## THE A-ITORNEY- GENERAL OF ?!?EXAS

May 21, 1968

Honorable J. W. Edgar Commissioner **of** Education Texas EducationAgency Austin, Texas

**Dear** Dr. **Edgar:** OpinionNo. M- 238
Rer Whether equipment purchased for and provided to vocational rehabilitation clients is regarded as client services and may be excluded from inventory required of state-owned personal property.
You have requested the opinion of this office upon the question of whether:

.equipmentpurchased for and provided ;o'vocationalrehabilitationclients (apart of their physical rehabilitationprogram and/or necessary to their restoration to a productiveplace in society)be regarded as client services or in any other manner denominated that thereby such equipment shall be excluded from inventoryrequired of stateowned personal property?'
In connectionwith the foregoingquestion you have stated that:

"Within the totalvocational rehabilitation process forhandicapped clients, it is often necessary to purchase certain items of equipment for the client, as an essential part of his rehabilitationprogram. Such items can and do range from an artificial leg, to a medically prescribed fixture necessary for client hygiene, to a typewriter for training and self

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" employment. Automotive tools,welding kits, wheelchairs and myriad of such items are purchased for clientservices.

II

. . . "The physical and administrativeburden involved in the.inventory forclient equipment is serious. Growth of theVocational Rehabilitation,Divisionwithin the past fiveyears has. been tremendous. The client case loadhas multiplied to a point that a major proportion of couns,elor-time

is and will be involved in attempting to keep the inventory accounting complete, therebydetracting seriously from the, time available for client servicing and counseling."
You have further informed this officeby your letter that communicationshave been had with the Regional Office~of the Department of Health, Education andWelfare concerning Federal requirements fork an inventory control andhave been notified that:, ,I

. . .there is no requirement for maintaininq such inventory; only the usual fiscal responsibilityconcernins such expenditures *
. .wedo not feel that an annual inventory of equipment purchased for clients with federal funds is necessary or desirablebecause of the cost of maintaining such an inventory." (Emphasisadded.)
In closing, you have stated.inyour letter that:
"In the **face** of this mounting burden,experienced

. . .by the Vocational Rehabilitation

,.Division in maintaining such inventory accountability, discussionmeetingswere held with repre-, sentatives of the State Comptroller and State Auditors Office. They share the concern. They

-1162-Dr. J. W. Edgar, page 3 (M-2381

recognize thatwe are burdenedwith a problem which entails expending far more, estimated on an annualbasis, in the inventory process than the client items cost initially. Ztwas brought out that from an accounting stand point, the equipment is considered services and not capital outlay. ” The State of Texas accepted the provisions of the Federal Vocational RehabilitationAct, 29 U.S.C.A.,Chap. 4. part 401, with the enactment ofArticle 2675-1,Vernon's Civil Statutes. Section 3 ofArticle 6252-6,Vernon's Civil Statutes, provides, in part, that:

"All real and personal propertybelonging to the State shall be accounted forby the head of the agency which has possession of the property- "(a) The Comptroller of Public Accounts shall administer the property accounting system established by this Act. The StateAuditor shall adminhster the property responsibility system establishedby thisAct. The ComptrolZer shall issue such rules and regulations and manual of' instructionand prescribe such records, reports, and forms as he deems necessary to accomplish the objects of thisAct subject to the approval of the StateAuditor. The StateAuditor is directed to cooperatewith the Comptroller in the exercise of the Comptroller's rule-making powersherein granted by giving technical as- 'sistanceand advice." Section 4(c) ofArticle 6252-6, directs that:
"All personal property ownedby the State shallbe accounted forby the agencywhich possesses the property. The Comptroller shall by

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Dr. J. W. Edgar, page 4 (M-238)

Lc.gtulation

definewha_tis meant by-&crsonal -- --.-.- ~~o&g~-fZo~@ ourooses of this-. Un- ,,~ less the Comptroller prescribes, otherwise, personal property shall mean all non-consumable personal property. In nromulqam such regulations, the Comotroller shail take into accouF G&value of the orooertv, its expected useful &f-e,-and cost of record keeoinq should bear a ~$~~~le rclationshio to the cost of the orooertv uficJ.n.-,_which

records are kept. - The Comptroller shall consult.

with the StateAuditor in making such regu’lations and theAuditor shall cooperatewith the Comptroller in the exercise of this rule-making power by giving technical assistance and advice." (Emphasis added.)
The Crippled Children's Division of the State Department of Health purchases equipment for the use of the children with whom it works similar to that used by theVocational Rehabilitation Division of the Texas EducationAgency. Section 3 of Article 4419c, Vernon's Civil Statutes, enumerates certain powers of the Crippled Children's Division of the State Deoartment of Health and is set forth in part as follows:

"At the discretion of the State Department of Health, transportation,appliances, braces and material necessary in the proper handling of crippled children may be in part or entirely provided. Such appliances,braces and material, beins'a part of the care and treatment Droaram and necessary to the ohvsical restoration of the individualcrippled child as defined in thisAct, shall not be considered to be stateowned oersonal property and shall be excluded from the personal prooertv inventorv reauired of stateowned orooertv; and all such property including ~appliances,

braces and materials, being a part of the care and treatment program, and which are now being accounted for under the provisions of the present system of 'accountingshall be deleted from and not required after the passage and effective date of this Act. The State Deoartment of Health, however. shall maintain at all

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Dr. J. W. Edgar, page 5 (M-238)

times a complete record of such appliances, braces and materials provided and such records shallbe verified bv the State Auditor." (Emphasisadded.)
In view of the foregoing,we are of the opinion that the Comptroller of PublicAccounts, upon consultationwith and approval by the StateAuditor, could promulgate.certainrules and regulations, under the discretion conferred upon him pursuant to Section 4(c) ofArticle 6252-6,whereby certain equipment purchased for and provided to clients of theVocational Rehabilitation Division,being of a consumable nature as properly determined and definedby the Comptroller,would not be deemed "personalproperty" for the purposes of Article 6252-6 and would thus not be required to undergo an annual inventory.

In this connection,however, the Comptroller of Public Accounts might require some form of recordkeeping such as that required of the Crippled Children's Division of the State Department of Health under Article 4419c.
SUMMARY
The Comptroller of PublicAccounts, upon consultationwith and approvalby the State Auditor, could promulgatecertain rules and regulations, pursuant to Section 4(c) of Article 6252-6,Vernon's Civil Statutes,whereby certain equipment purchased for use by clients of the Vocational RehabilitationDivision of the Texas EducationAgency would not be deemed "personal property“ for the purposes ofArticle 6252-6 and would thus not be required to undergo an annual inventory.
V& truly yours,

ORD C. MARTIN orney General of Texas Prepared by Pat Bailey Assistant Attorney General -1165-. 1

Dr. J. W. Edgar, page 6 (M-238)

APPROVED: **OPINION** COMblX~EE Hawthorne Phillips,Chairmen Kerns Taylor, Co-Chairman Thomas Mack Roger 51er Malctalm Quick Dyer Moore, Jr.
A. J. CARUBBI, JR. Executive Assistant

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