September 7, 1965 #-7x!L
LN Pfw I
Honorable Wallace Shropshlre Opinion No. C-499
County Attorney
Travis County Re: Whether or not county funds
Austin, Texas may be transferred from an
exlstlng line item In the
county budget to another
exlstlng line Item and re-
lated questions concerning
the amendment of the county
Dear Mr. Shropshlre: budget.
This office Is In receipt of your letter of August 10,
1965, wherein you request our opinion on various questions ln-
volvlng amendment of the county budget under the Texas Budget
Law. We quote the questions posed by you as follows:
'II
1 Where all of the budgeted funds for a
particular line item or object have been expended
bc t there is a surplus In other llnr Item accouri‘,s
In the Department budget, what is the proper pro-
cedure to be followed by the Commlssloners~ Court
In transferring funds from the surplus accounts to
the depleted account: (Can these funds be trans-
ferred from the budget of one Department to another
Department?)
"(a) Is It necessary for the Court to declare
an emergency as set out in Art. 6&a-11?
"(b) Or may the Court simply enter an order
authorizing the County Auditor to affect the trans-
fer of these funds a8 might be Indicated by Art.
6&a- 20?
"(c) If (b) Is permissible should a formal order
be drawn or will a mere entry on the minutes of the
Court showing what was done suffice?
11
. . *
"2. .(a) What Is the proper procedure to be
followed in amending the budget 80 as to create a
new object or line Item which was not budgeted
originally but for which new object surplus funds
are available In other budgeted line ltem accounts?
-2355-
Hon. Wallace Shropshlre, page 2 (Ca99 )
What is the procedure where new objects or expendl-
tures exceeds the budget?
"(b) Will a declaration of emergency by the
Commlssloner.9~Court as set out in Article 68ga-11
suffice to accomplish such a transfer?
II
. . .
“3. (a) Where the county has Incurred obliga-
tions for expenditures which were not in the
budget when It was adopted and without prior
authorization of the Commissioners' Court, will
the subsequent authorization of payment by the
Commissioners1 Court be tantamount to a budget
amendment or must the Commissioners' Court adopt
the proper budget amendment or change to affect
the amendment just as If the obligation had not
yet been incurred?
"(b) Is it the duty of the Auditor to ln-
form the Commissioners' Court that a bill pre-
sented by him for payment Is authorized within
the budgeted funds and that there Is sufficient
appropriated funds available to pay same?
"(c) Can the Auditor approve a bill for
presentment to fhe Commissioners' Court for pay-
ment If there Is no authorized budgeted appro-
prlatlon or If the budgeted approprlatlon has
been depleted?
,I
. . .,t
In considering your questions, we quote the following per-
tinent statutes from the Texas Budget Law. Article 68ga-11, Revised
Civil Statutes of Texas, In part reads:
"The Commlsslonerst Court In each county shall
each year provide for a public hearing on the county
budget -- which hearing shall take place on some
date to be named by the Commissioners1 Court subse-
quent to August 15th and prior to the levy of taxes
by said Commissioners' Court. Public notice shall
be given that on said date of hearing the budget
as prepared by the County Judge will be considered
by the Commissioners' Court. Said notice shall name
the hour, the date and the place where the hearing
-2356-
don. ilallaceShropshlre, page 3 (C- bg9)
shall be conducted. Any taxpayer of such county shall
have the right to be present and participate In said
hearing. At the conclusion of the hearing, the bud-
get as prepared by the County Judge shall be acted
upon by the Commissioners’ Court. The Court shall
have authority to make such changes In the budget
as In their judgment the law warrants and the in-
terest of the taxpayer demand. When the budget has
been finally approved by the Commissioners Court, the
budget , as approved by the Court shall be filed with
the Clerk of the County Court, and taxes levied only
in accordance therewith, and no expenditure of the
funds of the county shall thereafter be made except
In strict compliance with the budget as adopted by
the Court. Except that emergency expenditures, In
case of grave public necessity, to meet unusual and
unforeseen conditions which could not, by reasonably
diligent thought and attention, have been Included
In the original budget, may from time to time be
authorized by the Court as amendments to the original
budget. In all cases where such amendments to the
original budget Is made, a copy of the order of the
Court amending the budget shall be filed with the
Clerk of the County Court, and attached to the budget
originally adopted.”
Article 68qa-20, Revised Clvll Statutes of Texas, reads as
follows :
“Nothing contained In this Act shall be con-
strued as precludlnR the Legislature from making
changes In the budget for State purposes or pre-
vent the County Commissioners’ Court from maklnp:
changes In the budRet for county purposes or pre-
vent the governing body of any Incorporated city
or town from making changes In the budget for city
purposes, or prevent the trustees or other school
governing body from making changes in the budget
for school purposes: and the duties required by
virtue of this Act of State, County, City and
School Officers or Representatives shall be per-
formed for the compensation now provided by law
to be aid said officers respectively.” (Emphasis
added.7
We note that one of the purposes of the budget law is to
effectively discourage and prevent deficit Bpending by counties, In
accordance with the public policy of the state, as established by
Section 7 of Article XI, of the Texas Constitution. McClellan v.
