The House Committee on General Investigating 
         78th Legislature 
         August 6, 2004 
         9:00 a.m. 
         Capitol Extension, E2.030 
         Pursuant to a notice posted on July 15, 2004, the House  
         Committee on General Investigating met in a public hearing and  
         was called to order by the chair, Representative Bailey, at 9:12  
         The roll was answered as follows: 
         Present:  Representatives Bailey; Flynn; Keel (3). 
         Absent:   Representatives Paxton; Dutton (2). 
         A quorum was present. 
         (Representative Ken Paxton now present at 9:14 a.m.) 
         Chairman Bailey called on Joanna Peavy from the Texas State  
         Auditors office to explain the procedures used to prepare the  
         audit report concerning HHSC and the Clarendon CHIP EPO contract  
         issued on July 6, 2004 . 
         The Chairman called on John Young from the Texas State Auditors  
         office to further explain information contained in the report. 
         Chairman Bailey called on  Commissioner Albert Hawkins, Texas  
         Health and Human Services Commission to discuss the audit report  
         and to advise the Committee the status of the new contract and  
         to further explain the steps the Commission is taking to recoup  
         funds that were overpaid on the Clarendon CHIP EPO contract. 
         At various points during Commissioner Hawkins testimony, Joanna  
         Peavy and John Young were called on to clarify points and answer  
         additional questions. 
         Chairman then called on David Wilkes, the outside actuary for  
         HHSC to explain his opposition to different amendments to the  
         CHIP EPO contract and the cost associated, he also answered  
         specific questions about his understanding of whom it was that  
         approved the amendments and associated costs. 
         At 11:12 a.m., on the motion of the chair and without objection,  
         the meeting was adjourned subject to the call of the chair. 
         Rep. Bailey, Chair 
         Roberta Bilsky, Clerk