder a bid
deposit in the form of a blanket bond.
SECTION 35. Subsection (d), Section 2161.123, Government
Code, is amended to read as follows:
(d) The commission and the state auditor shall cooperate to
develop procedures providing for random periodic monitoring of [to
periodically monitor] state agency compliance with this section.
The state auditor shall report to the commission a state agency that
is not complying with this section. In determining whether a state
agency is making a good faith effort to comply, the state auditor
shall consider whether the agency:
(1) has adopted rules under Section 2161.003;
(2) has used the commission's directory under Section
2161.064 and other resources to identify historically
underutilized businesses that are able and available to contract
with the agency;
(3) made good faith, timely efforts to contact
identified historically underutilized businesses regarding
contracting opportunities; and
(4) conducted its procurement program in accordance
with the good faith effort methodology set out in commission rules.
SECTION 36. Subsection (b), Section 2161.124, Government
Code, is amended to read as follows:
(b) The commission[, in cooperation with the state
auditor,] shall develop a standard form for the report.
SECTION 37. Section 2175.061, Government Code, is amended
by amending Subsection (b) and by adding Subsection (c) to read as
follows:
(b) Subject to Subsection (c) [the review and comment of the
state auditor], the commission may prescribe forms and reports
necessary to administer this chapter and may adopt necessary rules,
including rules governing the sale or transfer of surplus or
salvage property to state agencies, political subdivisions, or
assistance organizations.
(c) Subject to a risk assessment and to the legislative
audit committee's approval of including the review in the audit
plan under Section 321.013, the state auditor may review and
comment on the forms and reports prescribed and the rules adopted by
the commission under Subsection (b).
SECTION 38. Section 2177.003, Government Code, is amended
to read as follows:
Sec. 2177.003. CONSULTATION. The commission, at least
quarterly, shall consult with the following entities to ensure that
the electronic procurement system meets the needs of users of the
system:
(1) the department;
(2) [the state auditor;
[(3)] groups, including coordinating councils,
created by the commission to assist with electronic commerce
initiatives;
(3) [(4)] the vendor advisory committee established
under Section 2155.081; and
(4) [(5)] other state agencies and local governments
that use the system.
SECTION 39. Subsections (a) and (c), Section 2205.004,
Government Code, are amended to read as follows:
(a) The board is composed of:
(1) a member appointed by the governor;
(2) a member appointed by the lieutenant governor;
(3) a member appointed by the speaker of the house of
representatives; and
(4) a representative of the Texas Building and
Procurement [General Services] Commission, designated from time to
time by the presiding officer of the commission[; and
[(5) a representative of the state auditor's office,
designated from time to time by the state auditor].
(c) The representative [representatives] of the Texas
Building and Procurement [General Services] Commission is an [and
the state auditor's office are] ex officio, nonvoting member
[members] of the board and serves [serve] only in an advisory
capacity.
SECTION 40. Subsection (n), Section 2256.005, Government
Code, is amended to read as follows:
(n) Except as provided by Subsection (o), at least once
every two years a state agency shall arrange for a compliance audit
of management controls on investments and adherence to the agency's
established investment policies. The compliance audit shall be
performed by the agency's internal auditor or by a private auditor
employed in the manner provided by Section 321.020. Not later than
January 1 of each even-numbered year[,] a state agency shall report
the results of the most recent audit performed under this
subsection to the state auditor. Subject to a risk assessment and
to the legislative audit committee's approval of including a review
by the state auditor in the audit plan under Section 321.013, the
state auditor may review information provided under this section.
If review by the state auditor is approved by the legislative audit
committee, the state auditor may, based on its review, require a [A]
state agency to also [shall] report to the state auditor other
information the state auditor determines necessary to assess
compliance with laws and policies applicable to state agency
investments. A report under this subsection shall be prepared in a
manner the state auditor prescribes.
SECTION 41. Section 2256.022, Government Code, is amended
to read as follows:
Sec. 2256.022. EXPANSION OF INVESTMENT AUTHORITY.
Expansion of investment authority granted by this chapter shall
require a risk assessment by the state auditor or performed at the
direction of the state auditor, subject to the legislative audit
committee's approval of including the review in the audit plan
under Section 321.013.
SECTION 42. Section 2261.203, Government Code, is amended
to read as follows:
Sec. 2261.203. COMPARABLE COSTS. [(a)] Each state agency
that makes procurements to which this chapter applies shall monitor
performance under a contract to verify that comparable costs are
being charged for comparable goods and services.
[(b) The state auditor on request shall assist a state
agency's monitoring efforts under this section.]
SECTION 43. Subsection (a), Section 2262.051, Government
Code, is amended to read as follows:
(a) In consultation with the Texas Building and Procurement
Commission, the Department of Information Resources, the
comptroller, and the state auditor, the attorney general shall
develop and periodically update a contract management guide for use
by state agencies. Participation by the state auditor under this
subsection is subject to approval by the legislative audit
committee for inclusion in the audit plan under Section 321.013(c).
