By: Crownover H.B. No. 4307
A BILL TO BE ENTITLED
AN ACT
relating to the creation of the office of inspector within the State
Auditor's Office and the appointment of deputy inspectors general
at the Health and Human Services Commission, Texas Youth
Commission, Texas Department of Criminal Justice, Texas Education
Agency, and Texas Department of Transportation; providing
penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 321.001, Government Code, is designated
as Subchapter A, Chapter 321, Government Code, and a heading is
added to that subchapter to read as follows:
SUBCHAPTER A. GENERAL PROVISIONS
SECTION 2. Sections 321.002 through 321.023, Government
Code, are designated as Subchapter B, Chapter 321, Government Code,
and a heading is added to that subchapter to read as follows:
SUBCHAPTER B. STATE AUDITOR
SECTION 3. Chapter 321, Government Code, is amended by
adding Subchapter C to read as follows:
SUBCHAPTER C. OFFICE OF INSPECTOR GENERAL DIVISION
Sec. 321.101. DEFINITIONS. In this subchapter:
(1) "Agency" means a state agency subject to this
subchapter under Section 321.102.
(2) "Commission" means the Health and Human Services
Commission.
(3) "Division" means the office of inspector general
division of the state auditor's office.
(4) "Fraud" means an intentional deception or
misrepresentation made by a person with the knowledge that the
deception could result in some unauthorized benefit to that person
or some other person. The term includes any act that constitutes
fraud under applicable federal or state law.
(5) "Furnished," in reference to items or services:
(A) means items or services provided directly by,
provided under the direct supervision of, or ordered by:
(i) a physician or other individual
licensed under state law to practice the individual's profession,
either as an employee or in the individual's own capacity;
(ii) a provider; or
(iii) another supplier of services; and
(B) does not include services ordered by one
party but billed for and provided by or under the supervision of
another.
(6) "Hold on payment" means the temporary denial of
reimbursement under a federal program for items or services
furnished by a specified provider.
(7) "Inspector general" means the inspector general
appointed under Section 321.109.
(8) "Program exclusion" means the suspension of a
provider's authorization under a federal program to request
reimbursement for items or services furnished by that provider.
(9) "Provider" means a person, firm, partnership,
corporation, agency, association, institution, or other entity
that was or is approved by the commission to provide:
(A) medical assistance under contract or
provider agreement with the commission; or
(B) third-party billing vendor services under a
contract or provider agreement with the commission.
(10) "Review" includes an audit, inspection,
investigation, evaluation, or similar activity.
(11) "State funds" or "state money" includes federal
funds or money received and appropriated by the state or for which
the state has oversight responsibility.
Sec. 321.102. APPLICABILITY. (a) Except as provided by
Subsections (c) and (d), this subchapter applies only to the:
(1) Health and Human Services Commission;
(2) Texas Youth Commission;
(3) Texas Department of Criminal Justice;
(4) Texas Education Agency; and
(5) Texas Department of Transportation.
(b) A state agency may not establish an office of inspector
general without specific legislative authorization.
(c) A health and human services agency as defined by Section
531.001 is an agency to which this subchapter applies for purposes
related to the review and investigatory authority of the division.
(d) A state agency that receives federal stimulus money is
an agency to which this subchapter applies for purposes of Section
321.122.
Sec. 321.103. REFERENCE IN OTHER LAW. (a) Notwithstanding
any other provision of law, a reference in law or rule to an
agency's office of inspector general means, for an agency to which
this subchapter applies, the office of inspector general division
of the state auditor's office.
(b) Notwithstanding any other provision of law, a reference
in law or rule to the commission's office of investigations and
enforcement or the commission's office of inspector general means
the office of inspector general division of the state auditor's
office.
Sec. 321.104. INTERFERENCE PROHIBITED. The governor, the
legislature or a committee of the legislature, or a state agency may
not prevent the inspector general or a deputy inspector general
from initiating, performing, or completing an investigation,
audit, review, or any oversight, compliance, or enforcement
activity pursued by the division under this subchapter or other
law.
Sec. 321.105. OFFICE OF INSPECTOR GENERAL. (a) The office
of inspector general is a division of the state auditor's office.
(b) The division is governed by the inspector general.
(c) The division shall have its principal office and
headquarters in the state auditor's office in Austin.
Sec. 321.106. INDEPENDENCE OF DIVISION. Except as
otherwise provided by this subchapter, the division and inspector
general operate independently of any other agency.
Sec. 321.107. ADMINISTRATIVE ATTACHMENT. A person
designated by the inspector general to serve as the deputy
inspector general for an agency, together with division staff
assigned to the deputy inspector general, are administratively
attached to the assigned agency. The assigned agency shall provide
to the division personnel administrative support services.
Sec. 321.108. SERVICE LEVEL AGREEMENT. (a) The division
and each state agency to which this subchapter applies shall enter
into a service level agreement that establishes the performance
standards and deliverables with regard to administrative support
provided to the division by the agency.
(b) The service level agreement must be reviewed at least
annually to ensure that services and deliverables are provided in
accordance with the agreement.
