79R2318 JJT-D
By: Smith of Tarrant H.B. No. 2801
A BILL TO BE ENTITLED
AN ACT
relating to audits of state agency expenditures to recover
overpayments and lost discounts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 10, Government Code, is
amended by adding Chapter 2115 to read as follows:
CHAPTER 2115. RECOVERY OF CERTAIN STATE AGENCY OVERPAYMENTS
Sec. 2115.001. DEFINITIONS. In this chapter:
(1) "Overpayment" includes a duplicate payment made to
a vendor for a single invoice and a payment made to a vendor:
(A) when an available discount from the vendor
was not applied;
(B) for a late payment penalty that was
improperly applied by the vendor;
(C) for shipping costs that were computed
incorrectly or incorrectly included in an invoice;
(D) for state sales tax; or
(E) for a good or service the vendor did not
provide.
(2) "State agency" means a department, commission,
board, office, or other agency, including a university system or an
institution of higher education other than a public junior college,
that:
(A) is in the executive branch of state
government;
(B) is created by statute; and
(C) does not have statutory geographical
boundaries limited to a part of the state.
Sec. 2115.002. CONTRACT CONSULTANTS FOR RECOVERY AUDITS FOR
CERTAIN OVERPAYMENTS. (a) The comptroller shall contract with one
or more consultants to conduct recovery audits of payments made by
state agencies to vendors. The audits must be designed to detect
and recover overpayments to the vendors and to recommend improved
state agency accounting operations.
(b) A contract under this section:
(1) may provide for reasonable compensation for
services provided under the contract, including compensation
determined by the application of a specified percentage of the
total amount recovered because of the consultant's audit activities
or recommendations as a fee for services;
(2) may permit or require the consultant to pursue a
judicial action in a court inside or outside this state to recover
an overpaid amount; and
(3) to allow time for the performance of existing
state payment auditing procedures, may not allow a recovery audit
of a payment during the 180-day period after the date the payment
was made.
(c) The comptroller or a state agency whose payments are
being audited may provide a person acting under a contract
authorized by this section with any confidential information in the
custody of the comptroller or state agency that is necessary for the
performance of the audit or the recovery of an overpayment, to the
extent the comptroller and state agency are not prohibited from
sharing the information under an agreement with another state or
the federal government. A person acting under a contract
authorized by this section, and each employee or agent of the
person, is subject to all prohibitions against the disclosure of
confidential information obtained from the state in connection with
the contract that apply to the comptroller or applicable state
agency or an employee of the comptroller or applicable state
agency. A person acting under a contract authorized by this section
or an employee or agent of the person who discloses confidential
information in violation of a prohibition made applicable to the
person under this subsection is subject to the same sanctions and
penalties that would apply to the comptroller or applicable state
agency or an employee of the comptroller or applicable state agency
for that disclosure.
Sec. 2115.003. STATE AGENCIES SUBJECT TO MANDATORY RECOVERY
AUDITS. (a) The comptroller shall require that recovery audits be
performed on the payments to vendors made by each state agency that
has total expenditures during a state fiscal biennium in an amount
that exceeds $100 million. Each state agency described by this
subsection shall provide the recovery audit consultant with all
information necessary for the audit.
(b) The comptroller may exempt from the mandatory recovery
audit process a state agency that has a low proportion of its
expenditures made to vendors, according to criteria the comptroller
adopts by rule after consideration of the likely costs and benefits
of performing recovery audits for agencies that make relatively few
or small payments to vendors.
Sec. 2115.004. PAYMENT TO CONTRACTORS. (a) A state agency
shall pay, from recovered money appropriated for the purpose, the
recovery audit consultant responsible for obtaining for the agency
a reimbursement from a vendor.
(b) A state agency shall expend or return to the federal
government any federal money that is recovered through a recovery
audit conducted under this chapter. The state agency shall expend
or return the federal money in accordance with the rules of the
federal program through which the agency received the federal
money.
Sec. 2115.005. FORWARDING REPORTS. (a) The comptroller
shall provide copies, including electronic form copies, of any
reports received from a consultant contracting under Section
2115.002 to:
(1) the governor;
(2) the state auditor's office; and
(3) the Legislative Budget Board.
(b) The comptroller shall provide the copies required by
Subsection (a) not later than the seventh day after the date the
comptroller receives the consultant's report.
(c) Not later than January 1 of each odd-numbered year, the
comptroller shall issue a report to the legislature summarizing the
contents of all reports received under this chapter during the
state fiscal biennium ending August 31 of the previous year.
SECTION 2. The comptroller shall adopt rules under Chapter
2115, Government Code, as added by this Act, in a timely manner so
that the comptroller may begin contracting with a consultant under
that chapter not later than January 1, 2006.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2005.