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. Subsection (a), Section 2102.007, 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 on
risk management, control, or governance processes for the
organization. Assurance services include audits as defined in this
section.
(3) [2] "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" mean 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. Examples 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 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, and 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 read on three several days
in each house be suspended, and this rule is hereby suspended.