Sec. 321.109. APPOINTMENT. (a) The governor, with the
advice and consent of the senate, shall appoint an inspector
general to serve as director of the division.
(b) The appointment shall be made without regard to race,
color, disability, sex, religion, age, or national origin.
(c) In making the appointment, the governor shall consider
the person's knowledge of laws, experience in the enforcement of
law, honesty, integrity, education, training, and executive
ability.
Sec. 321.110. TERM; VACANCY. (a) The inspector general
serves a two-year term that expires on February 1 of each
odd-numbered year.
(b) The governor shall fill a vacancy in the office of
inspector general for the unexpired term.
Sec. 321.111. ELIGIBILITY. (a) A person is not eligible
for appointment as inspector general or designation as a deputy
inspector general if the person or the person's spouse:
(1) is an officer or paid consultant of a business
entity or other organization that holds a license, certificate of
authority, or other authorization from an agency to which this
subchapter applies or that receives funds from an agency to which
this subchapter applies;
(2) owns or controls, directly or indirectly, more
than a 10 percent interest in a business entity or other
organization receiving funds from an agency to which this
subchapter applies; or
(3) uses or receives a substantial amount of tangible
goods or funds from an agency to which this subchapter applies,
other than compensation or reimbursement authorized by law.
(b) A person is not eligible to serve as inspector general
or deputy inspector general if the person or the person's spouse is
required to register as a lobbyist under Chapter 305 because of the
person's or spouse's activities for compensation related to the
operation of an agency to which this subchapter applies.
Sec. 321.112. CONFLICT OF INTEREST. (a) The inspector
general may not serve as an ex officio member on the governing body
of a governmental entity.
(b) The inspector general may not have a financial interest
in the transactions of the division, the state auditor's office, or
an agency to which this subchapter applies.
(c) The inspector general and the deputy inspector general
designated for the commission may not have a financial interest in
the transactions of a provider.
Sec. 321.113. REMOVAL. The governor, with the advice and
consent of the senate, may remove the inspector general from office
as provided by Section 9, Article XV, Texas Constitution.
Sec. 321.114. DEPUTY INSPECTORS GENERAL. (a) The
inspector general, in consultation with the office of the governor
and as necessary to implement this subchapter, shall designate
persons to serve as deputy inspectors general for each agency to
which this subchapter applies.
(b) A deputy inspector general shall report to and perform
duties as directed by the inspector general.
(c) Each agency to which this subchapter applies shall
provide to the agency's designated deputy inspector general
facilities and support services, including suitable office space,
furniture, computer and communications equipment, administrative
support, and salary and benefits as provided by the General
Appropriations Act.
Sec. 321.115. PEACE OFFICERS. (a) The division may employ
and commission peace officers to assist the inspector general in
carrying out the duties of the division relating to detection,
investigation, and prevention of fraud, waste, and abuse in
programs at an agency to which this subchapter applies or in
programs receiving state or federal funds that are implemented,
administered, or overseen by or for the agency.
(b) A commissioned peace officer or otherwise designated
law enforcement officer employed by the division is not entitled to
supplemental benefits from the law enforcement and custodial
officer supplemental retirement fund unless the officer transfers
from a position, without a break in service, that qualifies for
supplemental retirement benefits from the fund.
Sec. 321.116. EXPERTS. Subject to the availability of
funds, the inspector general and deputy inspectors general may
contract with certified public accountants, qualified management
consultants, or other professional experts as necessary to
independently perform the functions of the division.
Sec. 321.117. EMPLOYEES; TRAINING. (a) The inspector
general may employ personnel as necessary to implement the duties
of the division.
(b) The inspector general shall train division personnel to
pursue, efficiently and as necessary, fraud, waste, and abuse cases
in programs at an agency to which this subchapter applies or other
state or federally funded programs implemented, administered, or
overseen by or for the agency.
Sec. 321.118. ASSISTANCE BY AGENCY EMPLOYEES. (a) The
inspector general may require employees of an agency to which this
subchapter applies to provide assistance to the division in
connection with the division's duties relating to the investigation
of fraud, waste, and abuse in the provision of services for programs
at an agency to which this subchapter applies or state or federally
funded programs implemented, administered, or overseen by or for
the agency.
(b) The inspector general or the deputy inspector general
for the commission may also require employees of any health and
human services agency to provide assistance under Subsection (a).
Sec. 321.119. MERIT SYSTEM. (a) The division may establish
a merit system for its employees.
(b) The merit system may be maintained in conjunction with
other state agencies that are required by federal law to operate
under a merit system.
Sec. 321.120. GENERAL RESPONSIBILITIES. (a) The division
is responsible for the investigation of fraud, waste, and abuse, as
defined in applicable state and federal law, in the provision or
funding of services by or for an agency to which this subchapter
applies or under a program implemented, administered, or overseen
by or for the agency.
(b) The division shall set clear objectives, priorities,
and performance standards for the division that emphasize:
(1) coordinating investigative efforts to
aggressively recover money;
(2) allocating resources to cases that have the
strongest supportive evidence and the greatest potential for
recovery of money; and
(3) maximizing opportunities for referral of cases to
the office of the attorney general in accordance with this
subchapter and other applicable law.
