Court Opinion

ID: 4129924
Source: CourtListenerOpinion
Date Created: 2017-02-18 00:58:06.086059+00
Date Added: 2024-06-11T14:31:36.906478
License: Public Domain

QBffice     of tty RIttarnep          Qkneral
                                                Wite of llCexae
DAN MORALES                                      September IS,1993
 ATTORNEY
       GENERAL
      Honorable John A Sickel                                 Opinion No. DM-257
      Criminal District Attorney
      Van Zandt County                                        Re: Whether section 140.003 of the
      202 North Capitol Street                                Local Government Code requires a
      Canton, Texas 75103                                     specialized local entity to deposit its timds
                                                              in the count+ bank account or permits the
                                                              specialized local entity to deposit its funds
                                                              in its own bank account in the county’s
                                                              depository bank, and related ques-
                                                              tions (RQ-547)

        Dear Mr. Sickek

                You have requested that we answer several questions posed by your county
        auditor regarding the operation of section 140.003, subsections (t) and (g), of the Local
        Govermnent Code. Section 140.003 provides in pertinent part as follotis:

                      (a) In this section, “specialii         local entity” means:

                                 (1) a district or crimmal district attorney;

                          (2) a juvenile board, juvenile probation office, or juvenile
                  department established for one or more counties; or

                            (3) an adult probation office or department established for a
                  judicial district.

                       . .   .

                        (0 Each specialized local entity shall deposit in the county
                  treasmy of the county in which the entity has jurisdiction the funds
                  the entity receives. The county shall hold, deposit, disburse, invest,
                  and otherwise care for the timds on behalf of the specialized local
                  entity as the entity directs.       If a specialized local entity has
                  jurisdiction in more than one county, the district judges having
                  jurisdiction in those counties, by a majority vote, shall designate from
                  among those counties the county responsible for managing the
                  entity’s funds.

                      (g) The county auditor, if any, of the county that manages a
                  special&d local entity’s funds has the same authority to audit the
                  tunds of the entity that the auditor has with regard to county funds.

                                                       p.   1333
Honorable John A. Sickel - Page 2            (DM-257)

        The county auditor first asks about the meaning of         &posit    in thewun@ treamy
as that phrase is used in subsection (f):

          (1) Doea “deposit in the county treasury” mean deposit in the county
               bank account? In considering this question, please bear in mind
               that the county accounting system is capable of accounting for
               separate funds even though they are actually deposited in one
               bank account. All of the county fimds are now in one bank
               account but in our accounting system there are separate tbnds
               (accounts) for the general fund, the four road and bridge funds,
               and several other funds. The funds are commingled at the bank
               but not in our records.

You note that the county auditor apparently is concerned specifically with the funds of the
local adult probation department, which is a state agency. In a separate letter to our office
on this matter, the county auditor writes us that “specialiied local entities typically guard
their presumed right to maintain a separate bank account(s) and accounting systems so
long as their bank account is in the bank designated as the county depository.”

        In Attorney General Opinion DM-162 we concluded that article 59.06 of the Code
of Criminal Procedure, in directing that certain forfeited property received by a county’s
felony prosecutor or law enforcement agency be deposited in “a special &nd in the county
treasury,” means that such property must be deposited with the county treasurer for
placement in the wunty depository. Attorney General Opinion DM-I 62 (1992) at 4. Part
of our rationale for that conclusion was that the plain language of article 59.06,’
specifically the use of the same phrase a qecialjimd    in thecum@ treawryin subsection
(c)(l) regarding funds of “the attorney representing the me” (emphasis added) and in
subsection (c)(3) regarding funds of a “county law enforcement agency” (emphasis added),
indicates that such forfeited property must be deposited in the manner in which section

        1Article59.06 oftbe Codeof CrimiaslPmcedurcprovidesin pcninmt part:

               (c) Ifalocalagtecmentcxiststdwxentheattomeyrepresmtingthestate
          sod law eaformmmt agencies, all money, securities, negotiable instmmmts,
          sbcks or bonds, or things of value, or proceedsfrom the sale of those items, shall
          be depositedaemrding to the terms of tbe agreementinto one or motE of the
          following funds:
               (1) aspecialfundinthemuntytnasluyforthebenefitoftheotticeoftbc
          attoroey representingthe state, to be used by the attorney solely for the official
          puposeSofhisoflice;
               . . . ; [or]
                (3)aspecialfundinthecountytreasuryifdistributedtoamuntylaw
           eoforeanentagency,to be wed solely for law enforcementpurposes.

