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Honorable Joe Resweber Opinion No. M- 887

County Attorney Harris County Courthouse Re: County Auditor's responsibility Houston, Texas 77002 under a contractbetween the commissioners court and the United States government for a ConcentratedEmployment Project under the MDTA and Dear Mr. Resweber: the ECA.

Your request for an opinion on the above subjectmatter asks the following questions:

"1
. Does the County Auditor have the responsibilityunder State statutes to specify the accountingmethod to be used for these funds and have the responsibility to audit these funds?
”2

. If the first question is answered in the affirmative, should the CEP fundsbe deposited with the County Treasurer?

“3. If the first question is answered in the affirmative, should the CountyAuditor follow the accountingmethods and auditing procedures specified in the federal contractwhenever they conflict with county accountingmethods and auditing procedures?

“4

. If the first question is answered in the affirmative, should the County Auditor follow the accountingmethods and auditing procedures specified in the federal laws and regulationswhenever they conflictwith county accountingmethods and auditing procedures?
-4321-Honorable Joe Resweber, page 2 (M-887)

"5
. If the first question is answered in the affirmative, should the grant monies be placed in the County depository in conformancewith applicable state statutes and the County's depository contracts or does the Commissioners Court have the option of depositing these funds in anotherbank? If so, should thatbank qualify in conformancewith the County depository laws? "6
. Various actionsby the Harris County commissioners Court have been taken in regard to the C.E.P. Grant program and these actionshave been entered on the minutes of the CommissionersCourt. If the first question is answered in the affirmative, should the County Auditor audit and approve a claim based upon an entry in the Commissioners Court's minutes concerninga requisition relating to the ConcentratedEmployment Program in question, inasmuch as there is some doubt as to whether these items are proper to be included in theminutes of the Harris County CommissionersCourt?"
In Attorney General's OpinionM-605 (1970) itwas held: "Underthe provisions of Paragraph 11 of Article 2351,V.C.S., the CommissionersCourt may enter into a contractwith the United States gwernment to administer the ConcentratedEmployment Project under theManpower Development and Training Act (MDTA)and the Economic OpportunityAct (EOA)." In view of Attorney General's Opinion M-605 (1970),the commissioners court entered into a contractwith theUnited States government to administer the ConcentratedEmployment Project under the Manpower Development and Training Act (MDTA)and the Economic OpportunityAct (EOA).

Pursuant to this contract the commissioners courthas agreed to be responsible for the task set forth in the "statement

-4322-Honorable Joe Resweber, page 3 (M-887)

of work tobe performed under this contract.” The commissioners courthas agreed to "use accountingprocedureswhich shall accurately allocate each expenditure incurred in the performance of this project.*

The commissioners courthas further agreed that it "will employ qualified accountants to keep the Fiscal records under this contract. All Fiscal recordswill conform to the requirements specified in the Department of Labor HA - Manual Transmittal Sheet No. 65 - dated Sept., 1969 "Title 2500 Accounting Chapter 2510Accounting for Redelegated Funding of MA

Programs Section 2511 Contractors/Sponsorapcru cost reporting

procedure"; and that it "willmaintain records on, and properly document, all 'In-Kind'contributionsto the cost of the contract.”

Article 1651, Vernon's Civil Statutes, requires that the County Auditor shall have, general oversight of all books and records of all officers of the county. Article 1653,Vernon's Civil Statutes, provides that the County Auditor shall examine the books and accounts of any officer relating to the finances of the county, and Article 1656 provides that the County Auditor shall prescribe the forms to be used in the accounting of revenues and other funds and feesbelonging to the county.

In answer to your first question you are advised that the County Auditor does not have the responsibility for specifying the accountingmethod to be used for funds disbursed pursuant to the contract in question, as such accountingmethods are spelled out in the contract itself.

Answering your second question you are likewise advised that the c&P grantmonies prwided for in the contract are not to be deposited in the County Treasury, but are to be deposited in a specialbank account specificallyprovided for in the contract documents.

-4323-Honorable Joe Resweber, page 4 (M-887)

In answer to your third question you are advised that the accountingprocedtires specified,in the contract control the disbursement of federalmonies specified in the contract.

In view of our affirmative answer to the first question, we answer your fourth questionby stating that the auditing procedures specified in the contract control Over any county accountingmethods and auditing procedures.

It also follows, in answer to your fifth question, that the provisions of Paragraph (c) of Section 23 of the general provisions for cost reimbursement do not require the specialbank account to be a county depository.

In reply to .yoursixth question,we have con.cluded that the County Auditor is not required to audit and apprwe claims relating to the employment program prwided for in the contract in accordancewith its terms.

Summarizing our answers to your questions,we express the opinion that the commissioners court, in entering the contractwith the federal government,becomes a sponsoring agent for the United States government in carrying out the Concentrated Employment Project under the Manpower Development and Training Act and the Economic Opportunity Act: and consequently, such CEP funds do not become county funds subject to the various statutory provisionsrelating to the handling of countymonies. Such funds are not deposited tisstate or county funds but are dealt with as trust funds pursuant to the federal contract. See Attorney General's Opinion No. C-530 (1965). SUMMARY Under the provisions of a contractbetween the commissioners court and the United States government to administer the ConcentratedEmployment Project under theManpower Development a,nd TrainingAct (MDTA)and the Economic OpportunityAct (EOA);CEP funds do not become countymonies a~nd are therefore not subject to the auditing procedures applicable to county funds.
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Honorable Joe Resweber, page 5 (M-887) 

## ,C yerp truly yyyrs,

Attohey General of Texas if Preparedby John Reeves Assistant Attorney General APPROVED: OPINION COMMITTEE Kerns Taylor, Chairman W. E. Allen, Co-Chairman Sam L. Jones, Jr. Gordon Cass John Banks James Quick
MEADE F. GRIFFIN Staff Legal~Assistant
ALFREDWALKER Executive Assistant NOLA WHITE First Assistant

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