THF,ATTORNEY GENERAL 

OF TEXAS 

AUIWI-IN. Tncx~s 78711 

April 7, 1977 

The Honorable Robert E. Schneider Opinion No. H- 975 

Executive Director 

Texas Water Rights Commission Re: Auditing requireStephen F. Austin State Office Bldg. ments for water districts. 

Austin, Texas 78701 

Dear Mr. Schneider: 

You inquire about audit requirements for water districts. 

In 1973, the Legislature enacted a bill, now codified in 

sections 50.371-.376 of the Water Code, requiring an annual 

audit of all districts created pursuant to article 3, section 

52(b) (1) and (21, and article 16, section 59 of the Texas 

Constitution. Water Code 9 50.001(l). A number of pre-lY73 

enactments deal with audit and accounting requirements for 

some of the same water districts. You ask whether the 1973 

legislation impliedly repealed certain existing audit statutes 

and if not, how apparent inconsistencies between old and new 

audit requirements can be resolved. 

The 1973 act requires the governing bodies of certain 

water control and improvement districts, fresh water supply 

districts, utility districts and other districts created 

under general or special law to provide water and sewer services to have the district's accounts audited each year 

according to generally accepted accounting principles by a 

certified public accountant or public accountant holding a 

permit from the Texas State Board of Public Accountancy. 

Water Code 95 50.371(a),(b); 50.372. Accounts kept by a 

district depository or treasurer must also be available 

for audit. Id. 9 50.373. The Act requires the audit to 

be completedyithin 120 days after the close of the district's 

fiscal year. Id. S 50:371(c). The audit report must be filed 

with the TexasTater Rights Commission, the district office, 

and either the county clerk or a designated city official, 

depending on the location of the district. Id. 9 50.374. 

Other sections.requir,e the Water Rights CommEion to review 

the audit and provide for enforcement of the Act. - Id. SS 

50.374, 50.375, 50.376. 

p* 4059 
- . J 

The Honorable Robert E. Schneider - page 2 (H-975) 

Other Water Code sections governing audits for water 

districts are as follows: Section 50.021 (districts within 

counties of 500,000 or more); section 51.359 (control and 

improvement districts): section 53.149 (fresh water supply 

districts); section 54.309 (municipal utility districts); 

section 55.429 (water improvement districts); section 56.181 

(drainage districts): section 57.173 (levee improvement districts); and sections 61.213, 62.158 and 63.224 (navigation 

districts). You suggest that these provisions have been impliedly repealed. 

The law does not favor repeal by implication but instead 

will attempt to reconcile apparent conflicts between different 

laws relating to the same subject. Gordon v. Lake, 356 S.W.Zd -- 

138 (Tex. 1962). Where a conflict does exist between two 

statutes, the last enacted, as the most recent expression of 

leaislative intent, will control and imDliedlv reDea1 inconsistent prior enactments. Commercial Standard Fire and 

Marine $0. v. 

-- 

Commissioner of Insurance, 429 S.W.2d 930 

(Tex.Civ. App. -- Austin 1x8, no writ); Attorney General 

Opinion H-90 (1973). 

In the most part, the 1973 audit requirements do not 

conflict with prior laws on the subject. Where the new 

provisions differ from the old they are more often repetit,ive 

or cumulative of them than inconsistent with them. Most of 

the pre-1973 statutes require a yearly audit without stating 

how it should be done. The district's compliance with the 

detailed specifications set out in sections 50.371-.376 will 

usually fulfill its responsibilities under prior law. 

The pre-1973 statutes impose on certain districts 

additional responsibilities not required by. sections 50.371- 

. 376. These districts must comply with both enactments. 

For example, some of the older statutes require the audit 

report to be filed with the county auditor or in another 

off,ice not required by section 50.374. Water Code 99 50.021(c), 

51.359(c), 53.149(b), 55.429(b), 62.158(d), 63.224(c). We believe that the filing provisions are cumulative, and that the 

district must file its report in all locations specified by 

both statutes. 

Some of the.pre-1973 statutes prescribe different 

qualifications for the auditor than does section 50.371(b), 

which specifies that he must be "a certified public accountant 

or public accountant holding a permit from the Texas State 

p. 4060 
The Honorable Robert E. Schneider - page 3 (H-975) 

Board of Public Accountancy." For example, certain earlier 

provisions require a "competent person . . . qualified under 

law" or a "competent auditor." Water Code SS 50.021(b), 

55.429(a). Others permit the district to have either the 

county auditor or an independent public accountant perform 

the audit. Water Code 59 51.359(a), 62.158(b), 63.224(b). 

