Could Connecticut cancel another state agency’s debt to a DAS revolving fund?

Plain-English summary

In September 1993, Connecticut’s AG said the Department of Administrative Services could not use the general claims-cancellation statute to erase amounts other state agencies owed its technical-services and general-services revolving funds. Those funds paid for services and supplies on behalf of agencies and depended on the recipient agencies’ repayments to continue operating.

The cited statute addressed uncollectible claims and compromise of disputed claims. The AG reasoned that an agency-to-agency charge was an internal obligation of the state to itself. It made no sense under that wording to call the claim “uncollectible” from the state or to imagine a compromise between two separate parties when both sides were state agencies. His conclusion was expressly limited to the funds’ debts owed by other state agencies; it did not decide how to handle claims against outside persons or organizations.

DAS and agency finance staff at the time

The opinion said the cited cancellation and compromise procedure could not be used for the interagency balances described in the request.

State fiscal officials at the time

The AG treated the revolving funds’ receivables as internal state accounting obligations rather than claims involving an outside debtor.

Currency note

This opinion was issued in 1993. 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.

Common questions

Q: Could DAS write off another agency’s revolving-fund balance as uncollectible?
A: Not under the claims-cancellation statute the AG examined. He said the state could not sensibly treat its own interagency obligation that way.

Q: Could the governor compromise a disputed balance between two state agencies under that statute?
A: The AG said no. A compromise requires at least two parties, while the state was on both sides of this internal charge.

Q: Did the opinion cover DAS claims against private vendors?
A: No. It addressed amounts owed to the two revolving funds by other state agencies.

Background and statutory framework

Conn. Gen. Stat. § 3-7 authorized cancellation of certain uncollectible claims and compromise of disputed claims. The AG read those terms in their ordinary sense and declined to apply the procedure to interagency repayments to revolving funds.

Citations and references

Statute: Conn. Gen. Stat. § 3-7.

Source

• Landing page: https://portal.ct.gov/AG/Opinions
• Opinion page: https://portal.ct.gov/ag/opinions/1993-formal-opinions/honorable-r-michael-dunne-department-of-administrative-services-1993030-formal-opinion-attorney-gene

Original opinion text

Honorable R. Michael Dunne, Department of Administrative Services, 1993-030 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General, Richard Blumenthal

September 23, 1993

Honorable R. Michael Dunne

Department of Administrative Services

165 Capitol Avenue

Hartford, Connecticut 06106

Dear Commissioner Dunne:

This is in response to your department's request for a formal opinion from this office as to whether or not Section 3-7 of the General Statutes is applicable to certain internal service/revolving funds administered by the Department of Administrative Services (DAS). Your department's request focuses on whether monies owed to the funds by other State agencies may be cancelled from the books of DAS or otherwise compromised in accordance with the provisions of Section 3-7. For the reasons that follow, we believe that Section 3-7 does not apply to monies owed to the funds by other State agencies.

The internal service/revolving funds to which monies are owed are the two funds established by the Legislature in Sections 4a-7 and 4a-75 of the General Statutes, as amended by 1993 Conn. Pub. Act No. 93-30. The fund mentioned in Section 4a-7 is the technical services revolving fund and is used for the purchase, installation and utilization of information systems, as defined in Section 16a-109 of the General Statutes for budgeted agencies of the State. The second fund is the general services revolving fund pertaining to current expenses for supplies, materials, equipment and contractual services as will be incurred by DAS in anticipation of the future requirements of State agencies or under other conditions necessitating the payment of such expenses prior to the determination of the legal or equitable claims to be charged on account of such expenses to the appropriations of such agencies. Both funds are typical revolving funds in that each has the purpose of having DAS carry on certain activities on behalf of other State agencies which, in turn, yield repayments by the recipient agencies in the continued financing of each fund, constituting a cycle. The repayments are made by the recipient agencies through various sources, including appropriations from the General Assembly.

Section 3-7 reads as follows:

(a) Any uncollectible claim for an amount of two hundred dollars or less may be cancelled upon the books of any state department or agency upon the authorization of the head of such department or agency, provided any uncollectible patient claim due to The University of Connecticut Health Center for an amount of four hundred dollars or less may be cancelled upon the books of said health center upon the authorization of the board of trustees of The University of Connecticut, in accordance with procedures approved by the comptroller.

(b) The governor, upon the recommendation of the attorney general, may authorize the cancellation upon the books of any state department or agency of any uncollectible claim for an amount greater than two hundred dollars due to such department or agency or, in the case of any uncollectible patient claim due to The University of Connecticut Health Center, greater than four hundred dollars.

(c) Upon the recommendation of the attorney general, the governor may authorize the compromise of any disputed claim by or against the state or any department or agency thereof, and shall certify to the proper officer or department or agency of the state the amount to be received or paid under such compromise. Such certificate shall constitute sufficient authority to such officer or department or agency to pay or receive the amount therein specified in full settlement of such claim. The record of any compromise effected pursuant to the provisions of this section shall be open to public inspection in accordance with section 1-19.

Statutes must be applied as their words direct, Frazier v. Manson, 176 Conn. 638, 643, 410 A.2d 475, 478 (1979), and the words of a statute must be given their plain and ordinary meaning. Klapproth v. Turner, 156 Conn. 276, 280, 240 A.2d 886, 888-889 (1968). "In construing a statute, common sense must be used and courts must assume that a reasonable and rational result was intended." Norwich Land Co. v. Public Utilities Commission, 170 Conn. 1, 4, 363 A.2d 1386, 1388 (1975).

Sections 3-7(a) and (b) apply specifically to claims which are "uncollectible," meaning claims which are "not capable of being collected." Webster's Third New International Dictionary 2485 (1961). Section 3-7(c) applies to the "compromise" of disputed claims. To "compromise" means "to adjust or settle (a difference) between parties;...to come to a settlement or agreement by mutual concession." Id. at 468.

Applying Section 3-7 as its words direct, it is our opinion that the statute cannot logically be applied to the internal service/revolving funds in question. Because State agencies are agencies of the State itself, which the Legislature has given statutory authority to act for the State in implementing State programs, see Catholic Family and Community Services v. Commission on Human Rights and Oportunities, 3 Conn. App. 464, 467, 489 A.2d 408, 410 (1985), funds owed by one State agency to another are actually funds owed by the State to itself. It would not make sense to consider such funds to be "uncollectible" or to authorize the State to cancel claims against itself. Likewise, with regard to Section 3-7(c), it would be illogical to authorize the State to compromise disputed claims with itself. A "compromise" requires the existence of at least two parties.

Construing Section 3-7 with common sense so as not to reach an absurd result, it is our conclusion that the provisions of Conn. Gen. Stat. § 3-7 do not apply to the internal service/revolving funds, at least to the extent that debts are owed to the funds by other State agencies.

Very truly yours,

RICHARD BLUMENTHAL

ATTORNEY GENERAL

Robert D. Dagata

Assistant Attorney General

RB/RDD/aes