                                            p.   1334
Honorable John A Sickel - Page 3             (DM-257)

113.021 of the Local Government Coder requires “money belonging to a county” to be
deposited, regardless of whether the property has the character of county funds. Id.at 2-
3. Furthermore, we noted, “other provisions of state law requiring the deposit of fimds in
the county depository are not limited in their reach to specifically ‘county funds’or county
offiwrs."  Id.at 3. We cited as examples sections 116.002 and 140.003 of the Local
Govemment Code and article -103.004 of the Code of Criminal Procedure. Id. The hal
reason for our decision in Attorney General Opiion DM-162 was our reluctance to
construe article 59.06 to allow forfeiture iimds to be deposited without the protection of
the bonds or other security that section 116.002 of the Local Government Code requires
of the depository of the wunty treasury. Id.

         The foregoing reasoning of Attorney General Opiion DM-162 applies with equal
force to your auditor’s question regarding section 140.003 of the Local Government Code.
The plain language specifies “deposit in the county treasury,” not “deposit in the bank that
is the depository of the wunty treasury.” The language applies to all “specialized local
entities,” even adult probation departments. Furthermore, section 140.003 is not unique in
requiring the deposit in the county depository of funds that are not necessarily “county
funds.”

        Fiily,  we believe that iimds received by an adult probation department are
“money wllected or held by a district. . officer in a county” for the purposes of section
116.002 of the Local Government Code) and therefore must be protected by the county
depository’s bond. Section 491.001 of the Government Code defines adultprobutton
dqmtment as “a wmmunity supervision and corrections department established under
Article 42.131, Code of Criminal Procedure.” Article 42.131, section 2, of the Code of
Criminal Procedure requires the district judge or judges of each judicial district to
“establish a wmmunity supervision and wrrections department and employ district
personnel as may be necessary” to statf the department. The personnel of an adult
probation department, therefore, are employees of the district judge or judges and

       %ection 113.021 oftheLacal Govemmmtc4Nleprovidosiapmt:

                  (a) The fq   mmmissiens, fimds, and o&er money belonging to a county
          shallkQpositcdwiththecountytnasurrrbytkoffi~rwhomllectstbe
          money. The Offimr must depositthe money in accordancewith any applicable
          praxduresprcscriibyormderSeetion     112.001or 112.002..

       ‘Section   116.002of the Local Gevemm&cedeprwi~inpart:

               (a) This chapterappliesto mcneymllected or held by a district, county,01
          pncinct officerin a countyand by the efticersof a d&ineddistrict or subdivision
          in the mmty, in&ding the rimdsat a municipalor quasi-municipalmbdivisien
          or mrpration that has the powerto selectits owa depositorybut has not done so.
          Tbe mom-y shall be deposited under this chapter, and the money shall be
          consideredin tixing, and is protectedby, a monty depository’bond.
                                                                      s

                                            p.   1335
Honorable John A. Sickel - Page 4           (DM-257)

accordingly act as agents for the judge(s) as “district officer(s)” in wllecting and holding
money in a wunty. We are as reluctant here as we were in Attorney General Gpiion
DM-162 to reach a conclusion that would allow public tbnds to be deposited without the
protection of the bonds or other security that section 116.002 of the Local Government
Code requires of the depository of the county treasury.

         For the foregoing reasons, we conclude that section 140.003 of the Local
Government Code, in diiecting an adult probation office, as a “specialized local entity,” to
deposit the funds it receives “in the county treasury of the county in which the entity has
jurisdiction,” means that such timds must be deposited with the county treasurer for
placement in the county depository. Whether the county treasurer should maintain the
wunty treasury in segregated bank accounts is a question of sound banking and
accounting practices rather than of legal prescription under section 140.003.

        Your county auditor next asks whether the phrase “the &nds the entity receives,”
as used in section 140.003, means all lunds 6om any source. We believe the phrase
plainly indicates the broad intendment of any and all funds the entity receives.4 We are not
aware of any law that excludes a specific t!md of a specialized local entity from the
application of section 140.003. In the absence of such a law, section 140.003 requires all
fimds of a specialii    local entity to be deposited in the county treasury.

