STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6674

February 19, 1991

AUDITOR GENERAL:

Employing independent auditing firms upon direction by the Legislature

LEGISLATURE:

Auditor General employing independent auditing firms upon direction by the Legislature

Pursuant to Const 1963, art 4, Sec. 53, the Legislature may, by resolution, authorize the Auditor General to employ independent auditing firms and may provide general direction as to the standards and procedures to be followed by the Auditor General in selecting such outside auditing firms; the Legislature may not, however, control or determine the specific firm or firms to be selected by the Auditor General pursuant to such general policies and directives.

Honorable David Holmes

State Senate

The Capitol

Lansing, Michigan

You have requested my opinion regarding the authority of the Auditor General to employ independent accounting firms to conduct audits of state agencies. Your letter and its attachments suggest that the Auditor General is contracting primarily with major national accounting firms without securing competitive bids and expresses concern that this practice bypasses smaller, Michigan-based and minority-owned accounting firms.

The Auditor General is a constitutional officer whose powers and duties are set forth in Const 1963, art 4, Sec. 53. Therefore, restrictions upon such authority may be imposed only where clearly provided for in the constitution or in statutes authorized pursuant to the constitution.

As regards any duly authorized statutory restrictions, the Management and Budget Act, 1984 PA 431, MCL 18.1101 et seq; MSA 3.516(101) et seq, requires state agencies in the executive branch of government to solicit competitive bids "whenever practicable to efficiently and effectively meet the state's needs,"' and to offer preference to Michigan-based firms, where consistent with federal statutes. MCL 18.1261(1); MSA 3.516(261)(1). However, Const 1963, art 4, Sec. 53, places the Auditor General in the legislative branch of state government which is expressly exempted from the Management and Budget Act. MCL 18.1115(5); MSA 3.516(115)(5).

Const 1963, art 4, Sec. 53, provides in pertinent part:

OAG, 1967-1968, No 4637, p 241 (May 16, 1968), stated that the power of the Auditor General to employ independent accounting firms, as set forth in this provision of the constitution, is contingent upon the direction of the Legislature but not subject to control by the executive branch of government. That opinion, however, did not address the extent of the Legislature's authority over the Auditor General pursuant to art 4, Sec. 53, supra.

At issue is the meaning of the phrase "upon direction by the legislature."' Because Const 1963, art 4, Sec. 53, is a new provision, it is appropriate to examine the debates of its framers and the Address to the People. Advisory Opinion on Constitutionality of 1978 PA 426, 403 Mich 631, 640-641; 272 NW2d 495 (1978). Beech Grove Investment Co v Civil Rights Comm, 380 Mich 405, 425-427; 157 NW2d 213 (1968).

Similar language first appeared in the proceedings of the Constitutional Convention as part of a committee substitute to Committee Proposal 78 to read in pertinent part:

It was approved on first reading in that form without relevant debate. 1 Official Record, Constitutional Convention, 1961, pp 1715-1716. Had this initial language been ratified, the Legislature might well have had the authority to designate the specific accounting firms to be employed by the Auditor General.

However, on second reading, the delegates instead adopted the present language "upon direction of the legislature"' but without any explanatory debate. 2 Official Record, Constitutional Convention 1961, pp 2771-2778. This change is significant. In contrast to the language originally proposed, which would have limited the Auditor General to employing "such firms ... as the legislature ... may direct,"' the language finally approved by the delegates contemplates only more general supervision by the Legislature.

It is my opinion, therefore, that, pursuant to Const 1963, art 4, Sec. 53, the Legislature may, by resolution, authorize the Auditor General to employ independent auditing firms and may provide general direction as to the standards and procedures to be followed by the Auditor General in selecting such outside auditing firms; the Legislature may not, however, control or determine the specific firm or firms to be selected by the Auditor General pursuant to such general policies and directives.

Frank J. Kelley

Attorney General