88R11479 LRM-F
 
  By: Smithee H.B. No. 3116
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the conduct of efficiency audits of state agencies.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle C, Title 3, Government Code, is amended
  by adding Chapter 327 to read as follows:
  CHAPTER 327. EFFICIENCY AUDITS OF STATE AGENCIES
         Sec. 327.001.  DEFINITIONS. In this chapter:
               (1)  "Audit plan" has the meaning assigned by Section
  321.001.
               (2)  "Department" has the meaning assigned by Section
  321.001.
               (3)  "Efficiency audit" means an evaluation of the
  economy, efficiency, and effectiveness of department operations,
  including the effectiveness of department programs at achieving
  intended objectives.
               (4)  "External auditor" means a private entity selected
  by the state auditor to conduct an efficiency audit of a department.
               (5)  "Legislative audit committee" means the committee
  described by Section 321.002.
         Sec. 327.002.  REQUIRED EFFICIENCY AUDIT. (a) Each
  department, including an institution of higher education, as
  defined by Section 61.003, Education Code, shall undergo an
  efficiency audit in accordance with this chapter.
         (b)  The state auditor, subject to the legislative audit
  committee's approval, shall adopt a schedule for conducting the
  efficiency audits required by this chapter and include the annual
  portion of the schedule in the audit plan under Section 321.013.
  The schedule must provide for each department to be audited every
  six years. A department may not be audited under this chapter in
  the same year that the department is reviewed under Chapter 325
  (Texas Sunset Act).
         (c)  A department required by law to perform an internal
  efficiency audit is not required to perform the audit in any year
  the department is audited under this chapter.
         (d)  A department shall pay the costs incurred by the state
  auditor relating to an efficiency audit required by this chapter.  
  The state auditor shall determine the costs of the audit and the
  department shall pay the amount of those costs promptly on receipt
  of a statement from the state auditor regarding those costs.
         Sec. 327.003.  SELECTION AND SUPERVISION OF AUDITOR. (a)
  Not later than March 1 of the year in which an efficiency audit of a
  department is scheduled under this chapter, the state auditor shall
  contract with an external auditor to conduct the audit. 
         (b)  The state auditor shall oversee the external auditor and
  ensure that the efficiency audit is conducted in accordance with
  the requirements of this chapter.
         (c)  The external auditor is not subject to direction from
  the department being audited.
         Sec. 327.004.  SCOPE OF AUDIT. (a) The state auditor shall
  establish the scope of each efficiency audit conducted under this
  chapter with the external auditor contracted to perform the audit. 
         (b)  At a minimum, an efficiency audit must:
               (1)  examine all state resources, including financial
  resources, staff, and technology, to determine whether those
  resources:
                     (A)  are used effectively and efficiently to
  achieve the desired outcome for a department's program
  beneficiaries; and
                     (B)  are not used for purposes other than the
  intended goals of the audited programs;
               (2)  identify and make recommendations for cost savings
  and reallocation of resources to improve the effectiveness of
  audited programs; and
               (3)  identify opportunities for improving services
  through consolidation of functions, outsourcing, and elimination
  of duplicative efforts.
         Sec. 327.005.  REPORT TO LEGISLATURE. (a) Not later than
  November 1 of the year an efficiency audit is conducted under this
  chapter, the state auditor shall:
               (1)  prepare a report with the external auditor
  contracted to perform the audit and submit the report to the chairs
  of the standing committees of each house of the legislature with
  primary jurisdiction over the audited department; and
               (2)  submit the report, recommendations, and complete
  audit to the audited department.
         (b)  The state auditor and the audited department shall
  publish the report, recommendations, and complete efficiency audit
  on the entity's Internet website.
         Sec. 327.006.  REQUIRED IMPLEMENTATION PLAN. Not later than
  the 90th day after receiving the complete audit and
  recommendations, the administrative head of the audited department
  shall deliver a plan for implementing the recommendations to the
  legislative audit committee and to the chairs of the standing
  committees of each house of the legislature with primary
  jurisdiction over the audited department.  The implementation plan
  must include a justification for any recommendation the audited
  department declines to implement.
         SECTION 2.  Section 322.017, Government Code, is repealed.
         SECTION 3.  Not later than January 1, 2024, the state auditor
  shall adopt the schedule required by Section 327.002, Government
  Code, as added by this Act, for conducting efficiency audits of each
  department.
         SECTION 4.  This Act takes effect September 1, 2023.