Bill Text: TX HB593 | 2011-2012 | 82nd Legislature | Introduced


Bill Title: Relating to the powers and duties of the state auditor's office.

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2011-02-18 - Referred to Appropriations [HB593 Detail]

Download: Texas-2011-HB593-Introduced.html
  82R2821 KJM-F
 
  By: Pitts H.B. No. 593
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the powers and duties of the state auditor's office.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 321.001, Government Code, is amended by
  amending Subdivisions (1) and (2) and adding Subdivision (3-a) to
  read as follows:
               (1)  "Audit plan" means the outline of work [approved
  by the committee] for the State Auditor's Office in a year for the
  performance of audits and related services, including technical
  assistance, data analysis, consulting and oversight functions,
  investigations, and the preparation of audit reports and other
  types of communications.
               (2)  "Audit working paper" means all documentation
  [documentary] and other information prepared or maintained in
  conducting an audit, review, or investigation, including all
  intra-agency and interagency communications and risk assessment
  information relating to an audit, review, or investigation and all
  draft reports or portions thereof.
               (3-a)  "Coordinating council" means the Audit and
  Investigative Coordinating Council established under Section
  321.0221.
         SECTION 2.  Chapter 321, Government Code, is amended by
  adding Section 321.0014 to read as follows:
         Sec. 321.0014.  APPLICABILITY TO CERTAIN ENTITIES. This
  chapter applies to the following entities in the same manner as if
  each entity were a department:
               (1)  an independent organization certified by the
  Public Utility Commission of Texas under Section 39.151, Utilities
  Code;
               (2)  a regional mobility authority;
               (3)  the Texas Economic Development Corporation;
               (4)  a nonprofit organization that is established by or
  for a state officer or department and that solicits gifts, grants,
  and other donations for the Texas Enterprise Fund under Section
  481.078 or any other purpose; and
               (5)  any public or private person or entity, including
  a local governmental entity or political subdivision of this state,
  receiving funds that were made available by or provided under the
  American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5).
         SECTION 3.  Sections 321.011(a), (c), and (d), Government
  Code, are amended to read as follows:
         (a)  The State Auditor may employ a professional staff,
  including assistant auditors and other [stenographic and clerical]
  personnel.
         (c)  The State Auditor may discharge any [assistant auditors
  or stenographic or clerical] personnel at any time for any reason
  satisfactory to the State Auditor and without a hearing.
         (d)  The State Auditor and staff are to be free from partisan
  politics, and the State Auditor is free to select the most efficient
  personnel available for each position in the State Auditor's [his]
  office so that the State Auditor may render to the legislature the
  service the legislature has a right to expect. It is against public
  policy and illegal for a member of the legislature, an officer or
  employee of the state, or an officer or employee of a state
  department to recommend or suggest that the State Auditor appoint a
  person to a position on the state auditor's staff.
         SECTION 4.  Section 321.012, Government Code, is amended to
  read as follows:
         Sec. 321.012.  BUDGET [EXPENDITURES] AND SALARIES. (a)  The
  State Auditor shall submit an operating budget to the committee not
  later than September 1 of each year [directs and controls the
  expenditure of any money appropriated to the office of the State
  Auditor and must approve the State Auditor's appropriation requests
  and audit plan].
         (b)  [Before payment may be made on a voucher issued for
  payment of the salaries and expenses of the office, the State
  Auditor must approve the voucher.
         [(c)     The salaries of the assistant auditors and
  stenographic and clerical personnel may not exceed the amounts paid
  by other departments for similar services.
         [(d)]  Salaries shall be paid monthly.
         SECTION 5.  Sections 321.013(b), (c), (d), (e), (f), and
  (j), Government Code, are amended to read as follows:
         (b)  The State Auditor shall conduct the audits in accordance
  with generally accepted government auditing standards as
  prescribed by one of the following:
               (1)  the United States Government Accountability
  Office;
               (2)  the American Institute of Certified Public
  Accountants; [, the Governmental Accounting Standards Board, the
  United States General Accounting Office,] or
               (3)  other professionally recognized entities that
  prescribe auditing standards.
         (c)  The State Auditor shall submit an annual [recommend the]
  audit plan for the state [for each year] to the committee not later
  than September 1 of each year.  The annual audit plan is considered
  approved if the committee does not take action on the plan before
  November 1 of the year the  plan is submitted.  The State Auditor
  shall notify the committee of any changes to the plan. In devising
  the plan, the State Auditor shall consider recommendations
  concerning coordination of agency functions made jointly by
  representatives of the Legislative Budget Board, Sunset Advisory
  Commission, and State Auditor's Office. The State Auditor shall
  also consider the extent to which a department has received a
  significant increase in appropriations, including a significant
  increase in federal or other money passed through to the
  department, and shall review procurement activities for compliance
  with Section 2161.123. The plan shall provide for auditing of
  federal programs at least as often as required under federal law and
  shall ensure that audit requirements of all bond covenants and
  other credit or financial agreements are satisfied.  An audit plan
  created under this subsection is considered an audit working paper
  and is exempt from disclosure under Section 552.116. [The committee
  shall review and approve the plan.]
