                         The Attorney                General of Texas
                                             April     11,    1978
JOHN L. HILL
Attorney General


                   Mr. Ron Jackson                                    Opinion No. H- 115 2
                   Executive Director
                   Texas Youth Council                                Re: Authority of TYC to use
                   8900 Shoal Creek                                   Community Assistance funds to
                   Austin, Texas 78766                                reimburse  recipients of such
                                                                      funds for expenses of outside
                                                                      audits.

                   Dear Mr. Jackson:

                         You have requested our opinion as to the authority of your agency to
                   use Community Assistance funds to reimburse recipients of such funds for
                   expenses of having outside audits conducted which are required by law. It is
                   our opinion that such use of these appropriated funds is implicitly authorized.

                          Article 3, section 44 of the Texas Constitution provides that “[tl he
                   Legislature . . . shall not . . . grant, by appropriation or otherwise, any
                   amount of money out of the Treasury of the State, to any individual, on a
                   claim, real or pretended, when the same shall not have been provided for by
                   pre-axisting law. . . .I’ In addition to the requirement of pre-existing law,
                   article 8, section 6 provides that “[nlo money shall be drawn from the
                   Treasury but in pursuance of specific appropriations made by law.” We find
                   the pre-existing law for the requested use of Texas Youth Council (TYC)
                   funds to be article 5143d, section 6, V.T.C.S. The specific appropriation is
                   item 5f? “Community Assistance,” of the 1977 appropriations.           General
                   Appropriations Act, Acts 1977, 65th Leg., ch. 872, art. II, at 2786.

                         Article 5143d, establishing   the Texas Youth Council, provides in part:

                                 Sec. 6. The Texas Youth Council shall:

                                 . . .

                                 (e)(l) Assist local communities by providing services
                               and funding for programs for the pre-delinquent and




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Mr. Ron Jackson         -   Page 2   (H-1152)



             delinquent through contracts with local public and private
             nonprofit entities which volunteer for such assistance when
             funds are available for the purpose. Such assistance shall be
             granted under the following terms and conditions:
                (A) Rules and Regulations of the Texas Youth Council. (il
             The Texas Youth Council shall prescribe such rules, regula-
             tions, priorities, and standards, not inconsistent with the
             Constitution and laws of this state, as it considers necessary
             and appropriate to insure adequate services by the local
             entity rendering the service.

                . . .

                (D) Programs and Services to be Audited. All services
             and programs funded by authority of this subsection shall be
             monitored and evaluated fiscally and programmatically     by
             the Texas Youth Council to assure cost and program
             effectiveness.

If the TYC determines that using Community Assistance funds to reimburse audit
expenses is “necessary and appropriate to insure adequate services by the local
entity” receiving the fund, such use of funds is authorized.   V.T.C.S. art. 5143d, S
6(e)(l)(A). See V.T.C.S. art. 5143d, S 2; Attorney General Opinion WW-865 (1960).

       Subdivision (D) of section 6 quoted above requires that the TYC monitor the
Community Assistance program. If audits, funded by Community Assistance funds,
are a reasonably implied necessity for securing the maximum benefit of the
program, then such use of the funds can “assist local communities by providing
services and funding for programs for the pre-delinquent        and delinquent. . . .‘I
V.T.C.S. art. 5143d, S 6(e)(l).

        Article V, section 30 of the 1977 General Appropriations   Act provides in part
that:

                None of the appropriations herein made shall be used to
             employ any firm or person to audit the books of any
             department, board, commission, institution or State agency,
             this being the duty of the State Auditor . . . .
                ,..
                Notwithstanding other provisions of this Act, any state
             agency providing grants or operating funds for governmental
             programs to local governmental units, private corporations,
             or other organizations     other than a state agency or
             department,    may require, as a condition to granting or
             providing such funds, that the receiving entity have a yearly




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        Mr. Ron Jackson   -   Page 3    (H-1152)



                   independent audit performed and transmitted to the state
                   agency.    If sufficient personnel are available, the state
                   agency may have its internal audit staff make a yearly
                   inspection visit to the local entity.

        Section 30 does not necessarily impose audit costs on the recipients,    nor does it
        preclude reimbursement by the state.

                                         SUMMARY

                   The  Texas Youth Council has authority to use Community
                   Assistance funds to reimburse recipients of such funds for
                   expenses of having outside audits performed.


                                            Y--i--T+J~~.&
                                               ’ JOHN L. HILL
                                                 Attorney General of Texas

        APPROVED:




        DAVID M. KENDALL, First As.4




        C. ROBERT HEATH, Chairman
        .Opinion Committee

        jst




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