Texas 2017 - 85th Regular

Texas Senate Bill SB1563 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	85R5573 JXC-D
2	2	By: Kolkhorst S.B. No. 1563
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to audits of the fiscal accounts and records of emergency
8	8	services districts.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Chapter 775, Health and Safety Code, is amended
11	11	by adding Subchapter N to read as follows:
12	12	SUBCHAPTER N. AUDIT OF DISTRICTS
13	13	Sec. 775.451. DUTY TO AUDIT. (a) The board shall have the
14	14	district's fiscal accounts and records audited annually at the
15	15	expense of the district.
16	16	(b) The person who performs the audit shall be a certified
17	17	public accountant holding a license issued by the Texas State Board
18	18	of Public Accountancy.
19	19	(c) The audit required by this section shall be completed
20	20	not later than the 120th day after the close of the district's
21	21	fiscal year.
22	22	Sec. 775.452. FORM OF AUDIT. (a) For a district located
23	23	wholly in one county, the commissioners court shall adopt
24	24	accounting and auditing manuals.
25	25	(b) For a district located in more than one county, the
26	26	county auditors of each county in which the district is located,
27	27	with the approval of the commissioners court of each county, shall
28	28	adopt accounting and auditing manuals.
29	29	(c) Except as otherwise provided by the manuals, the
30	30	district audit shall be performed according to the generally
31	31	accepted auditing standards adopted by the American Institute of
32	32	Certified Public Accountants. Financial statements shall be
33	33	prepared in accordance with generally accepted accounting
34	34	principles.
35	35	Sec. 775.453. FINANCIAL REPORTS. The district's
36	36	depository, the district's treasurer, and the district's
37	37	bookkeeper, if any, who receives or has control over any district
38	38	funds shall keep a full and itemized account of district funds in
39	39	the depository's, treasurer's, or bookkeeper's possession. The
40	40	itemized accounts and records shall be available for audit.
41	41	Sec. 775.454. FILING OF AUDITS, AFFIDAVITS, AND FINANCIAL
42	42	REPORTS. (a) After the board has approved the audit report, the
43	43	board shall, not later than the 135th day after the close of the
44	44	district's fiscal year, submit a copy of the report to the
45	45	commissioners court of each county in which the district is located
46	46	for filing.
47	47	(b) If the board refuses to approve the annual audit report,
48	48	the board shall, not later than the 135th day after the close of the
49	49	district's fiscal year, submit a copy of the report to the
50	50	commissioners court of each county in which the district is located
51	51	for filing, accompanied by a statement from the board explaining
52	52	the reasons for the board's failure to approve the report.
53	53	(c) Copies of each audit report, annual financial dormancy
54	54	affidavit described by Section 775.458, or annual financial report
55	55	described by Section 775.459, as applicable, shall be filed
56	56	annually in the office of the district.
57	57	(d) Each district shall file with the commissioners court of
58	58	each county in which the district is located an annual filing
59	59	affidavit, executed by an authorized representative of the board,
60	60	stating that all copies of the annual audit report, annual
61	61	financial dormancy affidavit, or annual financial report have been
62	62	filed under this section.
63	63	(e) The annual filing affidavit shall be submitted with the
64	64	applicable annual document when the document is submitted to a
65	65	commissioners court for filing under this subchapter.
66	66	(f) A commissioners court shall file with the attorney
67	67	general the names of any districts in the county that do not comply
68	68	with this subchapter.
69	69	(g) A submission to a county commissioners court required by
70	70	this section may be made electronically.
71	71	Sec. 775.455. REVIEW BY COMMISSIONERS COURT. (a) The
72	72	commissioners court of each county in which a district is located
73	73	may review the audit report of the district.
74	74	(b) If the commissioners court has any objections or
75	75	determines any violations of generally accepted auditing standards
76	76	or accounting principles, statutes, or board rules, or if the
77	77	commissioners court has any recommendations, the commissioners
78	78	court shall notify the board and the district's auditor.
79	79	(c) Before the audit report may be accepted by the
80	80	commissioners court as being in compliance with the provisions of
81	81	this subchapter, the board and the auditor shall remedy objections
82	82	and correct violations of which they have been notified by the
83	83	commissioners court.
84	84	(d) If the audit report indicates that a penal law has been
85	85	violated, the commissioners court shall notify the appropriate
86	86	county or district attorney and the attorney general.
87	87	(e) A commissioners court in which a district is located may
88	88	request that the state auditor assist in the establishment of
89	89	standards and procedures for review of district audits by the
90	90	commissioners court. Participation by the state auditor is subject
91	91	to approval by the legislative audit committee for inclusion in the
92	92	audit plan under Section 321.013(c), Government Code.
93	93	Sec. 775.456. REVIEW BY COUNTY AUDITOR. (a) A county
94	94	auditor may review the audit report of each district in the county.
95	95	(b) A commissioners court may request that the state auditor
96	96	assist in the establishment of standards and procedures for review
97	97	of district audits by the county auditors. Participation by the
98	98	state auditor is subject to approval by the legislative audit
99	99	committee for inclusion in the audit plan under Section 321.013(c),
100	100	Government Code.
101	101	Sec. 775.457. ACCESS TO AND MAINTENANCE OF DISTRICT
102	102	RECORDS. (a) The commissioners court of each county in which a
103	103	district is located shall have access to all vouchers, receipts,
104	104	district fiscal and financial records, and other district records
105	105	the commissioners court considers necessary.
