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AUDITOR GENERAL: CONSTITUTIONAL LAW: SCHOOL DISTRICTS:
Auditor General access to local records
The State Board of Education and the Superintendent of Public Instruction may not delegate their authority to examine school records to the Auditor General to enable the Auditor General to review those records in order to conduct a performance audit of the Department of Education.
The Auditor General's office may utilize its subpoena power to compel the production of local school records sought in connection with audits of state agencies. Generally, in recognition of the Auditor General's responsibilities for state agency audits under Const 1963, art 4, § 53, local school officials may provide such records to the Auditor General upon oral or written request without the formal service of a subpoena.
Opinion No. 7158 June 29, 2004
Mr. Thomas D. Watkins, Jr. Superintendent of Public Instruction Michigan Department of Education Lansing, MI 48909
You have asked two questions regarding the Auditor General's ability to examine school records in order to conduct a performance audit of a state department.
You first ask whether the State Board of Education or the Superintendent of Public Instruction may delegate their authority to examine school records to the Auditor General to enable the Auditor General to review those records in order to conduct a performance audit of the Center for Educational Performance and Information.
Under section 1281 of the Revised School Code (Code), MCL 380.1281(2), the State Board of Education4 has the authority to examine and audit the official records and accounts of school districts, public school academies, and intermediate school districts in Michigan. In order to receive state school aid funds under the State School Aid Act of 1979 (State School Aid Act), school districts, public school academies, and intermediate school districts must allow the Department of Education or the department's designee to audit all records related to a program for which it receives funds. MCL 388.1768. The Superintendent of Public Instruction is the principal executive officer of the Michigan Department of Education. Const 1963, art 8, § 3; Straus v Governor, 459 Mich 526, 538; 592 NW2d 53
(1999).
Section 94a of the State School Aid Act creates the Center for Educational Performance and Information (CEPI) within the office of the State Budget Director in the Department of Management and Budget. MCL 388.1694a. CEPI is responsible for coordinating and collecting all data required by state and federal law from all entities receiving funds under the State School Aid Act. MCL 388.1694a. You have advised my staff that the Auditor General, in order to audit the accuracy and completeness of computer-stored data maintained by CEPI, seeks to examine school records located at school districts, public school academies, and intermediate school districts under the authority conferred on the State Board of Education or Superintendent of Public Instruction by the provisions of the Code and the State School Aid Act.
The office of the Auditor General was created through Const 1963, art 4, § 53, which provides:
4 All of the administrative statutory powers, duties, functions, and responsibilities of the State Board of Education set forth in MCL 380.1281 were transferred in Executive Order 1996-12, section 1(ll), to the Superintendent of Public Instruction by a Type II transfer, as defined by MCL 16.103.
The auditor general shall conduct post audits of financial transactions and accounts of the state and of all branches, departments, offices, boards, commissions, agencies, authorities and institutions of the state established by this constitution or by law . . . .
He shall be assigned no duties other than those specified in this section.
Under the prior constitution, the Auditor General was an elected officer of the executive branch and the Legislature was given complete authority to establish the scope of the Auditor General's powers. Const 1908, art 6, § 1. The 1963 Constitution provides for a new Auditor General, an official appointed by the Legislature with specified powers. Under Const 1963, art 4, § 53, the Legislature cannot confer any additional duties upon the Auditor General. OAG, 1963-1964, No 4284, p 278, 279 (February 18,
1964).
In interpreting Const 1963, art 4, § 53, the Attorney General has consistently concluded that the Auditor General does not have the authority to audit local units of government. See OAG, 1997-1998, No 6970, p 108 (January 28, 1998); OAG, 1983-1984, No 6225, p 303, 310 (May 7, 1984); Letter
Opinion of the Attorney General to Auditor General Albert Lee, dated December 17, 1975. This conclusion is supported by the debates of the Constitutional Convention, which demonstrate that the framers of the 1963 Constitution intended that the Auditor General would audit only state agencies, departments, and institutions and would not audit local units of government. The constitutional debates expressly mention that school districts are not subject to audits by the Auditor General. 1 Official Record, Constitutional Convention 1961, pp 1681-1682.
OAG No 6970 examined a provision in the fiscal year 1996-1997 appropriations act for the Michigan Department of Transportation (MDOT) that required the Auditor General to "perform audits and make investigations of the disposition of all state funds received by county road commissions . . . and cities and villages for transportation purposes to determine compliance with the terms and
conditions" of the applicable law by MDOT. The appropriations act directed the local units of government to make the pertinent records available to the Auditor General for this review. The opinion notes that the Auditor General interpreted this provision to simply allow an examination of records of local governmental units in conjunction with a performance audit of a state department and not as authorization to audit the local governmental unit.
The Attorney General rejected this interpretation of the statute, reasoning that the plain language of the appropriations act does not "merely allow the Auditor General to access a local governmental unit's records in the course of auditing state agencies; it affirmatively requires that the Auditor General audit local governmental units." OAG, No 6970, at 111. (Emphasis added.) The Attorney General concluded:
County road commissions and other local governmental units are not entities "of the state" as that term is used in Const 1963, art 4, § 53, even when they are using state funds allocated under 1951 PA 51. Accordingly, legislation requiring the Auditor General to audit such local governmental units is unconstitutional. Id.
