Request By:
Dr. James B. Graham
Auditor of Public Accounts
Capitol Annex
Frankfort, Kentucky 40601
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
You request an opinion of this office relative to questions raised following the recent decision of the Supreme Court of Kentucky, Ex Parte Auditor of Public Accounts (80-SC-540-OA), rendered November 25, 1980 (not yet in the West Advance Sheets). In that case the court specifically held that the state auditor has no legal authority to audit the books and accounts of the Kentucky Bar Association. The court cited § 116 of the Kentucky Constitution as completely removing the subject from any legislative authority and rendered obsolete and ineffective the statutes pertaining to it. The court wrote that the judicial branch, of which the Bar Association is a part and arm, has exclusive authority to manage its own affairs, citing §§ 27 and 28, Kentucky Constitution.
While the court indicated that the General Assembly has the authority to require an accounting of funds it has appropriated from revenues it has caused to be raised, it noted that the funds generated by the Bar Association have not been collected pursuant to any statute and have not been appropriated by the General Assembly and are not subject to legislative appropriation.
Question No. 1:
"Whether the Auditor of Public Accounts has the right to conduct audits of Circuit Court Clerks if he is not statutorily required to conduct the audits; "
Under the very explicit condition or assumption of your question, the answer is "no", since the state auditor's exercise of his function is strictly dependent upon express legislative enactments. Thus your auditing the circuit clerks either as a permissive or mandatory matter depends strictly upon legislative enactment. Section 91 of the Kentucky Constitution, which includes the Auditor of Public Accounts, explicitly provides in part that "The duties of all these officers shall be such as may be prescribed by law . . .", referring obviously to enactments of the General Assembly. Thus the duties of the constitutional state officers listed in § 91 of the Constitution, which includes the state auditor, are to be prescribed only by the legislature. See Commonwealth v. Southern Pac. Co., 127 Ky, 358, 105 S.W. 466 (1907) 467; and Ferguson v. Chandler, 266 Ky. 694, 99 S.W.2d 732 (1936) 733.
Even though the very nature of the auditor's function impresses upon the office a "watch-dog" role, the specific unleashing of the office upon government requires the enacting hand of the General Assembly. In this context it must not be forgotten that your office has no common law powers. As Chief Justice Palmore wrote in Ex Parte Auditor, above, the Office of the State Auditor is not invested with rights and powers that pervade the entire spectrum of state government.
The answer to question 1 is simply that the Auditor of Public Accounts has no right to conduct audits of circuit court clerks, as a permissive or mandatory matter, if he is not statutorily required or permitted to conduct such audits.
Question No. 2:
"Whether the Auditor of Public Accounts is required to audit the accounts of Circuit Court Clerks; and"
As personnel within the Court of Justice, the circuit clerks are state officers by explicit designation in KRS 30A.010(2). Also see OAG 76-509, copy enclosed.
Although the court, in Ex Parte Auditor, made it clear that "the judicial branch of this state government has exclusive authority to manage its own affairs," it wrote that "to the extent that it (legislature) has appropriated funds from the general revenues of the state to the judicial branch of government the legislative body has a legitimate and necessary right to know how those funds have been spent." The court added: "In short, the legislative body may require that the accounts so financed be audited."
Thus as an exception to the in-house control of the judiciary over its own affairs, the court in Ex Parte Auditor established that the "General Assembly has the authority to require an accounting of funds it has appropriated from revenues it has caused to be raised."
The next question is to what extent are the circuit clerks involved with the state treasury appropriations? The court in Ex Parte Auditor pointed out that the 120 circuit clerks collect some $3,000,000 per month for the general fund of the state. See KRS 30A.120, relating to collection of fines and forfeitures to be turned into the state treasury. See KRS 23A.200 and 23A.215, relating to circuit court filing fees required to be placed, by the circuit clerks, in the state general fund. Note KRS 24A.170 and 24A.180, relating to district court filing fees required to be placed in the state general fund by the clerks.
The compensation and expenses of the clerks are paid out of the state treasury. See § 120, Constitution, and KRS 64.055 and 30A.050.
Each clerk receives an amount from the state treasury to pay jurors. See KRS 30A.110.
At this point we see that the clerks put money into the state treasury and they expend money coming out of state appropriations, so as to subject themselves to your audit, if the legislature has so provided.
The next question is whether the legislature has expressly provided for auditing the clerks.
KRS 43.050(2)(a) reads:
* * *
"(2) The auditor shall:
"(a) 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."
KRS 43.010 reads:
"As used in this chapter, unless the context requires otherwise:
"(1) 'Auditor' means the auditor of public accounts.
"(2) 'Budget unit' means a department or other unit of organization for which separate appropriations are made from those for any other organization unit.
"(3) '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 law."
In view of the direct involvement of the circuit clerks in putting money into the state treasury and expending money coming out of the state treasury, and in view of the express language of KRS 43.050(2)(a) and 43.010, above quoted, it is our opinion that your office is required to audit the circuit clerks of Kentucky in the areas of state treasury involvement, within the practical capabilities of your staff and budget, and considering other mandatory audits. Note that the legislature has expressly required you to audit the accounts of the Clerk of the Supreme Court and Clerk of the Court of Appeals. See KRS 21A.030(7) and 22A.040(7).
Question No. 3:
"If the Auditor is required to audit the accounts of Circuit Court Clerks, whether the legislature is required to appropriate monies to fund the audit activity."
The answer is "yes". If a legislative mandate is to be properly implemented, appropriations adequate for the function must be furnished.