106	106	(b) All district fiscal records shall be prepared on a
107	107	timely basis and maintained in an orderly manner in accordance with
108	108	generally accepted accounting principles. The fiscal records shall
109	109	be available for public inspection during regular business hours. A
110	110	district's fiscal records may be removed from the district's office
111	111	for the purposes of recording the district's fiscal affairs and
112	112	preparing an audit, during which time the fiscal records are under
113	113	the control of the district's auditor.
114	114	Sec. 775.458. FINANCIALLY DORMANT DISTRICTS. (a) A
115	115	financially dormant district is a district that had:
116	116	(1) $500 or less of receipts from operations, tax
117	117	assessments, loans, contributions, or any other sources during the
118	118	calendar year;
119	119	(2) $500 or less of disbursements of funds during the
120	120	calendar year;
121	121	(3) no bonds or other long-term (more than one year)
122	122	liabilities outstanding during the calendar year; and
123	123	(4) no cash or investments that exceeded $5,000 at any
124	124	time during the calendar year.
125	125	(b) A financially dormant district may elect to file with
126	126	the commissioners court of each county in which the district is
127	127	located a financial dormancy affidavit instead of complying with
128	128	the audit requirements of Section 775.451.
129	129	(c) The annual financial dormancy affidavit must be:
130	130	(1) prepared in a format prescribed by the
131	131	commissioners court to which the affidavit is submitted; and
132	132	(2) submitted for filing by an authorized
133	133	representative of the district.
134	134	(d) The affidavit must be filed annually on or before
135	135	January 31 until the district becomes financially active. The board
136	136	shall send notice to the commissioners court of each county in which
137	137	the district is located if the district becomes financially active.
138	138	After the district becomes financially active, the district shall
139	139	file annual audit reports as prescribed by this subchapter.
140	140	(e) A district that becomes financially dormant after
141	141	having been financially active shall file annual financial dormancy
142	142	affidavits on or before January 31, until the district is dissolved
143	143	or again becomes financially active.
144	144	(f) A district governed by this section is subject to
145	145	periodic audits by the commissioners court of each county in which
146	146	the district is located.
147	147	Sec. 775.459. AUDIT REPORT EXEMPTION. (a) A district may
148	148	elect to file annual financial reports with the commissioners court
149	149	of each county in which the district is located instead of complying
150	150	with the audit requirements of Section 775.451 if:
151	151	(1) the district had no bonds or other long-term (more
152	152	than one year) liabilities outstanding during the fiscal period;
153	153	(2) the district did not have gross receipts from
154	154	operations, loans, taxes, or contributions in excess of $250,000
155	155	during the fiscal period; and
156	156	(3) the district's cash and temporary investments were
157	157	not in excess of $250,000 during the fiscal period.
158	158	(b) The annual financial report must be:
159	159	(1) accompanied by an affidavit attesting to the
160	160	accuracy and authenticity of the financial report that is signed by
161	161	an authorized representative of the district;
162	162	(2) prepared in a format prescribed by the
163	163	commissioners court to which the report is submitted; and
164	164	(3) on file with the commissioners court of each
165	165	county in which the district is located not later than the 45th day
166	166	after the close of the district's fiscal year.
167	167	(c) A district governed by this section is subject to
168	168	periodic audits by the commissioners court of each county in which
169	169	the district is located.
170	170	Sec. 775.460. FAILURE TO AUDIT. If a district fails to file
171	171	an audit report, an annual financial dormancy affidavit, or an
172	172	annual financial report, as applicable, according to the schedule
173	173	required by this subchapter, the president and treasurer of the
174	174	board are removed from the board and:
175	175	(1) in a district located wholly in one county, the
176	176	commissioners court shall fill the vacancies as provided by Section
177	177	775.034; and
178	178	(2) in a district located in more than one county,
179	179	notwithstanding Section 775.044, the commissioners courts shall
180	180	fill the vacancies with qualified persons by joint order.
181	181	Sec. 775.461. POLICIES AND AUDITS OF DISTRICTS. (a) The
182	182	board shall adopt a written:
183	183	(1) code of ethics for district directors, officers,
184	184	employees, and persons who are engaged in handling investments for
185	185	the district;
186	186	(2) policy relating to travel expenditures;
187	187	(3) policy relating to district investments that
188	188	ensures that:
189	189	(A) purchases and sales of investments are
190	190	initiated by authorized individuals, conform to investment
191	191	objectives and regulations, and are properly documented and
192	192	approved; and
193	193	(B) periodic review is made of district
194	194	investments to evaluate investment performance and security;
195	195	(4) policy and procedure for selection, monitoring, or
196	196	review and evaluation of professional services; and
197	197	(5) policy that ensures a better use of management
198	198	information including:
199	199	(A) budgets for use in planning and controlling
200	200	cost;
201	201	(B) an audit committee of the board; and
202	202	(C) uniform reporting requirements that require
203	203	the use of generally accepted accounting and audit principles.
204	204	(b) The state auditor may audit the financial transactions
205	205	of a district if the state auditor determines that the audit is
206	206	necessary.
207	207	SECTION 2. Sections 775.082, 775.0821, and 775.0825, Health
208	208	and Safety Code, are repealed.
209	209	SECTION 3. This Act takes effect July 1, 2018.