How long does the Arkansas Auditor of State have to keep redeemed and unredeemed state warrants?

Plain-English summary

Auditor of State Andrea Lea asked four questions about how long her office had to keep state warrants (the documents Arkansas uses to draw money from the state treasury) and in what medium. The Attorney General's answers turned on whether a warrant had been redeemed.

For redeemed warrants, the statute is specific: paper originals must sit in a secure place or vault for one year from the close of the fiscal year of issuance. If the office makes an electronic copy, the paper original can be discarded after three months and the electronic copy must be kept for ten years. The Auditor has discretion over the medium.

For unredeemed warrants, the statute is silent. Because warrants are good for one year past the close of the fiscal year and then become "outlawed," the AG suggested that one-year window as a sensible reference point for any internal retention policy, but emphasized the choice was the Auditor's.

Question 4 asked the AG to define "electronic copy." The AG declined to issue a controlling definition (saying that's the legislature's job), but offered the dictionary reading: a duplicate of an original warrant stored or transmitted in some electronic medium.

Currency note

This opinion was issued in 2017. 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.

Background and statutory framework

Under Arkansas public-finance law, a "warrant" is the device the state uses to draw money from the state treasurer. The Auditor of State enters every warrant in a register and tracks the warrant's name, date, payee, and purpose. Each day, the Auditor reconciles her records against the Treasurer's. Redeemed warrants are stamped void with the Auditor's signature.

Warrants have a one-year usable life past the close of the fiscal period against which they were drawn. After that, they become "outlawed" and cannot be redeemed or reissued. Until that point, they are "unredeemed."

Arkansas Code § 19-4-406 spells out the retention rules but, as the AG read the statute, only for redeemed warrants. The opening clause directs the Auditor to "place all redeemed warrants in a secure place or vault." The general references later in the section to "a warrant" therefore carry that limiting context. The retention periods (one year intact, or three months original plus ten years electronic) apply to redeemed warrants.

The AG noted that the general state records-retention statute (Act 918 of 2005, Ark. Code Ann. §§ 25-18-601 to -605) does not reach the Auditor's office because the term "state agencies" in that act excludes elected constitutional officers.

Common questions

How long does the Auditor have to keep an unredeemed warrant? At the time of this opinion, no statute set a specific period. The AG read the retention statute as applying only to redeemed warrants. The Auditor had discretion, and the AG suggested the warrant's one-year usable life as a useful reference point.

How long does the Auditor have to keep a redeemed warrant? If kept only on paper, one year from the close of the fiscal year in which it was issued. If an electronic copy was made, the paper original could be discarded after three months and the electronic copy had to be kept for ten years.

Could the Auditor scan paper warrants and shred the originals? Yes, after three months, under Ark. Code Ann. § 19-4-406(a)(2)(B). The electronic copy then carried the ten-year retention obligation.

What counts as an "electronic copy"?
The legislature did not define the term, and the AG declined to write a controlling definition (the AG's office said that role belongs to the legislature). Using ordinary dictionary meaning, the AG described an electronic copy as an identical version of an original warrant stored or transmitted in an electronic medium.

Are there situations where warrants have to be kept longer? Yes. In footnote 8, the AG quotes § 19-4-406(b) on longer retention requested by the Legislative Auditor or State Historian. She also says § 19-4-406(c) can require longer retention under federal law or regulations.

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

STAT E O F ARKAN SAS
ATTO RN EY G EN ERAL
LES LI E RU T LED GE

Opinion No. 2017-059

November 2, 2017

The Honorable Andrea Lea
Auditor of State
500 Woodlane Street, Suite 230
Little Rock, AR 72201

Dear Auditor Lea:

This is in response to your request for an opinion concerning the Auditor of State's duty to store warrants under Ark. Code Ann. §§ 19-4-401 et seq. and 25-16-501 et seq. In this regard, you have posed the following questions:

1) How long does the Auditor of State have to retain unredeemed warrants or copies of unredeemed warrants?

2) How long does the Auditor of State have to retain redeemed warrants or copies of redeemed warrants?

3) In what form or medium must the warrants be held?

4) What is an electronic copy?

RESPONSE

In my opinion, Arkansas law does not expressly require the Auditor of State to retain unredeemed warrants, or copies of unredeemed warrants, for a particular amount of time. The Auditor of State is expressly required to keep disbursement records of all issued warrants. And because warrants issued by the Auditor can be redeemed up to one year after the close of the fiscal period in which they were issued, this time period may be relevant when establishing as a matter of discretion a retention policy with respect to unredeemed warrants.

