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By: Shapiro S.B. No. 1694
A BILL TO BE ENTITLED
AN ACT
relating to state agency internal auditing.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2102.002, Government Code, is amended to
read as follows:
Sec. 2102.002. PURPOSE. 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. Internal auditing is
defined as an independent, objective assurance and consulting
activity designed to add value and improve an organization's
operations. It helps an organization accomplish its objectives by
bringing a systematic, disciplined approach to evaluate and improve
the effectiveness of risk management, control, and governance
processes.
SECTION 2. Section 2102.003, Government Code, is amended to
read as follows:
Sec. 2102.003. DEFINITIONS. In this chapter:
(1) "Administrator" means the executive head of a
state agency.
(2) "Assurance services" means an examination of
evidence for the purpose of providing an independent assessment of
risk management, control, or governance processes for an
organization. Assurance services include audits as defined in this
section.
(3) "Audit" means:
(A) a financial audit described by Section
321.0131;
(B) a compliance audit described by Section
321.0132;
(C) an economy and efficiency audit described by
Section 321.0133;
(D) an effectiveness audit described by Section
321.0134; or
(E) an investigation described by Section
321.0136.
(4) "Consulting services" means advisory and related
client service activities, the nature and scope of which are agreed
upon with the client and are intended to add value and improve an
organization's operations. Consulting services include counsel,
advice, facilitation, and training.
(5) [(3)] "State agency" means a department, board,
bureau, institution, commission, or other agency in the executive
branch of state government.
SECTION 3. Section 2102.006, Government Code, is amended by
adding Subsection (d) to read as follows:
(d) The governing board of a state agency, or the
administrator of a state agency if the state agency does not have a
governing board, shall periodically review the resources dedicated
to the internal audit program and determine if adequate resources
exist to ensure that risks identified in the annual risk assessment
are adequately covered within a reasonable time frame.
SECTION 4. Section 2102.011, Government Code, is amended to
read as follows:
Sec. 2102.011. INTERNAL AUDIT STANDARDS. The internal
audit program shall conform to the Standards for the Professional
Practice of Internal Auditing, [generally accepted governmental
auditing standards,] the [Certified Internal Auditor] Code of
[Professional] Ethics contained in the Professional Practices
Framework as promulgated by[, and the Statement of Responsibilities
of Internal Auditing of] the Institute of Internal Auditors, and
generally accepted government auditing standards.
SECTION 5. This Act takes effect September 1, 2003.
SECTION 6. The importance of this legislation and the
crowded condition of the calendars in both houses creates an
emergency and an imperative public necessity that the
constitutional rule requiring bills to be read on three several
days in each house be suspended, and this rule is hereby suspended.