Bill Text: TX SB1563 | 2017-2018 | 85th Legislature | Introduced


Bill Title: Relating to audits of the fiscal accounts and records of emergency services districts.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2017-03-21 - Referred to Intergovernmental Relations [SB1563 Detail]

Download: Texas-2017-SB1563-Introduced.html
  85R5573 JXC-D
 
  By: Kolkhorst S.B. No. 1563
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to audits of the fiscal accounts and records of emergency
  services districts.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 775, Health and Safety Code, is amended
  by adding Subchapter N to read as follows:
  SUBCHAPTER N. AUDIT OF DISTRICTS
         Sec. 775.451.  DUTY TO AUDIT. (a)  The board shall have the
  district's fiscal accounts and records audited annually at the
  expense of the district.
         (b)  The person who performs the audit shall be a certified
  public accountant holding a license issued by the Texas State Board
  of Public Accountancy.
         (c)  The audit required by this section shall be completed
  not later than the 120th day after the close of the district's
  fiscal year.
         Sec. 775.452.  FORM OF AUDIT. (a) For a district located
  wholly in one county, the commissioners court shall adopt
  accounting and auditing manuals. 
         (b)  For a district located in more than one county, the
  county auditors of each county in which the district is located,
  with the approval of the commissioners court of each county, shall
  adopt accounting and auditing manuals.
         (c)  Except as otherwise provided by the manuals, the
  district audit shall be performed according to the generally
  accepted auditing standards adopted by the American Institute of
  Certified Public Accountants. Financial statements shall be
  prepared in accordance with generally accepted accounting
  principles.
         Sec. 775.453.  FINANCIAL REPORTS. The district's
  depository, the district's treasurer, and the district's
  bookkeeper, if any, who receives or has control over any district
  funds shall keep a full and itemized account of district funds in
  the depository's, treasurer's, or bookkeeper's possession. The
  itemized accounts and records shall be available for audit.
         Sec. 775.454.  FILING OF AUDITS, AFFIDAVITS, AND FINANCIAL
  REPORTS. (a) After the board has approved the audit report, the
  board shall, not later than the 135th day after the close of the
  district's fiscal year, submit a copy of the report to the
  commissioners court of each county in which the district is located
  for filing.
         (b)  If the board refuses to approve the annual audit report,
  the board shall, not later than the 135th day after the close of the
  district's fiscal year, submit a copy of the report to the
  commissioners court of each county in which the district is located
  for filing, accompanied by a statement from the board explaining
  the reasons for the board's failure to approve the report.
         (c)  Copies of each audit report, annual financial dormancy
  affidavit described by Section 775.458, or annual financial report
  described by Section 775.459, as applicable, shall be filed
  annually in the office of the district.
         (d)  Each district shall file with the commissioners court of
  each county in which the district is located an annual filing
  affidavit, executed by an authorized representative of the board,
  stating that all copies of the annual audit report, annual
  financial dormancy affidavit, or annual financial report have been
  filed under this section.
         (e)  The annual filing affidavit shall be submitted with the
  applicable annual document when the document is submitted to a
  commissioners court for filing under this subchapter.
         (f)  A commissioners court shall file with the attorney
  general the names of any districts in the county that do not comply
  with this subchapter.
         (g)  A submission to a county commissioners court required by
  this section may be made electronically.
         Sec. 775.455.  REVIEW BY COMMISSIONERS COURT. (a)  The
  commissioners court of each county in which a district is located
  may review the audit report of the district.
         (b)  If the commissioners court has any objections or
  determines any violations of generally accepted auditing standards
  or accounting principles, statutes, or board rules, or if the
  commissioners court has any recommendations, the commissioners
  court shall notify the board and the district's auditor.
         (c)  Before the audit report may be accepted by the
  commissioners court as being in compliance with the provisions of
  this subchapter, the board and the auditor shall remedy objections
  and correct violations of which they have been notified by the
  commissioners court.
         (d)  If the audit report indicates that a penal law has been
  violated, the commissioners court shall notify the appropriate
  county or district attorney and the attorney general.
         (e)  A commissioners court in which a district is located may
  request that the state auditor assist in the establishment of
  standards and procedures for review of district audits by the
  commissioners court. Participation by the state auditor is subject
  to approval by the legislative audit committee for inclusion in the
  audit plan under Section 321.013(c), Government Code.
         Sec. 775.456.  REVIEW BY COUNTY AUDITOR. (a)  A county
  auditor may review the audit report of each district in the county.
         (b)  A commissioners court may request that the state auditor
  assist in the establishment of standards and procedures for review
  of district audits by the county auditors. Participation by the
  state auditor is subject to approval by the legislative audit
  committee for inclusion in the audit plan under Section 321.013(c),
  Government Code.
         Sec. 775.457.  ACCESS TO AND MAINTENANCE OF DISTRICT
  RECORDS. (a) The commissioners court of each county in which a
  district is located shall have access to all vouchers, receipts,
