             THE       ATTORSEY           GESERAL
                          OF  TEXAS

                         October 29. 1987




Honorable   Dale Hanna                   Opinion    No.   m-818
Johnson   County Attorney
Johnson County Courthouse                Re:   Whether a commissioners
Cleburne,   Texas  76031                 court is authorized    or   re-
                                         quired to fund an    independ-
                                         ent   audit   of the    county
                                         clerk's office under certain
                                         circumstances

Dear   Mr.   Hanna:

       You ask:.

             Can or   must the    commissioners    court    of
         Johnson County, Texas pay for an independent
         audit of the county clerk's office which was
         done at    the   request of    the   county    clerk
         without prior     commissioners    court   approval
         in preparation    for his trial on a charge        of
         theft and which resulted      in his acquittal?

       You   furnish   the   following    factual    background:

             During the summer       of 1986 a misdemeanor
         indictment   charging theft was filed          against
         the county clerk       of Johnson County,       Texas.
         The allegation     was that the county clerk had
         taken money     from    the office     for    personal
         use.    A jury trial     was held and the       county
         clerk was found not guilty in October,            1986.
         During the     course of     preparing    for   trial,
         the county clerk hired an independent           C.P.A.
         'to do an audit of his office.         This was done
         at a cost    of $7,700.00.        After the     trial,
         the county clerk at a meeting of the Johnson
         County commissioners        court on    December     8,
         1986 asked     the    commissioners     to    consider
         reimbursing    him for the audit in view of his
         acquittal   and in view of the many         recommen-
         dations    made    by    the    independent    auditor




                                   p. 3879
Honorable   Dale   Hanna   - Page   2   (JM-818)                      I




        resulting  in improvements  in internal  finan-
        cial controls  in the   office of the   Johnson
        county clerk's office.

      Additional   factual   information    furnished    by    YOU
reflects that there     was no reDresentation     bv the    county
clerk or anvone else that the countv was to be resDonsible
for the    audit  and there   was   no knowina    acceDtance     of
benefits   bv the county.

      At the time    of the acts   in question,    article   1641,
V.T.C.S.   (codified   by  the 70th    Legislature     as  section
115.031   of    the  Local  Government     Code),   provided     in
pertinent   part:

            Anv   Commissioners        Court,     when    in    its
        iudoment     an    imDerative     Dublic       necessitv
        exists therefor.        shall    have     authoritv      to
        emDlov a disinterested,         cornDetent and exDert
        public accountant       to audit      all or any       part
        of the books,       records, or       accounts of       the
        county:     or    of-v       district.      countv       or
        precinct     officers       agents,     or    employees,
        including    auditors'of     the counties,       and    all
        governmental      units of the county, hospitals,
        farms, and other institutions           of the      county
        kept and     maintained     at   public expense,         as
        well as     for    all   matters      relating      to   or
        affecting    the fiscal affairs of'the            county.
        The    resolution      providing      for    such    audit
        shall    recite     the    reasons     and     necessity
        existing     therefor      such    as   that     in     the
        judgment of said court there exists official
        misconduct,     willful     omission or       negligence
        in   records      and   reports,       misapplication,
        conversion     or   retention      of   public      funds,
        failure in keeping accounts,           making     reports
        and    accounting      for   public      funds    by    any
        officer, agent or employee.           . . .     (Emphasis
        added.)

      Article   1641 further provides   the manner for giving
notice of such resolution     and its adoption by the    commis-
sioners court.     It also requires that any contract    entered
into by    the court   for such   an audit   shall be  made    in
accordance.with    the statutes applicable   to the letting    of
contracts   by the court.




                                 p. 3880
Honorable   Dale         Hanna   - Page    3   (J+818)




      Article   1641    is   explicit   in vesting       authority     to
contract   for an audit      solely in the commissioners          court.
Moreover,   article 2351(10), V.T.C.S.         (codified by the 70th
Legislature    as   section 115.031      of the     Local    Government
Code),    provided     at   the    time   in    question     that    the
commissioners     court shall     audit and     settle all     accounts
against the county and direct their payment.              &S   Attorney
General Opinion       JM-725   (1987).   'Under the      scenario    you
have provided,     the commissioners     court did not enter        into
the contract      for   the   independent    audit    of   the    county
clerk.    Clearly, there was no express contract upon              which
the county is liable for payment of the audit.

      Under certain   circumstances,   a county or city can       be
held liable for     benefits under    a contract    which is    not
made in conformity    with the constitution,     state statute or
city charter.     In Harris Countv v. Emmite, 554 S.W.2d        203
(Tex. Civ. App. - Houston      [lst Dist.] 1977, writ     dism'd),
the appellate    court found    that there was "some     evidence"
which would support a jury finding that the county           "know-
ingly accepted benefits"     where the evidence    reflected    the
following:

            Plaintiff   and Harris County Commissioners
        Court entered      into two   successive    written
        employment    contracts   providing   that    plain-
        tiff would perform consultation       services    for
        the county's Manpower       project for a     stipu-
        lated number of hours at a stipulated         hourly
        rate.    A third contract was prepared       and the
        plaintiff,    in anticipation    of its execution,
        worked an additional      50 hours,    but it was
        not executed by the Commissioners        Court    and
        plaintiff   was not paid for that work.

             .   .   .    .

