STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL
June 16, 1975
Miss Alice Kundert
State Auditor
State Capitol Building
Pierre, South Dakota 57501
OFFICIAL OPINION NO. 75-108
If an appropriation authority has been established authorizing the expenditure of grant moneys, can state warrants be issued on a duly established fund if no cash is reflected in the fund balance?
Dear Miss Kundert:
You have requested an official opinion based on the following facts:
The Department of Public Safety, Division of Law Enforcement Assistance, is the receiving agency for Federal Law Enforcement Assistance Administration (LEAA) moneys.
Grants are in turn approved by the state criminal justice commission to state and local governments.
At the state level, agencies must have received appropriation authority established by the general appropriations bill or by act of the interim joint appropriation committee in order to spend these grant moneys.
The Department of Public Safety, Division of Law Enforcement Assistance, wishes to pay grants on a reimbursement basis, i.e., requiring state agencies sub-grantees to expend funds first and then proving such expenditures, be properly reimbursed.
Based on these facts your question is:
If an appropriation authority has been established authorizing the expenditure of grant moneys, can state warrants be issued on a duly established fund if no cash is reflected in the fund balance?
SDCL4-8A-8 provides:
Moneys appropriated on a program basis by the general appropriation act may be transferred between program accounts within or between departments and bureaus only at the written request of a department secretary or bureau commissioner, or his designee, in accordance with procedures established by the bureau of finance and management. Moneys appropriated by the general appropriation act may be transferred between institutions of the state only upon written request of the appropriate governing board, and upon specific written approval of the bureau of finance and management. The bureau of finance and management shall keep a record of all such authorizations of transfers and make them available for public inspection.
SDCL 4-8-14 provides:
Whenever moneys shall have been actually provided for any funds of the state by levy of taxes, sale of bonds or warrants, or otherwise, and such moneys shall not have been actually collected and covered into the state treasury, but concerning the receipt of which moneys there can be no question, the state board of finance is authorized, by a majority vote to anticipate the receipt of such moneys into such fund by drawing temporarily upon the moneys in any other fund of the state for which there shall not be immediate use.
In view of the provisions of SDCL 4-8A-8 and 4-8-14, I do not believe that the negative cash balance proposal is lawful. The Legislature has specified that certain formal procedures are required to lawfully transfer funds between various program accounts. To authorize or allow an informal "negative balance" approach to accomplish the same task would be to ignore the law. If SDCL 4-8A-8 is to be amended to allow such an informal procedure the Legislature is the proper body to make such an amendment.
It also appears to me that SDCL 4-8-14 sets up a procedure similar to that of SDCL 4-8A-8. There is not, however, authority in SDCL 4-8-14 for a warrant on a "negative balance" account being authorized without complying with statutory procedures. The flexibility problem presented by your question is capable of being handled by SDCL 4-8A-8 or 4-8-14, but not by the procedures of an automatic authority to write warrants on a negative balance account that as additional funds coming but not available.
The answer to your question therefore is NO.
Respectfully submitted,
William Janklow
Attorney General
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