Thus, the Attorney General opined that the statutory provision in the appropriations act violated Const 1963, art 4, § 53, to the extent it required the Auditor General to audit local units of government.
You advise that the Auditor General now seeks to access school records under the authority conferred on the State Board of Education or the Superintendent of Public Instruction in the Revised School Code or the State School Aid Act to examine the records and accounts of school districts, public school academies, and intermediate school districts. The powers of governmental officers and state agencies, however, are limited by the constitution and statutes that confer those powers and may not be extended by implication beyond what may be necessary for the reasonable execution of the power. Coffman v State Bd of Examiners in Optometry, 331 Mich 582, 590; 50 NW2d 322 (1951). No provision
of the State School Aid Act or the Revised School Code authorizes the Superintendent or the State Board of Education to delegate their authority to examine records to the Auditor General.
Moreover, since the State Board of Education, the Superintendent of Public Instruction, and the Department of Education are part of the executive branch of government, Straus v Governor, 459 Mich at 538, and the Auditor General is part of the legislative branch of government, neither the State Board of Education nor the Superintendent of Public Instruction may delegate, and the legislative branch may not exercise, a power conferred by the Legislature on these officers and this agency of the executive branch. To do so would violate the doctrine of separation of powers. Const 1963, art 3, § 2.
It is my opinion, therefore, in answer to your first question, that the State Board of Education and the Superintendent of Public Instruction may not delegate their authority to examine school records to the Auditor General to enable the Auditor General to examine those records in order to conduct a performance audit of the Department of Education.
Your second question assumes that this delegation is permitted and asks whether such a delegation of authority would make the Auditor General an agent of the State
Board of Education or the Superintendent of Public Instruction. In light of my answer to your first question, it is not necessary to answer your second question.
While executive branch authority to examine records described above may not be delegated to the Auditor General and his staff, other provisions of law relevant to the Auditor General's authority to examine records should be addressed. Section 1(3) of 2003 PA 1, MCL 13.101(3) provides:
Upon demand of the auditor general, deputy auditor general, or any person appointed by the auditor general to make the audits and examinations provided in this act, the officers and employees of all branches, departments, offices, boards, commissions, agencies, authorities, and institutions of this state shall produce for examination all books, accounts, documents, and records of their respective branch, department, office, board, commission, agency, authority, and institution and truthfully answer all questions relating to their books, accounts, documents, and records of their respective activities and affairs. [Emphasis added.]
Moreover, MCL 13.101(4) grants the Auditor General subpoena power to compel the production of records when conducting audits and examinations of state agencies. That statute provides:
In connection with audits and examinations described in this act, the auditor general, deputy auditor general, or any person appointed to make audits and examinations may issue subpoenas, direct the service of the subpoena by any police officer, and compel the attendance and testimony of witnesses; may administer oaths and examine any person as may be necessary; and may compel the production of books, accounts, papers, documents, and records. The orders and subpoenas issued by the auditor general, deputy auditor general, or any person appointed with the duty of making the examinations provided in this subsection may be enforced upon application to any circuit court as provided by law. [MCL 13.101(4); emphasis added.]
The subpoena power conferred by the emphasized language above is not limited to records maintained by state agencies.5 The Auditor General's office has subpoena power to require the production of records of such entities as local school districts, public school academies, and intermediate school districts, provided those records are sought "[i]n connection with audits" of state agencies performed by the Auditor General's office. Thus, if necessary, the Auditor General’s office may issue subpoenas to compel the production of local school documents it must examine in connection with an audit of a state agency, such as CEPI.6 In recognition of the Auditor General's responsibilities for state agency audits under Const 1963, art 4, § 53, local school officials and others may provide such records
5 Where statutory language is unambiguous, governing rules of statutory construction require that "we presume that the Legislature intended the meaning [it] clearly expressed." DiBenedetto v West Shore Hospital, 461 Mich 394, 402; 605 NW2d 300 (2000).
6 In addition, the Auditor General may, in the discharge of his duties to audit state agencies, access public records of local units of government under the Freedom of Information Act, 1976 PA 442, MCL 15.231 et seq. OAG, No 6970, p 111.
to the Auditor General upon oral or written request without the formal service of a subpoena. However, the obligations described in subsections 1(3) and (4) of 2003 PA 1 may be affected by state or federal laws restricting or prohibiting the disclosure of certain records. See, e.g., the Family Educational Rights and Privacy Act of 1974, 20 USC 1232g.
It is my further opinion, therefore, that the Auditor General's office may utilize its subpoena power to compel the production of local school records sought in connection with audits of state agencies. Generally, in recognition of the Auditor General's responsibilities for state agency audits under Const 1963, art 4, § 53, local school officials may provide such records to the Auditor General upon oral or written request without the formal service of a subpoena.
MIKE COX
Attorney General