323 CE NTER STREET, SU ITE 200 · LITTLE ROC K. ARKAN SAS 7220 1 TELEPHONE (501) 682-2007 ·FAX (50 1) 682-8084 ARKAN SAS AG .GOV

The Honorable Andrea Lea
Auditor of State
Opinion No. 2017-059
Page 2

In response to your second question, I believe the amount of time the Auditor must retain redeemed warrants or their copies depends upon the medium in which the warrants are stored. If the redeemed warrants are stored in their original, paper form, they must be kept in a secure place or vault for a period of one year from the close of the fiscal year in which they were issued. But if the redeemed warrants are stored as electronic copies, the copies must be retained for 10 years, and the originals for three months.

With respect to your third question, it is my opinion that the Auditor may choose the storage medium (original or electronic copy) for both redeemed and unredeemed warrants. As to your fourth question, it is my opinion that, in this context, an "electronic copy" is an identical version of an original warrant that is stored in an electronic medium.

DISCUSSION

A general overview of the applicable law will be helpful before turning to your specific questions. Under Arkansas public-finance law, a "warrant" is a device for drawing money from the state treasurer. 1 The Auditor "enter[s] in a book ... each warrant drawn ... on the State Treasury for the payment of money in the order in which the warrant [was] issued." 2 For each warrant issued from her office, the Auditor must record the "number and date of each warrant, the name of the person in whose favor drawn, and for what it was drawn. " 3 And each day, the Auditor will "examine and verify the disbursement and redemption records of the Treasurer of State ... and compare them with the records in his or her own office and with [his or her] redeemed warrants." 4 Any warrants that have been redeemed are marked void with a "stamp[] over the signature of the Auditor of State."5

1
See Op. Att'y Gen. 97-107 (citing State v. Family Bank of Hallandale, Florida, 623 So. 2d 474 (Fla. 1992)). See also Ark. Code Ann. § 25-16-515 (Rep I. 2014) (stating that it is the duty of the Auditor of State to "draw all warrants upon the State Treasury for money."). 2 Id. at§ 25-16-516(c) (Repl. 2014)
3
Id.
4
Id. at§ 19-4-405(a) (Repl. 2016).

5
Id. at § 19-4-405(b)

The Honorable Andrea Lea
Auditor of State
Opinion No. 2017-059
Page 3

Generally, warrants must be redeemed "within the twelve (12) months immediately following the close of the fiscal year or other appropriate fiscal period against which appropriation the warrant was charged." 6 "Warrants that are outstanding at the end of the State Fiscal Year on June 30 and have been issued more than 12 months will be considered to be 'outlawed,'" 7 or unredeemable.

With this general overview of the law in mind, I turn to your specific questions.

Question 1: How long does the Auditor of State have to retain unredeemed warrants or copies of unredeemed warrants?

It is my opinion that there is no specific length of time that an unredeemed warrant or a copy of an unredeemed warrant must be retained. But warrants are capable of being redeemed for a period of one year following the close of the fiscal year in which they were issued. This time period may be relevant in determining how long the Auditor chooses as a policy matter to keep unredeemed warrants or their copies.

The Auditor has the following explicit duties with respect to the storage of warrants:

(a)(l) The Auditor of State shall place all redeemed warrants in a secure place or vault in the Auditor of State's office, subject to the inspection of any interested citizen.

6
Ark. Code Ann. § 19-4-703. See also id. at § 25-16-51 S(b) (stating that "[i]n no case shall the Auditor of State carry forward from one ( 1) term to another an unexpended balance of any appropriation after the time for which it was made has expired."). "Warrants" are thus distinguishable from "checks," in that a stale check is not a nullity. See e.g. Hartsook v. Owens, 236 Ark. 790, 370 S.W.2d 69 (1963). Accord Op. Att'y Gen. 97-107 (distinguishing an "outlawed," or expired warrant, with a check, which does not likewise expire). 7 Ark. Admin. Code 006.09.1 Rl-19-4-703 (Department of Finance and Administration, Office of Accounting Financial Management Guide at 79, available at http://www.dfa.arkansas.gov/offices
/accounting/Documents/financialManagementGuide.pdf (last accessed October 13, 2017)). The Treasurer of State-Warrant Division cannot redeem an "outlawed warrant," and the Auditor of State-Warrant Division cannot reissue an "outlawed warrant." See id. It necessarily follows that during the time between which the warrant is issued and the warrant becomes officially "outlawed," the warrant is considered to be "unredeemed."

