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The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 6009 November 20, 1981 COUNTIES: Optional unified county--duties of county treasurer and county finance director In an optional unified county, the county treasurer is responsible for the deposit of county moneys in such depositories as are designated by the county board of commissioners, the investment of surplus county moneys when directed to do so by the county board of commissioners, and for debt management in accordance with bond and note resolutions adopted by the county board of commissioners. In an optional unified county, the county finance director is responsible for central accounting and for investment of surplus county moneys if directed by the county board of commissioners. In such counties, the county treasurer pays out county moneys upon order of the board of county commissioners signed by the clerk and countersigned by the chairman. The office of county treasurer must be funded by the county board of commissioners at a serviceable level. Honorable Jerome T. Hart State Senator The Capitol Lansing, Michigan Referring to Bay County, which on November 7, 1978, voted to adopt the optional unified form of county government authorized by 1973 PA 139, as last amended (1) by 1980 PA 100; MCLA 45.551 et seq; MSA 5.302(51) et seq, you inquire: 'Under an optional unified form of county government, what are the specific responsibilities and duties of the county treasurer and the county finance director?' It appears from correspondence submitted to this office in further elaboration of this general question that the Treasurer of Bay County is concerned with responsibility for central accounting, deposit of county moneys, investment of county moneys, debt management, procedures for paying out county moneys, and the level of financial support required for the county treasurer's office. While the duties and responsibilities of the department of finance are spelled out in 1973 PA 139, supra, 13(b), the county treasurer's duties and responsibilities are not described in 1973 PA 139, supra. 1973 PA 139, supra, Sec. 20, declares: 'When an optional unified form of county government becomes effective, this act [1973 PA 139] is controlling as to all matters to which it relates, and provisions of law not in conflict continue in full force and effect.' 1973 PA 139, Sec. 13(b), supra, sets forth the duties and responsibilities of the department of finance, and provides: 'The department of finance shall supervise the execution of the annual county budget and maintain expenditure control; perform all central accounting functions; collect moneys owing the county not particularly within the jurisdiction of the county treasurer; purchase supplies and equipment required by county departments; and perform all investment, borrowing, and debt management functions except as done by the county treasurer.' [Emphasis added.] Thus, the responsibility for central accounting functions clearly rests with the department of finance under the optional unified form of county government. The uniform budgeting and accounting act, 1968 PA 2, as amended; MCLA 141.421 et seq; MSA 5.3228(21) et seq, addressed budgeting and accounting in all counties, including those counties which adopt the optional unified form of county government. Under 1968 PA 2, supra, Sec. 2b(3)(f), the elected county executive or appointed county manager of a county which has adopted the optional unified form of county government is designated chief administrative officer and is vested with broad budgetary and accounting authority pursuant to 1968 PA 2, supra, Secs. 14-20a. However, 1968 PA 2, Secs. 14-20a, supra, also confers certain powers upon the county's fiscal officer defined in 1968 PA 2, supra, Sec. 2c(2), as the county's finance director who prepares and administers the county's budget. However, the functions of the department of finance under 1973 PA 139, Sec. 13(b), supra, may not invade the constitutional and statutory authority of the county treasurer. Cf. OAG, 1979-1980, No 5587, p 454 (October 26, 1979). Indeed, 1973 PA 139, supra, Sec. 4(4), provides '[t]he power vested in the office of . . . county treasurer . . . shall not be minimized or divested by this act.' In addition, 1973 PA 139, supra, Sec. 12(1), provides: '(1) Upon the date an optional unified form of county government becomes effective, the following officials shall exercise the powers and functions as provided by law, . . .. '(c) The treasurer.' The county treasurer and other officers specified in Const 1963, art 7, Sec. 4, are constitutional officers. OAG, No 5587, supra. Several of the principal statutes granting powers to the county treasurer are applicable to the other concerns raised by the Treasurer of Bay County. A primary statutory duty of the county treasurer is related to the receipt, deposit and payment of county funds. RS 1846, ch 14, Sec. 40; MCLA 48.40; MSA 5.686, provides: 'It shall be the duty of the county treasurer to receive all moneys belonging to the county, from whatever source they may be derived; and all moneys