        Your county auditor next asks:

           (3) Does “hold, deposit, disburse, invest, and otherwise care for the
                funds” [as used in subsection (f) of section 140.003] mean that
                the county is to use the same accounting procedures for the
                specialized local entity funds that it does for county funds? For
                example, is the county auditor required to countersign a check
                or warrant as provided in Section 113.043, L[ocal]
                G[overnment] C[ode]? Is the county auditor responsible for
                monitoring the budget for these funds as he/she is for wunty
                funds? (See Section 111.092LGC [.I)

As we noted in Attorney General Opinion DM-247 (1993) at 7-g, “the phrase ‘otherwise
care for’ [as used in subsection (t) of section 140.003] strongly indicates that the
legislature intended a broad application of the various statutory wunty financial

         4Article42.1310ftheCodeofCriminalFVsedme providesthat a “mmmunityqervision and
eomctions deptmmt” (which encompassesthe meaningof an adult probationdepartmentGov’tCede
p 49l.@Ol(b)(2))*may accept state aid and grants and gitls from any source,”code Crim. Proc. art.
42.131, g 7; that the county or menties within the judicial district servedby such a departmentmust
provi& minimumsupportfor the “facilities,equipment,and utilities”used by the department,id. 8 8; and
thst *[t]he districtjudge or judges may expend district funds in order to provide eqanded facilities,
equipment,and utilities”for the departmentin certaincircumstances,id. 8 9(a).

                                            p. 1336
Honorable John A. Sickel - Page 5             (DM-257)

requirements to the tinds of specialized local entities.“5 The legislative history of that
statute also indicates that the legislature intended the language to place the same
accounting responsibilities on the funds of probation departments, among other entities, as
are applied to wunty tinamx~.~ We therefore conclude that section 140.003, subsection
(Q incorporates the requirements of sections 111.0927 and 113.043s of the Local
Government Code and makes them generally applicable to payments made by specialized
local entities.  Cj Local Gov’t Code 8 116.002 (warrants, checks, and vouchers
evidencing “money collected or held by a district. . officer” and deposited in county
depository are “subject to audit and wuntersignature as provided by law”).

        In his last question, your county auditor asks whether subsection (g) of section
140.003 makes the wunty auditor repondblefor prescribing accounting procedures for a
specialized local entity (we assume the reference is to sections 112.001 and 112.002 of the

         51n that opinion we mncladed that section 140.003, s&section Q, makes applicable to the
forfeiture-fuadkmsactioas of districl and crhiaal districl attorneysunder chapter 59 of the Code of
CriminalPromdurethe mmty auditm'srecord-keeping      reqdmmcntsof sections 112.005 aad 112.007 of
the LocalGovemmentCode. At&ormy      GeaeralOpinionDM-247,at 8.

           6nK senate 8pon8orof the biII emcting section 140.003 explained the legislative &eat as
follows:

             mhe bill providessome tightealag up of the accountingand handling of certain
             8peciahifmd8th9tcxi8tinourmuntie8.           T%edistrictattornqkiimd,the
             juvenile board,pmbationdcpamnent-these people all have fee incomes that go
             intofundgandtbcy~notrtquindunda~lawtomrrglywithtbt
             mmpetitive-biddingstalutes,to mmply with the same kind of amountabilitythat
             i8appIicdtothemmtytrea8q8odthcmuutymmmi88ioner8.            AndthissimpIy
             places some amounting and put&as@ responsibilitiesto gema little bit of
             amomaabiIityiatotbo8apubIiefund8.

Hearings on H.B. 1434 Before the Senate Iatergovemmeatal Rel. Comm., 71st Leg. (May 25, 1989)
(ststemmt of SenatorF%rmer)
                          (tapetemrdingavailablefrom SeaateStaff Sezvicea).

           ‘sedion 111.092, Lccal Gwcrmmnt Code, provides: “The munty auditor shall oversee the
warrantproceMtoensurethattbcmpenscsof~department&notcxceedthcbudgetappropriationsfor
thandepmtmmt.”

        Setion 113.043, vocal   ~ovrmment    Code,providesin part: “Ina countywith a munty auditor,
*carnty tmmrcrnndthemontydcpo8itorym8ynotp8yaeheckor wsrmnt tmIe88it is mmtersigaed
by the munty auditorto validateit as a properaad tudgated item ofaxpmdilure.”