Sec. 321.121. GENERAL POWERS. The division has all the
powers necessary or appropriate to carry out its responsibilities
and functions under this subchapter and other law. In addition to
performing functions and duties otherwise provided by law, the
division may:
(1) provide for coordination between the division and
special investigative units formed by managed care organizations
under Section 531.113 or entities with which managed care
organizations contract under that section;
(2) audit the use and effectiveness of state or
federal funds, including contract and grant funds, administered by
a person or an agency to which this subchapter applies;
(3) conduct reviews, investigations, and inspections
relating to the funds described by Subdivision (2);
(4) recommend policies promoting economical and
efficient administration of the funds described by Subdivision (2)
and the prevention and detection of fraud, waste, and abuse in
administration of those funds; and
(5) conduct internal affairs investigations in
instances of fraud, waste, and abuse and in instances of misconduct
by employees, contractors, subcontractors, and vendors.
Sec. 321.122. FEDERAL STIMULUS MONEY RESPONSIBILITIES. (a)
The division has oversight responsibility for any federal stimulus
funds provided to this state or a state agency by the federal
government.
(b) The division shall monitor:
(1) actions of the federal government related to
efforts to promote economic recovery by providing federal funds to
the states; and
(2) actions of any state agency that receives federal
stimulus funds to prevent fraud, waste, and abuse in the use of the
funds.
(c) The division shall study appropriate provisions of the
American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5)
and any subsequent federal economic stimulus legislation that may
make federal stimulus money available to this state and any federal
regulations and executive orders connected to the federal
legislation to:
(1) determine the extent to which federal stimulus
money is available for the programs of any state agency;
(2) provide oversight for the use of federal stimulus
funds by a state agency that receives the funds; and
(3) recommend to the legislature any state legislation
necessary to maximize this state's receipt of federal funds.
(d) Notwithstanding Section 321.114, the inspector general
shall appoint a deputy inspector general for an agency to which this
subchapter applies solely under Section 321.102(d) and this section
only if the inspector general determines that the agency receives
enough federal stimulus money to warrant the appointment.
Sec. 321.123. HEALTH AND HUMAN SERVICES RESPONSIBILITIES.
The division is responsible for:
(1) the investigation of fraud, waste, and abuse in
the provision or funding of health or human services by this state;
(2) the enforcement of state law relating to the
provision of those services to protect the public; and
(3) the prevention and detection of crime relating to
the provision of those services.
Sec. 321.124. RULEMAKING BY INSPECTOR GENERAL. (a)
Notwithstanding Section 531.0055(e) and any other law, the
inspector general shall adopt the rules necessary to administer the
functions of the division, including rules to address the
imposition of sanctions and penalties for violations of state or
federal law and due process requirements for imposing sanctions and
penalties.
(b) A rule, standard, or form adopted by an agency to which
this subchapter applies that is necessary to accomplish the duties
of the division is considered to also be a rule, standard, or form
of the division and remains in effect as a rule, standard, or form
of the division until changed by the inspector general.
(c) The rules must include standards for the division that
emphasize:
(1) coordinating investigative efforts to
aggressively recover money;
(2) allocating resources to cases that have the
strongest supportive evidence and the greatest potential for
recovery of money; and
(3) maximizing opportunities for referral of cases to
the office of the attorney general.
Sec. 321.125. STATE AUDITOR AUDITS, INVESTIGATIONS, AND
ACCESS TO INFORMATION NOT IMPAIRED. This subchapter or other law
related to the operation of the division does not:
(1) take precedence over the authority of the state
auditor to conduct audits under this chapter or other law; or
(2) prohibit the state auditor from conducting an
audit, investigation, or other review or 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 other review.
Sec. 321.126. EXECUTIVE ORDERS. (a) The governor may issue
executive orders directing state agencies to implement
recommendations issued by the division for corrective or remedial
actions promoting the economical and efficient administration of
money and the detection of fraud.
(b) The governor may submit to the lieutenant governor, the
speaker of the house of representatives, the state auditor, and the
comptroller a report of the executive orders issued under this
subchapter and the compliance by state agencies with those orders.
Sec. 321.127. DEFENSE BY ATTORNEY GENERAL. The attorney
general shall defend any action brought against the inspector
general, a deputy inspector general, or an employee or officer of
the division as a result of that person's official act or omission,
whether or not the person has terminated service with the division
at the time the action is instituted.
Sec. 321.128. INTERAGENCY COORDINATION. (a) The division
and the attorney general shall enter into a memorandum of
understanding to develop and implement joint written procedures for
processing cases of suspected fraud, waste, or abuse, as those
terms are defined by state or federal law, or other violations of
state or federal law under programs at an agency to which this
subchapter applies or in programs receiving state or federal funds
that are implemented, administered, or overseen by the agency.
