History of the SAO

History of the SAO

In 1929, the 41st Legislature created the first "State Auditor and Efficiency Expert" position in Texas state government. The position was in the executive branch, and the individual in that position was appointed by the Governor. The State Auditor and Efficiency Expert was authorized to inspect all books and records of all the officers, departments, and institutions of state government and to investigate all custodians of public funds and disbursing officers of the State. In addition, the State Auditor and Efficiency Expert was allowed to examine departments for duplication of efforts and efficiency of employees. The State Auditor and Efficiency Expert was allowed to serve for two years and could be removed or discharged at any time by the Governor. Between 1929 and 1943, the position of State Auditor and Efficiency Expert was subject to frequent turnover.

In 1943, the 48th Legislature amended the enabling legislation to provide for the appointment of the "State Auditor" by the legislative branch instead of by the Governor. Other changes included the creation of the Legislative Audit Committee, the legislative body responsible for appointing the State Auditor and specifying the qualifications, powers, and duties of the State Auditor. The Committee included the Speaker of the House of Representatives, the Chairman of the House Appropriations Committee, the Chairman of the House Revenue and Taxation Committee, the Lieutenant Governor, the Chairman of the Senate Finance Committee, and the Chairman of the Senate Committee on State Affairs. The law also required that the individual appointed State Auditor be a certified public accountant. Since the position was moved to the legislative branch of state government, there have been only five State Auditors.

In 1987, the 70th Legislature expanded the authority of the State Auditor and allowed the State Auditor to conduct audits of all agencies, including institutions of higher education, as specified in the audit plan. The 70th Legislature also specified the types of audits that could be performed. These audits included: financial audits, compliance audits, economy and efficiency audits, effectiveness audits, special audits, and investigations, all of which were specified in Texas Government Code, Chapter 321.

The law passed by the 70th Legislature also specified that all audits were to be conducted in accordance with generally accepted auditing standards as prescribed by the American Institute of Certified Public Accountants, the Governmental Accounting Standards Board, the United States General Accounting Office, or other professionally recognized entities that prescribe auditing standards. In addition, the State Auditor was required to develop an audit plan for each fiscal year and consider recommendations made by the Audit Coordination Committee, which included representatives from the Legislative Budget Board, the Sunset Advisory Commission, and the State Auditor's Office.

Since 1987, various legislation has clarified the responsibilities and authority of the State Auditor. The 78th Legislature made the most recent changes to the composition of the Legislative Audit Committee in 2003, when it modified the structure of the six-member committee. The place held by the Chair of the Senate State Affairs Committee was replaced with a senator appointed by the Lieutenant Governor. In addition, the 78th Legislature passed legislation that made the Speaker of the House of Representatives and the Lieutenant Governor joint chairs of the Legislative Audit Committee.