         (d)  At any time during an audit or investigation, the State
  Auditor may require the assistance of the chief executive officer,
  the administrative head, an official, a board or commission member,
  an auditor, an accountant, or other officers or employees of the
  entity being audited or investigated. During an investigation, the
  State Auditor, or the State Auditor's designated representative,
  may take possession of any property the State Auditor has
  reasonable cause to believe was purchased with public funds after
  making a determination that the property is necessary for the
  purposes of the investigation.
         (e)  The State Auditor is entitled to access and make copies
  of [to] all of the books, accounts, confidential or nonconfidential 
  [unconfidential] reports, vouchers, or other records of
  information in any department or entity subject to audit, including
  [access to] all electronic data. However, the State Auditor is
  entitled to [has] access and make copies of [to] information and
  data the release of which is restricted under federal law only with
  the approval of the appropriate federal administrative agency, and
  the State Auditor is entitled to [shall have] access and make copies
  of [to] copyrighted or restricted information obtained by the
  Office of the Comptroller of Public Accounts under subscription
  agreements and utilized in the preparation of economic estimates
  only for audit purposes.
         (f)  The State Auditor may conduct financial audits,
  compliance audits, [and] investigations, [and, with specific
  authority from the committee,] economy and efficiency audits,
  effectiveness audits, and special audits as defined by this chapter
  and specified in the audit plan.
         (j)  In devising the audit plan under Subsection (c), the
  State Auditor shall perform risk assessments as required by law.
  The process of assessing risks to the state is the first stage of
  auditing, and all records of risk assessment are part of the audit
  working papers of the State Auditor. Accordingly, all documentation
  of risk assessments by the State Auditor is exempt from disclosure
  under Section 552.116 and may be withheld or redacted in response to
  a request under Chapter 552 without the necessity of requesting a
  decision from the attorney general under Subchapter G, Chapter 552.
         SECTION 6.  Section 321.0131, Government Code, is amended to
  read as follows:
         Sec. 321.0131.  FINANCIAL AUDIT. A financial audit is an
  audit to determine:
               (1)  in the case of the state or a department, whether
  the records, books, and accounts of the audited entity accurately
  reflect its financial and fiscal operations and condition;
               (2)  whether the audited entity is maintaining
  effective accounting control over revenues, encumbrances,
  obligations, expenditures, assets, [and] liabilities, and other
  resources;
               (2-a)  whether the audited entity is complying with
  laws, rules, regulations, and contract and grant provisions as the
  laws, rules, regulations, and provisions relate to financial
  transactions, systems, and processes;
               (3)  whether the accounting and record-keeping of
  collections of state revenues and receipts by the audited entity
  are fair, accurate, and in accordance with law;
               (4)  whether the accounting and record-keeping of money
  or negotiable securities or similar assets handled by the audited
  entity on behalf of the state or received from the state and held in
  trust by the audited entity are proper, accurate, and in accordance
  with law; or [and]
               (5)  whether financial statements and other financial,
  program, and statistical reports of the audited entity are fairly
  presented.
         SECTION 7.  Section 321.0132, Government Code, is amended to
  read as follows:
         Sec. 321.0132.  COMPLIANCE AUDIT. A compliance audit is an
  audit to determine:
               (1)  whether the audited entity has obligated,
  expended, received, and used state funds in accordance with the
  purpose for which those funds have been appropriated or otherwise
  authorized by law;
               (2)  whether the audited entity has obligated,
  expended, received, and used state funds in accordance with any
  limitations, restrictions, conditions, or mandatory directions
  imposed by law on those obligations, expenditures, receipts, or
  uses;
               (3)  in the case of a local or private entity or agency,
  whether the records, books, and accounts of the audited entity
  fairly and accurately reflect its financial and fiscal operations
  relating to the obligation, receipt, expenditure, and use of state
  funds or funds represented as being collected for a state purpose;
               (4)  whether the collections of state revenues and
  receipts by the audited entity are in accordance with applicable
  laws, rules, and regulations; [and]
               (5)  whether money or negotiable securities or similar
  assets handled by the audited entity on behalf of the state or
  received from the state and held in trust by the audited entity have
  been properly and legally administered; and
               (6)  whether an entity that has contracted with a
  department or received funds through a grant with a department is
  complying with the provisions of the contract or grant, as
  applicable.