  district fiscal and financial records, and other district records
  the commissioners court considers necessary.
         (b)  All district fiscal records shall be prepared on a
  timely basis and maintained in an orderly manner in accordance with
  generally accepted accounting principles. The fiscal records shall
  be available for public inspection during regular business hours. A
  district's fiscal records may be removed from the district's office
  for the purposes of recording the district's fiscal affairs and
  preparing an audit, during which time the fiscal records are under
  the control of the district's auditor.
         Sec. 775.458.  FINANCIALLY DORMANT DISTRICTS. (a)  A
  financially dormant district is a district that had:
               (1)  $500 or less of receipts from operations, tax
  assessments, loans, contributions, or any other sources during the
  calendar year;
               (2)  $500 or less of disbursements of funds during the
  calendar year;
               (3)  no bonds or other long-term (more than one year)
  liabilities outstanding during the calendar year; and
               (4)  no cash or investments that exceeded $5,000 at any
  time during the calendar year.
         (b)  A financially dormant district may elect to file with
  the commissioners court of each county in which the district is
  located a financial dormancy affidavit instead of complying with
  the audit requirements of Section 775.451.
         (c)  The annual financial dormancy affidavit must be:
               (1)  prepared in a format prescribed by the
  commissioners court to which the affidavit is submitted; and 
               (2)  submitted for filing by an authorized
  representative of the district.
         (d)  The affidavit must be filed annually on or before
  January 31 until the district becomes financially active. The board
  shall send notice to the commissioners court of each county in which
  the district is located if the district becomes financially active.
  After the district becomes financially active, the district shall
  file annual audit reports as prescribed by this subchapter.
         (e)  A district that becomes financially dormant after
  having been financially active shall file annual financial dormancy
  affidavits on or before January 31, until the district is dissolved
  or again becomes financially active.
         (f)  A district governed by this section is subject to
  periodic audits by the commissioners court of each county in which
  the district is located.
         Sec. 775.459.  AUDIT REPORT EXEMPTION. (a) A district may
  elect to file annual financial reports with the commissioners court
  of each county in which the district is located instead of complying
  with the audit requirements of Section 775.451 if:
               (1)  the district had no bonds or other long-term (more
  than one year) liabilities outstanding during the fiscal period;
               (2)  the district did not have gross receipts from
  operations, loans, taxes, or contributions in excess of $250,000
  during the fiscal period; and
               (3)  the district's cash and temporary investments were
  not in excess of $250,000 during the fiscal period.
         (b)  The annual financial report must be:
               (1)  accompanied by an affidavit attesting to the
  accuracy and authenticity of the financial report that is signed by
  an authorized representative of the district;
               (2)  prepared in a format prescribed by the
  commissioners court to which the report is submitted; and
               (3)  on file with the commissioners court of each
  county in which the district is located not later than the 45th day
  after the close of the district's fiscal year.
         (c)  A district governed by this section is subject to
  periodic audits by the commissioners court of each county in which
  the district is located.
         Sec. 775.460.  FAILURE TO AUDIT. If a district fails to file
  an audit report, an annual financial dormancy affidavit, or an
  annual financial report, as applicable, according to the schedule
  required by this subchapter, the president and treasurer of the
  board are removed from the board and:
               (1)  in a district located wholly in one county, the
  commissioners court shall fill the vacancies as provided by Section
  775.034; and 
               (2)  in a district located in more than one county,
  notwithstanding Section 775.044, the commissioners courts shall
  fill the vacancies with qualified persons by joint order.
         Sec. 775.461.  POLICIES AND AUDITS OF DISTRICTS. (a) The
  board shall adopt a written:
               (1)  code of ethics for district directors, officers,
  employees, and persons who are engaged in handling investments for
  the district;
               (2)  policy relating to travel expenditures;
               (3)  policy relating to district investments that
  ensures that:
                     (A)  purchases and sales of investments are
  initiated by authorized individuals, conform to investment
  objectives and regulations, and are properly documented and
  approved; and
                     (B)  periodic review is made of district
  investments to evaluate investment performance and security;
               (4)  policy and procedure for selection, monitoring, or
  review and evaluation of professional services; and
               (5)  policy that ensures a better use of management
  information including:
                     (A)  budgets for use in planning and controlling
  cost;
                     (B)  an audit committee of the board; and
                     (C)  uniform reporting requirements that require
  the use of generally accepted accounting and audit principles.
         (b)  The state auditor may audit the financial transactions
  of a district if the state auditor determines that the audit is
  necessary.
         SECTION 2.  Sections 775.082, 775.0821, and 775.0825, Health
  and Safety Code, are repealed.
         SECTION 3.  This Act takes effect July 1, 2018.
feedback