bill ordering outside efficiency audits of every state agency

The text as introduced · 758 words

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.