(b) The memorandum of understanding shall require:
(1) the division and the attorney general to set
priorities and guidelines for referring cases to appropriate state
agencies for investigation, prosecution, or other disposition to
enhance deterrence of fraud, waste, abuse, or other violations of
state or federal law, including a violation of Chapter 102,
Occupations Code, in the programs and to maximize the imposition of
penalties, the recovery of money, and the successful prosecution of
cases;
(2) the division to refer each case of suspected
fraud, waste, or abuse to the attorney general not later than the
20th business day after the date the division determines that the
existence of fraud, waste, or abuse is reasonably indicated;
(3) the attorney general to take appropriate action in
response to each case referred to the attorney general, which
action may include direct initiation of prosecution, with the
consent of the appropriate local district or county attorney,
direct initiation of civil litigation, referral to an appropriate
United States attorney, a district attorney, or a county attorney,
or referral to a collection agency for initiation of civil
litigation or other appropriate action;
(4) the division to keep detailed records for cases
processed by the division or the attorney general, including
information on the total number of cases processed and, for each
case:
(A) the agency to which the case is referred for
investigation;
(B) the date on which the case is referred; and
(C) the nature of the suspected fraud, waste, or
abuse;
(5) the division to notify each appropriate unit of
the office of the attorney general of each case referred by the
division;
(6) the attorney general to ensure that information
relating to each case investigated by the attorney general is
available to each unit of the attorney general's office with
responsibility for investigating suspected fraud, waste, or abuse;
(7) the attorney general to notify the division of
each case the attorney general declines to prosecute or prosecutes
unsuccessfully;
(8) representatives of the division and the attorney
general to meet not less than quarterly to share case information
and determine the appropriate agency to investigate each case; and
(9) the division and the attorney general to submit
information requested by the comptroller about each resolved case
for the comptroller's use in improving fraud detection.
(c) An exchange of information under this section between
the attorney general and the division or any other state agency does
not affect whether the information is subject to disclosure under
Chapter 552.
(d) With respect to Medicaid fraud, in addition to the
provisions required by Subsection (b), the memorandum of
understanding required by this section must also ensure that no
barriers to direct fraud referrals to the attorney general's
Medicaid fraud control unit or unreasonable impediments to
communication between Medicaid agency employees and the Medicaid
fraud control unit are imposed and must include procedures to
facilitate the referral of cases directly to the attorney general.
Sec. 321.129. INFORMATION AND TECHNOLOGY; PUBLIC INTEREST
INFORMATION AND COMPLAINTS. (a) The division may obtain
information or technology necessary to enable the division to meet
its responsibilities under this subchapter or other law.
(b) The division shall develop and implement policies that
provide the public a reasonable opportunity to appear before the
division and to speak on any issue under the division's
jurisdiction.
(c) The division shall prepare information of public
interest describing the functions of the division and the
division's procedures by which complaints are filed with and
resolved by the division. The division shall make the information
available to the public and appropriate state agencies.
(d) The division shall keep an information file about each
complaint filed with the division relating to a state agency or
entity receiving state or federal money and falling under the
investigatory jurisdiction of the division.
Sec. 321.130. REVIEW, INVESTIGATION, AND AUDIT AUTHORITY.
(a) The inspector general may evaluate any activity or operation of
an agency to which this subchapter applies, a provider, if
applicable, or a person in this state that is related to the
investigation, detection, or prevention of fraud, waste, abuse, or
employee misconduct in a program at an agency to which this
subchapter applies or in a state or federally funded program
implemented, administered, or overseen by or for the agency. A
review may include an investigation or other inquiry into a
specific act or allegation of, or a specific financial transaction
or practice that may involve, impropriety, malfeasance, or
nonfeasance in the obligation, spending, receipt, or other use of
state or federal money.
(b) The division shall conduct reviews and inspections to
protect the public and detect and prevent fraud, waste, and abuse in
the provision or funding of services or programs described by
Subsection (a).
(c) A state agency or the governing body or governing
officer of a state agency may not impair or prohibit the inspector
general from initiating or completing a review.
(d) With respect to an agency to which this subchapter
applies, the inspector general may audit and review the use and
effectiveness of state or federal funds, including contract and
grant funds, administered by a person or agency receiving the funds
in connection with an agency or state or federally funded program
implemented, administered, or overseen by or for the agency.
Sec. 321.131. CLAIMS CRITERIA FOR INVESTIGATIONS. The
division by rule shall set specific claims criteria that, when met,
require the division to begin an investigation.
Sec. 321.132. INITIATION OF REVIEW. The inspector general
may initiate a review:
(1) on the inspector general's own initiative;
(2) at the request of an agency to which this
subchapter applies or the governing body or governing officer of
the agency; or
(3) based on a complaint from any source concerning a
matter described by Section 321.130.
Sec. 321.133. INTEGRITY REVIEW FOR MEDICAID PROGRAM. (a)
The deputy inspector general designated for the commission shall
conduct an integrity review to determine whether there is
sufficient basis to warrant a full investigation on receipt of any
complaint of fraud, waste, or abuse of funds in the state Medicaid
program from any source.
(b) An integrity review under this section must begin not
later than the 30th day after the date the division receives a
complaint or has reason to believe that Medicaid fraud, waste, or
abuse has occurred. An integrity review shall be completed not
later than the 90th day after the date the review began.