Guerra, 152 Tex. 373, 258 S.W.2d 72, (1953).
-2357-
Hon. Wallace Shropshlre, page 4 (c-499)
Section 11 of Article 68ga requires that no funds of the
county shall be expended except In strict compliance with the bud-
get as adopted by the Court. This section, however, does authorize
amendments to the budget for emergency expenditures In cases of grave
public necessity, to meet unusual and unforeseen conditions which
could not, by reasonably diligent thought and attention, have been
Included In the original budget.
Section 20 of Article 68ga expressly authorizes the
Commissioners to make changes In the county budget for county pur-
Doses * However. these changes are llmlted to chances within the
bbjects covered-by the budget. Rains v. Mercantll; National Bank of
Dallas, 188 S.w.2~ 798, (Tex.Clv.App. 1945), affirmed 144 Tex. 490,
mW.2d 850 (1946); Southland Ice Co. v. City of Temple, 100 F.2d
825 (5th Clr. 1939). It was held In Attorney General's Opinion No,
O-1053 that Section 20 of Article 68ga does not authorize the Com-
missioners Court to Increase the budget after Its adoption.
It Is our opinion that the Le lslature Intended for the
restrictions In Section 11 of Article 8 8ga to apply to situations
where new Items were added to the original budget which would re-
quire an Increase In the original budget. This reasonlng Is In
keeping with the purposes of the budget as outlined above. In the
Rains case, the Court In dlstlngulshl between the provisions of
Section 11 and Section 20 of Article 63 9a said:
"The quoted portion of Art. 68ga-11 and Art.
68ga-20 seems to be the only provisions relating to
amendment of the budget. Art. 68ga-11 is very
specific as to when the county budget may be amended
and the steps to be taken to make the amendment.
It Is thought that the restriction as to amendment
applies only when new or additional expenditures not
provided for In the original budget are sought to
be added by amendment. Under Art. 6&5ga-20,subject
to llmltatlon of Art. 68ga-11, a county budget may
be amended at any time. The limitation of expendi-
tures provided for by the second amendment to the
County budget was not such as comes within the
llmltation provided In Art. 68ga-11." (Emphasis
added.)
As will be noted from the above quote, the Court refers to the
"chaqe" in Article 68ga-20 as an "amendment". It also points out
that amendment under Section 11" and "amendment under Section 20"
of Article 68ga are different.
Based on the above discussion, we now pass to the ques-
tions under question 1. We are of the opinion that where all of
-2358-
Hon. Wallace Shropshlre, page 5 (C- 499 )
the budgeted funds for a particular line item have been expended, but
there Is a surplus In other line Item accounts In the department bud-
get, and the Commissioners' Court reallocates the funds, transferring
funds from the surplus line Item account to the depleted line Item
account, this muld require an amendment to the budget as contem-
plated by Section 20 of Article 68ga. Also, it Is our opinion that
funds may be transferred from the budget of one department to the
budget of another. However, Constitutional funds may not be trans-
ferred In contravention of Section 9 of Article VIII of the Texas
Constitution. The transferring of the funds In both Instances above
do not require new expenditures not Included In the original budget,
therefore, the provisions of Section 11 of Article 68ga are not
applicable.
It Is our oplnlon that the correct procedure In transferring
the funds In the above two situations would be to amend the budget.
However, this would not require the existence of an emergency as
contemplated by Section 11 of Article 689a. An order of the Commls-
sloners' Court showing how the funds were reallocated and showing
that the budget was amended would, In our opinion, suffice to affect
the amendment of the budget under the above situations.
In answer to your questlons In question 2, we are of the
oplnlon that where a new line item which was not budgeted orlginally,
but for which new object funds are available in other budgeted ac-
counts, the budget must be amended as contemplated by Section 11 of
Article 68ga to transfer funds to the new Item account. in the
Southland Ice Co. case, the Court said at page 829:
"The city could not transfer funds and apply them
to a new object not mentioned in the budget, there be-
ing no emergency. . . .'
As can be seen from the above quote , an emergency must exlst as con-
templated by Section 11 of Article 68ga In order to amend the budget
and transfer such funds.
The correct procedure to amend the budget under the clr-
cumstances of question 2 would be for the Commissioners' Court to
enter an order, setting forth how the budget Is to be amended, find-
ing an emergency to exist, that a grave public necessity exists to
meet unusual and unforeseen conditions which could not, by reasonably
diligent thought and attention have been Included In the original
budget. A copy of such order should be filed with the County Clerk
and attached to the budget originally adopted.
-2359-
Hon. Wallace Shropshlre, page 6 (C-499 )
In answer to your first question under question 3, we are
of the opinion that where the county Incurred obligations for ex-
penditures which were not In the budget when originally adopted,
the Commissioners1 Court could thereafter amend the budget to ln-
elude these obligations. Tn Morrison v. Kohler, 207 S.W.2d 51 (Tex.