         SECTION 8.  Chapter 321, Government Code, is amended by
  adding Section 321.01365 to read as follows:
         Sec. 321.01365.  AUDIT WORKING PAPERS RELATED TO AN
  INVESTIGATION.  All audit working papers of the State Auditor
  related to an investigation or complaint, including all records of
  communications related to the investigation or complaint, are
  confidential and are not subject to disclosure under Chapter 552.
         SECTION 9.  Section 321.014, Government Code, is amended by
  adding Subsections (b-1) and (e-1) and amending Subsections (c),
  (d), (e), and (f) to read as follows:
         (b-1)  If the State Auditor determines that any information
  to be included in a report would affect the security of a computer
  network of a department, the State Auditor may report that
  information to the chief executive officer of the affected
  department in a separate report. The separate report is an audit
  working paper of the State Auditor.
         (c)  The State Auditor shall submit each report to the
  committee prior to publication. After a report is published, the
  [The] State Auditor shall file a copy of each report prepared under
  this section with:
               (1)  the governor;
               (2)  the lieutenant governor;
               (3)  the speaker of the house of representatives;
               (4)  the secretary of state;
               (5)  the Legislative Reference Library;
               (6)  each member of the governing body and the
  administrative head of each entity that is the subject of the
  report; and
               (7)  members of the legislature on a committee with
  oversight responsibility for the entity or program that is the
  subject of the report.
         (d)  The State Auditor shall maintain a complete file
  containing:
               (1)  copies of each audit report; and
               (2)  audit working [work] papers and other evidence
  relating to the work of the State Auditor.
         (e)  The State Auditor shall maintain the audit working
  papers [files] required by Subsection (d) for at least seven
  [eight] years after the date [on which] the report is published
  [information is filed].
         (e-1)  Each department or entity shall file a written
  response with the State Auditor within the period established by
  the State Auditor. The written response must:
               (1)  identify whether the department or entity agrees
  or disagrees with each recommendation;
               (2)  if the department or entity disagrees with the
  recommendation, state the reason why the department or entity
  disagrees with the recommendation; and
               (3)  state whether the department or entity intends to
  implement the recommendation.
         (f)  Each audited department or entity shall report on the
  manner in which the department or entity has addressed the findings
  and recommendations that are included in a report prepared by the
  state auditor under this section and on the status of the
  department's or entity's responsive efforts. The state auditor
  shall prescribe the form and schedule for a report by the department
  or entity under this subsection.
         SECTION 10.  Section 321.017, Government Code, is amended to
  read as follows:
         Sec. 321.017.  AUDIT [REVIEW] AND OVERSIGHT OF FUNDS AND
  ACCOUNTS RECEIVING COURT COSTS. (a)  The state auditor may audit
  [review] each fund and account into which money collected as a court
  cost is directed by law to be deposited to determine whether:
               (1)  the money is being used for the purpose or purposes
  for which the money is collected; and
               (2)  the amount of the court cost is appropriate,
  considering the purpose or purposes for which the cost is
  collected.
         (b)  The state auditor may perform audits [reviews] under
  this section as specified in the audit plan developed under Section
  321.013.
         (c)  The state auditor shall make the findings of an audit [a
  review] performed under this section available to the public and
  shall report the findings to the governor, the chief justice of the
  supreme court, the presiding judge of the court of criminal
  appeals, and the committee. The report may include the state
  auditor's recommendations for legislation or policy changes.
         SECTION 11.  Section 321.018, Government Code, is amended by
  amending Subsection (b) and adding Subsection (f) to read as
  follows:
         (b)  Each subpoena issued under Subsection (a) must be signed
  by either of the joint chairs of the committee or the secretary of
  the committee.
         (f)  The State Auditor may subpoena witnesses, computers,
  equipment, books, records, or other documents in order to perform
  the State Auditor's duties under this chapter.  A subpoena issued
  under this subsection may be served and enforced in the manner
  provided for a subpoena issued under Subsection (a).
         SECTION 12.  Section 321.022, Government Code, is amended by
  adding Subsection (d) to read as follows:
         (d)  The State Auditor may produce a public report for any
  investigation or complaint. The report shall be marked as a public
  report.
         SECTION 13.  Chapter 321, Government Code, is amended by
  adding Sections 321.0221 through 321.0226 to read as follows:
         Sec. 321.0221.  AUDIT AND INVESTIGATIVE COORDINATING
  COUNCIL. (a)  The Audit and Investigative Coordinating Council is
  composed of:
               (1)  the State Auditor; and
               (2)  individuals appointed by the State Auditor from
  any of the following:
                     (A)  internal auditors;
                     (B)  inspectors general appointed or employed at
  any department;
                     (C)  chief fiscal officers;
                     (D)  information technology specialists; or
                     (E)  any other employee of a department.
         (b)  The State Auditor shall serve as the chair of the
  coordinating council.  A member serves at the will of the State
  Auditor and as an additional duty of the member's office or
  employment.
