Honorable F. T. Graham Opinion No. W-1200

Criminal District Attorney CameronCounty Re: Whether the County Auditor Brownsville, Texas of CameronCounty is required to, audit and issue reports on Improvement district finances, and related Dear Mr. Graham: questions.

Youhave requested anopinion from this office on the following questions:

"1. Is the County Auditor of Cameron County required to audit and issue reports on improvement district finances? "2. Are water Improvement districts and water control and lmprovement districts authorized to select an independent auditor to audit the books and issue reports on'the finances o'f suchSndependent districts?

“3. If such water improvement districts and water control andImprovement districts are so authorized, does this fact relieve the county auditor from makingsuch audit and issuing reports on,,the finances of such improvement districts? Article 1667, Vernon's Civil Statutes, provides in part that: "In all counties which have or may

have a County Auditor andcontaining a population of one hundred ten thousand (110,000) or more
. . . and in which counties there exists or in which there maybe created any improvement, navigation, drainage, or road or irrigation district, or any other character of district having for its purpose the expenditure of public funds for improvementpurposes, or for improvements ofHonorable F. T. Graham,page 2 (WW-1200)

anykind whether derived from the Issuance of bonds or through any character of spaclal assessment, the County Auditor shall exercise such control over the finances of said district as hereinafter provided. Article 1671, Vernon’s Civil Statutes, provides In part that:

“The county auditor shall check ‘all

reports required by law to be filed by any district,officer, andwithin thirty days after the filing thereof shall makea detailed report to the commissioners court showing his finding thereon andthe condition of such district as shownby said report, andas shownby the records of his office.

. . .‘I
Article 1672, Vernon’s Civil Statutes, provides In part that:

‘The county auditor shall receive for hls

services In auditing the affairs of such dlstricts, such compensatlon,,as the commissioners court mayprescribe

. . . Since the population of CameronCounty Is In excess of one hundred ten thousand (llO,OOO), andIn turn does not fall within the oulatlon brackets set forth in Articles 1676a, 1676b or 2O-1, Vernon’s Civil Statutes, the County

88 Auditor of CameronCounty would be re uired duties set forth In Articles 1667, 16 8, % to perform those 1669 and 1671, Vernon’s Civil Statutes, andspecifically the auditing and Issuing of reports on Improvement district finances, unless relieved of suoh duties by statutory enactment.

Articles 7622-7807n, Vernon’s Civil Statutes, deal with Water Improvemant Districts , andArticle 7761 thereof provides In part that: The’dlrectors shall have kept

a compieie’book of accounts,for such district, andshall~ on September first of each year select a competent auditor whoshall sxamlne ~theaccounts, books and reports of the depository,, the assessorand collector andthe dlrectors, .and makea full report thereon, a copy oftwhich shall be filed with the depository and a,copy with,the directors andone with.

Honorable F. T. Graham,page 3 (WW-1200)

the county clerk of the county or'counties in which such district is situated.

. . .' Articles 7880-1-7880-147~6, Vernon's Civil Statutes, deal with Water Control andImprovement Districts, andArticle 7880-45 thereof provides that:

“A complete system of accounts shall be kept by the district and anydistrict so electing, In lieu of having audit of && affairs by on@or more County Auditors, mayprovide for either monthly, quarterly or semi-annual audit of its affairs by an Independent public accountant of recognized integrity andability, andthe audits shall conform to January 1st as the end of the fiscal year for the district; and, anydistrict failing to procure audits in January andJuly of each year shall be subject to audit, andpayment of the actual cost of such audit, for the omitted period, by the county auditor of the county in which the district's principal office is situated, the cost of such audit to be determined by the Commissioners Court of the particular county andpaid by the district. Each report of audit shall be In duplicate, one of which shall be filed in the district's office andone filed in the office of the auditor, where they shall constitute public records, open to inspection by any interested person." Theprovisions of both Article 7761 andArticle 7880- 45, clearly indicate that it is within the authority of either aWater Improvement District or aWater Control andImprovementDistrict to select an independent auditor to audit the books of andissue reports on the finances of such districts.