Clv.App. 1947, error ref. n.r.e.), the Court said at page 958 :
"We cannot agree with appellants' contention
that the Order of the Commissioners' Court of Eecem-
ber 9, 1946, amending the budget for the several com-
mlsslonerts road precincts Is void for the reason that
on such date no emergency then existed authorizing such
amendment because the services of the engineers, for
which the amendment was made to cover, had already been
performed. We find nothing in the budget law requlrlng
the'budget be amended at the time or before an obllga-
tlon not Included In the budget could be legally assumed.
We feel that It would be altogether too strict a con-
struction to place upon the provisions of the budget laws
governing counties to require that the budget should be
amended at the time the obligation was Incurred. On the
contrary we believe that the Commissioners' Court in
amending any budget to cover any Item of expense not al-
ready covered in the original budget should be controlled
by the facts and circumstances as existed at the time the
obligation was Incurred or assumed. . . ."
We are further of the opinion that In order to legally pay
these Incurred obligations which were not Included In the original
budget, the budget must be amended as contemplated by Sectlop 11 ?f
Article 68ga. Under this section, this would require the existence
of an emergency.
As to the duties of the County Auditor, Article 1651, Re-
vised Civil Statutes of Texas, makes It hls duty to "see to the
strict enforcement of the law governing county finances." As held
by this office In Opinion No. 0-6220 (1944), this duty would Include
the enforcement of the terms and provisions of the county budget.
In answer to your question (b) under question 3, we are
of the opinion that the Auditor does Inform the Commissioners' Court
that a bill Is authorized by budgeted funds and that there are funds
avallable to nav the bill when he aDDroves same. The Commlssloners~
Court has no ju&isdlctlon to allow the bill or claim without the
approval of the Auditor. Wyatt Metal & Boiler Works v. Llpscomb,
87 S.W.2d 331, (Tex.Clv.App. 1935, error ref.). To answer the (c)
portion of your-third queaiion, we are of the-opinion that the.Atidi-
tor should not approve a bill for presentment to the Commissioners'
-2360-
Hon. Wallace Shropshire, Page 7 (c-499 1
Court If there Is no budgeted approprlatlon or If the budgeted ap-
propriation has been depleted. Article 1666, Revised Civil Statutes
of Texas, provides as follows:
"He shall prepare an estimate of all the revenues
and expenses, and annually submit It to the Commissioners
Court, which Court shall carefully make a budget of all
appropriations to be set aside for the various expenses
of the county government In each branch and department.
He shall open an account wlth each appropriation In said
budaet, and all warrants drawn aaainst same shall be
en&e; to said account. He shail carefully keep an
oversight of same to see that the expenses of any de-
artment do not exceed said budget appropriation, and
eep said court advised of the condition of said appro-
priation accounts from time to time." (Bnphasis added.)
SUMMARY
-------
1. One of the purposes of the budget law
Is to effectively discourage and prevent deficit
spending by counties, In accordance with the
public policy of the state, as established by
Constltutlonal Article 11, Sec. 7.
An amendment to the budget Is required
as c%emplated by Section 20 of Article 68ga
when Commissioners' Court reallocates funds,
transferring funds from a surplus line Item
account to a depleted line Item account in the
same department.
3. The transferring of funds from one de-
partment to another is authorized and requires
an amendment as contemplated by Section 20 of
Article 68ga.
4. Correct procedure In amending budget
under Section 20 of Article 68ga would be for
the Commissioners' Court to enter an order
amendlng the budget and showing how the funds
were reallocated.
-2361-
Hon. Wallace Shropshlre, page 8 (c-499 )
5. An amendment to the budget is required
as contemplated by Section 11 of Article 68ga
where funds are transferred from surplus new
object funds to new line Item object not orlgln-
ally budgeted.
6. Correct procedure in amend1 county
budget under Section 11 of Article 6 ga Is for
3
the Commissioners' Court to enter an order set-
ting forth how budget Is to be amended, declar-
ing an emergency, finding that grave public
necessity exists to meet unusual and unforeseen
conditions which could not, by reasonably dill-
gent thought and attention have been Included In
original budget, file copy of such order with
County Clerk and attach such copy to budget
originally adopted.
7. Budget may be amended so as to Include
obligations Incurred before budget was adopted.
8. Budget must be amended as contemplated
by Section 11 of Article 68ga in order to ln-
elude obligations Incurred by county which were
not Included in original budget.
9. Eutles of County Auditor would Include
the enforcement of the terms and provisions of
the county budget.
10. When Auditor approves claim or bill, he
does Inform Commissioners1 Court that bill Is
authorized by budgeted funds and that there are
funds available to pay such bill.
11. Auditor should not approve bill for
presentment to Commissioners1 Court If there
Is no budgeted appropriation for such bill or
If the budgeted appropriation has been depleted.
Very truly yours,
WAGGONER CARR
Attorney General
Dean Arrlngto
DA:ra:zt Assistant
-2362-
fion.Wallace Shropshlre, page 9 (C-499 )
APPROVED:
OPINION COMMITTEE
W. 0. Shultz, Chairman
John Reeves
Grady Chandler
Ivan Williams
Robert Flowers
APPROVED FOR THE ATTORNEY GENERAL
BY: T. B. Wright
-2363-