### T~CATTORNEYGENERAI.

OF-XAS

AUHTXN ~.TEXAS PRICE DANIEL ATTORNEY

GENERAL Feb. 17, 1948

Hon. c. B, cavness State Auditor Austin, Texas Opinion No. V-504.

Re: Specific questions respecting the.sppllcabillty of regulotlcns which apply generally to State departmerits, institutions, and agencies, to the Texas Employment COavi~lssion, in anplificrtirn of &3ptni*n No. V-427,

Dear Sir:

Werefer toyour request for opinion on several specific questions respecting the appllcabilitg of regulations, which apply generally to State Departments, institutions andagencies, to the Texas Employment Commission in amplification of Opinion No, V-427.

In Opinion No. V-427 this department held that the Texas Employment Commission is aState Agency, yet with respect to Federal funds expended for administration of the agency the standards of the Social Security Administrator andthe United States Employment Serc vice of the Department of Labor andthe rules andregulations adopted bythe Commission to meet such standards prlmarlly govern. Otherwiee, the general provislans of the laws of this State bre rppllcsble.

Wecan appreciate fully your continued concern over the apparent conflict in 3tate andFederal laws and regulations which apply to this “State Qency” financed through Federal appropriations. It Is aperfect example of the hybrid nature andthe Federal control which may be retained over eState Agency set up by co-operetlve Federal andState Statutes andfinanced by Fsdersl funds. Aspointed out InV-427 the terms andconditions of the Federal Statutes are recognized andagreed to by our State Sthutes. Therefore, there is noalternative except to give primary authority to the Federal laws and regulations applicable just as the Texas Legislature has.. .

Hon. C, Ii, Cavness, page 2

done. In this connection, ing questions: 

### v-504

you nowpresent the Pollow-

‘1. Is it necessary for the Legislative Audit Committee to approve the Texas Employment Commission’s budget for the expenditure of Its administration costs which are paid from ‘Federal’ funds?

“2. Is it necessary for the Texas Employment Commission to purchase itssupplies, equipment, etc., andmakeits rental contracts, through the State Board of Control, under the

sameregulations that apply to other State Departments, Institutions, andAgencies?”

Wehave not found anygeneral provision of the laws of this State which authorizes the Legislative Audit Committee to approve anyState department’s budget, nor is there anysuch 

### provision in the Texas Unemployment Compensation Act. There are several provisions in the Departmental Appropriation Act concerning approval bythe Legislative Audit Committee of the expenditure of funds of various State departments. It has been suggested that possibly such necessity of the Legislative Audit 

### Committee’s approval of the Texas Employment Commission’s budget is implied from asimilar paragraph of the Departmental Appropriation Act, page 930, which reads:

“All ,theabove items appropriated for administration to the Texas Unemployment Compensation Commission shall be subject to the approval of the Legislative Audit Committee and none of the funds herein provided shall be spent until such approval’ shell have been obtained,”

In our opinion this provision relative to the Texas Employment Commission refers to the expenditure of the items appropriated and not to the preparation

or approval of abudget. Themoneys are not granted In trust by the Federal Government to the States, and thus 

### are not appropriated, until abudget has been prepared andadopted in its fins1 form. In other words, if the quoted provision grants any authority to the Legialtive Audit Committee, such authority commences after the budgetary proceaa prculiar to the Texas wyment Commission is completely finished. Uo again refer to Opinion No. V-427 for the construction. -



### Mon. C.Ii, Cavness, page 3 V-504

placed upon this quoted provision relative to expenditures,
Although It Is not witbin the province 

### ofthis office te construe the standards andprograms of the various Federml agencies involved heroin, werote tkrt these standards madprograms require the Texas aployment Commission to submit for consider&Ion abudget request setting forth in detail the prepossQ erpemditures. (?'rrt Iv, Vole 1, i3ulde for State bplaymemt Security AdministratIon, Soctloa 2000) Amydifferencea are settled between the Commlasloo and the respoctlve regional supervisors with the final detormlsrtloe of the ureunts necorsary for the propor a~lmistratlon of the State's acts resting with the Federal agencies. (Section 2006, supra) These standords~ will reveal that there are POprovisions for 

### approval. of the budget by anySt&e Committee similar to the Legislative Audit CommIttoe.

It is therefore our eplnloa th8t it is rat recoosrry Per the Leglsl@tive Audit Coulttoe to &)- prove the Texas Pmpley~ont Cemmlsafo~~h budget for the oxpeadlturo of Its admlmlstratlvs costs which &re **paid** frem “Feleral” fuada.

qua.attention has boemcalled to~Flscrl ID-UCtloa E. S. 501, Sectlen 1290, which in effect holds t&t the State laws, rules, tures b$State 

### agenciesan®ulations governing expebdlshall control the expondlturos of 

### Fsm+ fusds grsnted for unerployaoat andeBplmobt eervlco ramI~lstratlro. ZIefarencs 

### lamade, houeoor, to Sectlona 1030-33, ?art IQ,'Volumo I of Quid&hr.St*te Bmplqrent Socurl* Admlnlstrrtlqn, orUc# Is rh 4lrborrt1.B upon Sootion 1290 rorerrsg to dOQ0. ?hoae ~lattor soctloxr refer te a"State ?ractlco," wklch Is u ostab- 'llsbod custom or usage, accepted andge8ora.llg ap)llod

aa anexpondlturr control la 

### the flrcal rlrlmlrrtartien l 

### rthe8tate Mvorament, a80~1~ one 

### rw0i th8Setial Security Board will use Intstem'inlng~the neceroltg Y expebdltures w aState agency. Whether other faoterb give roasob for the Board to devlato tren tbo Nate ?raotlce is aololr wltkin it8 provlrce to dooile.

