SB1347 - Relating to the conduct of efficiency audits of state agencies.

  89R13652 LRM-F     By: Hughes S.B. No. 1347       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 recommend 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. (a)   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:                 (1)  the legislative audit committee; and                 (2)     the chairs of the standing committees of each   house of the legislature with primary jurisdiction over the audited   department.           (b)     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, 2026, 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, 2025.