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    Honorable Joe Resweber        Opinion No.   M- 887
    County Attorney
    Harris County Courthouse      Re:   County Auditor's responsibility
    Houston, Texas 77002                under a contract between the
                                        commissioners court and the
                                        United States government for
                                        a Concentrated Employment
                                        Project under the MDTA and
    Dear Mr. Resweber:                  the ECA.

              Your request for an opinion on the above subject matter
    asks the following questions:

              "1 . Does the County Auditor have the re-
         sponsibility under State statutes to specify the
         accounting method to be used for these funds and
         have the responsibility to audit these funds?

              ”2 .If the first question is answered in
        the affirmative, should the CEP funds be deposited
        with the County Treasurer?

              “3.  If the first question is answered in the
         affirmative, should the County Auditor follow the
         accounting methods and auditing procedures speci-
         fied in the federal contract whenever they con-
         flict with county accounting methods and auditing
         procedures?

              “4 . If the first question is answered in the
         affirmative, should the County Auditor follow the
         accounting methods and auditing procedures specified
         in the federal laws and regulations whenever they
         conflict with county accounting methods and audit-
         ing procedures?

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Honorable Joe Resweber, page 2   (M-887)


         "5 . If the first question is answered in the
    affirmative, should the grant monies be placed in
    the County depository in conformance with applicable
    state statutes and the County's depository contracts
    or does the Commissioners Court have the option of
    depositing these funds in another bank? If so,
    should that bank qualify in conformance with the
    County depository laws?

         "6. Various actions by the Harris County com-
    missioners Court have been taken in regard to the
    C.E.P. Grant program and these actions have been
    entered on the minutes of the Commissioners Court.
    If the first question is answered in the affirmative,
    should the County Auditor audit and approve a claim
    based upon an entry in the Commissioners Court's
    minutes concerning a requisition relating to the
    Concentrated Employment Program in question, inasmuch
    as there is some doubt as to whether these items are
    proper to be included in the minutes of the Harris
    County Commissioners Court?"

          In Attorney General's Opinion M-605 (1970) it was held:

         "Under the provisions of Paragraph 11 of
    Article 2351, V.C.S., the Commissioners Court
    may enter into a contract with the United States
    gwernment to administer the Concentrated Em-
    ployment Project under the Manpower Development
    and Training Act (MDTA) and the Economic Oppor-
    tunity Act (EOA)."

          In view of Attorney General's Opinion M-605 (1970), the
commissioners court entered into a contract with the United States
government to administer the Concentrated Employment Project under
the Manpower Development and Training Act (MDTA) and the Economic
Opportunity Act (EOA).

          Pursuant to this contract the commissioners court has
agreed to be responsible for the task set forth in the "statement


                             -4322-
Honorable Joe Resweber, page 3      (M-887)



of work to be performed under this contract.”  The commissioners
court has agreed to "use accounting procedures which shall accu-
rately allocate each expenditure incurred in the performance of
this project.*

          The commissioners court has further agreed that it
"will employ qualified accountants to keep the Fiscal records
under this contract. All Fiscal records will conform to the re-
quirements specified in the Department of Labor HA - Manual Trans-
mittal Sheet No. 65 - dated Sept., 1969

     "Title         2500 Accounting
      Chapter       2510 Accounting for Redelegated Funding of MA
                         Programs
      Section       2511 Contractors/Sponsor apcru   cost reporting
                         procedure";

and that it "will maintain records on, and properly document, all
'In-Kind' contributions to the cost of the contract.”

          Article     1651,
                        Vernon's Civil Statutes, requires that
the County Auditor shall have, general oversight of all books and
records of all officers of the county. Article   1653, Vernon's
Civil Statutes, provides that the County Auditor shall examine
the books and accounts of any officer relating to the finances of
the county, and Article 1656 provides that the County Auditor shall
prescribe the forms to be used in the accounting of revenues and
other funds and fees belonging to the county.

          In answer to your first question you are advised that
the County Auditor does not have the responsibility for specify-
ing the accounting method to be used for funds disbursed pursuant
to the contract in question, as such accounting methods are spelled
out in the contract itself.

          Answering your second question you are likewise advised
that the c&P grant monies prwided for in the contract are not to
be deposited in the County Treasury, but are to be deposited in
a special bank account specifically provided for in the contract
documents.


                                 -4323-
Honorable Joe Resweber, page 4     (M-887)




          In answer to your third question you are advised that
the accounting procedtiresspecified,in the contract control the
disbursement of federal monies specified in the contract.

          In view of our affirmative answer to the first question,
we answer your fourth question by stating that the auditing pro-
cedures specified in the contract control Over any county account-
ing methods and auditing procedures.

          It also follows, in answer to your fifth question, that
the provisions of Paragraph (c) of Section 23 of the general pro-
visions for cost reimbursement do not require the special bank
account to be a county depository.

          In reply to .your sixth question, we have con.cludedthat
the County Auditor is not required to audit and apprwe claims   re-
lating to the employment program prwided for in the contract in
accordance with its terms.

          Summarizing our answers to your questions, we express
the opinion that the commissioners court, in entering the con-
tract with the federal government, becomes a sponsoring agent
for the United States government in carrying out the Concentrated
Employment Project under the Manpower Development and Training
Act and the Economic Opportunity Act: and consequently, such
CEP funds do not become county funds subject to the various
statutory provisions relating to the handling of county monies.
Such funds are not deposited tisstate or county funds but are
dealt with as trust funds pursuant to the federal contract. See
Attorney General's Opinion No. C-530 (1965).

                         SUMMARY

           Under the provisions of a contract between the
     commissioners court and the United States government
     to administer the Concentrated Employment Project
     under  the Manpower Development a,ndTraining Act
     (MDTA) and the Economic Opportunity Act (EOA); CEP
     funds do not become county monies a~ndare therefore
     not subject to the auditing procedures applicable to
     county funds.

                              -4324-
.   *




        Honorable Joe Resweber, page 5    (M-887)

                                           ,C
                                         yerp truly   yyyrs,




                                         Atto hey General of Texas
                                             if
        Prepared by John Reeves
        Assistant Attorney General

        APPROVED:
        OPINION COMMITTEE

        Kerns Taylor, Chairman
        W. E. Allen, Co-Chairman
        Sam L. Jones, Jr.
        Gordon Cass
        John Banks
        James Quick

        MEADE F. GRIFFIN
        Staff Legal~Assistant

        ALFREDWALKER
        Executive Assistant

        NOLA WHITE
        First Assistant




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