Case Information

*1 T~CATTORNEYGENERAI.

OF-XAS AUHTXN ~.TEXAS PRICE DANIEL ATTORNEY GENERAL Feb. 17, 1948

Hon. c. B, cavness Opinion No. V-504.

State Auditor Austin, Texas Re: Specific questions respect-

ing the .sppllcabillty of regulotlcns which apply generally to State depart- merits, institutions, agencies, to the Texas Employment COavi~lssion, in anplificrtirn of &3ptni*n No. V-427, Dear Sir:

We refer to your request for opinion on several specific questions respecting the appllca- bilitg of regulations, which apply generally to State Departments, institutions and agencies, the Texas Employment Commission in amplification of Opinion No, V-427.

In Opinion No. V-427 this department held that the Texas Employment Commission is a State Agency, yet with respect to Federal funds expended for adminis- tration of the agency the standards of the Social Secur- ity Administrator and the United States Employment Serc vice of the Department of Labor and the rules and regu- lations adopted by the Commission to meet such standards prlmarlly govern. Otherwiee, the general provislans the laws of this State bre rppllcsble.

We can appreciate fully your continued concern

over the apparent conflict in 3tate and Federal laws and regulations which apply to this “State Qency” financed through Federal appropriations. It Is a perfect example of the hybrid nature and the Federal control which may be retained over e State Agency set up by co-operetlve Federal and State Statutes and financed by Fsdersl funds. As pointed out In V-427 the terms and conditions Federal Statutes are recognized and agreed to by our Therefore, there is no alternative ex- State Sthutes. cept to give primary authority to the Federal laws and applicable just as the Texas Legislature has

. .

Hon. C, Ii, Cavness, page 2 done. In this connection, you now present the Pollow- ing questions:

‘1. Is it necessary for the Legislative Audit Committee to approve the Texas Employ- ment Commission’s budget for the expenditure of Its administration costs which are paid from ‘Federal’ funds?

“2. Is it necessary for the Texas Em- ployment Commission to purchase itssupplies, and make its rental contracts, the State Board of Control, under the same regulations that apply to other State Departments, Institutions, and Agencies?” We have not found any general provision of the laws of this State which authorizes the Legislative Audit Committee to approve any State department’s bud- get, nor is there any such provision in the Texas Unem- ployment Compensation Act. There are several provisions in the Departmental Appropriation Act concerning approval by the Legislative Audit Committee of the expenditure funds of various State departments. It has been suggested Audit Com- that possibly such necessity of the Legislative mittee’s approval of the Texas Employment Commission’s budget is implied from a similar paragraph of the Depart- mental Appropriation Act, page 930, which reads:

“All ,the above items appropriated administration to the Texas Unemployment Compensation Commission shall be subject to the approval of the Legislative Audit Committee and none of the funds herein shall be spent until such approval’ shell have been obtained,”

In our opinion this provision to the Texas Employment Commission refers to the expenditure items appropriated and not to the preparation The moneys are not granted or approval of a budget.

In trust by the Federal Government to the States, thus are not appropriated, until a budget has been pre- pared and adopted in its fins1 form. In other words, if the quoted provision grants any authority to the Legialtive Audit Committee, such authority commences after the budgetary proceaa prculiar to the Texas wyment Commission is completely finished. Uo again refer to Opinion No. V-427 the construction *3 - Mon. C. Ii, Cavness, page 3 V-504

placed upon this quoted provision to expendi- tures, the province of this

Although It Is not witbin office te construe the standards and programs of the various Federml agencies involved heroin, we rote tkrt these standards mad programs require the Texas aploy- ment Commission to submit for consider&Ion a budget request setting forth in detail the prepossQ erpemdi- tures. (?'rrt Iv, Vole 1, i3ulde for State bplaymemt Security AdministratIon, Soctloa 2000) Amy differ- encea are settled between the Commlasloo and the respoc- tlve regional supervisors with the final detormlsrtloe of the ureunts necorsary the propor a~lmistratlon of the State's acts resting with the Federal agencies. (Section 2006, supra) These standords~ will reveal that there are PO provisions for approval. of the budget by any St&e Committee similar to the Legislative Audit CommIttoe. is therefore our eplnloa th8t it is rat

recoosrry Per the Leglsl@tive Audit Coulttoe to &)- prove the Texas Pmpley~ont Cemmlsafo~~h budget the oxpeadlturo of Its admlmlstratlvs costs which &re frem “Feleral” fuada. paid

qua. attention has boem called to~Flscrl ID-UC- tloa E. S. 501, Sectlen 1290, which in effect holds t&t the State laws, rules, an& governing expebdl- tures b$ State agencies shall control the expondlturos of Fsm+ fusds grsnted for unerployaoat and eBplmobt ZIefarencs la made, houeoor, eervlco ramI~lstratlro.