         (c)  The coordinating council shall meet at least quarterly
  and at other times at the call of the chair.
         (d)  The coordinating council may:
               (1)  cooperate on and coordinate the planning and
  performance of audits, reviews, and investigations, as necessary;
  and
               (2)  cooperate on and coordinate fraud prevention
  activities.
         (e)  The coordinating council shall submit a report of the
  coordinating council's activities at least once each year to:
               (1)  the governor;
               (2)  the lieutenant governor;
               (3)  the speaker of the house of representatives;
               (4)  the State Auditor; and
               (5)  the appropriate legislative oversight committees.
         (f)  Chapters 551 and 2110 do not apply to the coordinating
  council.
         (g)  The coordinating council's activities under this
  section do not include making management decisions or directing the
  operations of a department.
         Sec. 321.0222.  INSPECTORS GENERAL: COOPERATION AND
  COORDINATION WITH STATE AUDITOR.  (a)  The State Auditor may, on
  request of a department's inspector general, provide appropriate
  information or other assistance to the inspector general.
         (b)  An inspector general and the State Auditor may meet to
  share information, coordinate audits, investigations, or reviews,
  or schedule work plans.
         (c)  The State Auditor is entitled to access all information
  maintained by an inspector general, including:
               (1)  information made confidential by state or federal
  law;
               (2)  vouchers;
               (3)  electronic data;
               (4)  internal records; and
               (5)  other information.
         (d)  Any documentation or other information prepared or
  maintained by or for the State Auditor in connection with the State
  Auditor's work with an inspector general to conduct an audit,
  investigation, or review is confidential and not subject to
  disclosure under Chapter 552.
         Sec. 321.0223.  INSPECTORS GENERAL: STATE AUDITOR AUDITS,
  INVESTIGATIONS, AND ACCESS TO INFORMATION NOT IMPAIRED. Provisions
  in this chapter or other law related to the operation of an
  inspector general do not:
               (1)  take precedence over the authority of the State
  Auditor to conduct an audit, review, or investigation under this
  chapter or other law;
               (2)  prohibit the State Auditor from conducting an
  audit, investigation, or review; or
               (3)  prohibit the State Auditor from having full and
  complete access to all records and other information, including
  witnesses and electronic data, that the State Auditor considers
  necessary for the audit, investigation, or review.
         Sec. 321.0224.  INSPECTORS GENERAL: ACCESS TO STATE AUDITOR
  INFORMATION.  Except as authorized by the State Auditor, this
  chapter or other law related to the operation of an inspector
  general does not permit an inspector general or any other person to
  access any working papers, including any documents, notes, and
  other information, collected or maintained by the State Auditor's
  Office.
         Sec. 321.0225.  REPORTING BY INSPECTORS GENERAL. (a)  On the
  request of the State Auditor, an inspector general shall in a timely
  manner provide the State Auditor with the status of an ongoing
  audit, investigation, or review.
         (b)  An inspector general shall provide a final report to the
  State Auditor for each audit, investigation, or review conducted by
  the inspector general. The final report must include:
               (1)  a summary of the activities performed by the
  inspector general in conducting the audit, investigation, or
  review;
               (2)  a determination of whether wrongdoing was found;
  and
               (3)  a description of any findings of wrongdoing.
         (c)  An inspector general's final reports are subject to
  disclosure under Chapter 552.
         (d)  The State Auditor shall prescribe the form and content
  of a report submitted under this section.
         Sec. 321.0226.  INFORMATION SHARING. The State Auditor, by
  providing the coordinating council or an inspector general with
  information that is confidential or otherwise excepted from
  required disclosure under law, does not waive or affect the
  confidentiality of the information for purposes of state or federal
  law or waive the right to assert exceptions to required disclosure
  of the information in the future.
         SECTION 14.  Chapter 321, Government Code, is amended by
  adding Sections 321.024 through 321.027 to read as follows:
         Sec. 321.024.  USE OF STATE RESOURCES. The State Auditor may
  enter into an agreement with a department under which the State
  Auditor is permitted to use resources of the department, including
  the services of law enforcement officers commissioned or employed
  by the department.
         Sec. 321.025.  ASSISTANCE BY DEPARTMENT EMPLOYEES.  The
  State Auditor may require employees of a department to provide
  assistance in connection with the State Auditor's duties relating
  to the investigation of fraud, waste, and abuse in the provision of
  services for programs at a department or in state or federally
  funded programs implemented, administered, or overseen by or for
  the department.
         Sec. 321.026.  ASSISTANCE OF LOCAL GOVERNMENTAL ENTITIES.
  The State Auditor may enter into an agreement with a municipality or
  county in this state that permits the State Auditor to use the
  resources of the municipality or county, including the services of
  law enforcement officers.
