ATTORNEY GENERAL OF TEXAS

GREG ABBOTT

April 9, 2008

The Honorable Dan W. Heard

Calhoun County Criminal District Attorney

211 South Ann Street

Port Lavaca, Texas 77979

Dear Mr. Heard:

Opinion No. GA-0618

Re: Authority of a county auditor to refuse

payment to a former employee of a county

hospital on the ground that such payment is

unconstitutional (RQ-0640-GA)

You write to inquire about the authority of a county auditor to refuse to approve a payment

proposed and approved by a county-owned hospital. 1 After providing details regarding the proposed

payment and describing the county auditor's concerns, you ask whether the county auditor has the

"right to refuse payment of county hospital payroll on grounds that [the payment] is a[n]

unconstitutional grant ofpublic money, ormustthe county auditor acceptthe hospital administrator's

determination that there is adequate quid pro quo so as to avoid the payment being a violation ofthe

Texas Constitution[.]"2 Request Letter, supra note 1, at 2.

The subject of your question is a payment proposed by the hospital administrator of the

county-owned hospital to a former employee. See ide at 1. You inform us that the employee has

terminated employment and that the proposed payment is being offered to the former employee by

the hospital for some continuing obligations.3 See ide You tell us the hospital administrator has

obtained a legal opinion concluding that the proposed payment conforms to the requirements of

article III, section 52 ofthe Texas Constitution. See id.; see also Odefey Letter, supra note 3. You

also tell us that the county auditor has consulted with your office regarding the legality of the

ISee Letter from Honorable Dan W. Heard, Calhoun County Criminal District Attorney, to Honorable Greg

Abbott, Attorney General of Texas, at 1 (Oct. 15, 2007) (on file with the Opinion Committee, also available at

http://www.oag.state.tx.us) [hereinafter Request Letter].

2See TEX. CONST. art. III, § 52(a) (prohibiting counties and other political subdivisions from making gifts or

grants of public funds to any individual or private entity).

3See also Letter from Anne Marie Odefey, Roberts, Roberts, Odefey & White, on behalfofBoard ofManagers,

Memorial Medical Center, to Shannon Salyer, Assistant District Attorney, Calhoun County (Oct. 10, 2007) (attachment

to Request Letter) [hereinafter Odefey Letter] (quoting Letter Memo, dated September 19, 2007, from hospital

administrator to former employee, outlining employee's continuing obligations).
The Honorable Dan W. Heard - Page 2 (GA-0618)

proposed payment but is unconvinced by the hospital administrator's argument "and continues to

believe the payment would violate" article III, section 52. Request Letter, supra note 1, at 1. In this

context you ask about the county auditor's authority. You do not ask us to evaluate and opine on the

constitutionality of the proposed payment. See generally id You instead seek our opinion as to

whether it is the county auditor orthe hospital administrator who has authority to determine whether

the proposed payment meets the requirements of article III, section 52. See ide at 1-2.

County hospitals are governed by chapter 263 of the Health and Safety Code. See TEX.

HEALTH & SAFETY CODE ANN. chI 263 (Vernon 2001). Chapter 263 authorizes the commissioners

court of a county to create a county hospital. See id § 263.021. A county hospital is governed by

a board ofmanagers, the members ofwhich are appointed by the county commissioners court. See

ide § 263.041(a). The board ofmanagers is charged with the general management and control ofthe

hospital including management and control ofthe hospital's employees and "all matters relating to

its government, discipline, contracts, and fiscal concerns." Id. § 263.046(a). And as the governing

body of the county hospital, the board of managers has a duty to expend its public funds in

accordance with article III, section 52. See Tex. Att'y Gen. Ope No. JM-I030 (1989) at 4

(recognizing that the "determination ofwhether a particular expenditure ofpublic funds meets those

constitutional requirements is left, at least in the first instance, within the sound discretion ofthe

governing body that proposes to pay public funds to a private entity") (citing Dodson V. Marshall,

118 S.W.2d 621 (Tex. Civ. App.-Waco 1938, writ dism'd). Chapter 263 requires the board of

managers to "certify all bills and accounts, including salaries and wages, and transmit them to the

commissioners court, which shall provide for their payment in the same manner that other charges

against the county are paid." TEX. HEALTH & SAFETY CODE ANN. § 263.053(b) (Vernon 2001)

(emphasis added).

