89R13652 LRM-F
By: Hughes S.B. No. 1427
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.