Interpretation's Date: March 6, 2001
by superintendent David Stewart
Section: III. County Educational Administration
SubSection: A. County Boards of Education
March 6, 2001
Dear Mr. Woolsey:
I am in receipt of your request for a Superintendent's Interpretation regarding the legality of a proposed loan from the Logan County Board of Education to the Boone County Board of Education. After reviewing all pertinent facts and law, it is my determination that this loan would not be legal.
In your letter you describe a previously approved arrangement whereby the students from Sharples Elementary School in Logan County, which will be closed, will attend Ramage Elementary School in Boone County next year. Your request specifically addressed a proposal in which Boone County has asked that Logan County give it the funds necessary to construct two additional classrooms to accommodate the transferred students at Ramage Elementary, with the understanding that the funds will be repaid to Logan County when they become available through the School Building Authority.
To begin, neither the West Virginia Code nor any West Virginia Department of Education Policy provides for this type of transfer between two county boards of education. As statutorily created bodies, county boards of education can only perform those acts which they are statutorily enabled to perform. See 51 Op. Att'y Gen. 99 (1964). The purpose of the account code referenced in the letter (Object Code 934 - Transfer to Other Governmental Unit - In State) is to allow for the accounting of legitimate transfers of funds from one entity to another, such as the pass-through of a federal or state grant from a RESA to a county board of education for expenditure. The account code was not created to grant authority to a board to loan funds to another fiscal body. Thus, because county boards of education are not granted the authority to loan each other money, such a transaction would not be legal.
Further, West Virginia Code 11-8-26 prohibits a fiscal body, including a county board of education, from expending funds or incurring obligations in excess of the funds available for current expenses. "All local fiscal bodies, including county boards of
education and municipalities, are forbidden by this section from obligating funds available in future budgets; they may not expend monies or incur obligations in excess of those funds available in the current budget." 51 Op. Att'y Gen. 47 (1964). "An undertaking by a fiscal body in advance of a fiscal year for the expenditure of money within that period, even though an equivalent amount of money be then in hand as a surplus or balance from the current year, is in reality an invasion of the funds of such subsequent year, and is in violation of the statute." Ireland v. Board of Educ., 115 W. Va. 614, 177 S.E. 452 (1934).
By way of example, the Attorney General of West Virginia has examined a similar issue and found that a county board of education has no authority to loan public funds to a non-profit corporation even though that non-profit corporation uses the funds for the purpose of purchasing school band uniforms. See 51 Op. Att'y Gen. 99 (1964).
In sum, there is no authority that allows a county board of education to loan public
funds to another county board of education. Therefore, your proposed loan arrangement
would not be legal.
Hoping that I have been of service, I am