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                             The Attorney General of Texas
                                                   June    5,     1978
JOHN L. HILL
Attorney General


                          Honorable Ben F. McDonald, Jr.                  Opinion   No. H- 1173
                          Executive Director
                          Texas Department   of Community       Affairs   Re:    Whether   article  6252-11~.
                          Box 13166, Capitol Station                      V.T.C.S., applies to audits.
                          Austin, Texas 78711

                          Dear Mr. McDonald:

                                 You ask whether a contract by the Texas Department          of Community
                          Affnirs with an accounting firm for auditing local entities     receiving federal
                          funds is subject to the requirements       of article 6252-11~.  Article 6252-llc,
                          enacted     by the 65th   Legislature,    governs    the employment     of private
                          consultants   by State agencies.    Acts 1977, 65th Leg., ch. 454, at 1185. It
                          authorizes the use of private consultants only when there is a substantial need
                          for consulting services that agency personnel cannot perform.      Sec. 3. Before
                          an agency can enter a contract       for consulting services valued in excess of
                          $10,000 it must publicly invite offers of the proposed services.       Sec. 6. The
                          act &fines “consulting service” as follows:

                                      the practice  of studying an existing or a proposed
                                      operation  or project of an agency and advising the
                                      agency with regard to the operation or project.

                          Sec. 1 (1).   “Private  consultant”   is defined as “an      entity   that   performs
                          consulting services.”  V.T.C.S. art. 6252-llc, 6 l(2).

                                  The answer     to your question    thus depends on whether          an audit
                          constitutes   a “consulting service” within the definition    in section 1 (1). This
                          definition  is phrased in general terms.       In determining    its scope, we m*v
                          consider the legislative history of article 6252-11~. See Texas & N. 0. R. Co.
                          v. Railroad Commission, 260 S.W.2d 626 (Tex. 1947). Legislative          debates and
                          committee    reports may be considered.    National Carloading Corp. v. Phoenix-
                          El Paso Express, Inc., 178 S.W.?d 133 (Tex. Civ. App. - El Paso). aff’d, 176
                          S.W.Zd 564 (Tex. 1943), cert. denied, 322 U.S. 747 (1949) (federal stam.           In
                          addition, the stntute must be interpreted     in light of the purpose sought to be
                          accomplished.     Hollan v. State, 308 S.W.2d 122 (Tex. Civ. App. - Fort Worth
                          1947, writ ref’d n.r.e.).




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    Honornble   Ren F. McDonald,    Jr.    -   Page 2        (H-1173)




           The legislative    history of article 6252-11~ indicates   that it was directed at
    management     consultants.      The sponsor of the bill, stated that it referred to the
    management     survey that determines whether an ngency’s programs were good or
    bad. Tape recording of public hearing of Senate State Affairs Committee,              March 9,
    1977, filed in Senate Staff Services Office.          He also noted that it concerned
    management     and efficiency     consultants. The bill was recommended         by the Joint
    Advisory     Committee       on Government      Operations    established     by the 64th
    Legislature.   V.T.C.S. art. 4413 (32e); see Joint Advisory Committee        on Government
    Operations,   Legislative    Proposals 6 (January 1977). The Committee’s          final report
    notes that State agencies enter into contracts for management            consulting services
    for a variety of projects.       Joint Advisory Committee     on Government        Operations,
    Final Report to the Governor 15-17 (January 1977). Many of the studies appeared to
    be directed at management         improvement.    The Committee      recommended       legisla-
    tion “that outlines state policy on the utilization of private management consulting
     firms by stnte agencies and prescribes procedures for the selection of managemenl
    consultants.”    Final Report to the Governor, Recommendation         4.

             In view of the legislative    history of article 6252-llc,    we believe that its
     definition    of “consulting services” refers to management        or program consulting.
     The dictionary     defines “management consultant” in terms similar to the statutorv
     definition:

                 management       consultant . . . one that advises business or
                 industrial   firms in the conduct of their       affairs and in
                 devising   and installing   more satisfactory   procedures  for
                 their use.

     Webster’s Third International       Dictionary   at 1372.    In our opinion, neither     the
     dictionary    definition   of management     consultant nor the statutory    definition   of
     private    consultant    includes a person employed       to perform   the routine      work
     necessary to the functioning      of an agency’s programs, even though his work may
     involve studying the agency’s records. The consultant renders opinions on the value
     of an agency’s projects and the efficiency in achieving its goals.

             An audit has been defined as a formal examination        and verification     of the
     books of account by an auditor.        May v. Wilcox Furniture      Downtown,     Inc., 450
     S.W.2d 734 (Tex. Civ. App. - Corpus Christi 1969, writ ref’d n.r.e.).       In our opinion,
     the typical audit, which tests the accuracy of financial records, is not a consulting
     service subject to article     6252~UC.     Moreover,  it is highly unlikely      that this
     legislation  was designed to control the use of outside auditors by Stnte agencies.        A
     provision which has appeared in each appropriations act for many years forbids the
     expenditure    of appropriated   funds on outside audits except       in narrow circum-
     stances.    See, e.g., General Appropriations   Act, 4~1s 1977, 65th Leg., ch. 872, art.
      V, S 30, at 3157; Appropriations-Executive     nnd 4dministrative     Departments,     Acts




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Honorable    Ben F. McDonald,      Jr.   -     Pige 3      (H-1173)




1941, 47th Leg., ch. 571, S 2(16) at 1292. See also Attorney Genera) Opinion H-1063
(1977). Thus, the determination   that routine audits are not subject to article 6252-
UC would not conflict with the Legislature% purpose in approving it.

       The Department        of Community    Affairs administers many federally       funded
contracts    with local entities.        The federal    grant requires     audits   of local
contractors,    and the Department       has provided these by contracting      with private
accounting    firms.       In our opinion,   these contracts    are not subject       to the
requirements     of article 6252~UC.    You inform us that the Legislative Budget Board
which must be notified of any agency’s employment of a private consultant,                see
V.T.C.S. art. 6252-UC, SS 4, 5, has also reached the same conclusion with regard to
auditing   services.       We note, however,      that the statute    provides no blanket
exception for accountants,       as it does for engineers, architects,   and legal counsel.
Sec. 2. Thus, a contract         with an accountant    would be subject to the act if it
 involved management or program consulting services, for example, a study which
evaluated accounting procedures in order to recommend improvements.

       You suggest that article 6252-UC, if applicable to contracts with accountants,
would conflict     with article 664-4, which provides that State agencies shall not
select accountants      on the basis of competitive     bidding.  In our opinion, the two
statutes are not in conflict.      Article 6252-UC does not require that contracts       for
consulting   services be let on competitive       bids.    It does require the agency to
publicize its intent to enter into a consulting contract valued in excess of $10,000,
so that private consultants       may offer to perform the required services.          Both
statutes   require    that selection     be based on competence,       qualifications,  and
reasonableness of fee. V.T.C.S. art. 664-4, S 3; V.T.C.S. art. 6252-UC, S 3(b).

                                         SUMMARY

               The Department      of Community     Services may employ a
               private accountant to audit recipients of federal grant funds
               without complying with the requirements of article 6252-UC,
               V.T.C.S.    Article 664-4, V.T.C.S.,  and article 6252-UC are
               not in conflict.




 APPROVED:




 DAVID      M. KENDA:LL,   First   Assistant




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Honorable   Ben F. McDonald,   Jr.   -   ?age    4     (~-1173)




C. ROBERT HEATH,       Chairman
Opinion Committee

jsn




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