(c) If the findings of an integrity review give the division
reason to believe that an incident of fraud involving possible
criminal conduct has occurred in the state Medicaid program, the
division must take the following action, as appropriate, not later
than the 30th day after the completion of the integrity review:
(1) if a provider is suspected of fraud involving
criminal conduct, the division must refer the case to the state's
Medicaid fraud control unit, provided that the criminal referral
does not preclude the division from continuing its investigation of
the provider or preclude the imposition of appropriate
administrative or civil sanctions; or
(2) if there is reason to believe that a recipient of
funds has defrauded the Medicaid program, the division may conduct
a full investigation of the suspected fraud.
Sec. 321.134. ACCESS TO INFORMATION. (a) To further a
review conducted by the division, the inspector general or a deputy
inspector general is entitled to access all books, records,
accounts, documents, reports, vouchers, databases, systems, or
other information, including confidential information, electronic
data, and internal records relevant to the functions of the
division that are maintained by or for a person, state agency, or
provider, if applicable, in connection with an agency to which this
subchapter applies or a state or federally funded program
implemented, administered, or overseen by or for the agency.
(b) The inspector general or deputy inspector general may
not access data or other information the release of which is
restricted under federal law unless the appropriate federal agency
approves the release to the division or its agent.
Sec. 321.135. COOPERATION REQUIRED. To further a review
conducted by the division, the inspector general or deputy
inspector general may require medical or other professional
assistance from an agency to which this subchapter applies or an
auditor, accountant, or other employee of the agency.
Sec. 321.136. REFERRAL TO STATE MEDICAID FRAUD CONTROL
UNIT. (a) At the time the division learns or has reason to suspect
that a health or human services provider's records related to
participation in the state Medicaid program are being withheld,
concealed, destroyed, fabricated, or in any way falsified, the
division shall immediately refer the case to the state's Medicaid
fraud control unit.
(b) A criminal referral under Subsection (a) does not
preclude the division from continuing its investigation of a health
or human services provider or the imposition of appropriate
administrative or civil sanctions.
Sec. 321.137. HOLD ON CLAIM REIMBURSEMENT PAYMENT;
EXCLUSION FROM PROGRAMS. (a) In addition to other instances
authorized under state or federal law, the division shall impose
without prior notice a hold on payment of claims for reimbursement
submitted by a health or human services provider to compel
production of records related to participation in the state
Medicaid program or on request of the state's Medicaid fraud
control unit, as applicable.
(b) The division must notify the health or human services
provider of the hold on payment not later than the fifth working day
after the date the payment hold is imposed.
(c) The division shall, in consultation with the state's
Medicaid fraud control unit, establish guidelines under which holds
on payment or exclusions from a health and human services program:
(1) may permissively be imposed on a health or human
services provider; or
(2) shall automatically be imposed on a provider.
(d) A health or human services provider subject to a hold on
payment or excluded from a program under this section is entitled to
a hearing on the hold or exclusion. A hearing under this subsection
is a contested case hearing under Chapter 2001. The State Office of
Administrative Hearings shall conduct the hearing. After the
hearing, the division, subject to judicial review, shall make a
final determination. The commission, a health and human services
agency, and the attorney general are entitled to intervene as
parties in the contested case.
Sec. 321.138. REQUEST FOR EXPEDITED HEARING. (a) On timely
written request by a health or human services provider subject to a
hold on payment under Section 321.137, other than a hold requested
by the state's Medicaid fraud control unit, the division shall file
a request with the State Office of Administrative Hearings for an
expedited administrative hearing regarding the hold.
(b) The health or human services provider must request an
expedited hearing not later than the 10th day after the date the
provider receives notice from the division under Section
321.137(b).
Sec. 321.139. INFORMAL RESOLUTION. (a) The inspector
general shall adopt rules that allow a health or human services
provider subject to a hold on payment under Section 321.137, other
than a hold requested by the state's Medicaid fraud control unit, to
seek an informal resolution of the issues identified by the
division in the notice provided under that section.
(b) A health or human services provider that seeks an
informal resolution must do so not later than the 10th day after the
date the provider receives notice from the division under Section
321.137(b).
(c) A health or human services provider's decision to seek
an informal resolution does not extend the time by which the
provider must request an expedited administrative hearing under
Section 321.138.
(d) A hearing initiated under Section 321.137 shall be
stayed at the division's request until the informal resolution
process is completed.
Sec. 321.140. EMPLOYEE REPORTS. The inspector general may
require employees at an agency to which this subchapter applies to
report to the division information regarding fraud, waste, misuse
or abuse of funds or resources, corruption, or illegal acts.
Sec. 321.141. SUBPOENAS. (a) The inspector general may
issue a subpoena to compel the attendance of a relevant witness at a
hearing or deposition under this subchapter or to compel the
production, for inspection or copying, of relevant materials in
connection with a review, hearing, or deposition conducted under
this subchapter.
(b) A subpoena may be served personally or by certified
mail.
(c) If a person fails to comply with a subpoena, the
inspector general, acting through the attorney general, may file
suit to enforce the subpoena in a district court in this state.
