Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

AGO 1963 No. 28 - May 31 1963
Attorney General John J. O'Connell


The state auditor has the statutory authority to authorize the use by various municipalities of a "long and short" account within the prescribed system of accounting of municipal funds, pursuant to his finding that it meets standards of accuracy required by RCW 43.09.200.

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                                                                   May 31, 1963

Honorable Cliff Yelle
State Auditor
Legislative Building
Olympia, Washington

                                                                                                                Cite as:  AGO 63-64 No. 28

Dear Sir:

            By letter previously acknowledged you have requested the opinion of this office on a question which we paraphrase as follows:

            Is it within the authority of the state auditor's office to authorize for the use of the various municipalities a "long and short" account within the prescribed system of accounting for municipal funds?

            We answer your question in the affirmative as qualified in the analysis.


            It is a general rule that public officers have only such powers as are expressly conferred upon them by law, or those powers which are necessarily implied from the express powers granted to them.  See,State ex rel. Taylor v. Superior Court, 2 Wn.2d 575, 98 P.2d 985 (1940).

            The power and duty of the state auditor to prescribe systems of accounting for municipal corporations have been established by the legislature.  RCW 43.09.200 requires the state auditor, through the division of municipal corporations, to

            ". . . formulate, prescribe, and install a system of accounting and reporting, which shall be uniform for every public institution, and every public office, and every public account of the same class.

             [[Orig. Op. Page 2]]

            "The system shall exhibit true accounts and detailed statements of funds collected, received, and expended for account of the public for any purpose whatever, and by all public officers, employees, or other persons.

            "The accounts shall show the receipt, use, and disposition of all public property, and the income, if any, derived therefrom; all sources of public income, and the amounts due and received from each source; all receipts, vouchers, and other documents kept, or required to be kept, necessary to isolate and prove the validity of every transaction; all statements and reports made or required to be made, for the internal administration of the office to which they pertain; and all reports published or required to be published, for the information of the people regarding any and all details of the financial administration of public affairs."

            Under the present system of accounting, as you have described it, cashiers and others are required to balance the actual cash on hand with their accounts daily, on an exact basis.  While the policy of the system is ideal, you point out that in practice it leads to absurdities; that because of the human error factor many municipalities employ a petty cash fund to drain off overages and fill up shortages of a minor nature.  While the "long and short" account would be an official recognition of the same practice, it would eliminate the petty cash fund by eliminating the requirement of a forced balance.  Under the proposed procedure the cashier or similar officer would record his accounts in accordance with the actual cash on hand at the end of each day whether or not a shortage or an overage existed.  It is pointed out that in practice a shortage in one day will usually be balanced by an overage on another day so that over a period of days there is actually no overage or shortage of cash.  On the other hand, the use of the petty cash fund does not reflect the accuracy or lack of it in the handling of funds.

            Further, on the merits of the "long and short" account, it is pointed out that there is an annual closing date; that periodic scrutiny by management and by state examiners together with the establishment of the "long and short" account tends to be a fairly effective method of determining the efficiency of individual cashiers.  It is also pointed out that both the REA [[Rural Electrification Administration]]and F.P.C. uniform system of accounts specifically provide for "cash overages and shortages" in private power accounting.  Finally, it is our understanding this system would not be  [[Orig. Op. Page 3]] interpreted to relieve any public employee or officer from responsibility for actual shortages, on a day-to-day basis, if such shortages are found to exist.

            In view of all of these considerations, this office finds no legal objection to your office authorizing the use of a "long and short" account within the prescribed system of accounting for municipal funds.  It is not for this office to decide the relative merits of one procedure over another beyond inquiring whether or not it violates any standard established by the constitution or statutes of this state.  Since our analysis has discovered no such objection, it is for your office to determine whether or not this procedure meets the standards prescribed by RCW 43.09.200,supra, as a factual matter, and particularly requirements of accuracy.  If your office determines that the use of the "long and short" account enhances the accuracy of the system of accounting employed by the various municipal corporations and that the system exhibits true accounts and meets the other functional requirements of the statute, we see no legal objection to its use.

            We trust this information will be of assistance to you.

Very truly yours,

Attorney General

Assistant Attorney General