Honorable Compton White
County Auditor
Freestone County
Fairfield, Texas
Dear Sir:           Opinion No. O-4294
                   Re: Can the school board of a common
                       school district legally Snvest any
                       part of the local matitenance
                       SWP~US  fund in United States
                       Government Defense Bonds or any
                       other kind of securities?
Your letter requesting the optiion of this department on
the above stated question reads as follows8
    "The St. Elmo conssonSohool District No. 46 In
    Freestone County has 'a surplus fund of approximately
    ($5,000.00) Five Thousand.Dollars in a local
    maintenanoe fund that will not be needed to.operate
    their 1941-1942 sOho    term for nine months: This
    sohool has no bonds outstanding nor has any debt'
    outstanding of,any nature. This District has a looal
    maintenanoe fund for sohool purposes of fifty aents
    on the,One Hundred ($100.00) Dollar valuation., Th$s
    surplus of Five Thousand ($5,000.00) Dollars is a
    surplus built up.from this fifty oentlevy.    The
    dls,trlothas no levy for any purposs except ~for local
    maintenanoe school purposes.
    "Please answer the following question: Can the sahool
    board of this district legally Invest any part of'thls
    looal.maintenanoe surplus fund ln United States
    Government Defense Bonds,or any other kLnd of
    seourltles?. An earlyreply from you answering this
    inquiry wiL1 be appreciated;"
Public sohool funds from every souroe, including those
derived from local taxation, oountg s,ahool.funds and
apportionment from the state available sohool fund, are
held in trust by the ol,ty,distrfot,.county, or other stat- ',
utory agenay, to be ,used for the benefit of the oommunity or
Honorable Compton White, page 2, O-4294


district. 'The funds are ao olearly impressed with a trust
in favor of-the sohool that they are within the protection
of both the State and Federal Constitutions, and the
Legislature may not devote them to any other purpose or to
the u88 Of any other benefioiary. (bJ8   v. City Of Dallas,
40 S.W. (2d) 20; Texas Jurisprudenoe, Vol. 37, p. 967.)
Powers of boards and offioers over funds belonging to school
districts, and the manner in whiah those powers Shall be
exercised, are prescribed by statutes, and the oourse
pr8scribed by law must be followed to~'th88xclusion of all
othermethods.   (Thompson v. Elm0 Independent School District,
269 S. W. 860; Dodson v. Jones, 190 S. U. 253; Texas
Jurisprudence, Vol. 37, p. 960.)
Article 2827, Vernonra Annotated Civil Statutes, reads in
part as f0110WS:

          "The public free school funds shall not be expended'
          except for the following purposes:
          "1. 'Ph8Stat8 and County available funds shall be
          used 8xclusiv8ly for the paym8nt of teaahersr and
          superintend8ntsr
          ~. . ~.~. census,salaries,
                                _. . fees for taking the
          acno1astilc        ana interest on money forrowed on
          short time to pay salaries of teachers and superin-
          tendents, when these salaries become due befOr the
          school funds for the current year become available;
          provided that no loans for the purpose of payment of
          teachers shall be 'paidout of funds other than those for
          the then current year.
          "2. Local school funds from district taxes, tuition
          fees of pupils not entitled tvfree tuition and other
          looal sources may be used for the purposes enumerated
          for Stateand county funds and for purchasing
          appliances and supplies, for the payment of insruance
          premiums, janitors and Other employes, for buying
          school sites, buying, building and repairing and rent-
          ing school tlOUS88,  and for other purposes neaessary
          in the conduct of the public schools to be determined
          by the B~oardof TrUSt88S,   the accounts and vouchers for
          county districts to be approved by the oountg superin-
          tendent; provided, that when the State available school
          fund in any city or district is sufficient to maintain
          the schools thereof in any year   for at l8aSt eight
          months, and leave a surplus, such surplus may be
          expended for the purposes mentioned herein."
It will be noted that the above mentioned statute in effect,
aUthoriZ8S the trustees of common sohool distriots to
expend funds derived from looal sources, and the surplus
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Honorable Compton White, Page 3     O-4294



from the State and oounty available school funds, for any
and all the purposes enumerated by law, and for such other
purposes, as in the disor8tiOn of the board, may be reason-
ably necessary in the maintenance of the schools. Like other
public officers, sohool officers are responsible for any
wrongful and illegal disbursement or misapplioatlon of sahool
funds. (Borger Independent School District v. Dickson, 52
S. W. (2d) 505; Powell v. Mathews, 280 S.W. 903.)
We fall to find any authority authorizing the board of
trustees to invest any part of the local maintenance fund in
Unit8d States GoverrutmntDefense Boards or any other kind of
securltles. Such funds must be expended as authorized by
Article 2827, supra. Therefore, W8 r8Sp8CtfUlly answer the
above atated question in the negative.
                                     Yours very truly
                              ATTORNE!t
                                   ., GRKRRAL OF TRXAS
                                  s/ Ardell Willi&

                              BY             Ardell WlllGiixi9
                                                   Assistant

AW: GO/q

APPROVED JAN. 16, 1942
s/ Grover Sellers
FIRST ASSISTANT
ATTORNEY GWRRAL
APPROVED OPINION COMMITTEE
By BWS, Chairman