SECTION 44. Subsection (b), Section 2262.052, Government
Code, is amended to read as follows:
(b) Subject to the legislative audit committee's approval
of including the work described by this subsection in the audit plan
under Section 321.013(c), the [The] state auditor may [shall]:
(1) periodically monitor compliance with this
section;
(2) report any noncompliance to:
(A) the governor;
(B) the lieutenant governor;
(C) the speaker of the house of representatives;
and
(D) the team; and
(3) assist, in coordination with the attorney general
and the comptroller, a noncomplying state agency to comply with
this section.
SECTION 45. Section 2262.053, Government Code, is amended
by adding Subsection (d) to read as follows:
(d) The Texas Building and Procurement Commission shall
administer the training program under this section.
SECTION 46. Subsection (a), Section 2306.074, Government
Code, is amended to read as follows:
(a) The [state auditor or a certified public accountant
shall audit the] department's books and accounts must be audited
each fiscal year by a certified public accountant or, if requested
by the department and if the legislative audit committee approves
including the audit in the audit plan under Section 321.013(c), by
the state auditor. A [and file a] copy of the audit must be filed
with the governor, the comptroller, and the legislature not later
than the 30th day after the submission date for the annual financial
report as required by the General Appropriations Act. If the state
auditor is conducting the audit and it is not available by the 30th
day after the submission date as required by the General
Appropriations Act for annual financial reporting, it must be filed
as soon as it is available.
SECTION 47. Subsection (b), Section 16.142, Water Code, is
amended to read as follows:
(b) The board by rule shall set the fee at an amount it
considers necessary to recover the costs incurred or to be incurred
by the board in administering the project over its life, including
the costs of processing an application, monitoring construction,
and auditing and monitoring the project. The state auditor may
[shall] review fees charged by the board to determine whether the
fees are set consistent with this subsection, based on a risk
assessment performed by the state auditor and subject to the
legislative audit committee's approval of including the review in
the audit plan under Section 321.013, Government Code.
SECTION 48. Subsection (b), Section 20.020, Water Code, is
amended to read as follows:
(b) The [board shall have an audit made by the] state
auditor may audit [or by a certified public accountant of] the
authority's books and accounts, based on a risk assessment
performed by the state auditor and subject to the legislative audit
committee's approval of including the audit in the audit plan under
Section 321.013, Government Code [for each fiscal year]. The cost
of an [the] audit shall be paid by the authority.
SECTION 49. Subsection (b), Section 36.061, Water Code, is
amended to read as follows:
(b) The state auditor may audit the records [financial
transactions] of any district if the state auditor determines that
the audit is necessary.
SECTION 50. Section 36.153, Water Code, is amended by
amending Subsection (a) and adding Subsections (c) and (d) to read
as follows:
(a) Annually and subject to Subsection (c), the board shall
have an audit made of the financial condition of the district.
(c) The district is exempt from the requirement under
Subsection (a) if it had:
(1) not more than $500 in receipts from operations,
tax assessments, loans, contributions, or any other sources during
the calendar year;
(2) not more than $500 in disbursements of funds
during the calendar year;
(3) no bonds or other liabilities with terms of more
than one year outstanding during the calendar year; and
(4) no cash or investments amounting to more than
$5,000 at any time during the calendar year.
(d) A financially dormant district may elect to submit to
the executive director a financial dormancy affidavit instead of
complying with the audit requirements of Section 49.191.
SECTION 51. Subsections (b), (c), and (d), Section 36.302,
Water Code, are amended to read as follows:
(b) The commission, the Texas Water Development Board, and
the Parks and Wildlife Department shall provide technical
assistance to the state auditor's office for a [the] review
performed under Subsection (a).
(c) In a review performed under Subsection (a), the [The]
state auditor shall make a determination of whether a district is
actively engaged in achieving the objectives of the district's
management plan based on an analysis [audit] of the district's
activities [performance under the plan].
(d) The state auditor may perform the review under
Subsection (a) [shall conduct such audits] following the first
anniversary of the initial certification of the plan by the Texas
Water Development Board under Section 36.1072 and at least as often
as once every seven years after that date, subject to a risk
assessment and to the legislative audit committee's approval of
including the review in the audit plan under Section 321.013,
Government Code [following the end of every five-year period
thereafter].
SECTION 52. Section 49.195, Water Code, is amended by
amending Subsection (b) and adding Subsection (f) to read as
follows:
(b) Subject to Subsection (f), the [The] commission may
request that the state auditor assist in the establishment of
standards and procedures for review of district audits by the
executive director.
