April 21, 1980

Mr. Tim Engelhart 
Commissioner 
Bureau of Administration 
State Capitol 
Pierre, South Dakota 57501

Official Opinion No. 80-26

Interest Charges on Delinquent Legislative Audit Billings to State Agencies

Dear Commissioner Engelhart:

You have requested an official opinion from this office in regard to the following factual situation:

FACTS: 

Legislative Audit has assessed interest charges of $2395.10 to a delinquent audit billing to the Bureau of Administration (see letter from Auditor General dated February 25, 1980).  The basis for the charges is SDCL 4-11-18 which states in part: 

All claims for services and expense of the auditor-general or assistants against such county or other public corporation shall be prepared in favor of the state treasurer in payment thereof at the first regular or special meeting of the governing board after the audit is completed.  Upon the neglect or refusal of the governing board to issue a warrant in payment of the claim as herein provided, interest at seven percent per annum shall be added for the time the same remains unpaid after the date of such meeting. 

The Auditor General, as stated in his letter, interprets this statute to include state government agencies as 'public corporation.'

Based on the above facts, you have asked the following questions:

QUESTIONS: 

1.  For purposes of this statute, does the term 'public corporation'  include state government departments and agencies? 

2.  Does Legislative Audit have the authority to charge interest to state agencies under this statute?

SDCL 4-11-18 states: 

For each audit made of any agency of state government, except those agencies or that portion of an agency that is financed with state general fund appropriations, the audited agency shall pay the actual costs of the audit computed by dividing the total expenses of the department of legislative audit relating to state government audits for the prior fiscal year by the number of audit hours spent performing state government audits during the same year and the result multiplied by the number of hours spent on the particular audit.  For audits of state agencies where more than one fund is involved, the auditor-general shall determine the method of allocating audit costs.  For each audit made of any county, municipality, school district, special district or other local government agency, the audited agency shall pay the actual costs of the audit computed by dividing the total expenses of the department of legislative audit relating to local government audits for the prior fiscal year by the number of audit hours spent performing local government audits during the same year and the result multiplied by the number of hours spent on the particular audit.  In all cases where the auditor-general, assistant, or employee is subpoenaed as a  witness for a county or other public corporation in the prosecution of its officers reported on by the department, the county or such other public corporation shall pay all witness fees and all expenses of serving subpoenas and attachment for witness and all expenses for procuring testimony, including the necessary expenses of such witness.  All claims for the services and expense of the auditor-general or assistants against such county or other public corporation shall be prepared in favor of the state treasurer in payment thereof at the first regular or special meeting of the governing board after the audit is completed.  Upon the neglect or refusal of the governing board to issue a warrant in payment of the claim as herein provided, interest at seven percent per annum shall be added for the time the same remains unpaid after the date of such meeting.

IN RE QUESTION NO. 1:

In my opinion the answer to your first question is no.  I do not believe that the term 'public corporation' as used in SDCL 4‑11‑18 includes state government and its agencies.

First of all, the term 'public corporation' as defined in Black's Law Dictionary, 4th edition, states that public corporations are created by the state to act as an agent in administering civil government, generally within a  particular geographical area or locality in the state.  Examples of such public corporations are listed as being cities, counties and school districts.

Secondly, the structure of SDCL 4-11-18 indicates to me an intention on the part of the Legislature to use the term 'public corporation' to refer to audits of 'counties, municipalities, school districts, special districts or other local government agency' not to include state agencies supported by general fund appropriations. The statute, after listing the local units of government mentioned above, then repeatedly refers to them as 'such county or other public corporation.'  If the intent of the Legislature would have been to include the State, I do not believe the Legislature would first refer to 'such county' and then include state government. This I believe is particularly true in view of the above-noted general definition of the term 'public corporation' from Black's Law Dictionary.  The Legislature is, of course, presumed to use words in their commonly understood meaning unless a contrary intention plainly appears.

IN RE QUESTION NO. 2:

The answer to your second question is also no.  The language of the last sentence of SDCL 4-11-18 indicates to me an intention on the part of the Legislature to deal with local units of government that have 'governing  boards.'  The state government does not have a governing board that would be in a position to neglect or refuse to issue a warrant in payment of the claim. Also, the context of the last sentence of SDCL 4-11-18, dealing with interest charges, indicates to me a reference to the language 'such county or other public corporation.'

This structure as discussed above, appears to me to evidence a legislative intent to apply such interest charges only to local units of government with which the auditor general has auditing responsibilities.

Respectfully submitted,

Mark V. Meierhenry
Attorney General