Request By:
Mr. James William Barnett
Attorney at Law
114 South Fourth Street
Danville, Kentucky 40422
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Robert L. Chenoweth, Assistant Deputy Attorney General and Chief Counsel
As the Attorney for the Harrodsburg Independent School District, you have asked the Office of the Attorney General for a formal opinion on the requirement of publication of receipts and disbursements under KRS Chapter 424. The situation prompting your question was a belief that school districts are not publishing with their general fund and other published funds the receipts and disbursements from cafeteria accounts and are only showing any disbursements made to the cafeteria accounts from the general fund.
The question you have presented was stated by you as follows:
"Is it necessay in order to comply with KRS
"Is it necessary in order to comply with KRS Chapter 424, that we would publish all receipts and disbursements for the cafeteria account, which is maintained by the supervisor of the cafeteria and used for the deposit of funds from students lunches and federal funds, with disbursements for the purchase of food, supplies, and services used in the operation of the school cafeteria? "
It is the opinion of the Office of the Attorney General that school districts must comply with the financial statement requirements set out by statute not only for general account funds but also for funds maintained in separate accounts, such as a cafeteria account. Please accept our apology for the delay of this response.
The statutory law with respect to financial statements is set out in KRS 424.220. This law was amended by the 1982 General Assembly to lessen the burden of preparing and the cost of publishing a financial statement by decreasing the amount of line item detail necessary. As applicable to all school districts save and except the Jefferson County System, KRS 424.220 reads in relevant part to this opinion as follows:
" . . . [e]very public officer of any school district, . . . whose duty it is to collect, receive, have the custody, control or disbursement of public funds, . . . shall at the expiration of each fiscal year prepare an itemized, sworn statement of the funds collected, received, held or disbursed by him during the fiscal year just closed, . . . The statement shall show in the aggregate by source, the amount of funds collected and received, and in the aggregate by payee, the amounts disbursed, or the amount of funds collected and received, from what sources received, the amount disbursed, the date of each disbursement, for what purpose expended, and to whom paid, except that only the totals of amounts paid to each individual as salary or commission and public utility bills need to be shown and except that the amount of salaries paid to all teachers shall be shown as a lump sum instructional expenditure for the school district and not by amount paid to individual teachers and the amount of salaries paid to all other employes of the board shall be shown as lump sum expenditures by category, including but not limited to, administrative, maintenance, transportation, and food service; however the local board of education must have accessible a factual list of individual salaries for public scrutiny and the local board shall furnish by mail a factual list of individual salaries of its employes to a newspaper qualified under KRS 424.120 to publish advertisements for the district, which newspaper may then publish as a news item the individual salaries of school employes."
The 1982 amendment to this section makes it clear that the public officer preparing for publication a financial statement may now choose to show only in the aggregate the amount received from each category or source of funds and likewise show only in the aggregate the amounts disbursed by payee, except that the salaries paid to employees are to be shown in lump sum per each category of employee, for example, the category of food service employee.
We are unable to distill any support for the proposition that a school district's financial statement need only cover general fund account monies. KRS 424.220 uses the term "public funds. " The basic thrust of the statute is found in the language providing that the public officer " . . . [s]hall at the expiration of each fiscal year prepare an itemized, sworn statement of the funds collected, received, held or disbursed year just closed,. . ." We by him during the fiscal year just closed, . . ." We believe the law is incisive that each school board is responsible and liable for all school funds. KRS 160.290(1) reads in part that:
"Each board shall have control and management of all school funds . . ."
KRS 160.340(2)(h) requires each board of education to have policies on file relating to the "expenditure and accounting for school funds, including all special funds." The Court of Appeals has given a broad interpretation to what is usually considered to be meant by the term "school funds." See Commonwealth v. Collins, 379 S.W.2d 436, 437 (1964). We also point out the regulations of the State Board of Education regarding financial accounting by a local board of education, through its various personnel, of food service funds. See 703 KAR 1:010 Section 2, 703 KRS 1:030 Section 2(12) and particularly 703 KAR 1:070 requiring various reports to properly protect all funds accruing to the School Fund Service Program.
Therefore, it is the position of the Office of the Attorney General that it is necessary, in order to comply with KRS 424.220, that a school district include in their financial statement receipts and disbursements for a cafeteria account.