January 31, 1984

Mr. Vernon L. Larson 
South Dakota State Auditor 
Office of the State Auditor 
500 East Capitol Avenue 
Pierre, South Dakota 57501

OFFICIAL OPINION NO. 84-06

Disbursement of public funds

Dear Auditor Larson:

You have requested my official opinion regarding the following factual situation:

FACTS: 

The South Dakota Constitution states that no money shall be paid out of the state treasury except on warrants drawn by the proper officer.  The South Dakota Codified Laws state that money may be paid from the state treasury only upon the State Auditor's warrant. In some cases, payments to third parties may be made in a more cost-efficient manner through the use of electronic fund transfers.

Based upon those facts you have asked the following questions:

QUESTIONS: 

1.  Can the Office of the State Auditor define the term warrant"? 

2.  If the answer to question one is "yes," can the State Auditor include methods of electronic funds transfer in its definition of the term "warrant"?

IN RE QUESTION NO. 1:

Article XII, § 1 of the South Dakota Constitution provides: 

No money shall be paid out of the treasury except on appropriation by law  and on warrant drawn by the proper officer.

SDCL 4-9-1 and 4-9-1.1 provide: 

4-9-1.  Money shall be paid from the state treasury only upon the auditor's warrant, and each warrant shall specify upon what fund or from what appropriation such warrant is to be paid; provided however that the treasurer may redeem outstanding bonds, pay interest on bonds when due, and interest on warrants, without the auditor's warrant, retaining such bond or interest coupon as his voucher for such payment until the next succeeding settlement, and endorsing on each warrant the amount of interest paid thereon. 

4-9-1.1.  The state auditor shall adopt, pursuant to chapter 1‑26, rules governing the procedure for issuing state warrants and the disbursements for which warrants may and may not be issued.  In Christopherson v. Reeves, 44 S.D. 634, 184 N.W. 1015 (1921), the South Dakota Supreme Court stated: 

It is elementary that in construing a constitutional or statutory provision words must be taken, and are presumed to have been used, in their usual and ordinary sense, unless there is a constitutional or statutory definition of the word, which, of course, would control, or unless the context is so plainly repugnant to the usual and ordinarily accepted meaning of the word as, of very necessity, to impose another meaning upon it.  184 N.W. at 1017. 

In that case the Court was trying to determine whether the Legislature had the authority to provide for payment of mileage and other 'expenses' to legislative members above and beyond the constitutionally mandated payment to legislators for their services of five dollars ($5.00) per day plus five cents ($.05) for every mile of necessary travel to and from the place of meeting of the Legislature on the most usual route.  After noting the 'familiar principle' that the Constitution is a limitation and not a grant, the Court concluded that since the Legislature was not forbidden by the Constitution from providing expense money to its members for reimbursement of expenses, the enactment of such a provision was constitutional.

Here we are faced with the word "warrant" in the Constitution without benefit of a constitutional definition of the word.  In addition, while my research has revealed descriptions of various sorts of warrants, ranging from arrests to guarantees and payments, I have been unable to identify a statutory definition of the word "warrant" as used in this context.  Accordingly, since the Legislature has in SDCL 4-9-1.1 granted rulemaking authority to the State Auditor to promulgate rules governing the procedure for issuing state warrants, it is my opinion that the State Auditor, by rule, may promulgate a definition of the word "warrant."

My answer to Question No. 1 is YES.

IN RE QUESTION NO. 2:

While the guidelines for exercise of the State Auditor's rulemaking authority granted in SDCL 4-9-1.1 can only charitably be characterized as "thin," it is my opinion that the State Auditor can incorporate methods of electronic funds transfers in its rules as part of its definition of "warrant."  Such procedures cannot establish a system whereby payment can be made without satisfaction of the substantive requirements of a warrant found in SDCL 4-9-1. By that I mean that the procedures must provide for authorization by the State Auditor, must identify the fund involved and must be attached to an identifiable appropriation authorization from the Legislature.

My answer to Question No. 2 is a conditional YES.

Respectfully submitted,

Mark V. Meierhenry
Attorney General