The Honorable Andrea Lea
Auditor of State
Opinion No. 2017-059
Page 4

(2)(A) Except as provided in subdivision (a)(2)(B) of this section, the Auditor of State shall keep a warrant intact and without further alteration for a period of one ( 1) year from the close of the fiscal year in which the warrant was issued.

(B)(i) If the Auditor of State makes an electronic copy of the warrant, the original shall be kept for three (3) months.

(ii) The electronic copy of the warrant shall be maintained for a period of ten (10) years from the close of the fiscal year in which the warrant was issued. 8

When interpreting a statute, it is necessary to first construe the statute just as it reads, 9 and avoid resorting to a strained construction in order to restrict or expand the statute's plain meaning. 10 Statutory terms may be clarified by an accompanying word or by the subject area of the statute as a whole, 11 which can give specific context to terms that might otherwise appear generalized. 12

Applying these principles, I believe the statute quoted above applies exclusively to redeemed warrants, such that there is no clear statutory answer to how long the

8
Ark. Code Ann. § 19-4-406(a). Additionally, "[i]f the Legislative Auditor or the State Historian requests retention of an original warrant or the electronic copy of a warrant in excess of the time periods provided [above], the warrant shall be retained by the Auditor of State for such period of time as required .... " Id. at§ 19-4-406(b). The Auditor may also be required to retain a certain warrant for a longer period of time if federal law or regulations require. Id. at § 19-4-406(c). 9 Weiss v. McFadden, 353 Ark. 868, 120 S.W.3d 545 (2003).
10
Thompson v. Younts, 282 Ark. 524, 669 S.W.2d 471 (1984).
11
See Weldon v. Southwestern Bell Telephone Co., 271 Ark. 145, 607 S.W.2d 395 (1980) (analyzing a statute that listed "maintenance of telephone lines, poles, and fixtures" and ultimately determining that the term "fixtures" is limited specifically to "telephone fixtures," based on the fact that the doctrine of noscitur a sociis has the effect of limiting the scope of general language to the specific language of its context); see also McDonald v. Bowen, 250 Ark. 1049, 1055, 468 S.W.2d 765, 769 (1971) (holding that the phrase "other public purposes," as used in a constitutional amendment for financing industrial development, should not be interpreted as "an open-ended authorization of unlimited scope," but instead should be comparable and relate back to the reference to the specific language of its context). 12 See Weldon, 271 Ark. at 146, 607 S.W.2d at 396.

The Honorable Andrea Lea
Auditor of State
Opinion No. 2017-059
Page 5

Auditor must retain unredeemed warrants. At the outset of the warrant-retention statute, the Auditor is directed to "place all redeemed warrants in a secure place or vault." 13 Thus, generic references in the remainder of the statute to "a warrant" can reasonably be understood as references to "redeemed warrants." So not only must the Auditor "place all redeemed warrants in a secure place or vault," she must also "keep a warrant [meaning a redeemed warrant] intact . . . for a period of one (1) year from the close of the fiscal year in which the warrant was issued." 14 If the redeemed warrant is stored in both original and electronic form, the original must be stored for three months, and the electronic copy for 10 years "from the close of the fiscal year in which the [redeemed] warrant was issued." 15

There is not a similar statute directing the Auditor to retain unredeemed warrants for a particular period of time. 16 However, warrants issued by the Auditor do not expire for a period of one year "immediately following the close of the fiscal year or other appropriate fiscal period against which appropriation the warrant was charged. 17 This one-year period may be relevant in determining how long unredeemed warrants, or copies of unredeemed warrants, should be retained. 18 In my opinion, the Auditor ultimately has the discretion (consistent with the office's constitutional mandate) to decide on a retention policy regarding unredeemed warrants.

13
Ark. Code Ann.§ 19-4-406(a)(l) (emphasis added).
14
Id. at§ 19-4-406(a)(2)(A).
15
Id. at§ 19-4-406(a)(2)(B)(ii). See also infra Response to Question 3.
16
Act 918of2005, codified at Ark. Code Ann.§§ 25-18-601 to -605 (Rep!. 2014), calls for the development of rules and guidelines for "the retention of public records commonly found in most state agencies." But the term "state agencies" does not include you as an elected, constitutional officer. See Ark. Code Ann. § 25-18-603(2)(B)(i). 17 Ark. Code Ann. § 19-4-703.
18
The statutes governing the Auditor's treatment of unredeemed warrants do not refer to "originals" or "copies." Rather, the Auditor is directed to maintain certain disbursement records for outgoing warrants, and to compare her records regularly with those of the Treasurer. See Ark. 25-15-516( c) ("The Auditor of State shall enter in a book to be kept for that purpose each warrant drawn ... in such manner as to show the number and date of each warrant, the name of the person in whose favor drawn, and for what it was drawn.").