         Sec. 321.027.  ASSISTANCE OF INSPECTORS GENERAL. The State
  Auditor may enter into an agreement with a department's inspector
  general under which the State Auditor is permitted to use resources
  of the inspector general, including the services of law enforcement
  officers commissioned or employed by the department or the
  inspector general.
         SECTION 15.  Sections 441.185(c) and (d), Government Code,
  are amended to read as follows:
         (c)  The state records administrator and the state archivist
  shall review the schedule and recommend the schedule's approval or
  disapproval to the director and librarian [and the state auditor.
  The state auditor, based on a risk assessment and subject to the
  legislative audit committee's approval of including the review in
  the audit plan under Section 321.013, may review the schedule].
         (d)  If the director and librarian[, and the state auditor,
  if the state auditor reviewed the schedule under Subsection (c),]
  approve the schedule, the schedule may be used as the basis for the
  lawful disposition of state records under Section 441.187 for a
  period to be determined by the commission.
         SECTION 16.  Section 481.123, Government Code, is amended to
  read as follows:
         Sec. 481.123.  DUTIES. The permit office shall:
               (1)  provide comprehensive information on permits
  required for business enterprises in the state and make that
  information available to applicants and other persons;
               (2)  assist applicants in obtaining timely and
  efficient permit review and in resolving issues arising from the
  review;
               (3)  facilitate contacts between applicants and state
  agencies responsible for processing and reviewing permit
  applications;
               (4)  assist applicants in the resolution of outstanding
  issues identified by state agencies, including delays experienced
  in permit review;
               (5)  develop comprehensive application procedures to
  expedite the permit process;
               (6)  compile a comprehensive list of all permits
  required of a person desiring to establish, operate, or expand a
  business enterprise in the state;
               (7)  encourage and facilitate the participation of
  federal and local government agencies in permit coordination;
               (8)  make recommendations for eliminating,
  consolidating, simplifying, expediting, or otherwise improving
  permit procedures affecting business enterprises by initiating
  [requesting that the state auditor, with the advice and support of
  the permit office, initiate] a business permit reengineering review
  process involving all state agencies;
               (9)  develop and implement an outreach program to
  publicize and make small business entrepreneurs and others aware of
  services provided by the permit office;
               (10)  adopt rules, procedures, instructions, and forms
  required to carry out the functions, powers, and duties of the
  permit office under this subchapter; and
               (11)  except as provided in Section 481.129, complete
  the implementation of the business permit review process on or
  before September 1, 1994, and provide all recommended statutory
  changes as needed to the legislature on or before January 1, 1995.
         SECTION 17.  Section 531.454, Government Code, is amended to
  read as follows:
         Sec. 531.454.  ELIGIBILITY SYSTEM REVIEW [DURING TRANSITION
  PERIOD]. [(a)]  The eligibility system, including all records,
  contracts, and other related information, is subject to audit by
  the state auditor in accordance with Chapter 321 [auditor's office
  shall establish, in consultation with the Department of Information
  Resources, an independent validation and verification program for
  the eligibility system during the period of the transition plan
  developed under Section 531.453.   The state auditor's office shall
  also coordinate and consult with the commission, including the
  commission's office of inspector general, in establishing the
  program].
         [(b)     The independent validation and verification program
  must allow for a determination of:
               [(1)     whether the goals set by the commission in the
  transition plan are being met in accordance with the timetable
  required by Section 531.453(a);
               [(2)     whether the eligibility system is progressing
  toward becoming fully functional relative to the needs of eligible
  Texas residents;
               [(3)     what actions are necessary to achieve full
  functionality of the eligibility system;
               [(4)     whether the commission is making progress toward
  meeting the goals of the enhanced eligibility system described in
  Section 531.452; and
               [(5)     what additional actions are necessary to achieve
  the goals of the enhanced eligibility system.
         [(c)     The state auditor's office shall present the proposed
  independent validation and verification program to the committee
  and seek the committee's recommendations for modifications to the
  proposed program.   The state auditor's office shall consider the
  committee's recommendations and modify the proposed program as
  necessary.
         [(d)  The state auditor's office may:
               [(1)     enter into a contract with a person to perform the
  duties required of the office under Subsection (a), subject to the
  requirements of Subsection (c); and
               [(2)     enter into a contract with a person to implement
  the independent validation and verification program, or may
  implement the program using a contractor with which the commission
  contracts as provided by Subsection (e).
         [(e)     The commission may enter into a contract with a person
  before September 1, 2007, to operate an independent validation and
  verification program for the eligibility system.
         [(f)     The quality assurance team shall establish a schedule
  for periodic monitoring of the eligibility system during the period
  of the transition plan developed under Section 531.453.
         [(g)     The state auditor's office and the quality assurance
  team shall share information as necessary to fulfill their
  respective duties under this section.]
