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                   E   i             EX-    GE




Commissioner   Raymond W. Vowel1              Opinion    No. M- 1275
State Department of Public   Welfare
John H. Reagan Building                       Re:    Refunds to public   or
Austin,  Texas   78701                               private  agencies
                                                     which have advanced
                                                     funds to the State
                                                     Department of Public
Dear Mr. Vowell:                                     Welfare.

      We are in receipt    of your recent opinion  request con-
cerning   the above captioned   matter and In which you submit
the following   question:

                     “May the State Department of Public
           Welfare refund monies advanced to the
           Department by public       or private    agencies
           for the purpose of providing         the non-
           federal    share of the estimated       costs of
           social    services   programs when the actual
           costs   of such programs are less than
           anticipated      and thus the advanced funds
           are in excess of that amount required            for   .
           Federal matching purposes?’

       You have advised   that the advancement of the funds by
the public   or private   agencies,     such as the United Fund,
for the estimated    costs of the services      is authorized
under the Federal    Social   Security    Act and such services
are purchased    by the Department pursuant       to contracts
with other public    or private     agencies.   In this con-
nection   you state that the problem
                   I, . . arises  when the estimated
           program costs  have proven to be in excess
           of the actual  costs  incurred,  thus rendering
           the advancements   to the Department in
           excess of the amount required    as the non-
           federal  share for Federal matching purposes.”




                                  -6258-
Commissioner    Raymond W. Vowell,        page    2     (M-1275)



       You have further   advised   that when the unrestricted
donated funds from the public       or private    agencies   are
received   by the De artment,     they are, pursuant to Article
695c, Section   4(12 P , Vernon’s   Civil  Statutes,    deposited
In a State Treasury account maintained         for that purpose.
You then describe    your procedure     and position    as followS:

                      “When the provider      agencies      furnish
            services    to eligible    individuals,       the
            Department is billed       for the actual        cost
            of the services      and the Department reimburses
            the provider     agencies    on an actual       cost
            basis.     The funds which are transmitted
            to the provider      agencies    as reimbursement
            are composed of non-fiaderal         ‘funds originally,
            received    from the aforementioned         donating’           ,’     ” .’
            agencies    and Federal matching funds made
            available     under the applicable       titles      of
            the Social     Security   Act.,   Since it is
            impossible     to predict    accurately      the
            number of participants        in a social       services
            program,    situations    often arise      in which
            the funds advanced to the Department to
            provide    the non-federal      share of estimated
            program costs are in excess           of the amount
            required    to match Federal      funds In order
            to meet actual      program costs.

                     “The Department desires        to refund
             to the aforementioned      donating    agencies
             that portion    of their   donation    which exceeds
             the amount required      to match Federal      funds
             in order to meet actual      program costs,.
             It is the Department’s      position    that we
             have been granted     the authority     to make
             such refunds    by Article   695c, Section
             4(12),  Vernon’s   Texas Civil     Statutes,
             as amended, and Section      29 of Article      V
             of Senate Bill    No. 11, Regular Session,
             as amended by Senate Bill No. 7, First
             Called Session,    62nd Legislature,       1971. ”

       You.request    our clarification      of       the   question   presented
for   two primary    reasons:




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Commissioner    Raymond W. Vowell,     page 3     (M-1275)



                      “(1)    All of the aforementioned
            purchase     of service     contracts    to which the
            Department Is a party are based on estimates
            of the number of participants            In a social
            services     program, for example,        the number
            of children      anticipated     as participants
            in a day care program.           It Is impossible
            to predict     accurately     the number of such
            participants.        In the present      case the
            United Fund estimate         of the number of
            children     who would be enrolled         In the
            day care program exceeded           the number of
            actual   participants.        It Is our opinion
            that the Department has no legal             entitle-
            ment to these excess         funds and that
            their refund is authorized            by law.

                     “(2)    Recent Federal    Legislation
            (the Revenue Sharing        Act) restricts     the
            types of social Tervices      which may be
            purchased     by the Department.     This legis-
            lation  will require     the Department to
            cancel or modify many of its purchase           of
            service   contracts,    thus rendering     necessary
            the refunds     herein described.”

       It Is our opinion      that your posltion       is correct   and
your   question   as posed must be answered in the affirmative.
While it is true under Section           6 of Article     VIII of the
Constitution     of Texas,    “no money shall     be drawn from the
Treasury,     but In pursuance      of specific   appropriations
made by law,” nevertheless,          this provision      has no appll-
cation   to monies deposb       pursuant to an authorizing
statute    In a special    trust account with the State Treasurer
as Custodian.      Attorney    General Opinions       Nos. WW-241(1957),
Ww-565(1959)     and b/k/-600(195g).      Also where the excess money
paid to the State results         from a “mistake of fact,”        there
is no constitutional       Inhibition     to prevent     the State from
refunding     the excess money so advanced.           See Attorney
General Opinion No. WW-749(1959),            and case authorities
there cited.

