The State Auditor's Office (SAO) is the independent auditor for Texas state government. The SAO operates with oversight from the Legislative Audit Committee, a six-member permanent standing committee of the Texas Legislature, jointly chaired by the Lieutenant Governor and the Speaker of the House of Representatives.
The SAO is authorized, by Chapter 321, Texas Government Code, to perform audits, reviews, and investigations of any entity receiving state funds, including state agencies and higher education institutions. Audits are performed in accordance with generally accepted government auditing standards, which include standards issued by the American Institute of Certified Public Accountants.
Types of audits the SAO performs include financial statement opinion audits, financial audits, compliance audits, economy and efficiency audits, effectiveness audits, and other special audits. The SAO may also issue other types of informational reports not subjected to the same tests and conditions that would be performed in an audit. Investigations are performed whenever there is evidence of fraud or abuse of state resources.
Other SAO responsibilities include managing the State Classification Plan and providing support to state agency and higher education human resource offices, which is performed by the State Classification Team. In addition, the SAO coordinates and provides continuing educational opportunities for audit and accounting professionals.
The work and activities performed by the SAO are included in an annual audit plan, approved by the Legislative Audit Committee. This includes mandatory work, required by state statute, or discretionary work which is determined through an ongoing risk assessment process.