The Honorable Andrea Lea
Auditor of State
Opinion No. 2017-059
Page 6

Question 2: How long does the Auditor of State have to retain redeemed warrants or copies of redeemed warrants?

Under Ark. Code Ann. § 19-4-406, the Auditor must "place all redeemed warrants in a secure place or vault." 19 And she must keep redeemed warrants "intact ... for a period of one ( 1) year from the close of the fiscal year in which the warrant was issued. " 20 If the redeemed warrant is stored in both original and electronic form, the original must be stored for three months, and the electronic col? for 10 years "from the close of the fiscal year in which the warrant was issued." 1

Question 3: In what form or medium must the warrants be held?

In my opinion, redeemed warrants may be retained either in their original form or as an electronic copy. And while the warrant-retention statute discussed above does not apply to unredeemed warrants, I believe the Auditor still has the discretion to hold unredeemed warrants in like fashion-either as originals or as electronic copies. 22

Section 19-4-406(a)(2) introduces two options with regard to the medium in which the Auditor may store a redeemed warrant. All redeemed warrants must be retained in a "secure place or vault." 23 And they generally must be kept "intact and without further alteration," 24 which is to say in original form. But if the Auditor chooses, she may "make[] an electronic copy" of the redeemed warrant. 25 If she does so, the original must be retained for three months and the electronic copy for "10 years from the close of the fiscal year in which the warrant was issued." 26

19
Ark. Code Ann.§ 19-4-406(a)(l).
20
Id. at§ 19-4-406(a)(2)(A).
21
See supra note 15.
22
See supra note 18.
23
Ark. Code Ann. § 19-4-406(a)(l).
24
Id. at§ 19-4-406(a)(2)(A).
25
Id. at§ 19-4-406(a)(2)(B)(i).
26
Id. at§ 19-4-406(a)(2)(A).

The Honorable Andrea Lea
Auditor of State
Opinion No. 2017-059
Page 7

Given that there is no express statute to the contrary, I believe the Auditor may make the same choice with respect to the storage medium for unredeemed warrants. That is, the Auditor could choose to retain an unredeemed warrant either "intact and without further alteration," or as an original and an electronic copy.

Question 4: What is an electronic copy?

There is no controlling statutory definition of the term "electronic copy." 27 This office cannot provide a controlling definition of a term where the legislature has not done so. 28 However, where a term is not defined, the Arkansas Supreme Court has held that it is appropriate to give words their commonly understood meanings. 29 The Court has sometimes resorted to dictionary definitions in order to determine the meaning of a word or phrase. 30

The New Oxford American Dictionary defines "electronic" as "carried out or accessed 3 hr means of a computer or other electronic device, esp[ ecially] over a network." And "copy," for purposes of your question, is defined in the New Oxford American Dictionary as "a thing made to be similar or identical to another. " 32

27
There is, however, a Department of Finance and Administration Regulation that governs "electronic warrants" with respect to their formatting and transfer. See Rule Rl-19-4-407 ("Electronic Warrants"), Office of Accounting Financial Management Guide, supra note 7, at 26-

28. I do not take your question regarding the definition of an "electronic copy" to refer to the
    process by which warrants may be formatted and transferred. 28 See Ops. Att'y Gen. 2011-144, 2010-002 (and opinions cited therein). See also Op. Att'y Gen. 1998-025 ("This office has consistently taken the position that in the absence of a legislatively-or judicially-formulated definition, it is inappropriate for the Attorney General, being a member of the executive branch of government, to formulate a controlling definition."). 29
    K.N. v. State, 360 Ark. 579, 584, 203 S.W.3d 103 (2005).
    30
    E.g., Arkansas Tobacco Control Board v. Santa Fe Natural Tobacco Co., 360 Ark. 32, 39, 199 S.W.3d 656 (2004). 31
    New Oxford American Dictionary 560 (Oxford Univ. Press, 2010).
    32
    Id. at 384.

The Honorable Andrea Lea
Auditor of State
Opinion Nc1. 2017-059
Page 8

Based on these definitions, I believe the term "electronic copy" means an identical version of an original work, which is stored in and accessed by means of a computer or other electronic device. In the context of your question, "electronic copy" would therefore be commonly understood as a duplicate of an original warrant, stored or transmitted in some electronic medium.

Sincerely,

~~
LESLIE RUTLEDGE
Attorney General