       You have advised that the funds in question     are
deposited In “Fund 166-Public   Welfare Administration
Operating   Fund,” which becomes a mix of the donated monies
and federal   monies for that special   purpose,  subject  to


                                   -6260-
                                                                     ,   .




CommiSSiOner      Raymond W.     VOWell,   page   4   (~-1275)



withdrawal     pursuant to Article     695, Section      4(12)   and
Article    V, Section    29, Senate Bill No. 1, 62nd Leg.,           3rd
C.S.,    1972.    Such  funds  are trust    funds   which   may  only
be so used to carry out the public           governmental      purposes
of the program as contracted         by the Department with the
parties.      Attorney   General Opinion No. C-.530(1972).
Neither    the State of Texas nor the Department of Public
Welfare may claim such excess         funds belonging       to the
parties,    for wtiich the Legislature       has made provision       for..
a refund.      As was stated by,,this     office    in Attorney     General
Opinion No. WW-241, infra,                  the funds here provided
are trust funds and do not belong to the State in its
sovereign     capacity,    but are received      and are to be expended
for a special      purpose.”

       Article   695c, Section   4(12), which must be read into
the contracts     executed   by the Department with the parties
concerned,     and pursuant to which the Department made its
said deposits     in “Fund 166,” reads In relevant   part,  as
follows:

                         “The State Department of Public
               Welfare    is authorized      to accept,     expend
               and transfer     any and all Federal and State
               funds appropriated        for Ehe purpose of
               providing     public    welfare   assistance     and/or
               services     as may be prescribed        or authorized
               under Federal law? and rules and regulationz7.
               The State Department of Public Welfare is
               authorized     to accept,      expend and transfer
               funds received       from a county,      municipality,
               or any public      or private      agency or from




     !;,a,;;~  especially   note that th$i;;;:sit     is to be
made          the State Treasury,    not          it.   Thus,
the Treasurer    becomes the “trustee”   of the trust    fund
for the benefit    of those whose money Is so deposited.




                                      -6261-
.     .




Commissioner     Raymond W. Vowell,        page 5 (M-1275)



Attorney    General Opinion No. O-3607(1941),citing                  Friedman
v. American Surety Co., 151 S.W.2d 570, 580 (Tex.Sup.
1941).    It is under this authority             that the Department
has contracted      with public      and private      agencies    for the
provision    of social     services     to needy persons        in order
to meet the Department's          responsibility       under Titles      I,
IV-A, X and XIV of the Federal            Social     Security    Act to
provide   certain    social    services    to former,       current   and
potential    recipients     of assistance       under those titles.

      In any event,      whether such      deposits  were in this
Instance    with or into the State         Treasury,   the General
Appropriations      Act, Senate Bill       No. 11, Section   29, 62nd.
g-g.9   1971,   R.S.,   as amended by      Senate Bill No. 7, 1st
        62nd    Leg.,   1971, "Refunds      of Deposits,"   provided
as Zllows:

                      "Any money deposited    into the State
             Treasury which is subject     to refund as
             provided    by law shall be refunded    from the
             fund into which such money was deposited,
             and so much as Is necessary      for said
             refunds   is hereby appropriated."

     This verbatim provision          appears again as Section    29
of Article   V of Senate Bill        No. 1, Third Called Session,
62nd Legislature,   1972.

       In view of all of the foregoing        considerations,       we
have therefore      concluded    that the Department of Public
Welfare    Is fully   authorized     to make the refunds     herein-
above'described      and made the subject     of the opinion
request.

                                -SUMMARY-

                     The State Department of Public
             Welfare may refund monies advanced to it
             by public  or private  agencies  for the
             purpose of providing   the non-federal
             share of the estimated    costs Of Social




                                     -6262-
Commissioner      Raymond W. Vowell,      page 6   (M-1275)



            services     programs when the actual    costs
            of such programs are less than anticipated,
            the amount of refund      being in excess    of
            the amount required     for federal   matching
            purposes.      Article 695c,   Sec. 4(12),
            V.C.S.;    S.B. No. 11, Sec. 29, 62nd Leg.
            1971, as amended by S.B. No. 7, let          C.S.,
            62nd     Leg.,   1971.
                                               n




                                                   ey General    of   Texas

Prepared    by Kerns Taylor
Assistant    Attorney General

APPROVED:
OPINION COMMITTEE

W. E. Allen,      Acting   Chairman

John Ranks
J. C. Davis
Roland Carlson
Harry Green

SAMUELD. MCDANIEL
Staff Legal Assistant

ALFRED WALKER
Executive Assistant

NOLA WHITE
First Assistant




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