         SECTION 18.  Section 654.016(d), Government Code, is
  amended to read as follows:
         (d)  An action of the classification officer under this
  section is subject to:
               (1)  any limitation established for the agency in the
  General Appropriations Act, including limitations on the number of
  positions and amount of appropriations; and
               (2)  the approval of the state auditor [with advice
  from the Legislative Audit Committee].
         SECTION 19.  Sections 654.032 through 654.036, Government
  Code, are amended to read as follows:
         Sec. 654.032.  EMPLOYMENT [APPOINTMENT] OF CLASSIFICATION
  OFFICER. The state auditor may employ a [shall appoint the]
  classification officer[, subject to the advice and approval of the
  Legislative Audit Committee].
         Sec. 654.033.  QUALIFICATIONS OF CLASSIFICATION OFFICER. To
  be eligible to be employed [for appointment] as classification
  officer, an individual must have:
               (1)  at least six years' experience in position
  classification or human resource management; or
               (2)  a period of experience equivalent to that
  described in Subdivision (1) in related work in state employment
  that specially qualifies the person for the position.
         Sec. 654.034.  SALARY OF CLASSIFICATION OFFICER. The state
  auditor shall set the salary of the classification officer [is
  entitled to the salary set by the General Appropriations Act].
         Sec. 654.035.  FIRST ASSISTANT CLASSIFICATION OFFICER. The
  [classification officer, subject to the approval of the] state
  auditor [and the Legislative Audit Committee,] may employ [appoint]
  a first assistant classification officer [to whom the
  classification officer may delegate the statutory powers and duties
  of the classification officer when the classification officer is
  absent].
         Sec. 654.036.  GENERAL DUTIES OF CLASSIFICATION OFFICER.
  Subject to approval by the state auditor, the [The] classification
  officer shall:
               (1)  maintain and keep current the position
  classification plan;
               (2)  advise and assist state agencies in equitably and
  uniformly applying the plan;
               (3)  conduct classification compliance reviews
  [audits] to ensure conformity with the plan; [and]
               (4)  make recommendations [that the classification
  officer finds necessary and desirable about the operation and] for
  improvement of the plan to the governor and the legislature; and
               (5)  study the compensation of positions that are
  exempt from the plan.
         SECTION 20.  Section 654.037, Government Code, is amended by
  amending Subsection (a) and adding Subsection (a-1) to read as
  follows:
         (a)  The classification officer shall:
               (1)  make periodic studies of salary rates in other
  governmental units and in industry for similar work performed in
  state government;
               (1-a)  conduct a periodic study of compensation of
  positions that are exempt from the position classification plan;
  and
               (2)  subject to approval by the state auditor, report
  the [classification officer's] findings from the studies made under
  Subdivisions [Subdivision] (1) and (1-a) to the governor's budget
  office and the Legislative Budget Board not later than October 1
  preceding each regular session of the legislature.
         (a-1)  A study of the compensation of exempt positions
  conducted under Subsection (a) must compare exempt positions from
  different agencies and take into account the following:
               (1)  the size of an agency's annual appropriations;
               (2)  the number of full-time equivalent positions at
  the agency;
               (3)  the market average compensation for a similar
  executive position;
               (4)  the exempt position salary as compared to a
  similar classified position within the agency; and
               (5)  other objective criteria as determined by the
  study team.
         SECTION 21.  Section 654.038, Government Code, is amended to
  read as follows:
         Sec. 654.038.  CLASSIFICATION COMPLIANCE REVIEWS [AUDITS];
  NOTIFICATION AND VOLUNTARY CORRECTION OF NONCONFORMITY. (a)  After
  approval by the state auditor, the [The] classification officer
  shall notify the governor, the comptroller, the Legislative Audit
  Committee, and the chief executive of the agency in writing when a
  classification compliance review [audit] reveals nonconformity
  with the position classification plan or with prescribed salary
  ranges. The notification shall specify the points of
  nonconformity.
         (b)  The chief executive is entitled to a reasonable
  opportunity to resolve the nonconformity by:
               (1)  reclassifying the employee to a position title or
  classification [class] consistent with the work performed;
               (2)  changing the employee's duties to conform to the
  assigned classification [class]; or
               (3)  recommending to the state auditor's office
  [obtaining] a new [class] description of work and salary range for
  the classification, subject to legislative approval.
         SECTION 22.  Section 654.039, Government Code, is amended to
  read as follows:
         Sec. 654.039.  REPORT OF INACTION. Subject to approval by
  the state auditor, the [The] classification officer shall make a
  written report of the facts to the governor and the Legislative
  Budget Board if the chief executive of an agency does not comply
  with Section 654.038(b) before the 21st day after the date of the
  classification officer's written notification.