received by him for the use of the county, shall be paid by him only on the order of the board of supervisors, signed by their clerk, and countersigned by their chairman, except when special provision for the payment thereof is, or shall be otherwise made by law.' [Emphasis supplied.] Thus, it is the county treasurer's duty to collect moneys owing to the county. See People on the relation of the Attorney General v Supervisors of St. Clair County, 30 Mich 387 (1874); Board of Supervisors of Bay County v Corliss, 209 Mich 487; 177 NW 232 (1920). Accordingly, where the department of finance through its operations receives moneys belonging to the county, such moneys must be turned over to the county treasurer pursuant to RS 1846, ch 14, Sec. 40, supra. The accounts of the county treasurer are to be examined each year by the county board of commissioners, 1851 PA 156, Sec. 6; MCLA 46.6; MSA 5.326 and 1966 PA 261, as amended, Sec. 16; MCLA 46.416; MSA 5.359(16), and may be audited by the board, 1973 PA 139, supra, Sec. 6(j)-(k). 1932 1st Ex Sess PA 40, Sec. 2, as last amended by 1979 PA 84; MCLA 129.12; MSA 3.752, states that the county board of commissioners shall provide by resolution for the designation of depositiories specifying the manner and proportion wherein county money may be placed, including tax money, which come into the possession of the county treasurer, and the treasurer and the surety on his or her official bond '[s]hall be liable for all money not deposited. . . .' pursuant to the terms of the act. See also, 1909 PA 99, Sec. 8; MCLA 129.38; MSA 5.538, which provides: 'It shall be the duty of the county treasurer to keep the accounts of the treasurer with all banks or depositories, where any monies may be kept or deposited, upon the regular books of his office, so that each item of all such accounts shall appear thereon. All items of interest, which may become due to the county from depositories, shall be entered on the books of the treasurer when received in such a manner that it shall appear upon what account for what time such interest accrued.' As to the record keeping of the Bay County Treasurer, it is noted that the report on examination Bay County internal controls and accounting systems, pp 13-14, dated April 29, 1980 (Michigan Department of Treasury), recommends that the county treasurer maintain a cash control ledger recording all deposit and investment activity affecting the various county funds, including a record of the cash and investment equity in each county fund. Also pertinent is the Michigan Penal Code, 1931 PA 328, Secs. 485 and 490; MCLA 750.485 and 750.490; MSA 28,753 and 28.758, which, respectively, provide for accounting by county officers who receive or pay out county money, and the latter section providing for the safekeeping of public moneys. Authorization for the investment of public money is contained in 1933 PA 70; MCLA 129.71; MSA 5.701, which authorizes a county board of commissioners to invest public money received by the county treasurer in interest bearing bonds, notes or other securities of the United States Government. See also, 1934 1st Ex Sess PA 23; MCLA 129.81 et seq; MSA 3.481 et seq. 1943 PA 20, as amended; MCLA 129.91 et seq; MSA 3.843(1) et seq, authorizes investment of surplus funds as provided therein. 1943 PA 20, supra, Sec. 1(1) provides the county board of commissioners '[b]y resolution, may authorize its treasurer or other chief fiscal officer to invest surplus funds . . .' as provided therein. [Emphasis added.] Thus, the county board of commissioners possesses statutory discretion in determining whether the county treasurer, or other fiscal officer, such as the department of finance pursuant to 1973 PA 139, Sec. 13(b), supra, shall invest surplus county funds. This statutory discretion with respect to investment of county funds is also evinced in 1933 PA 70; 1932 1st Ex Sess PA 40, and 1934 1st Ex Sess PA 23, supra. Further, 1851 PA 156, supra, Sec. 11, as amended, authorizes the board of commissioners to: '(p) Represent the county and have the care and management of the property and business of the county if other provisions are not made. '(q) Establish rules and regulations in reference to the management of the interest and business concerns of the county. . . .' With respect to borrowings, 1851 PA 156, Sec. 11, supra, provides the board of commissioners authority to: '(g) Borrow or raise by tax upon the county those funds authorized by law. (j) Direct and provide for the raising of money which is necessary to defray the current expenses and charges of the county, . . ..' Thus, unless specific statutory language requires the county treasurer to perform a prescribed function in relation to a county borrowing (eg, 1913 PA 42, Sec. 5; MCLA 141.15; MAS 5.635), the county board of commissioners possesses discretion in determining whether such function shall be performed by the county treasurer, or, in the case of a unified county government, the department of finance, pursuant to 1973 PA 139, Sec. 13(b), supra. A review of the outstanding bond resolutions of Bay County indicates that the county