AG to UCA: No, no and no | Arkansas Blog

Tuesday, July 22, 2008

AG to UCA: No, no and no

Posted By on Tue, Jul 22, 2008 at 2:59 PM

The attorney general has released his opinion on UCA's use of cash funds -- from a bookstore and food service -- to pay a $300,000 bonus to President Lu Hardin. The question is academic now, since Hardin has repaid the money.

But the answer, as expected, is that cash money is public money and, though not appropriated, subject to all the usual laws that apply to public money. It is not private money and thus may not be used to provide a bonus beyond statutory limits to public employees. Summary on the jump. This is the link to the full opinion.

ATTORNEY GENERAL'S OPINION

QUESTION: Are "cash funds" held by an institution of higher education and paid to the institution by private companies operating the institution's food service and bookstore, "public funds" of the  institution, or are such cash funds "private funds" of the university?  Q2) If such funds, even though paid to the institution by private businesses, are deemed to be "public funds" are those cash funds subject to appropriations acts of the General Assembly?  Q3) May an employee listed in A.C.A. 6-63-309 receive an amount in excess of the maximum salary level established in the institution's appropriation act plus twenty-five percent (25%) under any of  the following scenarios:  (a) from cash funds of the institution, if the cash funds are paid to the institution by private companies providing food service and the campus bookstore, and  the payment is salary?  (b) from cash funds of the institution, if the cash funds are paid to the institution by private companies providing food service and the campus bookstore, and  the payment is a bonus?  (c ) from cash funds of the institution, if the cash funds are paid to the institution by private companies providing food service and the campus bookstore, and the payment is pursuant to a "plan of deferred compensation" adopted by the board of trustees and funded with such cash funds? 

RESPONSE:  1) It is beyond dispute, in my opinion, that "cash funds" of a public university are public, rather than private funds.  2) Although the Arkansas Constitution does not require "cash funds" to be appropriated, the Arkansas General Assembly has imposed an appropriation requirement for most "cash funds" by statute.  Although I have not been presented with detailed facts regarding the particular funds in question, it appears that they are not exempted from the appropriation requirements of the applicable subchapter. 3a) No.  3b) No.  3c) No, assuming your question does not refer to one of the statutorily-authorized tax-qualified retirement or investment plans offered to university employees.

 

 

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