Untitled Texas Attorney General Opinion

* THE A'ITORNEY GENERAL OF TEXAS July 30, 1973 Honorable George W. McNiel Opinion’ No H- 74 State Auditor Sam Houston State Office Building ,Re: Legality of a revolving P. 0. Box 12067 fund ertablirhcd by the Aurtin, Texar 78711 State Commisrion for the Blind from funda received by gift and from which employeer of the agency may re- ceive advances againat their accrued claims ,for erlary or travel ,Dear Mr. McNiel: reimbursement. You have, arked about the authority of the :State Commierion for the Blind to engage in certain,practicer regarding employee expense*. Your letter atater: II . . . State Commiraion for the Blind . . . current fiecal practicer include the payment of advancea~ against employeer’ estimated claimr for salary or travel rcimburecment. The source . , . bar been client training ex- ,,penre fundr. . . locally held and darived from donationr for rehabilitation activitier. ” You alao ae.k if our answer would be different if, the advances were made after’ae actual performance of the travel or .employment but be- fore pyment by the State Comptroller. Furnished with your request was a memorandum reflecting the vicar of the Commirrion. By it we ire advired th&t: p. 332 ._ _ . . Honorable George W. McNiel, pege 2 (H-70 (I) The agency “has a rerponribility to rerve many personr who cannot readily come to the office of thin agency.. . . and it ir incumbent upon this agency’r rtaff . . . to deliver the rervicer of the agency to clients who cannot . . . readily leave their homer. ” (2) To service eligible individual8 ,throughout the lrtate “entailr a continuing extension by thin agency’s field c.taff of personal fund. or personal credit required for the defraying of . . . reason- able and necearary travel expenrer . . . . ” and (3) The agency dealn with human need.; time ir frequently of the eeaence. We are further advised .by the Commisrion: ” . . . [T]ravel voucherr are rometimer delayed weskr or monthr in being proceesed at the State Comptroller’r office . . . . [Flew of our employ- ees . . . can continue to finance their officia’l travel with personal fundr. . ; . ” In our opinion, rufficient authority doer exist for the Commiarion for the Blind to advance money from unrertricted fundr to pay authorized agency expenrcr incurred (or to be incurred) by employeer in the diecharge of agency buainesr. We find, however, no authority for pre-payments of salary. Becaure rpecial provirionr apply to the Commirrion which do not apply to all State l gencier, it in unnecenmary to conrider the authority that would exist in their absence.. The general rtatutory authority of the Texas Commireion for the Blind is found in Articles 3207a, 3207b, .md 3207c, V. T. C.S. In 5 2 of Article 3207a; Betting out power8 and dutier of the Commiraion, it is provided: p. 333 Honorable George, W, McNiel, page 3 (H-74) “(0 The Commirrion rhall take ruch measures ar it may deem advisable to prevent blind- nemmand to conrerve eyeright. . . . . ‘l(i) The Commirrion may receive and expend giftr, .bequerts, and devirea from inditi- dualr, arrociationr and corporationr, in accordance with the proviriona of’this Act. I’ Article 3207b, in part, readr (empharir added): ” . . . [T]he Commise.ion for the Blind shall an- nuallytlpoint an executive director and ruch other employeea aa may be neceraary and authorized by legislation applicable to the Commission for the Blind. Expenaer of member8 of the Board and of employee8 rhall be paid in the moot efficient and practical manner authorized by law for the payment of ruch expenrea. All accounta #hall be paid in ac- cordance with laws applicable to the Commiaaion or in accordance with lawr applicable to State agenciee generally, ” Article 3207c, dealing with the Vocational Rehabilitation Program ,of the Commission, provider in part (emphaair added): “Sec. 3. . . . In carrying out hir dutier under thir Act the Director: “(a) shall make regulationa governing pcrson- nel rtandardm, the protection of recordr and confidential information, . . . and ruch other regulationr ar he findr necerrarv to carry out the Durpoaeo of thir Act:, p. 334 -. . The Honorable George W. McNiel, page 4 (H-74) . . . . “(e) rhall make certification for dimbursementi, in accordance with regulationr, of funds avail- able for vocational rehabilitation purporer; “l(f) shall, with the approval of the Commission. take ruch other action as he deemr necessary or appropriate to carry out the purpose8 of the Act; * . . . “Sec. 7. The Director ir hereby authorized and em- powered, with the approval of the Commirsion, to accept and we giftr made unconditionally by will or otherwise for carrying out the purporer of this Act. . . . I’ The provision8 evidence an intent that the work of the Commission not be impeded by unnecersary red tape. Subsection (i) of 5 2 of Article 3207a, V. T. C. S., conatituter general legislation “earmarking” all gifts, bequests and devisea from individual8 to the Commission for it8 use, inter “as it may deem advisable to prevent blindnero and conserve eyeeight, ” pursuant to aubeection (f) thereof. Section 7 of Article 3207c, V.T.C.S., is additional general legislation to the aame effect. These provisionr are consistent with Article 16, ! 