(f) Participation by the state auditor under Subsection (b)
is subject to approval by the legislative audit committee for
inclusion in the audit plan under Section 321.013(c), Government
Code.
SECTION 53. Subsection (b), Section 152.203, Water Code, is
amended to read as follows:
(b) The river authority shall:
(1) maintain the appraisal on file as a public record;
and
(2) file a copy of the appraisal with the Texas
Commission on Environmental Quality [state auditor].
SECTION 54. Subsection (h), Section 22.004, Education Code,
is amended to read as follows:
(h) An audited financial statement provided under this
section must be made in accordance with rules adopted by the
commissioner of insurance or with generally accepted accounting
principles [state auditor], as applicable.
SECTION 55. Subsection (q), Section 42.152, Education Code,
is amended to read as follows:
(q) The State Board of Education, with the assistance of the
[state auditor and the] comptroller, shall develop and implement by
rule a reporting and auditing system for district and campus
expenditures of compensatory education funds to ensure that
compensatory education funds, other than the indirect cost
allotment, are spent only to supplement the regular program. The
commissioner, in the year following an audit of compensatory
education expenditures, shall withhold from a district's
foundation school fund payment an amount equal to the amount of
compensatory education funds the agency determines were not used in
compliance with Subsection (c). The commissioner shall release to
a district funds withheld under this subsection when the district
provides to the commissioner a detailed plan to spend those funds in
compliance with Subsection (c).
SECTION 56. Subsection (e), Section 43.006, Education Code,
is amended to read as follows:
(e) If an investment contract entered into under Subsection
(b) includes the permanent school fund within the scope of funds
under the control and management of the State Board of Education to
be invested by the corporation, the board shall provide for an
annual financial audit of the permanent school fund. Subject to the
legislative audit committee's approval of including the audit in
the audit plan under Section 321.013(c), Government Code, the [The]
audit shall be performed by the state auditor.
SECTION 57. Section 102.52, Education Code, is amended to
read as follows:
Sec. 102.52. TRANSFER OF MONEY; DISBURSEMENTS. All money
so received shall be transferred as soon as available to the West
Texas State University Foundation or to any other fund or
foundation chosen by agreement between the donors and the
administration of the university. The disbursement of all this
money is under the supervision of the business manager of the
university[, subject to accounting procedures approved by the state
auditor].
SECTION 58. Subsection (c), Section 130.0035, Education
Code, is amended to read as follows:
(c) The Legislative Budget Board shall be responsible for
recommending [develop recommended] standards for reports under
this section, in consultation with junior college districts, the
Texas Higher Education Coordinating Board, and the governor's
office of budget and planning[, and the state auditor].
SECTION 59. Subsection (a), Section 21.455, Labor Code, is
amended to read as follows:
(a) A state agency shall reimburse the commission through
interagency contract for the reasonable and necessary expenses
incurred by the commission in conducting a review under Section
21.453. [The actual expenses incurred by the commission shall be
determined by the state auditor's office.]
SECTION 60. Subsection (e), Section 21.556, Labor Code, is
amended to read as follows:
(e) An agency required to participate in a program under
this section shall pay the cost of attending the program or shall
reimburse the commission or state agency providing the program
through interagency contract. The cost of providing the program
shall be determined and approved by the commission or state agency
[in cooperation with the state auditor's office]. The state
auditor may audit the commission's expenditure of fees collected
under this section based on a risk assessment performed by the state
auditor and subject to the approval by the legislative audit
committee of including the audit in the audit plan under Section
321.013, Government Code.
SECTION 61. Subsection (d), Section 205.019, Labor Code, is
amended to read as follows:
(d) The state auditor may [shall] review the reimbursement
of funds [affected entities] for compliance by the affected
entities with this section, subject to a risk assessment performed
by the state auditor and to the legislative audit committee's
approval of including the review in the audit plan under Section
321.013, Government Code.
SECTION 62. Subsection (d), Section 506.002, Labor Code, is
amended to read as follows:
(d) The state auditor may [shall] review affected entities
for compliance with this section, subject to a risk assessment
performed by the state auditor and to the legislative audit
committee's approval of including the review in the audit plan
under Section 321.013, Government Code.
SECTION 63. Subsection (a), Section 140.007, Local
Government Code, is amended to read as follows:
(a) To assist counties, [the state auditor in consultation
with] the comptroller of public accounts may develop, promulgate,
and widely distribute forms, with instruction, for cost accounting
for public improvements. The [auditor and the] comptroller shall
consult with large and small governmental entities and the
construction industry prior to the promulgation of the forms and
instructions.
