89R18207 CS-D
By: King H.B. No. 3666
Substitute the following for H.B. No. 3666:
By: Capriglione C.S.H.B. No. 3666
A BILL TO BE ENTITLED
AN ACT
relating to the program of internal auditing conducted by state
agencies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2102.002, Government Code, is amended to
read as follows:
Sec. 2102.002. PURPOSE. The purpose of this chapter is to
establish guidelines for a program of internal auditing to assist
agency administrators and governing boards by furnishing
independent analyses, appraisals, and recommendations about the
adequacy and effectiveness of a state agency's systems of internal
control policies and procedures and the quality of performance in
carrying out assigned responsibilities. The purpose of internal
auditing is to strengthen an organization's ability to create,
protect, and sustain value by providing agency administrators,
management, and governing boards with independent, risk-based, and
objective assurance, advice, insight, and foresight [Internal
auditing is defined as an independent, objective assurance and
consulting activity designed to add value and improve an
organization's operations. It helps an organization accomplish its
objectives by bringing a systematic, disciplined approach to
evaluate and improve the effectiveness of risk management, control,
and governance processes].
SECTION 2. Section 2102.003, Government Code, is amended by
adding Subdivision (1-a) to read as follows:
(1-a) "Advisory services" means consulting and
related client service activities, the nature and scope of which
are agreed upon with the client and are intended to add value and
improve an organization's operations without providing assurance
or taking on management responsibilities. Advisory services
include counsel, facilitation, and training.
SECTION 3. Section 2102.005(a), Government Code, is amended
to read as follows:
(a) A state agency shall conduct a program of internal
auditing that includes:
(1) an annual audit plan that is prepared using risk
assessment techniques and that identifies the individual audits to
be conducted during the year; and
(2) [periodic] audits of the agency's major systems
and controls, including:
(A) financial [accounting] systems and controls;
(B) operational or administrative systems and
controls; and
(C) information technology [electronic data
processing] systems and controls.
SECTION 4. Section 2102.007(a), Government Code, is amended
to read as follows:
(a) The internal auditor shall:
(1) report directly to the state agency's governing
board or the administrator of the state agency if the state agency
does not have a governing board;
(2) develop an annual audit plan;
(3) conduct audits as specified in the audit plan and
document deviations;
(4) prepare [audit] reports and communicate advisory
and assurance services engagement results;
(5) conduct quality assurance reviews in accordance
with professional standards as provided by Section 2102.011 and
periodically take part in a comprehensive external peer review; and
(6) conduct economy and efficiency audits and program
results audits as directed by the state agency's governing board or
the administrator of the state agency if the state agency does not
have a governing board.
SECTION 5. The heading to Section 2102.008, Government
Code, is amended to read as follows:
Sec. 2102.008. APPROVAL OF AUDIT PLAN AND REVIEW OF AUDIT
REPORTS [REPORT].
SECTION 6. The heading to Section 2102.0091, Government
Code, is amended to read as follows:
Sec. 2102.0091. REPORTS OF [PERIODIC] AUDITS.
SECTION 7. Section 2102.011, Government Code, is amended to
read as follows:
Sec. 2102.011. INTERNAL AUDIT STANDARDS. The internal
audit program shall conform to the Global Internal Audit Standards
[for the Professional Practice of Internal Auditing, the Code of
Ethics contained in the Professional Practices Framework] as
promulgated by the Institute of Internal Auditors[, and generally
accepted government auditing standards].
SECTION 8. Section 2102.003(4), Government Code, is
repealed.
SECTION 9. 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, 2025.