6 of the Conetitution which (after generally providing that no appropriation for private or individual purpose8 shall be made), rtates (emphasis added): l’(b) State agencies charged with the rerponai- bility of providing servicee to those who are blind . . . may accept money from private . . . sourcea, deeignated by the private . . . rource ae money to be used in and eatablirhing and equipping facilities for asaioting those who are blind .’ . . in becoming gainfully employed, in rehabilitating end restoring the handicapped, and in providing other services p. 335 The Honorable George W. McNiel, page 5 (H-74) determined by the state agency to be essential for the better care and treatment of the handi- capped. Money accepted under this subsection is state money. . . . “The state agencies may deposit money accepted under this subsection either in the state treasury or in other secure depositories. The money may not be expended for any purpose other than the purpose for, which it was given. Notwith- stsndinp; the state agencies may expend money accepted under this subsection without the necessity of an appropriation. unlesr the Lenislature. bv law, requires that the money be expended only on ae- prouriation. The Legislature may prohibit state agencies from accepting money under this sub- section or may regulate the amount of money ac- cepted, the way the acceptance and expenditure of the money is administeted, and the purposes for which the state agencies may expend the money . . . . ,I The’general legislation on the subject omits any requirement that such’moneys be expended by the Commission only upon appropriation. We think the Legislature has impliedly sanctioned expenditures from such gifts without appropriation, and that further general legislation would be necessary to change that policy. See Attorney General Opinions M-1199 (1972), M-91 (1967). A ccordingly, provisinns and riders contained in the General Appropriations Act cannot control here, whatever might be the case of gift receiving agencies not within the scope of Article 16, 5 6b of the Conrtitution. Compare Attorney General;Opinion V-412 (1947). Tbe Legislature has been given only the power to regulate (not change) the pur- poses for which such gifts may be expended, i. l, , decide which, if any, of the donor’s designated purposes may be carried into effect, and it has been specified by general legislation that those gifts consistent with the terms of Articles 3207a and, 3207c, V. T. C.S., may be utilized and expended by the Commission. Donations become State money but are a supplemental source of funds to the Commission. p. 336 . . The Honorable George W. ticNie1, page 6 ~(H-74 We conclude that donations received by the Commission, unless limited by the private grant itself, may currently be spent without ap- propriation for any legitimate purpose (consistent with its statutory mandate) deemed by the agency to be necessary or essential for the better care and treatment of those whom it serve& The Commission had determined that adequate service is endangered by requiring its employees to finance travel expenses and other expenses incurred on behalf of the Commission and the State. Unless a constitutional bar applies, we cannot say that relief of such a condition is not a legitimate purpose for which such funds may be expended, particularly since Arti- cle 3207b expressly authorizes the payment of such expenses in the most efficient and practical manner authorized by law. Article 3, Sections 44, 50, and 51 of, the Constitution bar payment of post-performance extra compensation or claimr not supported by pre- existing law. and prohibit the giving or lending of the credit of the State in aid of persons, the pledge of the credit of the State for the present or prospective liability of persons, or the grant of public money to persons. We do not see any violation of such constitutional provisions so long as the expenses advanced by the agency are limited to those authorized un- der Article 6823a or other applicable.laws. Authorized expens,es are not “salary” or “emoluments, ” or “extra compensation, ” and disburse- ments of funds to pay them are not gifts or grants for private purposes. Such disbursements are made for a public purpose and expenditures from funds on hand for public purposes are not prohibited. State v. City of Austin, 331 S. W. 2d 737 (Tex. 1960). affirming State v. City of Dallas. 