treasurer has been assigned a number of contractual responsibilities, which must be continued, including allocating certain tax payments to various accounts for debt service purposes, investing and reinvesting construction funds, and maintaining books for the registration of county bonds. In paying out county money, the county treasurer is instructed by RS 1846, ch 14, Sec. 40, supra, in pertinent part, as follows: '[All] moneys received by him for the use of the county, shall be paid by him only on the order of the board of supervisors [now commissioners], signed by their clerk, and countersigned by their chairman, except when special provision for the payment thereof is, or shall be otherwise made by law.' In signing checks for payment of county moneys, the treasurer must verify, as noted above, that the payment order has been duly signed by the clerk and chairman of the board of commissioners, or is otherwise authorized by law. As stated in the treasurer's report of April 29, 1980, supra, p 4, it is the treasurer's general responsibility to determine from his records that there are sufficient moneys available in the respective fund to cover the disbursement. This responsibility for signing checks where there are sufficient moneys available arises out of the treasurer's duty to keep records of all deposits and investments of county moneys and out of a recognition that if moneys are not in a fund, the treasurer is not in a position to make disbursements out of that fund. In addition, specific statutory duties of the county treasurer with respect to tax collection are contained in the General Property Tax Act, 1893 PA 206; MCLA 211.1 et seq; MSA 7.1 et seq. As Justice Cooley stated in People on the relation of the Attorney General v Supervisors of St. Clair County, supra: 'The county treasurer is made an indispensable officer in the [taxation] system . . ., and duties too numerous to mention . . . are specifically imposed upon and to be performed by him officially, and without which it would be impracticable to enforce the collection of taxes.' 30 Mich 387, 391. Regarding the concern of the county treasurer as to the level of financial support required for that office, the Court of Appeals recently considered this question regarding the Treasurer of Wayne County in Wayne County Prosecutor v Wayne County Board of Commissioners, 93 Mich App 114, 123-124; 286 NW2d 62 (1979), holding that office must be funded at a serviceable level: 'In Wayne Circuit Judges v Wayne County, 383 Mich 10; 172 NW2d 436 (1969), Justice BLACK'S opinion speaks of the inherent powers of the courts to make certain that the courts function 'serviceably' as a co-equal branch of Michigan's government. In that case on rehearing, our Supreme Court held that the courts could order Wayne County to provide the Wayne County Circuit Court with critically needed law clerks and probation officers. We adopt 'serviceability' as the standard to be applied in determining whether the board of commissioners has unlawfully underfunded the county executive officers so that they are unable to fulfill their statutory obligations. Serviceability must be defined in the context of Justice BLACK'S opinion, i.e. 'urgent', 'extreme', 'critical', and 'vital' needs. A serviceable level of funding is the minimum budgetary appropriation at which statutorily mandated functions can be fulfilled. A serviceable level is not met when the failure to fund eliminates the function or creates an emergency immediately threatening the existence of the function. A serviceable level is not the optimal level. A function funded at a serviceable level will be carried out in a barely adequate manner, but it will be carried out. A function funded below a serviceable level, however, will not be fulfilled as required by statute.' [Footnote omitted.] Therefore, in summary, it is my opinion that under the optional unified form of county government in effect in Bay County under 1973 PA 139, supra: 1) Central accounting functions are the responsibility of the director of the department of finance; 2) Decisions regarding the depositories of county moneys, including the manner and proportion, are within the purview of the county board of commissioners and the treasurer is to make the deposits of county funds as ordered by the county board of commissioner; 3) Investment and debt management activities may be assigned by the county board of commissioners to the treasurer or the director of the department of finance, subject, however, to the terms of any outstanding bond or note resolution of the county reposing these activities in the treasurer which are contractual in nature and must be observed; 4) County money is to be paid out by the treasurer only upon order of the board of county commissioners, signed by the clerk and countersigned by the chairman, or otherwise as provided by law subject to sufficient moneys being available in the fund for which the disbursement is being made; and 5) The office of county treasurer must be funded at a serviceable level. Frank J. Kelley Attorney General (1)
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