The opinion
T~CATTORNEYGENERAI.
OF-XAS
AUHTXN ~.TEXAS
PRICE DANIEL
ATTORNEYGENERAL
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, and
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, to
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 of
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 of the
Federal Statutes are recognized and agreed to by our
State Sthutes. Therefore, there is no alternative ex-
cept to give primary authority to the Federal laws and
regulations applicable just as the Texas Legislature has
.. .
Hon. C, Ii, Cavness, page 2 v-504
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,
equipment, etc., and make its rental contracts,
through 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 of
funds of various State departments. It has been suggested
that possibly such necessity of the Legislative Audit Com-
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 for
administration to the Texas Unemployment
Compensation Commission shall be subject
to the approval of the Legislative Audit
Committee and none of the funds herein
provided shall be spent until such approval’
shell have been obtained,”
In our opinion this provision relative to the
Texas Employment Commission refers to the expenditure
of the items appropriated and not to the preparation
or approval of a budget. The moneys are not granted
In trust by the Federal Government to the States, and
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 for the construction
. -
Mon. C. Ii, Cavness, page 3 V-504
placed upon this quoted provision relative to expendi-
tures,
Although It Is not witbin the province of this
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 for 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.
It is therefore our eplnloa th8t it is rat
recoosrry Per the Leglsl@tive Audit Coulttoe to &)-
prove the Texas Pmpley~ont Cemmlsafo~~h budget for
the oxpeadlturo of Its admlmlstratlvs costs which &re
paid frem “Feleral” fuada.
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& regulations governing expebdl-
tures b$ State agencies shall control the expondlturos
of Fsm+ fusds grsnted for unerployaoat and eBplmobt
eervlco ramI~lstratlro. ZIefarencs la made, houeoor, to
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
aa an expondlturr control la the flrcal rlrlmlrrtartien
lr 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
through the Board or CoBtrel, and this lplnloa krr boom
Hon. C. H. Cavness, page 4 v-504
incorporated aa a part of the program of the Employment
Service of the Department of Labor. With reference to
this question we again refer to the standards of the
Federal agencies relative to rental of premises and note
that these contracts must receive approval of the respec-
tive regional offices. It Is specifically provided 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,
the conclusion follows that the rental contracts of the
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, equipment, etc., through the State Board
of Control, we refer to Opinion No. O-3737,wherein It
was held that the Commission did not have to follow the
manner snd method of purchasing supplies and equipment
through 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, etc.,
of ,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.
It is true that the Bureau of Employment Securl ty
does have in its standards and in Its suggested rules and
regulations 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,
. -
Hen. C. H. Cavness, page 5 v-504
provided 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 of the
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 for 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, equipment, etc., through the
Board of Control.
SUMHAFE
It is not necessary for the Legislative
Audit Committee to approve the Texas Employ-
men't Commission's budget for the expenditure
of 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
for the Texas Employment Commission to pur-
chaee its supplies, equipment, etc., and
make its rental contracts, through the State
Board of Control, under the s~pae regtilations
that apply to other State Departments, Insti-
tutions, and Agencies.
Yours very truly
ATTORNEYGEWRAL OF TIiXAS
By /?ibA%@ rikL&&
Robert 0. Koch
Assistant
?iCTIRG ATTORNEYGENERAL