319 S. W. 2d 767 (Tex. Civ.App. 1959); Barrington v. Cokinos, 338 S. W. td 133 (Tex. 1960). Articles3207a, 3207b, and 3207c, V. T. C.S., con- stitute “pre-existing law. ‘I’ Authorized expenses which are to be classified as paid for a public purpose are those of such a niture that the function of the agency cannot be discharged without incurring them, See Terrellv. King, ~14S. W. 2d 786 (Tex. 1929); Anno: 5 ALR 2d 1182; 63 Am. Jur. Zd, Public Officers and Employees, 0 387; 67 C. J. S., Officers, 8 91. Such expenses are part of the operating costs of the agency and are nither perquisites nor emoluments. Though they may sustain an employee, they are not expend- ed for the benefit of the employee, but for the agency which cannot function p. 337’ The Honorable George W. NcNiel, page 7 (H-74) unless employees are so surtained. They are no part of the employee’s “compensation for rervices rendered” and are also to be distinguished from personal expenses for private and individual purposes. See Terre11 v. Middleton, 187 S. W. 367 (Tex. Civ. App. ; San Antonio, 1916, writ re- fused). Authorized travel expenses incurred by an agency,employee are liabilities and expenses of the agency, not of the employee, and if the agency pays them in the first instance from unrestricted funds, there is no reason that we can see why the agency would not be entitled in the same manner as the employee, to later reimbursement therefor from funds specifically appropriated to pay travel expenres. Cf. Attorney General Opinions S-103 (1953): WW-1207 (1961). A procedure already exists where- by agencies may have public transportation costs billed directly to them and paid by the Comptroller upon a purchase voucher from the agency. See $ 12b, Article 5, of the General Appropriations Acts for both 1972md 1973-34. Reimbursement of authorized travel expenses incurred by State agency members and employees from specifically appropriated funds is governed by Article 6823a, V. T. C. S., the Travel Regulations Acts of 1959. That statute does not prohibit the expenditure of non-appropriated funds for such purposes. Attorney General Opinions WW-1053 (1961),; M-1175 (1972). Section 4 of that Act does specify (emphasis added): “Sec. 4 Unless otherwise provided by law, officer~r and employees traveling to the~perform- \ anc,e of their official duties shall not accept any aums of money for wage8 or expenses, from any corporation, firm, or person who may be or is being audited, examined, inspected. or investi- gated. and must receive their trave@expezsss from the amounts appropriated in the Apnropria- tion Acts. The Comptroller is hereby prohibited from paying the salary of any employee of the state who violates these provisions. ” p. 338 . . The Honorable George W. McNieI, page 8 (H-74) But the provirion has no application to activities not involving audits, examination, inspections or invertigations, and we interpret it as in- tended to guard against conflicts of interest - not against the pre-pay- ment of such expenses by the agency from unrestricted funds rather than by the individual employee from his personal assets. State employees are not required by law, as a condition of their employment, to privately finance the authorized agency expenses they incur. But if they do, they are given by ,law a means to recoup. The “per diem” and “mileage” provisions of Article 68231, V. T. C-S., do not argue otherwise; those are roughly calculated (in conjunction with Appropriation Act provisiona) to reimburse authorized actual expenses without the need for minute and wasteful accounting recxy the State. Section 3a of that statute specifically states that per diem ad- vances “shall be legally construed as additional compensation for offi- cial travel purposes only. I’ Section lla Article 5 of both the 1972 and the 1973-1974 General Appropriation Acts reads (emphasis added): “GENERAL TRAVEL PROVISIONS. a. The amounts specifically appropriated in this Act to each agepcy of the State for the payment of travel expenses are intended to.be and shall be the maximum amounts to be expended by employees and officials of the respec- tive agcrries. None of the moneys.a~~k~~priated by this Act for travel expenrer may be expended unless the ‘official travel and the reimbursement claims therefor are in compliance with the following con- ditions, limitations, and procedures. . . . ‘I In our view, this provision har no application to expenditures autho- rized by other laws, or to funds which msy be spent without appropriation. But it does govern reimbursement from appropriated funds. Article 68230, i 6f. provides that an officer or employee who receives an overpayment for travel expensesis to reimburse the state for such over- pm 339 . . . . . The Honor.able George W. McNiel, page 9 (H-74) payment. We think the frame obligation would rest with an employee or officer who is advanced expenrer by the Commission which later prove to be unauthorized. Secti.,n 7 