Request By:
Dr. James B. Graham
Auditor of Public Accounts
Capitol Annex
Room 170
Frankfort, Kentucky 40601
Opinion
Opinion By: Steven L. Beshear, Attorney General
This is in response to a request from your predecessor in office, which you have renewed, for an advisory opinion relative to the operation of the Kentucky Bar Association. The questions to be addressed by us, taken from the original request for an opinion, are enumerated below:
1. Is the Kentucky Bar Association a state agency?
2. Is the Kentucky Bar Association subject to audit by the Auditor of Public Accounts under the authority granted in Chapter 43 of the Kentucky Revised Statutes and/or House Bill 931 of the 1980 session of the General Assembly?
3. Should the receipts of the Kentucky Bar Association be deposited to the State Treasury under KRS 41.070(1)?
4. Is the Kentucky Bar Association a state budget unit and are Association's funds subject to appropriation by the General Assembly?
5. As it relates to budgeting, accounting and auditing requirements, what distinction can be made between the Kentucky Bar Association and the Board of Bar Examiners?
6. If the Kentucky Bar Association is not a state agency, can the Administrative Office of the Courts legally provide them office space at no cost? Also, can the Association legally use such state services as the centralized telephone system, central stores operations, and state purchase contracts?
We have thoroughly reviewed the memorandum regarding this matter prepared by one of your staff which was forwarded to us for our consideration. We respectfully disagree with the conclusion reached in that memorandum. It is the opinion of the Office of the Attorney General, as explained and supported below, that the Kentucky Bar Association is not a state agency for the purposes of being subjected to an audit by the Auditor of Public Accounts pursuant to KRS Chapter 43.
KRS 43.010(3) defines "state agency" as concerns the Auditor of Public Accounts as follows:
"'State agency' means any state officer, department, board, commission, institution, division, or other person or functional group that is authorized to exercise or does exercise any executive or administrative jurisdiction, powers, duties, rights or obligations of the state government conferred or imposed by law or exercised, performed or discharged by legal authority in compliance with the law."
Thus, central to our consideration is whether the Kentucky Bar Association is a state agency as contemplated by this definition. We also note, with respect to the functions of the Auditor, that KRS 43.050(2)(a) prescribes that the Auditor shall:
"Audit annually, and at such other times as may be deemed expedient, the accounts of all state agencies, all private and semiprivate agencies receiving state aid or having responsibility for the handling of any state funds, the accounts, records and transactions of the budget units, and the general accounts of the state."
We believe the Kentucky Bar Association is clearly not a department, board, commission, institution or division of state government; and, certainly, the Kentucky Bar Association does not receive state aid or have any responsibility for handling of any state funds. That is to say that the Kentucky Bar Association provides no public service codified by statute.
In support of our conclusion, we begin by referring to Section 116 of the Kentucky Constitution. Under this section, the Supreme Court of Kentucky has the power to prescribe rules of law, practice and court procedure. There is nowhere to be found in Section 116 of KRS 21A.160 (Organization and Control of State Bar Vested in Supreme Court) or in the Supreme Court rules on law practice or admission suggesting the Kentucky Bar Association is a statutory agency. Section 110(5)(b) of the Kentucky Constitution provides that the Chief Justice of the Commonwealth shall appoint such administrative assistants as he deems necessary. However, the bar association members, collectively, are not administrative assistants, although individual members of the bar association may be so appointed. Also, by Rule 1.010 of the Rules of the Supreme Court, "the policy-making and administrative authority of the Court of Justice is vested in the Supreme Court and the Chief Justice." By Rule 1.050(1) of the same set of rules, "the Administrative Office of the Courts shall act as the administrative and fiscal agency of the Court of Justice." The Kentucky Bar Association does not, then, exercise any administrative jurisdiction, powers, duties, rights or obligations of state government.
In further support of our conclusion we point out that the Kentucky Bar Association is not a state agency or state administrative organization as envisioned by KRS 12.010 et seq., and it is unquestionably not a budget unit. See KRS 41.010 and State Budget, 1980 Acts, Chapter 109, Part I, F (Judiciary), where the legislature does not include the Kentucky Bar Association as a state agency or budget unit in the biennial state budget. The Kentucky Bar Association does not receive any state money or expend it. KRS 41.070 is, therefore, wholly inapplicable. KRS 41.110 (restrictions on withdrawals of money from treasury) is also not applicable. There is no money being put into the treasury by or for the Kentucky Bar Association and no money being taken out.
The above, we believe, is responsive to the first four questions presented for our consideration. In question 5, it is asked what distinction can be made between the Kentucky Bar Association and the Board of Bar Examiners. The distinction is an obvious one. The General Assembly has authorized the Supreme Court of Kentucky to appoint a board of bar examiners. KRS 21A.130. This statutory provision points out a public purpose by statute in direct contrast to the facts regarding the Kentucky Bar Association. The General Assembly further provided that fees paid by applicants for admission to the practice of law and for the issuance of a license to practice law are to be paid into the state treasury. KRS 21A.140. The Board of Bar Examiners is serving an administrative function for the judiciary which is a budget unit for purposes of KRS 41.070 and also KRS 43.010(3).
In the last question, it is asked, if the Kentucky Bar Association is not a state agency, whether the Administrative Office of the Courts legally may provide them office space at no cost. Coupled with that question was the question of whether the Kentucky Bar Association may legally use such state services as the centralized telephone system, central store operation, and state purchase contracts.
The Kentucky Bar Association has moved into the new Kentucky Bar Association Center and is not therefore being provided office space. As to the use of such state services as the centralized telephone system, central stores operation, and state purchase contracts, we looked at the question of state purchase contracts in a miscellaneous letter dated January 25, 1979, to Mr. W. H. Baldwin, Account Manager, IBM, copy attached, and concluded in that letter that the Kentucky Bar Association was not an administrative agency of the Supreme Court of Kentucky for the purpose of applying state purchasing statutory law. While we think the General Assembly could legally authorize the Kentucky Bar Association to have the use of such state services in that the Kentucky Bar Association, although not a state agency, does serve a public purpose, in the absence of statutory provisions we have serious doubts as to whether the Kentucky Bar Association may presently utilize the state's centralized telephone system and the state central stores operation. However, we think it desirable to have this question finally determined by the Kentucky Supreme Court, if possible.