STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

July 15, 1969

L. W. Davis, Director
South Dakota Veterans Department
Pierre, South Dakota 57501

OFFICIAL OPINION NO. 69-66

Veterans' Department Revolving Fund may not be used to employ a supervisor of public funds

Dear Mr. Davis:

You have requested my official opinion to answer the following questions:

"1. Can the South Dakota Veterans Department pay the salary of one full time employee to assist in making collections on loans made in pursuance to law from the earnings received from investments of the Veterans Department Revolving Fund?

"2. Would it be a proper charge on such Veterans Department Revolving Fund to pay the mileage costs of extra travel involved in field officers' investigations of delinquent War Veteran Fund Accounts in order to obtain repayments of such loans made in pursuance to law?"

As a background for such inquiry, you have advised that the South Dakota Veterans Department is in the process of writing off loans that have been found uncollectable and inactive for over eight years. You have advised that some One Hundred Twenty Thousand Dollars in such loans, some of which are twenty to twenty-five years old, have been written off the books as uncollectable at this time. You have also advised that actions in court have been instituted to compel repayment on some of the loans, but as a condition to commencing such actions, field officers of the Veterans Department have investigated such loans.

You have advised that it is the conclusion of yourself, as Director, and the South Dakota Veterans Commission that the reason many of such loans have become delinquent stems from a lack of personnel in the Veterans Department to properly follow up the loans as made, and to make proper collection of interest and the principal of such loans.

While I may agree with your conclusion, I must advise that each of the questions you have submitted must be answered NO.

Under the South Dakota Constitution by Section 9 of Article 11, and Section 1 of Article 12, no moneys may be expended from the state treasury without an appropriation for such specific purpose. You perhaps should also be advised that SDCL 1967 4-8-2 makes any state officer authorizing the expenditures of money from the state treasury jointly and severally liable with the recipient of such moneys when such is expended from the state treasury without an appropriation for such purpose.

SDCL 1967 33-17-3 is the statute creating the Veterans Department Revolving Fund. 33-17-5 provides that money received on repayment of veterans loans, and the interest thereon, are receipted into such Veterans Department Revolving Fund. The initial statute (33-17-3) provides such moneys in the fund may be used only for the purposes set forth in 33-17-7 and 33-17-10. The repayments and the interest upon such loans, receipted into such fund in pursuance to 33-17-5 is appropriated for the purposes provided in Section 33-17-7 and 33-17-9. A consideration of these mentioned statutes reveals the only purpose for such loans is to aid a veteran himself or his dependants, or aid in furnishing on-the-job training of the veteran. Such statutes do not authorize the payment of compensation to an employee of the Veterans Department. Such department is the recipient of moneys from the general fund, as provided in the General Appropriation Act. (See Section 6(3) of Chapter 227 Laws of 1968, and Section 6(3) of Chapter 244 of the Laws of 1969, the General Appropriation Acts of 1968 and 1969 respectively.)

In view of the appropriation of such Veterans Department Revolving Fund, and the Constitution, it would be illegal to hire a separate employee, or to pay mileage for field officers in making investigations in regard to such loans.

Respectfully submitted,

Gordon Mydland
Attorney General