Request By:
James S. Davis, Jr., M.D.
Acting Chairman
Mary Pauline Fox, M.D.
Pike County Board of Health
Post Office Box 751
Pikeville, Kentucky 41502
Opinion
Opinion By: Chris Gorman, Attorney General; Gerard R. Gerhard, Assistant Attorney General
By letter of November 20, 1991, you ask that this office issue an opinion concerning the propriety of the Cabinet for Human Resources "mandatorily and arbitrarily" assuming certain accounting functions of the Pike County Health Department, rather than approving a contract for such services with a local certified public accountant.
In our view, the Cabinet for Human Resources has full statutory authority to establish a policy requiring a local health department to perform accounting and payroll functions through a centralized system operated by the Cabinet. Discussion follows.
By way of background, the Pike County Health Department, in accordance with normal procedure, sought approval from the Cabinet for Human Resources of a one-year personal services contract with a Pike County certified public accountant, for certain accounting and payroll services, at a cost not to exceed $ 20,800 (Cf., OAG 69-561, copy enclosed). Kenneth Fiser, Director of Administration and Financial Management for the Cabinet's Department for Health Services, by letter of August 2, 1991, approved a six month term for such contract. Citing the cost of contractor services, a substantially lower cost for similar services if provided through the Cabinet, and the Department's staffing and computer capacity, Mr. Fiser indicated, in substance, that after December, 1991, such services should be carried out through the Cabinet.
You cite KRS 212.245 as providing that a local health department may utilize services facilities equipment and personnel of the cabinet for human resources, and contract for services not otherwise available. KRS 211.170, your letter indicates, provides that the cabinet will supervise the financial, personnel, program, administrative, and other functions of local health departments.
Neither provision (KRS 212.245 and 211.170) bars the Cabinet's establishment and implementation of a policy that local boards of health carry out payroll and accounting operations through a centralized system operated by the cabinet.
KRS 212.245(2), in indicating that a local board may "Contract for services not otherwise available," says, in effect, that if services (e.g., payroll/ accounting) are available from the cabinet, they are to be used. The cabinet has indicated it has the resources to perform the board's accounting and payroll functions. Accordingly, the board may not contract for accounting and payroll services, as such services are otherwise available, in this case, from the cabinet.
KRS 211.170, you point out, provides that the cabinet will (shall) supervise financial, personnel, program, administrative, and other functions of local health departments. That is the direction of subsection 2 of KRS 211.170. At the same time, however, KRS 211.170(1) and (6) provide that in relation to local health departments, the cabinet shall, among other things:
(1) Establish policies governing the activities and practices of such departments;
* * *
(6) Allocate, modify or cancel allotments of state funds to local health departments pursuant to KRS 212.120; . . .
KRS 212.120(4), in turn, provides in part that:
The cabinet for human resources may, in its discretion alter or modify allotments from time to time and shall cancel any allotment . . . whenever a particular county health department for whose benefit the allotment was made is not maintained, operated and conducted in accordance with the standards prescribed by the cabinet for human resources. . . .
From this language it is clear that the legislature has vested the Cabinet with wide discretion to oversee or administer local boards of health and to set policies under which they are to operate. The Cabinet is affirmatively directed, by specific statutory terms, to cancel the allotment from state funds of a local board not maintained, operated, and conducted in accordance with the standard prescribed by the Cabinet. The Cabinet's authority to establish a standard that a local board shall perform its accounting and payroll functions through a system and means provided by the Cabinet is clear.
KRS 212.040 directs that a fiscal court shall, subsequent to establishing a local health department, "annually . . . make a levy sufficient to pay the annual expense of maintenance of the county health department. . . ." This language addresses the fiscal court. It does vest the local board with any authority regarding expenditure of such funds. Further, such language does not modify the Cabinet's express authority pursuant to KRS 212.170(1) and (6) and KRS 212.120(4), as discussed above.
The Cabinet indicated it has acquired the capacity to handle certain accounting and payroll functions of your board. It gave notice to such effect, and approved, for a limited time, in view of work that may already in progress, a contract with a local accountant for accounting and payroll functions, indicating that after such time the functions in question were to be performed through the Cabinet. Inquiry incident to preparing this opinion indicated that forty-nine of fifty-one local health departments are presently performing accounting and payroll functions through the centralized system in question. Such facts do not support a finding of arbitrariness.
KRS 211.170(1) directs that the Cabinet establish policies governing the activities and practices of local health departments, and KRS 211.170(3) directs that the Cabinet establish standards of operation in accordance with KRS 212.120. The Cabinet's establishment of a policy requiring your board to perform accounting and payroll operations through a centralized system administered by the Cabinet are clearly within the scope of authorization - and direction - of such provisions.