This, then, raises the third question of whether or not the County Auditor is relieved from makingthe audit and issuing reports on the finances of aWater Improvement District or aWater Control andImprovement District whensuch a district has selected anindependent auditor to audit the books of and issue reports on the finances of such district.

Insofar as Water Control andImprovement Districts are concerned Article 7880-45 affords analternative to the district as to the auditing of the books of the district and the Issuing of reports as to the finances of the district.Honorable F. T. Graham,page li (WW-1200)

If the district so elects, It may'.

. . in lieu of having audit of its affairs by one or more County Auditors, provide for

. . . audit of its affairs by an independent public accountant

. . .' In the event such election is not made, Article 7880-45 provides for the auditing of the books of the district andthe issuing of the reports on the finances of the district by the County Auditor. Consequently, weare of the opinion that if aWater Control andImprovement District electsto select an independent auditor, andif such audit andreports are made, the County Auditor would be relieved from the responsibilities of auditing the books of and issuing reports on the finances of the district.

However, insofar as Water Improvement Districts are concerned, the decision in the case of Skelton v. Cameron CountyWater Control &Improvement Dist. No. 5,49 S.W.2d 510 (Civ.Anc. 1912. error dism'd.) is Pertinent. While this case dealt with aWater Control andImprovement District, rather than aWater Improvement District, the language of Article 7880-45 at the time of the decision in this case Is important, andit is set forth as follows:

"Acomplete book of accounts shall be kept. During the first weekof each year a competent auditor shall be employed who shall examine the account books and records of the district, of the depository and of the tax assessor and collector andmakea report thereon. Said report shall be in triplicate, one copy being filed in the office of the district, one with the depository of the district, andone copy In the office of the auditor, all of,,which shall be open to public inspection. As can be readily seen, the provisions of Article 7880-45 at the time of the decision in Skelton v. Cameron CountyWater Control &Improvement Dist. No. 5, supra, were almost identical to those provisions presently found in Article 7761, which pertain to Water Improvement Districts. Consequently, it is logical to assumethe courts would follow the reasoning andresult reached in Skelton v. Cameron CountyWater Control &Improvement Dist. No. 5, supra. This case arose as a result of the Water Control andImprovement District obtaining aninjunction against the County Auditor whereby he was restrained from interfering with or taking any action in regard to the district or its board of directors. Onappeal the judgment of the trial court wasreversed, the injunction against the County Auditor dissolved, andthe cause dismissed. TheCourt of Civil Appeals in its opinion stated:Honorable F. T. Graham,page 5 (WW-1200)

"Article 1667 specifically and fully grants the powers of the county auditor in the exercise of which he wasrestrained." As aresult of the decision in Skelton v. Cameron CountyWater Control andImorovement Dist. No. C, , wQ5ye similarity of the provisions contained in Article 7 at the time of the decision in the foregoing case andthe present provisions of Article 7761, wemusttherefore conclude that the selection of an independent auditor by a Water Improvement District does not relieve the County Auditor from makingaudits and issuing reports on the finances of Water Improvement Districts.

SUMMARY 1. TheCounty Auditor of CameronCounty is required to audit and issue reports on those improvement districts set forth in Article 1667 unless relieved by other statutory enactment. 2. Water Improvement Districts andWater Control andImprovement Districts are authorized to select an independent auditor to audit the books andissue reports on the finances of such districts.
3. If aWater Control andImprovement District elects to select anindependent auditor to audit the books of andissue reports on the finances of such district, and such audit andissuance of reports is made, the County Auditor would be relieved from making such audit and issuing such reports. Theselection of an independent auditor by aWater Improvement District does not relieve the County Auditor from auditing the books of or issuing reports on the finances of such district. Yours very truly, WILLWILSON Attorney General of Texas PB:ds:lghHonorable F. T. Graham,page 6 (WW-1200)

APPROVED: OPINIONCOMMITTEE W.V. Geppert, Chairman W.0. Shultz, II Leslie King JamesH. Broadhurst Elmer McVey REVIEWED

FORTHEATTORNEY

GENERAL BY: Houghton Brownlee, Jr.