H.B. No. 3666 aims to enhance the internal auditing framework for state agencies in Texas by amending Chapter 2102 of the Government Code. The bill redefines the purpose of internal auditing to focus on strengthening an organization's ability to create, protect, and sustain value through independent, risk-based assurance and advisory services. It replaces the previous definition of internal auditing with a new emphasis on providing insights and foresight to management and the governing board. Additionally, the bill updates the terminology from "consulting" to "advisory services," clarifying that these services are intended to improve operations without assuming management responsibilities.

The bill also mandates that state agencies conduct a comprehensive internal auditing program, which includes developing an annual audit plan based on risk assessment and conducting periodic audits of various systems and controls. It specifies that internal auditors must report directly to the governing board or agency administrator and maintain independence from operational responsibilities. Furthermore, the internal audit program is required to conform to the newly established Global Internal Audit Standards, replacing the previous standards set by The Institute of Internal Auditors. The act is set to take effect on September 1, 2025.

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