., -
E i EX- GE
Commissioner Raymond W. Vowel1 Opinion No. M- 1275
State Department of Public Welfare
John H. Reagan Building Re: Refunds to public or
Austin, Texas 78701 private agencies
which have advanced
funds to the State
Department of Public
Dear Mr. Vowell: Welfare.
We are in receipt of your recent opinion request con-
cerning the above captioned matter and In which you submit
the following question:
“May the State Department of Public
Welfare refund monies advanced to the
Department by public or private agencies
for the purpose of providing the non-
federal share of the estimated costs of
social services programs when the actual
costs of such programs are less than
anticipated and thus the advanced funds
are in excess of that amount required for .
Federal matching purposes?’
You have advised that the advancement of the funds by
the public or private agencies, such as the United Fund,
for the estimated costs of the services is authorized
under the Federal Social Security Act and such services
are purchased by the Department pursuant to contracts
with other public or private agencies. In this con-
nection you state that the problem
I, . . arises when the estimated
program costs have proven to be in excess
of the actual costs incurred, thus rendering
the advancements to the Department in
excess of the amount required as the non-
federal share for Federal matching purposes.”
-6258-
Commissioner Raymond W. Vowell, page 2 (M-1275)
You have further advised that when the unrestricted
donated funds from the public or private agencies are
received by the De artment, they are, pursuant to Article
695c, Section 4(12 P , Vernon’s Civil Statutes, deposited
In a State Treasury account maintained for that purpose.
You then describe your procedure and position as followS:
“When the provider agencies furnish
services to eligible individuals, the
Department is billed for the actual cost
of the services and the Department reimburses
the provider agencies on an actual cost
basis. The funds which are transmitted
to the provider agencies as reimbursement
are composed of non-fiaderal ‘funds originally,
received from the aforementioned donating’ ,’ ” .’
agencies and Federal matching funds made
available under the applicable titles of
the Social Security Act., Since it is
impossible to predict accurately the
number of participants in a social services
program, situations often arise in which
the funds advanced to the Department to
provide the non-federal share of estimated
program costs are in excess of the amount
required to match Federal funds In order
to meet actual program costs.
“The Department desires to refund
to the aforementioned donating agencies
that portion of their donation which exceeds
the amount required to match Federal funds
in order to meet actual program costs,.
It is the Department’s position that we
have been granted the authority to make
such refunds by Article 695c, Section
4(12), Vernon’s Texas Civil Statutes,
as amended, and Section 29 of Article V
of Senate Bill No. 11, Regular Session,
as amended by Senate Bill No. 7, First
Called Session, 62nd Legislature, 1971. ”
You.request our clarification of the question presented
for two primary reasons:
-6259-
Commissioner Raymond W. Vowell, page 3 (M-1275)
“(1) All of the aforementioned
purchase of service contracts to which the
Department Is a party are based on estimates
of the number of participants In a social
services program, for example, the number
of children anticipated as participants
in a day care program. It Is impossible
to predict accurately the number of such
participants. In the present case the
United Fund estimate of the number of
children who would be enrolled In the
day care program exceeded the number of
actual participants. It Is our opinion
that the Department has no legal entitle-
ment to these excess funds and that
their refund is authorized by law.
“(2) Recent Federal Legislation
(the Revenue Sharing Act) restricts the
types of social Tervices which may be
purchased by the Department. This legis-
lation will require the Department to
cancel or modify many of its purchase of
service contracts, thus rendering necessary
the refunds herein described.”
It Is our opinion that your posltion is correct and
your question as posed must be answered in the affirmative.
While it is true under Section 6 of Article VIII of the
Constitution of Texas, “no money shall be drawn from the
Treasury, but In pursuance of specific appropriations
made by law,” nevertheless, this provision has no appll-
cation to monies deposb pursuant to an authorizing
statute In a special trust account with the State Treasurer
as Custodian. Attorney General Opinions Nos. WW-241(1957),
Ww-565(1959) and b/k/-600(195g). Also where the excess money
paid to the State results from a “mistake of fact,” there
is no constitutional Inhibition to prevent the State from
refunding the excess money so advanced. See Attorney
General Opinion No. WW-749(1959), and case authorities
there cited.
