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: 

We refer to your request for opinion on 

several specific questions respecting the appllcabilitg of regulations, which apply generally to 

State Departments, institutions and agencies, 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 a State Agency, 

yet with respect to Federal funds expended for administration of the agency the standards of the Social Security Administrator and the United States Employment Serc 

vice of the Department of Labor and the rules and regulations adopted by the Commission to meet such standards 

prlmarlly govern. Otherwiee, the general provislans of 

the laws of this State bre rppllcsble. 

We can appreciate fully your continued concern 

over the apparent conflict in 3tate and Federal laws and 

regulations which apply to this “State Qency” financed 

through Federal appropriations. It Is a perfect example 

of the hybrid nature and the Federal control which may 

be retained over e State Agency set up by co-operetlve 

Federal and State Statutes and financed by Fsdersl funds. 

As pointed out In V-427 the terms and conditions of the 

Federal Statutes are recognized and agreed to by our 

State Sthutes. Therefore, there is no alternative 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 now present 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., and make its rental contracts, 

through the State Board of Control, under the 

same regulations that apply to other State 

Departments, Institutions, and Agencies?” 

We have not found any general provision of the 

laws of this State which authorizes the Legislative 

Audit Committee to approve any State department’s budget, nor is there any such provision in the Texas Unemployment Compensation Act. There are several provisions 

in the Departmental Appropriation Act concerning approval 

by the 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 a similar paragraph of the Departmental Appropriation Act, page 930, which reads: 

“All ,the above 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 a budget. The moneys are not granted 

In trust by the Federal Government to the States, and 

thus are not appropriated, until a budget has been prepared and adopted 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 of this 

office te construe the standards and programs of the 

various Federml agencies involved heroin, we rote tkrt 

these standards mad programs require the Texas aployment Commission to submit for consider&Ion a budget 

request setting forth in detail the prepossQ erpemditures. (?'rrt Iv, Vole 1, i3ulde for State bplaymemt 

Security AdministratIon, Soctloa 2000) Amy differencea 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 PO provisions for approval. of the budget by 

any St&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 boem called to~Flscrl ID-UCtloa E. S. 501, Sectlen 1290, which in effect holds t&t 

the State laws, rules, 

tures b$ State agencies 

an& regulations governing expebdlshall control the expondlturos 

of Fsm+ fusds grsnted for unerployaoat and eBplmobt 

eervlco ramI~lstratlro. ZIefarencs la made, 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 and ge8ora.llg ap)llod 

aa an expondlturr control la the flrcal rlrlmlrrtartien 

l r the 8tate Mvorament, a8 0~1~ one rw0i th8 Setial 

Security Board will use In tstem'inlng~the neceroltg Y 

expebdltures w a State 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, we rerer to Oplnlom No. e-5524, a 

copy et which we enclose herewith. This opl~lor held 

th@t these rostrl contracts did not krvs to be U&I 

through the Board or CoBtrel, and this l plnloa krr boom 
Hon. C. H. Cavness, page 4 v-504 

incorporated aa a part of the program of the Employment 

Service of the Department of Labor. With reference to 

this question we again refer to the standards of the 

Federal agencies relative to rental of premises and note 

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 and the necessity of 

the amounts requested for rental space and the regional 

office of the USES will 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 be made otherwise than 

through a State agency aimllar to the Board of Control, 

the conclusion follows that the rental contracts of the 

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, we refer to Opinion No. O-3737, wherein It 

was held that the Commission did not have to follow the 

manner snd method of purchasing supplies and equipment 

through the Board of Control which is applicable to other 

State departments when purchases are made in the manner 

and method as required by the rules, regulations, etc., 

of ,the Social Security Board. We have reviewed this 

opinion and subsequent federal regulations and have not 

found any regulat,lon or law which would alter the conclusion reached ~therefn. 

After a study of the pertinent standards, rules 

and regulations) we have found that at the present time 

all of the interested Federal agencies have designated, 

pursuant to their standards and rules and regulations, 

the Fiscal Office of the Texas Bmployment Commission as 

the procurement officer who is charged with the responslbility of purchasing supplies and equipment. 

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” by which the Commission 

could under certain circumstances deslgnate the State Board 

of Control as its procurement officer. This portion of ~t.nr 

rules and regulations and standards of performance Issued 

by the Bureau of mployment Security, referred to above, 

could possibly be used by the Bureau as a basis for designating the State Board of Control a8 its procurement officer, 
. - 

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

provided the State Board of Control met with all the 

standards promulgated by the Bureau of Employment 

Set urlty . Whether or not this procedure is to 'be 

followed, and, If so, if the standards have been met, 

13 for the Bureau of Employment Security to determine, 

and we cannot therefore say as a matter of lav whether 

or not these purchases should be handled through the 

Board of Control. 

The United State3 Employment Service of the 

Department of Labor has its own separate laws under 

which to make a separate determination as to the method 

to be followed by the State agency in making these purchases. This Federal agency, as a bs~sis for Its grant 

of funds to a State, has what is known as a Plan of 

Operation. One of the items in this Plan of Operation 

is its fiscal processes, of which procurement of supplies, equipment, etc., is a smaller pert. We refer 

to Section 22.203 of the Plan of Operation submitted 

by the 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. 

As we have heretofore peinted out, these programs 

govern and require such purchase3 to be made other than 

through the Board of Control, and we again note that 

whether this procedure should be changed is within the 

discretion of ,the Secretary of Labor acting through the 

United State3 Employment Service. As the 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't Commission'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 

make its rental contracts, through the State 

Board of Control, under the s~pae regtilations 

that apply to other State Departments, Institutions, and Agencies. 

Yours very truly 

ATTORNEY GEWRAL OF TIiXAS 

By /?ibA%@ rikL&& 

Robert 0. Koch 

Assistant 

?iCTIRG ATTORNEY GENERAL