Sectlona 1030-33, ?art IQ,'Volumo I of Quid& hr.St*te Bmplqrent Socurl* Admlnlstrrtlqn, orUc# Is rh 4lrborr- t1.B upon Sootion 1290 rorerrsg to dOQ0. ?hoae ~lattor soctloxr refer te a "State ?ractlco," wklch Is u ostab- 'llsbod custom or usage, accepted and ge8ora.llg ap)llod la the flrcal

aa an expondlturr control rlrlmlrrtartien l r the 8tate Mvorament, a8 0~1~ one rw0i th8 Setial Security Board will use In tstem'inlng~the neceroltg Y expebdltures w a State agency. Whether other faoterb give roasob for the Board to devlato tren tbo Nate ?raotlce is aololr wltkin it8 provlrce to dooile.

Inaof&r as the 'procedure relrtlve to reatal CY-

trusts la concorned, we rerer to Oplnlom No. e-5524, a copy et which we enclose herewith. This opl~lor held th@t these rostrl contracts did not krvs to be U&I and this l plnloa krr boom the Board or CoBtrel, *4 Hon. C. H. Cavness, page 4 aa a part of the program of the Employment

incorporated Service of the Department of Labor. With reference this question we again refer to the standards Federal agencies to rental of premises and note that these contracts must receive approval of the respec- tive regional offices. It Is specifically that the Bureau of Employment Security has the responsibility for determining the reasonableness and the necessity of the amounts requested for rental space and the regional office of the USES will concern Itself primarily wfth the question of suitability of office space. (Part IV, Vol. 1, Guide for State Employment Security Administration, Sec- tion 2510) The requisites of these standards govern, and since they require that the leases be made otherwise than through a State agency aimllar to the Board of Control, of the the conclusion follows that the rental contracts Texas Employment Commirsion need not be made through the Board of Control.

With reference to the que.stion concerning the necessity of the Texas Employment Commission purchasing Its supplies, etc., through the State Board to Opinion No. O-3737, wherein of Control, we refer It was held that the Commission did not have to follow the manner snd method of purchasing supplies and equipment the Board of Control which is applicable to other State departments when purchases are made in the manner and method as required by the rules, regulations, ,the Social Security Board. We have reviewed this opinion and subsequent federal regulations and have not found any regulat,lon or law which would alter the con- clusion reached ~therefn.

After a study of the pertinent standards, rules

and regulations) we have found that at the present time all of the interested Federal agencies have designated, pursuant to their standards and rules and regulations, the Fiscal Office of the Texas Bmployment Commission as the procurement officer who is charged with the responsl- bility of purchasing supplies and equipment. is true that the Bureau of Employment Securl ty

does have in its standards and in Its suggested rules and a “suggested process” by which the Commission could under certain circumstances deslgnate the State Board of Control as its procurement officer. This portion of ~t.nr rules and regulations and standards of performance Issued by the Bureau of mployment Security, referred to above, could possibly be used by the Bureau as a basis for desig- nating the State Board of Control a8 its procurement officer, *5 - Hen. C. H. Cavness, page 5 the State Board of Control met with all the

standards promulgated by the Bureau of Employment Set urlty . Whether or not this procedure is to 'be followed, and, If so, if the standards have been met, 13 for the Bureau of Employment Security to determine, and we cannot therefore say as a matter of lav whether or not these purchases should be handled through the Board of Control.

The United State3 Employment Service Department of Labor has its own separate laws under which to make a separate determination as to the method to be followed by the State agency in making these pur- chases. This Federal agency, as a bs~sis for Its grant of funds to a State, has what is known as a Plan of Operation. One of the items in this Plan of Operation is its fiscal processes, of which procurement of sup- plies, equipment, etc., is a smaller pert. We refer to Section 22.203 of the Plan of Operation submitted by the Texas Employment Commission to the Secretary of Labor. In that section is found Attorney General's Opinion No. O-3737, which has been adopted by the Sec- retary of Labor end the United States Employment Ser- vice as its basis the approval of the Texas Agency's operation insofar as the procurement of supplies, equlp- ment, etc., are concerned.

As we have heretofore peinted out, these programs govern and require such purchase3 to be made other than through the Board of Control, and we again note that whether this procedure should be changed is within the discretion of ,the Secretary of Labor acting through the United State3 Employment Service. As the situation now presents itself, it ia not necessery for the Commission to purchase it3 supplies, the Board of Control.

SUMHAFE is not necessary the Legislative Audit Committee to approve the Texas Employ- men't Commission's budget for the expenditure its administration costs which are paid from Federal funds.

Bon. C. H. Cavness, page 6 v-504

At the present time it Is not necessary the Texas Employment Commission to pur- chaee its supplies,

make its rental contracts, the State Board of Control, under the s~pae regtilations that apply to other State Departments, Insti- tutions, and Agencies.

Yours very truly ATTORNEY GEWRAL OF TIiXAS By /?ibA%@ rikL&&

Robert 0. Koch Assistant ?iCTIRG ATTORNEY GENERAL