86R2931 SOS-D
By: Hall S.B. No. 75
A BILL TO BE ENTITLED
AN ACT
relating to forensic audits of certain school district projects.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter A, Chapter 44, Education Code, is
amended by adding Section 44.0085 to read as follows:
Sec. 44.0085. FORENSIC AUDIT OF CERTAIN PROJECTS REQUIRED.
(a) In this section, "capital project" means the construction,
acquisition, and equipment of a public school building that are
financed by the issuance of bonds under Section 45.001(a)(1)(A).
(b) The board of trustees of a school district shall
contract with an independent auditing firm to perform one or more
forensic audits of each capital project in the district in
accordance with this section.
(c) A forensic audit under this section must be performed:
(1) every three years if the capital project extends
more than three years following the execution date of the project
contract; and
(2) at the completion of the project or termination of
the project contract.
(d) If multiple forensic audits are required under
Subsection (c), a subsequent audit is not required to cover a period
for which a previous audit was performed under this section.
(e) A forensic audit under this section must include for the
audit period the following information:
(1) any performance metric or measurement tool used by
the school district to evaluate the performance of the capital
project;
(2) the district's quality assessment plan or other
assessment tool to measure risk;
(3) the district's method for monitoring of
deliverables, milestones, and delivery schedules under the
contract, including specifying whether enhanced monitoring is used
by the district;
(4) a project change order or amendment to the
contract;
(5) a decrease or increase in the quantity of work to
be performed or of materials, equipment, or supplies to be
furnished under the contract;
(6) a decrease or increase in the contract price of
more than 25 percent;
(7) project invoices and payments;
(8) contractor reports made or required, including
progress and financial reports;
(9) district reports made or required, including site
monitoring reports;
(10) the length of time between each district
monitoring activity;
(11) any assignment by the contractor of the
contractor's rights or duties under the contract;
(12) any buyout or sale of the entity with which the
district contracted for the project;
(13) any dispute resolved, including the dispute
resolution process used;
(14) any corrective action plan implemented;
(15) any contractor nonperformance, including any
contract remedy used for contractor nonperformance;
(16) any liquidated damages assessed or collected
under the contract;
(17) whether all or part of the contract was
terminated by mutual agreement, convenience, or cause;
(18) any internal audit of the project by the
district;
(19) a determination of compliance with:
(A) any financial provision under the contract;
and
(B) applicable laws, rules, and district
policies; and
(20) any identified fraud or malfeasance.
(f) A forensic audit under this section must be conducted in
accordance with generally accepted auditing standards as
prescribed by:
(1) the American Institute of Certified Public
Accountants;
(2) the Governmental Accounting Standards Board;
(3) the United States Government Accountability
Office; or
(4) any other professionally recognized entity that
prescribes auditing standards.
(g) A school district shall cooperate with an auditor
conducting a forensic audit under this section and provide
assistance to the auditor and access to all information necessary
to conduct the audit, including any confidential information.
(h) A contract under Subsection (b) shall require each
forensic audit to be filed with the school district not later than
the 90th day after the date the applicable audit period ends. The
district shall make each audit available as soon as practicable for
public inspection:
(1) on the district's Internet website; and
(2) at the district's central administrative building
during regular business hours.
(i) A school district shall pay for a forensic audit under
this section using the proceeds from the bonds issued for the
capital project.
SECTION 2. Section 44.0085, Education Code, as added by
this Act, applies only to a project subject to that section that is
financed by bonds issued on or after the effective date of this Act.
SECTION 3. This Act takes effect September 1, 2019.