SCHOOLS ‑- SCHOOL DISTRICTS ‑- BUDGETS ‑- POWER TO ISSUE WARRANTS AGAINST ANTICIPATED REVENUES.
School district officials may approve vouchers against anticipated revenues of bond sales where such revenues were included in the budget for the fiscal year.
The county auditor may issue warrants against such anticipated revenues before the bonds are sold.
The county auditor may pay such warrants before the anticipated revenues are actually deposited.
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June 8, 1954
Honorable Don G. Abel
Aberdeen, Washington Cite as: AGO 53-55 No. 268
We have your letter of May 10, 1954, requesting our answer to certain questions concerning the following situation:
A second class school district has voted a bond issue for school construction purposes. The current school budget for that district has been amended by a budget extension duly approved by all necessary authorities; this extension amends the budget so as to include the revenue anticipated from the sale of the bonds authorized by the said election. The bonds have not been sold.
On these facts the following questions have been asked:
1. May the school district approve vouchers against the funds anticipated from the bond sale?
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2. May the county auditor issue warrants against this anticipated fund?
3. May the county treasurer pay such warrants before the funds anticipated from the bond sale are actually deposited?
In answering these questions, you have asked that we consider the following additional alternate state of facts:
1. That the expenditure of these anticipated funds will leave the school district with a substantial deficit should the bonds be not sold.
2. That the expenditure of these anticipated funds will not leave a deficit in the school district if the bonds are not sold.
Our conclusion is that all of the questions should be answered in the affirmative, regardless of which alternate set of facts exist.
In answer to the first question it seems to us that if the budget has been extended to include the anticipated revenue from the bond sale, there would be no restriction on the school directors in approving vouchers against the funds anticipated. RCW 28.58.130 provides in part as follows:
"It shall be unlawful for any board of directors to contract indebtedness against its district in any one year in any sum in excess of the aggregate amount set forth and approved in its final budget. * * *"
The legislature has clearly limited the school district expenditures by the budget. However, there is no restriction on the expenditures provided for in the budget, provided they are in line with that budget. The following two opinions, copies of which are enclosed for your convenience, have dealt with this subject. AGO to the Prosecuting Attorney of Cowlitz County, dated March 13, 1937, and AGO to the Prosecuting Attorney of King County, dated April 11, 1936.
In answer to your second question, it is our opinion that the county auditor should issue warrants against this anticipated fund when the school directors so approve. We can see no reason for his refusing to do so. Of course, the [[Orig. Op. Page 3]] auditor is restricted by the constitutional debt limit under section 6, Article VIII, of the Constitution of the State of Washington. Enclosed is a copy of our opinion dealing extensively with this subject. (AGO to Prosecuting Attorney of Grant County, dated July 8, 1952 [[Opinion No. 51-53-345]].)
In answer to your third question, the county treasurer would not be prohibited from payment of these warrants before the anticipated bond sale funds were deposited. Once these warrants are presented for payment, if the issuance is proper, the county treasurer has no grounds on refusing payment. See our opinion to the Prosecuting Attorney of Asotin County, dated May 19, 1937, enclosed herein.
The alternate factual situation presented by you would not change the answers to the above questions. The fact that the board of directors is proceeding according to its budget is enough to justify the expenditures and any deficiency would be a matter for its concern during the next budgeting period.
It should be noted that the board of directors has a duty to proceed with the bond sale. See opinion to the Prosecuting Attorney of Grant County, May 16, 1921, enclosed.
It is our conclusion therefore that the bond issue having been lawfully passed and provided for in the school budget, there would be no need to wait for the actual deposit of the funds before the school board and other officials could act.
Very truly yours,
RALPH M. DAVIS
Assistant Attorney General