Charges against the county are paid by the county treasurer as required or directed by the

county commissioners court. See TEX. Lac. GOV'TCODEANN. § 113.041 (a) (Vernon 2008). Before

the commissioners court may direct a payment, each claim, bill, and account against the county must

be examined and approved by the county auditor. See id § 113.064(a); see also Anderson V. Ashe,

90 S.W. 872, 874 (Tex. 1906) (stating that the language of the predecessor statute of Local

Government Code section 113.064(a) "is mandatory, and makes the approval of the auditor a

condition precedent to the exercise ofjurisdiction over the claim by the commissioners' court");

Crider V. Cox, 960 S.W.2d 703, 706 (Tex. App.-Tyler 1997, writ denied) (stating that the county

auditor's approval of a claim is a requisite to the commissioners court's approval and that without

approval, the commissioners court's approval of a claim is void). This is so because the county

auditor, as an independent officer appointed and removed by the districtjudges, is an important part

of the "delicate system of checks and balances" designed to protect county funds. See Smith V.

McCoy, 533 S.W.2d 457, 459 (Tex. Civ. App.-Dallas 1976, writ dism'd); see also TEX. Lac.

GOV'TCODEANN. §§ 84.003 (Vernon 2008) (providing for appointment ofcounty auditor by district

judges), 84.009 (authorizing removal ofcounty auditor by district judges for official misconduct or

incompetence).

As one component ofthe "system of checks and balances," the county auditor has a duty to

ensure that claims paid by the county strictly comply with the law. TEX. Lac. GOV'T CODE ANN.
The Honorable Dan W. Heard - Page 3 (GA-0618)

§ 113.065 (Vernon 2008); see Smith, 533 S.W.2d at 459-60. In the fulfillment of this duty, the

county auditor must examine and approve any presented bills and accounts ofthe county hospital

before the county commissioners court can order payment. See Tex. Att'y Gen. Ope Nos. MW-12l

(1979) at 2 (concluding that approval and audit by the county auditor is a prerequisite for the bills

and accounts ofa county hospital), V-1265 (1951) at 4 ("Although the management ofthe county

hospital is vested in the board ofmanagers, the commissioners[] court must approve all accounts."),

V-l100 (1950) at 9 ("[I]t is our opinion that the general duties ofthe County Auditor in regard to

auditing county hospital accounts are, in the main, the same ofthose in regard to any other county

office."); Tex. Att'y Gen. LO-89-100, at 2 (stating that "bills and accounts ofthe county hospital

must be submitted to the county auditor for his examination and approval prior to their presentation

to the commissioners court for its approval and order authorizing payment"). Accordingly, we

conclude that because county.hospital bills and accounts are paid in the same manner as other

accounts ofthe county and because the county auditor has a duty to ensure county funds are spent

in strict compliance with the law, the county auditor has authority, in the exercise of reasonable

discretion, to refuse to approve a payment of a county hospital on the grounds that it is prohibited

by the Texas Constitution. See TEX. HEALTH & SAFETY CODE ANN. § 263.053(b) (Vernon 2001);

TEX. Loc. GOV'TCODEANN. § 113.064(a) (Vernon 2008); Tex. Att'y Gen. Ope No. JM-133 (1984)

at 2 (recognizing that auditor's authority to withhold approval of payments may not be arbitrary)

(citing Smith, 533 S.W.2d at 460).

We believeit important to note, especially in the circumstances you describe, that the county

auditor's authority and discretion is not unfettered. The county auditor may "neither arbitrarily nor

in contravention oflawwithhold approval ofpayment." Smith, 533 S.W.2d at 460. In circumstances

such as you describe where the county auditor has withheld approval of a payment that· the

appropriate governing body has evaluated and approved under article III, section 52, the courts would

be the final arbiter ofwhether the payment satisfied the constitution. See ide (discussing a challenge

to a county auditor's withholding of approval of a payment and contrasting the circumstances that

support a mandamus action against the ~uditor or a suit against the county); Tex. Att'y Gen. Ope No.

GA-0247 (2004) at 7 (distinguishing between mandamus action against county auditor and suit

against county); see also Tex. Mun. League Intergovernmental Risk Pool v. Tex. Workers' Compo

Comm 'n, 74 S.W.3d 377, 383-84 (Tex. 2002) (setting out three-part public purpose standard by

which to examine the merits of a payment under article III, section 52).
The Honorable Dan W. Heard - Page 4 (GA-0618)

SUMMARY

The bills and accounts of a county hospital must be certified

by the hospital's board of managers and transmitted to the county

commissioners court. All bills and accounts, including salaries and

wages, of a county hospital are paid in the same manner as charges

made against a county, which charges must be approved by the

county auditor and paid by order of the commissioners court. The

county auditor has authority to determine whether any proposed

payment strictly complies with the law. The county auditor, in an

exercise ofreasonable discretion, may refuse to approve a payment

on the grounds that it is unconstitutional. As between the county

hospital board ofmanagers and county auditor, a court would be the

final arbiter ofwhether the payment satisfied the constitution.

KENT C. SULLIVAN

First Assistant Attorney General

ANDREW WEBER

Deputy Attorney General for Legal Counsel

NANCY S. FULLER

Chair, Opinion Committee

Charlotte M. Harper

Assistant Attorney General, Opinion Committee