SECTION 64. Subsection (e), Section 391.0095, Local
Government Code, is amended to read as follows:
(e) A commission shall send to the state auditor, the
comptroller, and the Legislative Budget Board a copy of each report
and audit required under this section or under Section 391.009. The
state auditor may [shall] review each audit and report, subject to a
risk assessment performed by the state auditor and to the
legislative audit committee's approval of including the review in
the audit plan under Section 321.013, Government Code. If the state
auditor reviews the audit report, the state auditor [and] must be
given access to working papers and other supporting documentation
that the state auditor determines is necessary to perform the
review. If the state auditor finds significant issues involving
the administration or operation of a commission or its programs,
the state auditor shall report its findings and related
recommendations to the legislative audit committee, the governor,
and the commission. The governor and the legislative audit
committee may direct the commission to prepare a corrective action
plan or other response to the state auditor's findings or
recommendations. The legislative audit committee may direct the
state auditor to perform any additional audit or investigative work
that the committee determines is necessary.
SECTION 65. Subsection (b), Section 11.017, Health and
Safety Code, is amended to read as follows:
(b) The state auditor may [shall] audit the financial
transactions of the board in accordance with Chapter 321,
Government Code, subject to a risk assessment performed by the
state auditor and to the legislative audit committee's approval of
including the audit in the audit plan under Section 321.013,
Government Code.
SECTION 66. Subsection (b), Section 242.005, Health and
Safety Code, is amended to read as follows:
(b) The Legislative Budget Board and the state auditor shall
jointly prescribe the form and content of reports required under
this section, provided, however, that the state auditor's
participation under this section is subject to approval by the
legislative audit committee for inclusion in the audit plan under
Section 321.013(c), Government Code.
SECTION 67. Subsection (b), Section 451.452,
Transportation Code, is amended to read as follows:
(b) The state auditor may elect to [shall] file any comments
about the audit with the legislative audit committee and the board,
subject to a risk assessment performed by the state auditor and to
the legislative audit committee's approval of including the
preparation of the comments in the audit plan under Section
321.013, Government Code.
SECTION 68. Subsection (b), Section 452.452,
Transportation Code, is amended to read as follows:
(b) The state auditor may elect to [shall] file any comments
about the audit with the legislative audit committee and the
subregional board, subject to a risk assessment performed by the
state auditor and to the legislative audit committee's approval of
including the preparation of the comments in the audit plan under
Section 321.013, Government Code.
SECTION 69. Section 58.017, Agriculture Code, is amended to
read as follows:
Sec. 58.017. PERFORMANCE MEASURES. The Board, in
conjunction with the Legislative Budget Board[, the state auditor,]
and the Office of the Governor, shall develop a minimum of two
performance measures that provide information on the benefits of
the authority's loan programs. The performance measures shall be
included in the report required under Section 58.016(d) of this
code or as a component of the measures incorporated into the General
Appropriations Act.
SECTION 70. Article 60.02, Code of Criminal Procedure, is
amended by adding Subsection (m) to read as follows:
(m) Notwithstanding Subsection (j), work performed under
this section by the state auditor is subject to approval by the
legislative audit committee for inclusion in the audit plan under
Section 321.013(c), Government Code.
SECTION 71. Subsection (d), Section 231.011, Family Code,
as added by Chapter 556, Acts of the 76th Legislature, Regular
Session, 1999, is amended to read as follows:
(d) Each agency represented on the work group shall identify
specific child support services that are related to the agency's
areas of core competence and may be provided by the agency under a
contract. The [state auditor and the State Council on Competitive
Government shall assist:
[(1) the agencies in identifying the child support
services that are within the agency's core competency; and
[(2) the] work group shall develop [in developing]
strategies to obtain child support services from the agencies.
SECTION 72. Subsection (d), Section 11.0182, Parks and
Wildlife Code, is amended to read as follows:
(d) The [At least once each biennium the] state auditor may
[shall] audit the fund-raising activities performed under this
section, subject to a risk assessment performed by the state
auditor and to the legislative audit committee's approval of
including the audit in the audit plan under Section 321.013(c),
Government Code. If the state auditor performs an audit, the [The]
audit shall disclose who has engaged in fund-raising activities for
the department and the value of gifts each person has received or
solicited. The state auditor shall report the results of the audit
to the presiding officer of each house of the legislature and of
each committee having primary jurisdiction over the department.
Each member of the legislature may access the report.
SECTION 73. The following laws are repealed:
(1) Sections 320.002, 481.123, 552.010, 659.2552,
751.012, 772.0031, 2155.071, 2170.006, and 2176.108, Government
Code;
(2) Subsection (g), Section 2155.067, Subsection (l),
Section 2155.083, and Subsection (e), Section 2155.144, Government
Code;
(3) Article 24.21, Insurance Code;
(4) Subsection (d), Section 302.057, Occupations
Code; and
(5) Section 4, Chapter 314, Acts of the 45th
Legislature, Regular Session, 1937 (Article 6144cc, Vernon's Texas
Civil Statutes).
SECTION 74. This Act takes effect September 1, 2003.
* * * * *