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A BILL TO BE ENTITLED
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AN ACT
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relating to the program of internal auditing conducted by state |
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agencies. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 2102.002, Government Code, is amended to |
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read as follows: |
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Sec. 2102.002. PURPOSE. The purpose of this chapter is to |
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establish guidelines for a program of internal auditing to assist |
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agency administrators and governing boards by furnishing |
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independent analyses, appraisals, and recommendations about the |
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adequacy and effectiveness of a state agency's systems of internal |
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control policies and procedures and the quality of performance in |
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carrying out assigned responsibilities. The purpose of internal |
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auditing is to strengthen an organization's ability to create, |
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protect, and sustain value by providing agency administrators, |
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management, and governing boards with independent, risk-based, and |
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objective assurance, advice, insight, and foresight [Internal |
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auditing is defined as an independent, objective assurance and |
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consulting activity designed to add value and improve an |
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organization's operations. It helps an organization accomplish its |
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objectives by bringing a systematic, disciplined approach to |
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evaluate and improve the effectiveness of risk management, control, |
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and governance processes]. |
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SECTION 2. Section 2102.003, Government Code, is amended by |
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adding Subdivision (1-a) to read as follows: |
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(1-a) "Advisory services" means consulting and |
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related client service activities, the nature and scope of which |
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are agreed upon with the client and are intended to add value and |
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improve an organization's operations without providing assurance |
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or taking on management responsibilities. Advisory services |
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include counsel, facilitation, and training. |
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SECTION 3. Section 2102.005(a), Government Code, is amended |
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to read as follows: |
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(a) A state agency shall conduct a program of internal |
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auditing that includes: |
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(1) an annual audit plan that is prepared using risk |
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assessment techniques and that identifies the individual audits to |
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be conducted during the year; and |
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(2) [periodic] audits of the agency's major systems |
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and controls, including: |
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(A) financial [accounting] systems and controls; |
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(B) operational or administrative systems and |
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controls; and |
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(C) information technology [electronic data |
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processing] systems and controls. |
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SECTION 4. Section 2102.007(a), Government Code, is amended |
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to read as follows: |
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(a) The internal auditor shall: |
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(1) report directly to the state agency's governing |
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board or the administrator of the state agency if the state agency |
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does not have a governing board; |
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(2) develop an annual audit plan; |
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(3) conduct audits as specified in the audit plan and |
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document deviations; |
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(4) prepare [audit] reports and communicate advisory |
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and assurance services engagement results; |
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(5) conduct quality assurance reviews in accordance |
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with professional standards as provided by Section 2102.011 and |
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periodically take part in a comprehensive external peer review; and |
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(6) conduct economy and efficiency audits and program |
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results audits as directed by the state agency's governing board or |
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the administrator of the state agency if the state agency does not |
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have a governing board. |
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SECTION 5. The heading to Section 2102.008, Government |
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Code, is amended to read as follows: |
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Sec. 2102.008. APPROVAL OF AUDIT PLAN AND REVIEW OF AUDIT |
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REPORTS [REPORT]. |
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SECTION 6. The heading to Section 2102.0091, Government |
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Code, is amended to read as follows: |
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Sec. 2102.0091. REPORTS OF [PERIODIC] AUDITS. |
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SECTION 7. Section 2102.011, Government Code, is amended to |
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read as follows: |
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Sec. 2102.011. INTERNAL AUDIT STANDARDS. The internal |
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audit program shall conform to the Global Internal Audit Standards |
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[for the Professional Practice of Internal Auditing, the Code of |
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Ethics contained in the Professional Practices Framework] as |
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promulgated by the Institute of Internal Auditors[, and generally |
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accepted government auditing standards]. |
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SECTION 8. Section 2102.003(4), Government Code, is |
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repealed. |
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SECTION 9. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2025. |