                  TEEA’~~~HNEY                     GE&SAL
                                 OFTEXAS
                                 Au-.       II. Trun




Honorrue    c. H. cwnerm
State Audit&
Au&&I, !rexa*




                                        opinion so. O-4907
                                        Rer Bnk overdraft in the local fuuds
                                             of state Eduoetioua1 Iustitutious.

510 dll aokaouledge reoeipt of your let          of 00tobw 5, 1242, requesting
the oplnica of thi6 depwtamt.                     quote a1 followa:

     %I    OWUeOtim   with annual audito,   now being made by this deparSmant,
    of $10 book8 and rewrils of the various State Educational ~a~t&itxm
    we hh~ enoo=tered a pra~tiw, m the legality of uhioh np need flour
    opinion in order to &se     proper ocmsent and reooamendation in our
    Reports.

    "'ibisis a Pnotice (uhioh, inoidentally, is not general) of issuing
    aheaks agaimt boa1 Amd he& looounts is whioh there.are not suffioient
    ba1anwsto   payths oheoks. In other wurds these are financial
    trawaotiona whiah result in rotual hank overdrafts in ~erw&r of the
    Looal Fwda  +hioh are aubjeot:tos&ropriation, and reappropriation, by
    fhe tigialature - a method of finenoing by the college whioh may be
    questionable under existing statutes as it appears to have the effeot
    of supplementing Legislrtivo appropriations as well as perhaps extending
    tb State'8 oredit. Patunlly the reoipients.of these oheshs hold then,
    or the bank pays the& in Imtioiption of future collsotions of Fess of
    other rwenuer~. eto. I;O shall appreoiate your answer to the following
    queetionsr

    '(1) IS it legal for the Finenor Offioers of a State Eduor~+onal
    ~,,~~~oplft,   iwue &e&s    against bsnvacoounts in uhioh there
    we not dfi&ent     halames at the time to aover, on Looal .Fund
    Ao-ts    uhioh ars subject to Legislative appropristion?
                                                            ,
    s(2) If fhs mswr    to question PO. l'indioates an illegal practioe,
    wht is the legal &.stua of any and all suah cheohs7

     ~,~~+sie    your &wei   to thsa.e'questionfprobably muid not bs i
   '.affeoted ,b.the attitude or lotion oi the bsnk on nhioh the ohs&e :
     bad been drann,‘that is, whether or not they had aotually paid the
                                                                                 -   -.



krIoraue    c. E. cwnew   - Pag.e2.   &No7




      a nd
         ewr y ing
                 Inth e ir
                         b o o ka n
                                  -wer dr a awant.
                                            ft          c dlp p m x h a td y
      $lS,QaMLl 011August Slst, lQ42, a sitw.tlOn that bas been a0l-e or
      less OOntinUOUe itlWE    &EWtiCiUhr i.nnStWw, With tfm bu&  haring   b
      fulThhOd IlO WOUd~     t0 00WC those 0rsldmrts 8' the oollege, If
      aurasmaptiw     that&e   attitude acd aots of the hsnkbaveno     boaring
      up   t.teenwer to the dove 2uestions iu iaoorreot, we &all he
      plOased tc hvu you t&e that into ocnaideraticn.s

lhe answer to ttm f*D questiwr pmpouuded In your mquert for aa opinn?on
0al.b for an i11t4J~~tiOm  Of Artlole 26b4d. %xaa Civil gt&cteU.

?e Iare bssnuuable    tc tindan   interpretation of this ststste lyanyofthe
oau‘*r ofthim Stlk,ihers+om       ouranmers   ta yourquest     form      opida
am bad& an general legal pr%noiples as applied tc the hot       situatl~     8et
out iuyuurletber.

Artldle   26Md was CUiaotd ly tho %egislat?uu in 13SS, ihis   cltatute   provides
that the @maaing   boa&a cf the wvoral State edueatlwn?. instttut3w.e
tbereinmentianedmayluyin     contml of tke localinstit.Go~al inoaneLr
ouryhg   aut the hmtSon8   af an eduoatioLalinsbltutian,end tc eeleot
degoaltory bsuks themfor; that trte end full acoormts stall lz~*qt, hy
said hoards, snd by the an@yees   of such inetituti~na Of all ?@my ocl~ectod
dud paid out, ttr,persacs to r;fiara
                                  yaid, aud the plrposes for?Moh gadd;
that mete     reports sbsuld te printed b.lennially~enc., oopies of r;bioh'.
8mtabe    funlieAledtatb0~to     offio5JalsthcroInnanOd.   7t:sfurtdmr
pmv%ded that tb%e law shall he euhscrvienb to :bo Cmnial appmprtati0n
Mlls for the support of the as~eral insfi~t~~~s thu~~~~tiuzod.

Sso. 1, (a) of the acts of the legi6laturo in 1941, nvCzlrgappmpriat3cx3
for eduoational instituttons of bigherleaming   reads as follows:

      -7hat all bslanoes in the instit~ti0nal fund cf thn snrar*l '.tatc
      s&oatiormrl Iustitutions named in the aot,at ',itio:ono of t&a
      fiscal year oudiug August 21, 1942, +naLd.irg %.?.waos ‘in the
      revolving fund at that time, and the eutire InoOrc to saZd fwds
     .durlng each 0i.th.stm fiscal years ending August 21, 1942, and
      August Sl, 1945, which are not ot!Mrdso appmprslated for oither
      or both of said years are hereby appmprlated forthe support,
      malnt-snsncs,operation, end impromtaent of said State Isstitutions
      during eacb of said years, respectively.'

7.wdo not find anytbiug in said statute nor in the said appropriation bill
that msi&&s    the school authcrities of the educational iustit~tionS In
question in hwing   ohooks on the looal f?md tank aOcoucts during the
fisoil year, nithiu the limit of appmpriatiOn for the par, hut we think
t,ht&mid s&o01 auth~ritios wnnot lawfully draw ohecks 011such fuuds
&tig~yfiswl       year in exoess of the aQpropriatiommado by the
legislatere for that year0
:*omblo   c.   ii.   c3mloss   - Pago   3.   0.4907



:ouaoi~opinloa~t~sdrrrmonloorl~d~kaacolefsin
oxoaesof ths appropriation,
                          by saidsohoolautlmritias,
                                                  durkg any fbsal
year, that- outstsndlng andunpaidattbe endof-    fisoalyaar,ax-s'
mlid asd osmot bo pid out of ths fiturersvewes of suoh lastitutims.
                                                      Yoursvery truly
                                             A'lWRRETGZIRXULOF ‘GkS

                                             s/t.     F.   Pries



                                             w
                                                    E. P. Frioo
                                                     AsSistsnt




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