If an Arkansas city's elected recorder/treasurer is not keeping the books, can the city council hire someone else (or the former recorder) to do the work?
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This page answers the general question as of 2014. Ezel answers yours: what it means for your facts, under current Arkansas law, with citations.
Plain-English summary
Senator Johnny Key asked AG Dustin McDaniel about a city in his district whose elected recorder/treasurer reportedly was not submitting monthly financial reports or reconciling bank statements. The city council wanted to know whether it could hire the former recorder/treasurer to bring the books current. The AG pointed to A.C.A. § 14-59-115, part of the Municipal Accounting Law, which expressly contemplates this scenario: when the treasurer is not complying with the Accounting Law, the council may assign specific accounting duties to another employee, or it may contract those duties out to a qualified private person or entity. The former recorder/treasurer is eligible if qualified. The AG also noted that the council has procedural latitude in deciding how to make the assignment or contract. As a backstop, noncompliance with the Municipal Accounting Law is reviewable by the state Division of Legislative Audit and can be investigated by the prosecuting attorney.
Currency note
This opinion was issued in 2014. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
What the AG concluded
Q1: Can the city council hire the former recorder/treasurer to bring the municipality's books up to date?
Yes, if the current recorder/treasurer is not complying with the Municipal Accounting Law. A.C.A. § 14-59-115 lets the council assign the duties to another employee or contract them out to a qualified person. The former recorder/treasurer can be that person if otherwise qualified. The AG noted that the statute does not permit the council to assign the duties of collecting or disbursing funds to anyone outside the municipal employee roster — those duties must stay with a municipal employee.
Q2: Are there other options if the council does not pursue a removal-for-non-feasance action?
The AG noted that the answer to Q1 may make this moot. As additional avenues, noncompliance with the Municipal Accounting Law is reviewable by the state Division of Legislative Audit and is subject to investigation by the prosecuting attorney (A.C.A. §§ 14-59-117 and 14-77-106).
Common questions
Q: What does the Municipal Accounting Law actually require the treasurer to do?
A.C.A. § 14-59-115(a) requires each municipal treasurer (or an approved designated representative) to submit a monthly financial report to the council or board of directors. Subsection (b)(1) requires the treasurer to maintain the accounting records prescribed in the chapter. Noncompliance is what triggers the council's power to reassign or contract out the duties.
Q: Could the council contract the accounting work to a CPA firm?
The statute authorizes contracting "for such services to be performed by a private, qualified person or entity." A CPA firm would qualify as a "qualified . . . entity."
Q: Can the council assign the duty of writing or signing checks to an outside contractor?
No. A.C.A. § 14-59-115(b)(2)(B) specifically excludes "duties relating to the collecting or disbursing of funds" from what may be assigned outside the municipal employee roster. Cash-handling has to stay in-house.
Q: Does this opinion let the city council remove the recorder/treasurer?
No. The AG did not address removal procedures. The opinion only addresses the council's power to reassign specific accounting duties under the Municipal Accounting Law. Removal for nonfeasance is a separate process (touched on in the question but not in the answer).
Background and statutory framework
The Municipal Accounting Law is A.C.A. §§ 14-59-101 to 118. The provision the AG relied on, A.C.A. § 14-59-115, has two prongs. Subsection (a) imposes the monthly-report duty. Subsection (b)(2)(A) gives the council a remedy when the duty is not met: it may assign the duty internally or contract it out. Subsection (b)(2)(B) carves out the exception for cash-handling duties.
The AG was careful to say it could not determine the underlying factual question — whether the current recorder/treasurer was actually failing to comply. That is for the council and (if needed) Legislative Audit or the prosecuting attorney to resolve.
Citations
Statutes
- A.C.A. §§ 14-59-101 to 118 (Municipal Accounting Law)
- A.C.A. § 14-59-115 (procedures when treasurer is noncompliant; assignment or contracting of duties)
- A.C.A. § 14-59-117 (Legislative Audit review)
- A.C.A. § 14-77-106 (prosecuting attorney investigation)
Source
Original opinion text
STATE OF ARKANSAS
THE ATTORNEY GENERAL
DUSTIN McDANIEL
Opinion No. 2014-020
April 28, 2014
The Honorable Johnny Key
State Senator
Post Office Box 350
Mountain Home, Arkansas 72654
Dear Senator Key:
This is in response to your request for my opinion concerning a municipality in your district that reportedly has had continued problems with its recorder/treasurer. You state that according to a city council member, the recorder/treasurer does not submit regular financial reports or complete the reconciliation of bank statements, among other matters. You have asked the following questions in this regard on behalf of the city council:
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Can the city council hire the former Recorder/Treasurer to bring the financial records of the municipality up to date and answer to the city council? If so, what is the procedure?
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If not, are there any other avenues the city council can pursue in this situation beyond the removal for non-feasance process?
RESPONSE
A provision in the Arkansas Municipal Accounting Law appears to be relevant to your first question. Pursuant to A.C.A. § 14-59-115, a municipality's governing body may either assign municipal accounting duties to another employee or contract for such services if the treasurer is not complying with the Accounting Law:
(a) Each municipal treasurer of this state or the designated representative that has been approved by the governing body shall submit a monthly financial report to the council or board of directors.
(b)(1) Municipal treasurers shall maintain the accounting records prescribed in this chapter.
(2)(A) If the treasurer does not comply with the provisions of this chapter or requests that specific duties be assigned to another employee or contracting entity, the governing body of a municipality may assign specific duties outlined in this chapter to another employee, or it may contract for such services to be performed by a private, qualified person or entity.
(B) The governing body of a municipality may not assign duties relating to the collecting or disbursing of funds to anyone other than an employee of the municipality.
I of course cannot address the purely factual question whether the current recorder/treasurer is failing to comply with the Municipal Accounting Law. But if that is the case, then it seems the above-emphasized statute is authority for either assigning duties to another employee or contracting with a qualified person — including the former recorder/treasurer if he or she is in fact so qualified — to perform specific duties under this body of law.
As for the applicable procedure, it appears this is a matter to be determined by the city council. As the "governing body of [the] municipality," the council is the body authorized by section 14-59-115 to take steps to address the matter of noncompliance with the Accounting Law. It reasonably follows that the council will determine the procedure for either assigning duties to another employee or contracting for services toward this end.
A response to your second question regarding other avenues of relief may be unnecessary in light of the above. I will nevertheless note that a failure to comply with the Municipal Accounting Law is reviewable by the state Division of Legislative Audit and subject to investigation by the prosecuting attorney.
Deputy Attorney General Elisabeth A. Walker prepared the foregoing opinion, which I hereby approve.
Sincerely,
DUSTIN MCDANIEL
Attorney General
DM:EAW/cyh
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