Others specify that a certified public accountant must perform the audit. Water Code 5 54.309(a). In most cases, 

appointment of an auditor who qualifies under section 50.371(b) 

will also fulfill the requirements of the earlier provisions. 

If the county auditor has the qualifications required by 

section 50.371(b), he may be appointed. Where a district 

cannot comply with both section 50.371(b) and the earlier 

provision, it should comply with section 50.371(b) as the 

latest expression of legislative intent as to the auditor's 

qualifications. See Attorney General Opinion H-40 .(1973). - 

Section 50.371(c) requires that the audit be completed 

within 120 days of the close of the fiscal year, while 

sections 53.149 and 55.429 require completion within a shorter 

period of time. These provisions are not facially irreconcilable, 

since an audit completed within one month of the end of the 

fiscal year, is necessarily completed within 120 days thereof. 

However, since the 120 day time allowance may be necessary 

to secure an audit performed according to generally accepted 

auditing standards as directed in section 50.372, we believe 

the Legislature intended to allow the district 120 days in 

which to complete the audit. Construed as an affirmative 

provision to allow the auditor 120 days, section 50.371(c) is 

inconsistent with earlier statutes providing less time and 

therefore impliedly repeals those provisions. All districts 

will have 120 days in which to complete the audits required 

by section 50.371 et seq. and by the relevant specific statute. - 

Although most of the pre-1973 statutes require annual 

audits, section 51.359(b) requires water conservation and 

improvement districts to have semi-annual audits, while 

section 51.359(a) permits these districts to have monthly 

or quarterly audits as well. We believe that the provision 

requiring two audits, each of which would cover only a six 

month period, is inconsistent with and impliedly repealed 

by the more recently enacted law requiring an annual audit 

covering a full year's transactions. We do not believe, that 

sections 50.371--376 are inconsistent with section 51.359(a). 

The district is still permitted to have optional quarterly 

or monthly audits in addition to the required annual audit. 

p. 4061 
. . 

The Honorable Robert E. Schneider - page 4 (H-975) 

The older statutes contain no penalty for failure to 

audit while section 50.374(e) and (f) provide a civil penalty. 

This difference is not an inconsistency. It merely means that 

districts subject to the requirements of sections 50.371- 

. 376 are also subject to its penalty provisions for violations 

thereof. Similar violations of the old statute do not 

subject them to any penalty. 

The pre-1973 provisions for some districts require the 

county treasurer to act as district treasurer and give him 

responsibilities related to the day-to-day handling of funds. 

Water Code 99 56.181(c), 57.173(c), 61.213. These sections 

require the treasurer to report to the commissioners court 

about the financial condition of the district. They do not 

give either the district or the treasurer any duty to conduct an audit and hence are not inconsistent with sections 

50.371--376. 

You suggest that section 50.372, insofar as it directs 

the Commission to adopt a manual of accounts, is inconsistent 

with the requirement in section 50.021(b) that the district 

keep "a complete system of accounts" or the requirements in 

sections 56.181(b) and 57.173(b) that the county treasurer 

pay out district funds only on properly signed vouchers. 

Section 50.372 does not expressly require any departure from 

these practices mandated by the older statutes. We do not 

believe that the Commission may adopt a manual of accounts 

that requires accounting procedures inconsistent with the 

procedures required by statute. 

Accident Board, 

See Kelly v. Industrial 

358 S.W.2d 874 (Tex. Civ. App. -- Austin 

1962, writ ref'd). Cf. Garner v. Lumberton Independent 

School District, 430xW.2d 418,423 (Tex. Civ. App. -- 

Austin 1968, no writ)(grant of authority to administrative 

body to suspend legislative act not favored). 

You also ask about the effect of the 1973 law on articles 

1667 through 1671, V.T.C.S. Article 1667 applies to counties 

of a specified population which have a county auditor and in 

which exists an improvement, navigation, drainage or road 

district. The county auditor is to exercise financial control 

over these districts as provided in articles 1668 through 

1671. V.T.C.S. art. 1667. These provisions give him certain 

responsibilities for supervising district funds, such as 

keeping accounts, auditing and approving bills for district 

expenditures and countersigning warrants. V.T.C.S. arts. 

p. 4062 
. -- 

The Honorable Robert Ed. Schneider - page 5 (H-975) 

1668, 1669, 1671. He also checks reports that district officers are required to file and informs the commissioners court 

of the condition of the district as revealed by the reports. 