         9We mncladed in AttorneyGeaeralopinion DM-247, at 46, that forfeitarefimd transactions
underchapter59oftheCodeofCriminalRoadurenrenotarbjecttothecountersignaturerequircmemof
section 113.043. We do not considerhere aay other passible exceptions to the applicabilityof sections
111.092 and 113.043 to paymealsby spehlhd local entitk

                                              p.   1337
Honorable John A. Sickel - Page 6            (DM-257)

Local Government Code)rO and for determining whether a proposed expenditure of a
specialized local entity is for a legal purpose (under section 112.006 of the Local
Government Code),’r or whether the section merely permits the auditor to exercise those
functions if he or she chooses to. Subsection (g) speaks only of the “authority toaudit”
(emphasis added) and thus might be read to mean only the function of examining the
accounts of a specialized local entity. We believe, however, that subsection (9) should be
read in conjunction with the requirement in subsection (t) that the county “care for the
funds on behalf of the specialized local entity as the entity direct~.“~~ The meaning is
broader when both are read together and encompasses the other statutory fimctions of the
county auditor. This construction of subsection (g) is consistent with the aforementioned

        %%xien 112.001ofthe-          GovemmentC&provide%

                In a manly with a populationof less than 190,000, the countyaaditormay
           adept and enforcere&tioru, not inmnsisteat with law or with a rule adopted
           under Section 112.003, that the auditor masiders nexssary for the speedy and
           propermllecting, chmking, and a-ting       of the revenuesand otherfunds and
           fees thatbelong to the county.

section 112.002of the Local Govemmentcode plwides:

                 (a) ln a county with a populationof 190,000 or more, the county auditor
           shall prescribethe systemof amountingfor the county.

                @) The muuty auditormay adoptand enforceregulations,not inmnsistmt
           with law or with a rule adoptedunderSection 112.003,that the auditorconsiders
           mmssiuy for the speedyaad propermllecting, checking, and accountingof the
           mvenues and other fond8 and fees that belong to the county or to a person for
           whom a district clerk, district attorney,county officer, or precinct oft&r has
           made a mllection or for whose use or benefit the officer holds or has received
           funds.

        l*Smtiou 112.006 of the LocalGovernmentCodeprovides

                (a) The munly auditorhas gamral oversightof the books aad recordsof a
           musty, district,or stateofficeraathorizedor reqaixd by law to receiveor collect
           moneyor otherproperlythat is intendedfor the use of the manly or that belongs
           tothemunty.
               @) llte mmny auditor 8haII see to the strict enformmmt of the Iaw
           govMdngmuntyfin8oma.
          1% might be argued that the inclusion in s&section (0 of the phrase us tire enti@ directs
indicates the IegisIaturc’intent
                           s      that the spa&bed local mtity may control the extent to which it is
subjectedtofinan&lmanagementbythecounly treasum and the county auditor. We believe such aa
interpre4ation of the provisionwould undercutone of the apparentplrposs of section 140.003, which is
to s&en-      the mmty’s oversightof the limds of specializedlocal entities. Such an intqretation also
would mntlict with the legislativehistoryof the provision. See supro note 6. ln oar opinioa, the phrase
mcrdy ehrifies thatthe specializedlocal entitydoes not lose whateverdiscretionor prerogativeis granted
to it underotharapplicablelaw concerningits use of tim&, it merelymast handle its funds and aaxent
for its expenditureswithin the record-keepingand auditmnstraintsprovidedby section 140.003.

                                             p.   1338
Honorable John A. Sickel - Page 7            (DM-257)

legislative history of the statute.” We wnclude first, then, that subsection (g) at least
uuthortzes the county    auditor to prescribe accounting procedures for a specialized local
entity and to determine whether a proposed expenditure of a specialized local entity is for
a legal purpose.