         SECTION 23.  Section 654.041, Government Code, is amended to
  read as follows:
         Sec. 654.041.  EXAMINATION FOR COMPLIANCE BY STATE AUDITOR;
  REPORTS. The state auditor, in accordance with Chapter 321
  [subject to a risk assessment and to the Legislative Audit
  Committee's approval of including the examination in the audit plan
  under Section 321.013], may:
               (1)  examine or cause to be examined, in periodic
  postaudits of their expenditures and by methods the auditor
  considers appropriate and adequate, whether departments and
  agencies are in compliance with this chapter; and
               (2)  report the findings to the governor, the
  comptroller, and the Legislative Audit Committee.
         SECTION 24.  Section 654.043, Government Code, is amended to
  read as follows:
         Sec. 654.043.  FREE USE OF COMPTROLLER'S DATA PROCESSING
  CENTER. The state auditor's office [classification officer] may
  use, without charge, the comptroller's data processing center to
  process position classification information when the center is
  available.
         SECTION 25.  Sections 825.4041(f) and (g), Government Code,
  are amended to read as follows:
         (f)  At the end of each school year, the retirement system
  shall certify to the commissioner of education [and to the state
  auditor]:
               (1)  the name of each employer that has failed to remit,
  within the period required by Section 825.408, all payments
  required under this section for the school year; and
               (2)  the amounts of the unpaid required payments.
         (g)  If the commissioner of education [or the state auditor]
  receives a certification under Subsection (f), the commissioner [or
  the state auditor] shall direct the comptroller to withhold the
  amount certified, plus interest computed at the rate and in the
  manner provided by Section 825.408, from the first state money
  payable to the employer.  The amount withheld shall be deposited to
  the credit of the appropriate accounts of the retirement system.
  Any action taken under this subsection is subject to audit by the
  state auditor in accordance with Chapter 321.
         SECTION 26.  Section 1231.044(a), Government Code, is
  amended to read as follows:
         (a)  In accordance with Chapter 321 [On the board's request],
  the state auditor may [shall] review the disposition of state
  security proceeds.
         SECTION 27.  Section 2102.009, Government Code, is amended
  to read as follows:
         Sec. 2102.009.  ANNUAL REPORT. The internal auditor shall
  prepare an annual report and submit the report before November 1 of
  each year to the governor, the Legislative Budget Board, the Sunset
  Advisory Commission, the state auditor, the state agency's
  governing board, and the administrator. The state auditor shall
  prescribe the form and content of the report[, subject to the
  approval of the legislative audit committee].
         SECTION 28.  Section 2102.0091, Government Code, is amended
  by adding Subsection (d) to read as follows:
         (d)  A report required under this section shall be posted on
  a state agency's Internet website not later than the 30th day after
  the date the report is submitted to the state agency's governing
  board or to the administrator of the state agency if the state
  agency does not have a governing board.
         SECTION 29.  Chapter 2102, Government Code, is amended by
  adding Section 2102.0092 to read as follows:
         Sec. 2102.0092.  STATE AUDITOR ACCESS TO DRAFT REPORTS.  The
  state auditor is entitled to inspect and make copies of all drafts
  of an internal audit report.
         SECTION 30.  Section 2104.0215(a), Government Code, is
  amended to read as follows:
         (a)  A state agency that agrees to enter into a
  rehabilitation plan shall engage the services of an independent
  management consulting team approved by the governor and by the
  joint chairs [presiding officer and assistant presiding officer] of
  the legislative audit committee. The independent management
  consulting team may include the state auditor, one or more
  appropriate state agencies, and private consultants.
         SECTION 31.  Section 2263.005, Government Code, is amended
  by amending Subsections (a), (c), and (e) and adding Subsection (f)
  to read as follows:
         (a)  A financial advisor or service provider described by
  Section 2263.004 shall disclose in writing to the administrative
  head of the applicable state governmental entity [and to the state
  auditor]:
               (1)  any relationship the financial advisor or service
  provider has with any party to a transaction with the state
  governmental entity, other than a relationship necessary to the
  investment or funds management services that the financial advisor
  or service provider performs for the state governmental entity, if
  a reasonable person could expect the relationship to diminish the
  financial advisor's or service provider's independence of judgment
  in the performance of the person's responsibilities to the state
  governmental entity; and
               (2)  all direct or indirect pecuniary interests the
  financial advisor or service provider has in any party to a
  transaction with the state governmental entity, if the transaction
  is connected with any financial advice or service the financial
  advisor or service provider provides to the state governmental
  entity or to a member of the governing body in connection with the
  management or investment of state funds.
         (c)  A financial advisor or service provider described by
  Section 2263.004 shall file annually a statement with the
  administrative head of the applicable state governmental entity
  [and with the state auditor]. The statement must disclose each
  relationship and pecuniary interest described by Subsection (a) or,
  if no relationship or pecuniary interest described by that
  subsection existed during the disclosure period, the statement must
  affirmatively state that fact.