            The record contains several references            to
        the    county's      knowledge,        through       its
        representatives      other    than      Commissioners
        Court, of     plaintiff's    additional      services.
        Mr.  Jeff   Campbell,     then    director      of   the
        Harris County      Manpower    program,      testified
        that he had asked plaintiff        to continue with
        his work    pending the      authorization      of   the
        third contract,     since the program#s        standard
        procedure   was to pay for these over-runs            by
        making    the   contracts     retroactive.          co1 .
        Dittman,    iiason      between    Mr.      Campbell's



                                          p. 3881
Honorable    Dale   Hanna   - Page    4   (JM-818)




         department    and   the    county        judge ,    was
         informed   of   the    over-run        and    approved
         it. . . .      Mr.    Campbell         answered     the
         following  guestion--

             Q. Do you   think that  the over-run             work
                was beneficial  to the county?

             A. Absolutely.

544 S.W.2d    at 204.

      The court     stated that the       following   principles       of law
govern in such      circumstances.

             *It is the settled law in this State,                as
         established    by the decisions       of this      court,
         that where a municipality         knowingly     receives
         property   or services      or an agreement         which
         it had power      to enter into       as a contract,
         but which was not legally entered            into so as
         to make it binding as a contract,            it will be
         compelled   to pay the reasonable         value of the
         property   or services so       received,      as on     an
         implied contract.       In   such instances        it    is
         not correct to say that the municipality                 is
         estopped to deny that the illegal agreement,
         as such, is      a binding     contract.       The    rule
         correctly   stated is that in such             instances
         the municipality       is   liable on       an    implied
         contract to pay the reasonable           value of      the
         property    or    services      furnished       to     and
         accepted by      it.    In   the     instances       under
         discussion      the   illegal     agreement       is   not
         enforced   as    a contract.       To the      contrary,
         the   illegal     agreement            such      '     not
         enforced    at    all.     The    %tract        Fiat     is
         enforced     is   one   that    the     law     implies,
         because justice demands that a municipality
         shall not be permitted       to receive and retain
         the benefits of an agreement          without      paying
         the   reasonable      value    of    such    benefits.#
         !Citv f Ho St             Finn, 139 Tex. 111,           161
         S.W.2: 776"(1::2;.

544 S.W.2d    at 204-05.

        Unlike !&unite, under your factual scenario             you   state
there    was  never any   representation  by anyone              that   the




                                     p. 3882
Honorable   Dale   Hanna   - Page    5   (JM-818)




county was to   be liable   for   the audit and     there was   no
knowing acceptance   of benefits by     the county.     It is  our
opinion that under the foregoing       facts the county is     not
liable under the theory of      implied contract    for the   cost
of the audit.

      You also ask if the      county is authorized    to pay   for
the audit.     That   which the     commissioner's    court   could
authorize  in the first instance could be ratified by it at
a subsequent    date.     Wilson    v. Countv
s.W.2d 393, 397     (Tex. Civ.    App. - Carp:: C,'~%n'l9~~~
writ ref'd n.r.e.).      This principle    of law was applied     in
Anaelina  Countv v.     Kent, 374 S.W.2d      313, 317 (Tex.   Civ.
APP. - Beaumont    1963, no writ), where it was stated:

            The fifth     point    asserts that      since   no
         official   action    was    taken by    the   Commis-
         sioners Court      instructing    Kent   to   proceed
         with the final plans, the Court acts only as
         a body. and through        its minutes,     Kent   was
         entitled to     recover     only for    the   sum   of
         $2,000.00    representing       his   work   on    the
         Hill-Burton    Fund application.       The answer to
         this is 'that what       the Commissioners       Court
         could approve in the first instance,           it may
         ratify, and     its    order    and   resolution     of
         December   30th,    1958, clearly      ratified    the
         work he had done to that time.

      This raises      the question       whether the       commissioners
court of Johnson County could have entered into a contract
for an independent        audit of      the county    clerk under       the
provisions    of   article 1641       at    the outset.       This    would
require the commissioners         court to make a determination           of
whether   in   its judgment       an imDerative      DUbliC      necessity
existed for      such audit.       In addition      the     commissioners
court must comply with         the other requirements         of   article
1641.    It is our opinion        that the commisioners         court   may
pay   for    the     audit    if     it   chooses     to     ratify     the
authorization      of    such    audit     in  accordance      'with    the
requirements     of article 1641.

                              SUMMARY

             JohnsonCounty is not   liable to pay   for
         an independent  audit of the county clerk    of
         that county which was done at the request of
         the county clerk.    The commissioners   court
         of Johnson County may   pay for the audit    if



                                    p. 3883
Honorable   Dale   Hanna    - Page     6     (JN-818)




        it chooses to do so by ratifying        the   hiring
        of the   independent    audit    or in   accordance
        with   the   requirements     of   article     1641,
        V.T.C.S.   (now codified as section 115.031 of
        the Local Government     Code).




                                               JIM      MATTOX
                                               Attorney  General   of Texas

MARY KELLER
Executive  Assistant       Attorney        General

JUDGE ZOLLIE STEAKLEY
Special Assistant  Attorney           General

RICK GILPIN
Chairman,  Opinion     Committee

Prepared by Tom G. Davis
Assistant Attorney General




                                   p. 3884
