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 ofa county auditor to refuse to approve a payment proposed and approvedby acounty-ownedhospital. 1 

### Afterproviding details regarding theproposed 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 grantof publicmoney, ormustthe countyauditoracceptthehospital administrator's determination thatthere is adequate quid pro quo so as to avoidthe paymentbeing aviolation ofthe Texas Constitution[.]"2 Request Letter, supra 

### note 1, at 2.
The subject ofyour question is a payment proposed by the hospital administrator ofthe 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 ofthe

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 ofpublic funds to any individual or private entity).

3 See also Letterfrom Anne Marie Odefey, Roberts, Roberts, Odefey & White, onbehalfofBoard ofManagers, Memorial Medical Center, to Shannon Salyer, AssistantDistrictAttorney, 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

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proposed payment but is unconvinced by the hospital administrator's argument "and continues to believe the payment would violate" article III, section 52. RequestLetter, 

### supra note 1, at 1. In this contextyou ask aboutthe county auditor's authority. You do not askus to evaluate and opine onthe constitutionality ofthe proposed payment. 

### See generally id You instead seek our opinion as to whetheritis the county auditororthe hospital administratorwho has authorityto determine whether the proposed payment meets the requirements ofarticle III, section 52. 

### See ide at 1-2. County hospitals are governed by chapter 263 ofthe Health and Safety Code. 

### See TEX. HEALTH & SAFETY CODEANN. chI 263 (Vernon 2001). Chapter 263 authorizes the commissioners court ofa 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 withthe 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 (recognizingthatthe "determination ofwhetheraparticularexpenditure 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 theirpayment 

### in the same manner thatother charges against the county arepaid." 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 countycommissioners court. 

### See TEX. Lac. GOV'TCODEANN. 

### § 113 .041 (a) (Vernon2008). Before the commissioners courtmay direct apayment, eachclaim, bill, and accountagainstthe countymust be examined and approved by the county auditor. 

### See id § 113.064(a); 

### see alsoAnderson 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 ofa claim is a requisite to the commissioners court's approval and that without approval, the commissioners court's approval ofa claim is void). This is so because the county auditor, as an independentofficer appointed and removed bythe districtjudges, is an importantpart ofthe "delicate system ofchecks 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 (Vernon2008) (providing for appointmentofcounty auditorbydistrict judges), 84.009 (authorizing removal ofcounty auditor by districtjudges for official misconduct or incompetence).

As one component ofthe "system ofchecks 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

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§ 113.065 (Vernon 2008); see Smith, 533 S.W.2d at 459-60. In the fulfillment ofthis duty, the county auditor must examine and approve any presented bills and accounts ofthe county hospital before the county commissioners court can orderpayment. 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 inthe board ofmanagers, the commissioners[] courtmust 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 mustbe submittedto the county auditor for his examination and approval priorto theirpresentation 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 ofreasonable discretion, to refuse to approve a payment ofa 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 ofpayments may not be arbitrary) (citing Smith, 533 S.W.2d at 460).

We believeitimportantto note, especiallyinthe circumstances you describe, thatthe county auditor's authority and discretion is not unfettered. The county auditor may "neither arbitrarily nor in contravention oflawwithholdapproval of payment." Smith, 533 S.W.2d at460. Incircumstances such as you describe where the county auditor has withheld approval of a payment that· the appropriate governingbodyhas evaluated and approvedunderarticle III, section52, the courts would be the final arbiter ofwhetherthe payment satisfiedthe constitution. See ide (discussing a challenge to a county auditor's withholding ofapproval ofa payment and contrasting the circumstances that support a mandamus action againstthe**~uditor** ora suitagainstthe 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 RiskPool 

### 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 ofa payment under article III, section 52).

### The Honorable Dan W. Heard

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SUMMARY


### The bills and accounts ofa county hospital must be certified by the hospital's board ofmanagers and transmitted to the county commissioners court. All bills and accounts, including salaries and wages, ofa 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 ofthe 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