STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 5329

July 11, 1978

EXECUTIVE ORGANIZATION ACT:

Authority of head of principal department to control budget of a Type I agency.

INDIAN AFFAIRS COMMISSION:

Authority of Director of Department of Management and Budget to control budget.

DEPARTMENT OF MANAGEMENT AND BUDGET:

Authority of Director of Department of Management and Budget to control budget of Indian Affairs Commission.

APPROPRIATIONS:

Authority of head of a principal department to control budget of a Type I agency after an appropriation has been made to the Type I agency.

Where the legislature has appropriated funds for travel expenses of the Indian Affairs Commission, which is a Type I agency within the Department of Management and Budget, the Department is not required to reimburse members of the Commission for travel expenses which are incurred in violation of Department policies.

John V. Bailey

Acting Director

Michigan Commission on Indian Affairs

Baker-Olin Complex

3423 North Logan Street

Lansing, Michigan

Your predecessor requested my opinion on the following question:

The Indian Affairs Commission was created within the Executive Office of the Governor by 1972 PA 195; MCLA 16.711 et seq; MSA 3.547(101) et seq. The function of the Commission is to provide a centralized state agency to investigate and make recommendations upon issues directly affectig the State's Indian population. Pursuant to Const 1963, art 5, Sec. 2 the Governor, by executive order, transferred the Commission's budgeting, procurement and staffing and related management functions to the Department of Administration. Executive Order 1973-74; MCLA 18.22; MSA 3.516(22)(5).

The mandate of the Indian Affairs Commission is stated in 1972 PA 195, supra, Sec. 4, which provides:

Further duties of the Commission which are described in 1972 PA 195, supra, Sec. 5 include the obligations to appoint an executive director, approve employees of the Commission and prescribe their duties, coordinate services of state and local government departments for the benefit of Indian citizens of the state, consult with federal agencies and departments having control over Indian affairs, recommend legislation concerning Indians, apply for and accept grants and gifts from government or private sources, and submit a full written report of activities to the Legislature and the Governor.

The Commission, which carries out these functions, consists of nine members appointed by the Governor. These commissioners must meet at least four times per year and are paid a sum of $35 per diem for each commission meeting. In addition, pursuant to 1972 PA 195, supra, Sec. 2:

The fiscal year budget for the Indian Affairs Commission commencing October 1, 1976 contained a line item appropriation of $4,000 for travel expenses. 1976 PA 215. As of September 30, 1976 this account contained $2,199.00. In September, 1976, a commission member attended an out-of-state conference on Indian education. Thereafter, he submitted to the Department of Management and Budget a request for reimbursement for funds expended on that trip. Citing a departmental policy restricting out-of-state travel to trips which actually generate additional state revenue, the department rejected the request. This trip, in the Department of Management and Budget's view, did not meet the policy guidelines for reimbursement.

Executive Order 1973-74, supra, which transferred the Commission into the Department of Management and Budget, constituted a 'Type I' transfer. A Type I transfer is defined in the Executive Organization Act; 1965 PA 380, Sec. 3; MCLA 16.103; MSA 3.29(3). As discussed in OAG, 1965-1966, No 4479, p 209 (March 9, 1966), a Type I transfer means that an agency retains its substantive statutory duties and powers of rulemaking, licensing and registration, while all other responsibilities are to be performed under the direct supervision and control of the principal department to which the board has been transferred. OAG 4479, supra, p. 213, and Executive Organization Act, supra, Sec. 3.

The travel of a commissioner does not constitute the exercise of a power which may be performed independently of the head of the principal department. OAG 4479, supra. See also, OAG, 1965-1966, No 4468, p 291 (May 24, 1966).

It may also be noted that the fact that the legislative appropriation had not yet been fully expended is not significant in light of the constitutional caution, 'No appropriation shall be a mandate to spend. . . .' Const 1963, art 5, Sec. 20. If the Department of Management and Budget, acting in its supervisory capacity over an internal agency, concluded that a particular expenditure was inappropriate, the Department was within statutory bounds in refusing to authorize such expenditures, or to reimburse for them, even though a portion of an appropriation remained unexpended.

It is therefore my opinion that the Department of Management and Budget is not required to reimburse members of the Indian Affairs Commission for travel expenses which are incurred in violation of Department policies.

Frank J. Kelley