(d) On finding that good cause exists for issuing the
subpoena, the court shall order the person to comply with the
subpoena. The court may hold in contempt a person who fails to obey
the court order.
(e) The reimbursement of the expenses of a witness whose
attendance is compelled under this section is governed by Section
2001.103.
Sec. 321.142. INTERNAL AUDITOR. (a) In this section,
"internal auditor" means a person appointed under Section 2102.006.
(b) The internal auditor for an agency to which this
subchapter applies shall provide the inspector general with a copy
of the agency's internal audit plan to:
(1) assist in the coordination of efforts between the
inspector general and the internal auditor; and
(2) limit duplication of effort regarding reviews by
the inspector general and internal auditor.
(c) The internal auditor shall provide to the inspector
general all final audit reports concerning audits of any:
(1) part of the agency;
(2) contract, procurement, or grant; and
(3) program conducted by the agency.
Sec. 321.143. COOPERATION WITH LAW ENFORCEMENT OFFICIALS
AND OTHER ENTITIES. (a) The inspector general may provide
information and evidence relating to criminal acts to the state
auditor's office and appropriate law enforcement officials.
(b) The inspector general may refer matters for further
civil, criminal, and administrative action to appropriate
administrative and prosecutorial agencies, including the attorney
general.
(c) The inspector general may enter into a memorandum of
understanding with a law enforcement or prosecutorial agency,
including the attorney general, to assist in conducting a review
under this subchapter.
Sec. 321.144. COOPERATION AND COORDINATION WITH STATE
AUDITOR. (a) The state auditor may, on request of the inspector
general, provide appropriate information or other assistance to the
inspector general or division, as determined by the state auditor.
(b) The inspector general may meet with the state auditor to
coordinate a review conducted under this subchapter, share
information, or schedule work plans.
(c) The state auditor is entitled to access all information
maintained by the inspector general, including vouchers,
electronic data, internal records, and information obtained under
Section 321.134 or subject to Section 321.152.
(d) Any information obtained or provided by the state
auditor under this section is confidential and not subject to
disclosure under Chapter 552.
Sec. 321.145. PREVENTION. (a) The inspector general may
recommend to an agency to which this subchapter applies or the
presiding officer of the agency policies on:
(1) promoting economical and efficient administration
of state or federal funds administered by an individual or entity
that received the funds from a state agency; and
(2) preventing and detecting fraud, waste, and abuse
in the administration of those funds.
(b) The inspector general may provide training or other
education regarding the prevention of fraud, waste, and abuse to
employees of a state agency. The training or education provided
must be approved by the presiding officer of the agency.
Sec. 321.146. AWARD FOR REPORTING FRAUD, WASTE, ABUSE, OR
OVERCHARGES. (a) If the division determines that the report
results in the recovery of an administrative or civil penalty
imposed by law, the division may grant an award to an individual who
reports:
(1) activity that constitutes fraud, waste, or abuse
of money related to any agency programs or in programs receiving
state or federal funds that are implemented, administered, or
overseen by the agency; or
(2) overcharges in a program described by Subdivision
(1).
(b) The division may not grant an award to an individual in
connection with a report if the division or attorney general had
independent knowledge of the activity reported by the individual.
(c) The division shall determine the amount of an award
granted under this section. The amount may not exceed five percent
of the amount of the administrative or civil penalty imposed by law
that resulted from the individual's report.
(d) In determining the amount of an award granted under this
section, the division:
(1) shall consider the importance of the report in
ensuring the fiscal integrity of the program; and
(2) may consider whether the individual participated
in the reported fraud, waste, abuse, or overcharge.
(e) A person who brings an action under Subchapter C,
Chapter 36, Human Resources Code, is not eligible for an award under
this section.
Sec. 321.147. RULEMAKING BY PRESIDING OFFICER OF AGENCY.
The presiding officer of an agency may adopt rules governing the
agency's response to reports and referrals from the inspector
general on issues identified by the inspector general related to
the agency or a contractor of the agency.
Sec. 321.148. ALLEGATIONS OF MISCONDUCT AGAINST PRESIDING
OFFICER. If a review by the inspector general involves allegations
that a presiding officer of an agency has engaged in misconduct, the
inspector general shall report to the governor during the review
until the report is completed or the review is closed without a
finding.
Sec. 321.149. PERIODIC REPORTING REQUIRED. The inspector
general shall timely inform the governor, the attorney general, the
state auditor, and the presiding officer of the relevant agency of
the initiation of a review of an agency program and the ongoing
status of the review.
Sec. 321.150. REPORTING DIVISION FINDINGS. The inspector
general shall report the findings of the division in connection
with a review conducted under this subchapter to:
(1) the presiding officer of the agency;
(2) the governor;
(3) the lieutenant governor;
(4) the speaker of the house of representatives;
(5) the comptroller;
(6) the state auditor; and
(7) the attorney general.
Sec. 321.151. FLAGRANT VIOLATIONS; IMMEDIATE REPORT. The
inspector general shall immediately report to the presiding officer
of the agency associated with the review, the governor's general
counsel, and the state auditor a particularly serious or flagrant
problem relating to the administration of a program, operation of
the agency, or interference with an inspector general review.