Inaof&r as the 'procedure relrtlve to reatal CYtrusts la concorned, wererer to Oplnlom No. e-5524, a copy et which weenclose herewith. This opl~lor held th@t these rostrl contracts did not krvs to be U&I through the Board or CoBtrel, andthis 

### l plnloa krr boomHon. C. H. Cavness, page 4 

### v-504

incorporated 

### aaapart of the program of the Employment Service of the Department of Labor. With reference to this question weagain refer to the standards of the Federal agencies relative to rental of premises andnote that these contracts must receive approval of the respective regional offices. It Is specifically provided that the Bureau of Employment Security has the responsibility for determining the reasonableness andthe necessity of the amounts requested for rental space andthe regional office of the USESwill concern Itself primarily wfth the question of suitability of office space. (Part IV, Vol. 1, Guide for State Employment Security Administration, Section 2510) The requisites of these standards govern, and since they require that the leases bemadeotherwise than through aState agency aimllar to the Board of Control, the conclusion follows that the rental contracts 

### ofthe Texas Employment Commirsion need not be made through the Board of Control.

With reference to the que.stion concerning the necessity of the Texas Employment Commission purchasing Its supplies, equipment, etc., through the State Board of Control, werefer to Opinion No. 

### O-3737, wherein It

washeld that the Commission did not have to follow the

manner sndmethod of purchasing supplies andequipment through the Board of Control which is applicable to other State departments whenpurchases are madeinthe manner andmethod as required bythe rules, regulations, etc., of ,theSocial Security Board. Wehave reviewed this opinion and subsequent federal regulations andhave not found any regulat,lon or lawwhich would alter the conclusion reached ~therefn.

After astudy of the pertinent standards, rules andregulations) wehave found that at the present time all of the interested Federal agencies have designated, pursuant to their standards andrules and regulations, the Fiscal Office of the Texas Bmployment Commission as the procurement officer whois charged with the responslbility of purchasing supplies andequipment.

It is true that the Bureau of Employment Securl ty does have in its standards and in Its suggested rules and regulations a“suggested process” bywhich the Commission could under certain circumstances deslgnate the State Board of Control as its procurement officer. This portion of ~t.nr rules and regulations andstandards of performance Issued by the Bureau of mployment Security, referred to above, could possibly be used bythe Bureau as abasis for designating the State Board of Control a8its procurement officer,. -

Hen. C. H. Cavness, page 5 v-504

provided the State Board of Control metwith all the standards promulgated by the Bureau of Employment Seturlty

. Whether or not this procedure is to 'be followed, and, If so, if the standards have been met, 13for the Bureau of Employment Security to determine, andwecannot therefore say as amatter of lav whether

or not these purchases should be handled through the Board of Control.

TheUnited State3 Employment Service of the Department of Labor has its ownseparate laws under which to makeaseparate determination as to the method to be followed bythe State agency in making these purchases. This Federal agency, as abs~sis for Its grant of funds to aState, has what is knownas aPlan of Operation. Oneof the items in this Plan of Operation is its fiscal processes, of which procurement of supplies, equipment, etc., is asmaller pert. Werefer to Section 22.203 of the Plan of Operation submitted bythe Texas Employment Commission to the Secretary of Labor. In that section is found Attorney General's Opinion No. O-3737, which has been adopted by the Secretary of Labor end the United States Employment Service as its basis for the approval of the Texas Agency's operation insofar as the procurement of supplies, equlpment, etc., are concerned.

Aswehave heretofore peinted out, these programs govern andrequire such purchase3 to be madeother than through the Board of Control, andweagain note that whether this procedure should be changed is within the discretion of ,theSecretary of Labor acting through the United State3 Employment Service. Asthe situation now presents itself, it ia not necessery for the Commission to purchase it3 supplies, equipment, etc., through the Board of Control.

SUMHAFE

It is not necessary for the Legislative Audit Committee to approve the Texas Employmen'tCommission's budget for the expenditure of its administration costs which are paid from Federal funds.Bon. C. H. Cavness, page 

### 6 v-504

At the present time it Is not necessary for the Texas Employment Commission to purchaee its supplies, equipment, etc., and makeits rental contracts, through the State Board of Control, under the s~paeregtilations that apply to other State Departments, Institutions, andAgencies.

Yours very truly

ATTORNEY

GEWRALOFTIiXAS


# By/?ibA%@rikL&&

Robert 0. Koch Assistant

?iCTIRG ATTORNEY GENERAL