        Subsection (g) provides that “[t]he wunty auditor. . . has the sunre authority to
audit the funds of the entity that the auditor has with regard to county timds [emphasis
added],” but does not mention any ob&afionto exercise the auditor’s statutory Cmctions.
It therefore is appropriate to look at sections 112.001, 112.002 and 112.006 to see
whether the authority granted in those statutes is mandatory or permissive. Section
112.006 uses the mandatory word shnll in regard to the authority of the auditor to oversee
the legal propriety of expenditures. On the other hand, section 112.001 uses no
mandatory language and section 112.002 uses the word shell only in regard to the
accounting system “for the county,” id.$ 112.002(a),r4 and uses the permissive muy in
regard to the auditor’s authority to implement an accounting system for funds, including
nonwunty funds, held by a district clerk or district attorney, among others, id.
5 112.002(b).‘J

         We believe the legislature intended by subsections (f) and (g) to incorporate
sections 112.001 or 112.002 and 112.006 and to make them applicable to specialized local
entities. We therefore conclude that subsections (r) and (g) of section 140.003 generallyr6
require the county auditor, pursuant to section 112.006, to determine whether a proposed
expenditure of a spwiahwd local entity is for a legal purpose to the same extent that the
auditor is similarly responsible with respect to county finances. We Cuther conclude that
subsections (f) and (g) generallyr7 permit but do not require the wunty auditor, pursuant

        ‘3See supro nole 6 andamompiuiyiugtext.

        ‘~secliori112.002, LclcalGovanment Code,s&section @), provides:

                The manly auditormay adoptand enforcerqulatioru, not incwsisteat with
           law or wilh a rule adoptal u&r Section 112d303,that the auditormnsiders
           ~fortbespeedyaodpmpcrmUectin&checldn&aadaccountingoftbe
           revenuesandotberfundsandfeesthatbelongtothecwntyortoapersonfor
           whom a district clerk, distriti attorney, county officer, or precinct oft&r has
           made a mllection or for whose use or benefit the officer holds or has received
           fimds.

       r%ve de net mnsidcr here the possible exccptioruto UK applicabilityof section 112.006 to
paymentsby specdhd local cntitics. CJ AttorneyGeneralOpinion DM-247 at 46 (forfeiturefund
tran88don8 under chapter 59 of Code of Criminal Fmccdme are not subject to munte&nature
requimmt of section 113.043).

        “We do not consider here the possible exmptions to the applicabilityof section 112.001 or
112.002 to paymentsby specializedlocal entities. C/: id.

                                            p.   1339
Honorable John A. Sickel - Page 8       (DM-257)

to section 112.001 or 112.002, to prescribe accounting procedures for a specialized local
entity.

                                  SUMMARY

               Section 140.003 of the Local Government Code, in directing an
          adult probation office, as a “specialiied local entity,” to deposit the
          funds it receives “in the county treasury of the wunty in which the
          entity has jurisdiction,” means that such funds must be deposited with
          the wunty treasurer for placement in the county depository. The
          phrase “the timds the entity receives,” as used in section 140.003,
          subsection (t), means all funds from any source (except for any
          specific tind regarding which there may be a provision of law to the
          contrary).

               Section 140.003, subsection (f), incorporates the requirements
          of sections 111.092 (regarding county auditor’s budgetary oversight
          of warrant process) and 113.043 (prohibiting payment on check or
          warrant not wuntersigned by county auditor) of the Local
          Government Code and makes them generally applicable to payments
          made by special&d local entities.

                Subsections (t) and (g) of section 140.003 incorporate sections
          112.001 or 112.002 (regarding the county auditor’s authority to
          prescribe an accounting system) and 112.006 (regarding the county
          auditor’s authority to determine whether a proposed expenditure is
          for a proper purpose) of the Local Government Code and make them
          applicable to the management of the funds of specialized local
          entities. Subsections (f) and (g) generally require the county auditor
          to determine whether a proposed expenditure of a specialized local
          entity is for a legal purpose to the same extent that the auditor is
          similarly responsible with respect to county finances. Subsections (fl
          and (g) generally permit but do not require the county auditor to
          prescribe accounting procedures for a specialized local entity.

                                                     DAN      MORALES
                                                     Attorney General of Texas

                                         p.   1340
Honorable John A. Sickel - Page 9        (DM-257)

WILL PRYOR
First Assistant Attorney General

MARYKELLER
Deputy Attorney General for Litigation

RENF,A HICKS
State Solicitor

MADELEINE B. JOHNSON
Chair, Opiion Committee

Prepared by James B. Pin
Assistant Attorney General

                                         p. 1341