Sec. 321.152. INFORMATION CONFIDENTIAL. (a) Except as
provided by this subchapter, all information and material compiled
by the inspector general during a review under this subchapter is:
(1) confidential and not subject to disclosure under
Chapter 552; and
(2) not subject to disclosure, discovery, subpoena, or
other means of legal compulsion for release to anyone other than the
state auditor's office, the agency that is the subject of a review,
or the division or its agents involved in the review related to that
information or material.
(b) As the inspector general determines appropriate,
information relating to a review may be disclosed to:
(1) a law enforcement agency;
(2) the attorney general;
(3) the state auditor; or
(4) the agency that is the subject of a review.
(c) A person that receives information under Subsection (b)
may not disclose the information except to the extent that
disclosure is consistent with the authorized purpose for which the
person received the information.
Sec. 321.153. DRAFT OF FINAL REVIEW REPORT; AGENCY
RESPONSE. (a) Except in cases in which the division has determined
that potential fraud, waste, or abuse exists, the division shall
provide a draft of the final review report of any investigation,
audit, or review of the operations of an agency to the presiding
officer of the agency before publishing the division's final review
report.
(b) The agency director may provide a response to the
division's draft report in the manner prescribed by the division
not later than the 10th day after the date the draft report is
received by the agency. The inspector general by rule shall specify
the format of and requirements for the agency response.
(c) Notwithstanding Subsection (a), the division may not
provide a draft report to the presiding officer of the agency if in
the inspector general's opinion providing the draft report could
negatively affect any anticipated civil or criminal proceedings.
(d) The division may include any portion of the agency's
response in the division's final report.
Sec. 321.154. FINAL REVIEW REPORTS; AGENCY RESPONSE. (a)
The inspector general shall prepare a final report for each review
conducted under this subchapter. The final report must include:
(1) a summary of the activities performed by the
inspector general in conducting the review;
(2) a determination of whether wrongdoing was found;
and
(3) a description of any findings of wrongdoing.
(b) The inspector general's final review reports are
subject to disclosure under Chapter 552.
(c) All working papers and other documents related to
compiling the final review reports remain confidential and are not
subject to disclosure under Chapter 552.
(d) Not later than the 60th day after the date the division
issues a final report that identifies deficiencies or
inefficiencies in, or recommends corrective measures in the
operations of, an agency, the agency shall file a response that
includes:
(1) an implementation plan and timeline for
implementing corrective measures; or
(2) the agency's rationale for declining to implement
corrective measures for the identified deficiencies or
inefficiencies or the division's recommended corrective measures,
as applicable.
Sec. 321.155. COSTS. (a) The inspector general shall
maintain information regarding the cost of reviews.
(b) The inspector general may cooperate with appropriate
administrative and prosecutorial agencies, including the attorney
general, in recovering costs incurred under this subchapter from
nongovernmental entities, including contractors or individuals
involved in:
(1) violations of applicable state or federal rules or
statutes;
(2) abusive or wilful misconduct; or
(3) violations of a provider contract or program
policy.
Sec. 321.156. SEMIANNUAL REPORT. The division and the
attorney general shall jointly prepare and submit a semiannual
report to the governor, the lieutenant governor, the speaker of the
house of representatives, the state auditor, the comptroller, and
each member of the legislature concerning the activities of the
division and the attorney general in detecting and preventing
fraud, waste, and abuse under any agency programs or in programs
receiving state or federal funds that are implemented,
administered, or overseen by a state agency that is reviewed by the
division under this subchapter. The report may be consolidated
with any other report relating to the same subject matter the
division or the attorney general is required to submit under other
law.
Sec. 321.157. ADMINISTRATIVE OR CIVIL PENALTY; INJUNCTION.
(a) The division may:
(1) act for an agency to which this subchapter
applies, including a health and human services agency, in the
assessment by the division of administrative or civil penalties the
agency is authorized to assess under applicable law; and
(2) request that the attorney general obtain an
injunction to prevent a person from disposing of an asset
identified by the division as potentially subject to recovery by
the division due to the person's fraud, waste, or abuse.
(b) If the division imposes an administrative or civil
penalty under Subsection (a) for an agency:
(1) the agency may not impose an administrative or
civil penalty against the same person for the same violation; and
(2) the division shall impose the penalty under
applicable rules of the division, this subchapter, and applicable
laws governing the imposition of a penalty by the agency.
SECTION 4. The following sections of the Government Code
are repealed:
(1) Section 531.102;
(2) Section 531.1021; and
(3) Section 531.103.
SECTION 5. (a) The repeal by this Act of Section 531.102,
Government Code, does not affect the validity of a complaint,
investigation, or other proceeding initiated under that section
before the effective date of this Act. A complaint, investigation,
or other proceeding initiated under that section is continued in
accordance with the changes in law made by this Act.
(b) The repeal by this Act of Section 531.1021, Government
Code, does not affect the validity of a subpoena issued under that
section before the effective date of this Act. A subpoena issued
under that section before the effective date of this Act is governed
by the law that existed when the subpoena was issued, and the former
law is continued in effect for that purpose.