of Article 6823a reads: “Sec. 6. Double travel~expense~s payments ” .to state officials or employees are prohibited. When an employee engages in travel for which he is to be compensated by a non-state agency, he shall not receive any reimbursementfor such travel from “authorized amounts in the General Approp’r.iation’ . Act..” This’ pr’ovision bars “collecting twice”for .the same expense; it does not prohibit a state agency from replenishing an unrestricted fund depleted by legitimate travel expense advances with treasury funds appropriated to defray such expenses. See Attorney General Opinions S-103 (1953) ; WW-1207 (1961). We understand. however, that the’Commirsion currently treats such~ advances as “loans” to its employeer and requires them as a con- dition of eligibility for such advancements (and to secure their repay- ment) to grant to the Commission a power.of attorney authorizing the Commission to deposit to the agency’s checking account all salary and travel warrants from the Treasury made payable to the employee. The agency also charges the employee the sum of $1.00 for each adtince made. We think the characterization of such advances as ,“loans” in erron- eous. The amounts legitimately advanced are to pay liabilities of the agency; not those of the employee. No,advancements should be made in excess of authorized expenditures, for contemplated agency expenses.. We think it permissible for the agency to,arrapge that amounts so advanced not be paid again directly, to the employee in the form of Treasury travel warrants, but the Commission’s claim on employee travel warrants will never exceed the amount of the warrants to be issued so long as only authorized expenres have been advanced. p. 340 . . . ‘. The Honorable George W. McNicl, page 10 (H-74) Salary warrants cannot be handled the name way. When expensea are legitimately advanced, they are to be ured for a specific public pur- pore by the employee as the reprerentative of the agency. The money cannot be lawfully ured to satisfy purely personal needr. Such an ex- pense advance ir not a~.loan. A peraon’s ralary, however, is hip to do with as he wiahes. It cannot be advanced to him by the agency because the advance would then conrtitute a personal loan to him of public funds to be ured for private purporer. If amount.9 for expended expenser’are advanced in excess of the expenses which are later proved to have been actually authorized or neceerary. we think the agency can recover the exce.sa from the em- ployees, but we do not think salary warrant8 can be legitimately held in pledge, in effect, to secure such “loana. ” The agency cannot law- fully be in the burinear of lending public money to itr employeer, and the holding of salary warrants as security for exceraea would tend to relax agency diligence in aaruring that advances cover only authorized agency expenser. Nor do we think there ir any authority for the agency to charge em- ployees a fee-for making advancer of authorized expenree. Advances, if legitimately made, are made for the benefit of the agency and only inci- dentally benefit: the employee& The coat of making such advancea, if necessary, is an agency operating expense, pot properly chargeable to its employees as a “oervice. ” Rerponding to your inquiry, therefore, it ia our opinion that the Texas Commission for the Blind may, putruant to itr agency regulationa, lawfully advance to its employeer from unrertrjcted donationr on hand authori,zed agency expenrer which the employee will incur on behalf of >he agency in the performance of agency bueinerr, and may lawfully re- quire the employeea to whom ruch advances have been made to deposit with the agency Treasury travel warrantr:.isaued to pay for ruch expenaeo. But we are of the opinion that the State Commt#sion for the Blind is not authorized to require such employeer to deposit with tbe agency salary warrants iarued to them, or to charge a fee to employee6 for making such advances. Our answer icl the same whether such advances are made be- fore or after the authorized expenses are incurred. p. 341 The Honorable George W. McNiel, page I1 (H-74) SUMMARY The State Commirrion for the Blind, pursuant to itr agency regul+tiona, may Lw- fully advance to itr employeer from unrertricted donetionr on hand, authorized +gency expenrer which the employee will incur or bar incurred on behalf of the agency in the performance of agency burineer, and may lawfully require the employee6 to whom such advances are made to deporit with the Agency Treasury travel warrantr irrued to pay for ruch expenaer. But the State Commirrion for the Blind ir not auth- orized’fo require ruch employees to deporit with the agency salary warrant0 irrued to them, or to charge a fee to employees for making ouch adtince#. Very truly your@,, JOHN L. HILL General of ‘Texar z DAVID M. KENDALL, Opinion Committee Chairman p. 352