You have advised that the funds in question are
deposited In “Fund 166-Public Welfare Administration
Operating Fund,” which becomes a mix of the donated monies
and federal monies for that special purpose, subject to
-6260-
, .
CommiSSiOner Raymond W. VOWell, page 4 (~-1275)
withdrawal pursuant to Article 695, Section 4(12) and
Article V, Section 29, Senate Bill No. 1, 62nd Leg., 3rd
C.S., 1972. Such funds are trust funds which may only
be so used to carry out the public governmental purposes
of the program as contracted by the Department with the
parties. Attorney General Opinion No. C-.530(1972).
Neither the State of Texas nor the Department of Public
Welfare may claim such excess funds belonging to the
parties, for wtiich the Legislature has made provision for..
a refund. As was stated by,,this office in Attorney General
Opinion No. WW-241, infra, the funds here provided
are trust funds and do not belong to the State in its
sovereign capacity, but are received and are to be expended
for a special purpose.”
Article 695c, Section 4(12), which must be read into
the contracts executed by the Department with the parties
concerned, and pursuant to which the Department made its
said deposits in “Fund 166,” reads In relevant part, as
follows:
“The State Department of Public
Welfare is authorized to accept, expend
and transfer any and all Federal and State
funds appropriated for Ehe purpose of
providing public welfare assistance and/or
services as may be prescribed or authorized
under Federal law? and rules and regulationz7.
The State Department of Public Welfare is
authorized to accept, expend and transfer
funds received from a county, municipality,
or any public or private agency or from
!;,a,;;~ especially note that th$i;;;:sit is to be
made the State Treasury, not it. Thus,
the Treasurer becomes the “trustee” of the trust fund
for the benefit of those whose money Is so deposited.
-6261-
. .
Commissioner Raymond W. Vowell, page 5 (M-1275)
Attorney General Opinion No. O-3607(1941),citing Friedman
v. American Surety Co., 151 S.W.2d 570, 580 (Tex.Sup.
1941). It is under this authority that the Department
has contracted with public and private agencies for the
provision of social services to needy persons in order
to meet the Department's responsibility under Titles I,
IV-A, X and XIV of the Federal Social Security Act to
provide certain social services to former, current and
potential recipients of assistance under those titles.
In any event, whether such deposits were in this
Instance with or into the State Treasury, the General
Appropriations Act, Senate Bill No. 11, Section 29, 62nd.
g-g.9 1971, R.S., as amended by Senate Bill No. 7, 1st
62nd Leg., 1971, "Refunds of Deposits," provided
as Zllows:
"Any money deposited into the State
Treasury which is subject to refund as
provided by law shall be refunded from the
fund into which such money was deposited,
and so much as Is necessary for said
refunds is hereby appropriated."
This verbatim provision appears again as Section 29
of Article V of Senate Bill No. 1, Third Called Session,
62nd Legislature, 1972.
In view of all of the foregoing considerations, we
have therefore concluded that the Department of Public
Welfare Is fully authorized to make the refunds herein-
above'described and made the subject of the opinion
request.
-SUMMARY-
The State Department of Public
Welfare may refund monies advanced to it
by public or private agencies for the
purpose of providing the non-federal
share of the estimated costs Of Social
-6262-
Commissioner Raymond W. Vowell, page 6 (M-1275)
services programs when the actual costs
of such programs are less than anticipated,
the amount of refund being in excess of
the amount required for federal matching
purposes. Article 695c, Sec. 4(12),
V.C.S.; S.B. No. 11, Sec. 29, 62nd Leg.
1971, as amended by S.B. No. 7, let C.S.,
62nd Leg., 1971.
n
ey General of Texas
Prepared by Kerns Taylor
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
W. E. Allen, Acting Chairman
John Ranks
J. C. Davis
Roland Carlson
Harry Green
SAMUELD. MCDANIEL
Staff Legal Assistant
ALFRED WALKER
Executive Assistant
NOLA WHITE
First Assistant
-6263-
Untitled Texas Attorney General Opinion
Combined Opinion