SECTION 6. (a) The person serving as inspector general
under Section 531.102(a-1), Government Code, on the effective date
of this Act shall serve as the inspector general appointed under
Subchapter C, Chapter 321, Government Code, as added by this Act,
until February 1, 2011, and may be reappointed under Subchapter C,
Chapter 321 if the person has the qualifications required under
that chapter.
(b) A person serving on the effective date of this Act as
inspector general for a state agency subject to Subchapter C,
Chapter 321, Government Code, as added by this Act, shall serve as
the deputy inspector general designated for the agency under
Subchapter C, Chapter 321, Government Code, as added by this Act,
unless and until replaced by the inspector general.
(c) Not later than February 1, 2011, the governor shall
appoint an inspector general for the office of inspector general
division of the state auditor's office established under Subchapter
C, Chapter 321, Government Code, as added by this Act, to a term
expiring February 1, 2013.
SECTION 7. A contract or proceeding primarily related to a
function transferred to the office of inspector general division of
the state auditor's office established under this Act is
transferred to the division. The transfer does not affect the
status of a proceeding or the validity of a contract.
SECTION 8. (a) All personnel and assets currently assigned
to the inspector general of a state agency subject to Subchapter C,
Chapter 321, Government Code, as added by this Act, by operation of
Section 321.102(a) or (c), Government Code, shall be promptly
transferred to the office of inspector general division established
under Subchapter C, Chapter 321 along with any equipment,
documents, and records currently assigned to or used by the
inspector general of that agency. Inventory of personnel,
equipment, documents, records, and assets to be transferred under
this section shall be accomplished jointly by the transferring
agency and the inspector general serving under Subchapter C,
Chapter 321. All funds previously appropriated or used, from any
source, by the transferring agency in support of the transferred
functions, personnel, equipment, documents, records, or assets
shall also be contemporaneously transferred to the division.
(b) For purposes of this section, "currently assigned"
means:
(1) all personnel and vacant full-time equivalent
positions assigned to or supporting a transferred function at any
time during the state fiscal biennium beginning September 1, 2007;
and
(2) all inventory and equipment assigned to a
transferred function or transferring personnel or that was in the
possession of transferring personnel on or at any time after
October 31, 2008.
(c) All state and federal funding, including funding for
overhead costs, support costs, and lease or colocation lease costs,
for the functions to be transferred to the office of inspector
general division of the state auditor's office established under
Subchapter C, Chapter 321, Government Code, as added by this Act,
shall be reallocated to the division.
(d) For purposes of federal single state agency funding
requirements, any federal funds for an agency subject to Subchapter
C, Chapter 321, Government Code, as added by this Act, that may not
be appropriated directly to the office of inspector general
division shall be transferred from the single state agency
receiving the funds to the office of inspector general division
established under Subchapter C, Chapter 321 if the funds are
intended for a function performed by the division.
SECTION 9. On the effective date of this Act:
(1) all functions, activities, employees, rules,
forms, money, property, contracts, memorandums of understanding,
records, and obligations of a previously established office of
inspector general of an agency subject to Subchapter C, Chapter
321, Government Code, as added by this Act, by operation of Section
321.102(a) or (c), Government Code, become functions, activities,
employees, rules, forms, money, property, contracts, memorandums
of understanding, records, and obligations of the office of
inspector general division of the state auditor's office
established under Subchapter C, Chapter 321, without a change in
status; and
(2) all money appropriated or budgeted for the
operations of a previously established office of inspector general
at an agency subject to Subchapter C, Chapter 321, Government Code,
as added by this Act, by operation of Section 321.102(a) or (c),
Government Code, including money for providing administrative
support, is considered appropriated for the use of the office of
inspector general division established under Subchapter C, Chapter
321.
SECTION 10. (a) Each agency subject to Subchapter C,
Chapter 321, Government Code, as added by this Act, by operation of
Section 321.102(a) or (c), Government Code, shall take all action
necessary to provide for the orderly transfer of the assets and
responsibilities of any previously established office of inspector
general for that agency to the office of inspector general division
of the state auditor's office established under Subchapter C,
Chapter 321.
(b) A rule or form adopted by a previously established
office of inspector general of an agency subject to Subchapter C,
Chapter 321, Government Code, as added by this Act, by operation of
Section 321.102(a) or (c), Government Code, is a rule or form of the
office of inspector general division of the state auditor's office
established under Subchapter C, Chapter 321 and remains in effect
until changed by the inspector general.
(c) A reference in law or administrative rule to a
previously established office of inspector general of an agency
subject to Subchapter C, Chapter 321, Government Code, as added by
this Act, by operation of Section 321.102(a) or (c), Government
Code, means the office of inspector general division established
under Subchapter C, Chapter 321.
SECTION 11. If before implementing any provision of this
Act a state agency determines that a waiver or authorization from a
federal agency is necessary for implementation of that provision,
the agency affected by the provision shall request the waiver or
authorization and may delay implementing that provision until the
waiver or authorization is granted.
SECTION 12. 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, 2009.