V.T.C.S. art. 1671. 

County auditors in counties with a population of 330,000 

or more have additional responsibilities. They must prescribe 

the accounting system, forms and procedures used by the district and must make monthly and annual reports "similar in 

all respects to those required of him concerning county 

finances." V.T.C.S. art. 1670. In these monthly and annual 

presentations to the commissioners court and district judge, 

the county auditor reports the condition of each account, receipts and disbursals from each fund, indebtedness and other 

information he deems proper. V.T.C.S. art. 1665. Thus, articles 

1667 through 1671 authorize the county auditor to supervise 

district finances on a day-to-day basis, and require him to 

keep the county commissioners informed about the financial 

state of the district. These articles do not require county 

auditors to perform the kind of comprehensive annual audit 

mandated by section 50.371 of the Water Code, although auditors 

in counties of 330,000 or more must submit some kind of audit 

results to ,the Texas Water Rights Commission. Sections 50.374 

and 50.375, however, require the Commission to receive and 

review the audit report of each district. 

Because the 1973 enactment differs from sections 1667 

through 1671 in both its purpose and in the kind of accounting 

procedure it requires, we believe it is not in conflict with 

the earlier legislation. Although county auditors in counties 

of 330,000 or more may duplicate some of the work done by a 

public accountant appointed under section 50.371, such overlap 

merely reflects the nature of improvement districts which 

are of local and statewide concern. See Tex. Const. art. 16, 

5 59(a), k). In addition, this officehas determined that 

the county auditor was not relieved of his article 1667 duties 

by legislation requiring the district to have an annual audit 

done by an outside auditor. Attorney General Opinions H-809 

(19761, WW-1200 (1961); see Skelton 5 Cameron County Water 

Control & Im rovement Dist. No. 5, 49 S.W.2d 510 (Tex. Civ. 

APP. -- Sam9mrrdism'd). 

You also ask about the effect of sections 50.371-.376 on 

articles 1676a.and 167613, V.T.C.S., each of which applies to 

districts in counties within specified population brackets. 

Articles 1676a and 1676b expressly supersede other audit 

requirements and state that only their provisions along with 

certain other statutes shall apply to their respective districts. 

h-4063 
The Honorable Robert E. Schneider - page 6 (H-975) 

V.T.C.S. art. 1676a, 99 3, 4; 167613, 99 3, 4. Sections 

50.371-.376, on the other hand, apply to all water districts 

and therefore conflict with articles 1676a and 1676b. We 

believe that sections 50.371-.376 impliedly repeal the 

conflicting provisions of articles 1676a and 167633. Thus, 

the audit requirements of sections 50.371-.376 apply to 

districts described by sections 1676a and 1676b. 

Finally, you ask whether the Texas Water Rights 

Commission may accept for final filing a water district 

audit report prepared by a county auditor not licensed by 

the Texas State Board of Public Accountancy when the county 

auditor audits a district under the authority of one of the 

pre-1973 audit statutes. An audit report prepared by someone 

who lacks the credentials required by section 50.371(b) does 

not fulfill the requirements of sections 50.371 through 

50.376. The Water Code directs the Commission to review 

the report and notify the district of any violations of law. 

Sec. 50.375(a). The district must remedy objections and 

correct violations of which it has been notified before finally 

filing the report with the Commission. Water Code 9 50.375(b). 

If the district does not remedy such objections and violations, 

including a violation of the provision which states the 

auditor's qualifications, the Commission should not accept 

the audit report for final filing. 

SUMMARY 

Sections 50.371-.376 of the Water Code are 

generally consistent with certain other 

Water Code provisions on audit requirements for water districts, but repeal 

provisions on qualifications of the 

auditor and time for completing the audit tom 

the extent of any inconsistency: Sections 

50.371-.376 are not inconsistent with 

articles 1667 through 1671, V.T.C.S., but 

are inconsistent with articles 1676a and 1676b 

and therefore impliedly repeal the latter two 

provisions to the extent of any inconsistency. 

The Texas Water Rights Commission should not 

accept for final filing an audit report 

prepared by someone who does not meet the 

qualifications of section 50.371(b) but 

should inform the district of this violation 

and not accept the report until the violation 

is corrected. 

p. 4064 
_. -. 

The Honorable Robert E. Schneider - page 7 (H-975) 

APPROVED: 

c. ROBERT HEATH, Chairman 

Opinion Committee 

km1 

p. 4065