(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.
  (1) Consultant--A person with which the comptroller has contracted under Government Code, Chapter 2115.
  (2) Investment vehicle--Does not include real property.
  (3) Overpayment--Has the meaning assigned by Government Code, §2115.001(1).
  (4) Recovery audit--An audit performed under Government Code, Chapter 2115, to recover vendor overpayments made by state agencies.
  (5) Retiree--An individual who has been granted a retirement benefit under Government Code, Title 8, Subtitle B, C, D, E, or H.
  (6) Retirement benefit--Includes a service retirement benefit, a disability retirement benefit, an occupational disability retirement benefit, a nonoccupational disability retirement benefit, and a death benefit paid by or on behalf of a retirement system.
  (7) Retirement system--The Employees Retirement System of Texas, the Teacher Retirement System of Texas, the optional retirement program, the Judicial Retirement System of Texas Plan One, the Judicial Retirement System of Texas Plan Two, or the Texas Emergency Services Retirement System.
  (8) State agency--Has the meaning assigned by Government Code, §2115.001(2).
  (9) State employee--An officer or an employee of a state agency. The term does not include an independent contractor.
  (10) USAS--The uniform statewide accounting system.
  (11) Vendor payment--Does not include:
    (A) a payment from money held outside the state treasury if the payment was not reported to USAS as a cash expenditure;
    (B) a payment that already has been cancelled, recalled, refunded, or otherwise recovered;
    (C) a payment that was made by warrant if it has not yet been negotiated;
    (D) a payment of the compensation earned by a state employee;
    (E) a payment of a retirement benefit by or on behalf of a retirement system;
    (F) the refund by or on behalf of a retirement system of a member's accumulated contributions to the system;
    (G) a payment of the amount deducted from:
      (i) the compensation earned by a state employee; or
      (ii) the payment by or on behalf of a retirement system of a retirement benefit or the refund of a member's accumulated contributions;
    (H) a payment to an individual because of the individual's unemployment, under the Texas Unemployment Compensation Act, Labor Code, Title 4, Subtitle A;
    (I) a payment to a governmental entity of this state, including a state agency, a municipality, a county, a public school district, a public school, or a political subdivision;
    (J) a payment made by the Texas Department of Insurance in connection with the receivership of an insurance company;
    (K) a payment for the purchase of a security or other investment vehicle, except that the term includes a payment of a commission or similar fee concerning the purchase;
    (L) a payment of principal or interest, except that the term includes any interest paid under Government Code, Chapter 2251;
    (M) a payment of the premium to provide group insurance coverage for state employees or retirees;
    (N) a payment to a private person to administer a group insurance program for state employees or retirees;
    (O) a payment of a loan to a private person if, as of the date of the payment, the entire amount of the loan is required to be repaid;
    (P) a payment of a judgment against the state or a state agency or a payment to settle litigation involving the state or a state agency;
    (Q) a payment made by a person that is not a state agency; or
    (R) any other type of payment that the comptroller determines is not cost effective to include in the recovery audit.
(b) Exemption from the recovery audit process. A state agency is exempt from the recovery audit process under Government Code, Chapter 2115, if:
  (1) the total amount of the state agency's cash expenditures during the immediately preceding state fiscal biennium was equal to or less than $50 million, as reported to USAS; and
  (2) the total amount of the state agency's vendor payments during the immediately preceding state fiscal biennium was less than $40 million, as reported to USAS.
(c) Deposit of amounts recovered. A state agency that recovers money as a result of a recovery audit conducted under Government Code, Chapter 2115, shall deposit the money as required by applicable law.

Source Note: The provisions of this §5.58 adopted to be effective May 2, 2006, 31 TexReg 3587; amended to be effective November 26, 2019, 44 TexReg 7186