         (e)  The financial advisor or service provider shall
  promptly file a new or amended statement with the administrative
  head of the applicable state governmental entity [and with the
  state auditor] whenever there is new information to report under
  Subsection (a).
         (f)  The annual statement filed with a state governmental
  entity under this section is subject to audit by the state auditor
  under Chapter 321.
         SECTION 32.  Section 2306.074(a), Government Code, is
  amended to read as follows:
         (a)  The department's books and accounts must be audited each
  fiscal year by a certified public accountant or, in accordance with
  Chapter 321 [if requested by the department and if the legislative
  audit committee approves including the audit in the audit plan
  under Section 321.013(c)], by the state auditor. A copy of the
  audit must be filed with the governor, the comptroller, and the
  legislature not later than the 30th day after the submission date
  for the annual financial report as required by the General
  Appropriations Act. If the state auditor is conducting the audit
  and it is not available by the 30th day after the submission date as
  required by the General Appropriations Act for annual financial
  reporting, it must be filed as soon as it is available.
         SECTION 33.  Sections 2306.560(a) and (b), Government Code,
  are amended to read as follows:
         (a)  The [corporation shall hire an independent certified
  public accountant to audit the] corporation's books and accounts
  shall be audited by a certified public accountant or by the state
  auditor [for] each fiscal year. The corporation shall file a copy
  of the audit with the department and shall submit the audit report
  to the governor, lieutenant governor, speaker of the house of
  representatives, comptroller, Bond Review Board, State Auditor's
  Office, and Legislative Budget Board not later than the 30th day
  after the submission date established in the General Appropriations
  Act for the annual financial report.
         (b)  The corporation is subject to audit by the state auditor
  in accordance with Chapter 321.
         SECTION 34.  Section 1506.004(b), Insurance Code, is amended
  to read as follows:
         (b)  The state auditor shall be reimbursed for the cost of an
  audit performed under Subsection (a) [report the cost of each audit
  conducted under this section to the board and the comptroller. The
  board shall remit that amount to the comptroller].
         SECTION 35.  Section 2210.054, Insurance Code, is amended by
  amending Subsection (a) and adding Subsection (c) to read as
  follows:
         (a)  The association shall file annually with the department
  and the state auditor's office a statement covering periods
  designated by the department that summarizes the transactions,
  conditions, operations, and affairs of the association during the
  preceding year.
         (c)  The association is subject to audit by the state
  auditor. The association shall pay the costs incurred by the state
  auditor for performing an audit of the association under this
  section. The association shall pay the costs promptly after
  receipt of a statement from the state auditor's office regarding
  the incurred costs.
         SECTION 36.  Section 391.0095(e), Local Government Code, is
  amended to read as follows:
         (e)  A commission shall send to the governor, the state
  auditor, the comptroller, and the Legislative Budget Board a copy
  of each report and audit required under this section or under
  Section 391.009. The state auditor may review each audit and
  report[, subject to a risk assessment performed by the state
  auditor and to the legislative audit committee's approval of
  including the review in the audit plan under Section 321.013,
  Government Code]. If the state auditor reviews the audit or report,
  the state auditor must be given access to working papers and other
  supporting documentation that the state auditor determines is
  necessary to perform the review, in accordance with Chapter 321,
  Government Code. If the state auditor finds significant issues
  involving the administration or operation of a commission or its
  programs, the state auditor shall report its findings and related
  recommendations to the legislative audit committee, the governor,
  and the commission. The governor and the legislative audit
  committee may direct the commission to prepare a corrective action
  plan or other response to the state auditor's findings or
  recommendations. [The legislative audit committee may direct the
  state auditor to perform any additional audit or investigative work
  that the committee determines is necessary.]
         SECTION 37.  Section 366.183, Transportation Code, is
  amended to read as follows:
         Sec. 366.183.  AUDIT.  (a)  An authority shall have a
  certified public accountant audit the authority's books and
  accounts at least annually. The cost of the audit may be treated as
  part of the cost of construction or operation of a turnpike project.
         (b)  An authority's records are subject to audit by the state
  auditor. If an authority is audited by the state auditor, the
  authority shall reimburse the state auditor for the expense of the
  audit.
         SECTION 38.  Subchapter B, Chapter 371, Transportation Code,
  is amended by adding Section 371.053 to read as follows:
         Sec. 371.053.  AUDIT AUTHORITY. A comprehensive development
  agreement entered into by a toll project entity is subject to audit
  by the state auditor. If a comprehensive development agreement is
  audited by the state auditor, the toll project entity that entered
  into the agreement shall reimburse the state auditor for the
  expense of the audit.
         SECTION 39.  Sections 321.014(g) and 654.042, Government
  Code, are repealed.
         SECTION 40.  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, 2011.
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