Could Caddo Parish schools receive education fund earnings directly and use them for copiers or security equipment?

Plain-English summary

An audit questioned Caddo Parish's practice of transferring earnings from its Educational Excellence Fund to individual schools for spending. In 2000, the attorney general's office said the school board itself had to expend withdrawn earnings under LSA-R.S. 17:408.1(C). It suggested that schools could submit purchase requests for board review, approval, and payment instead of receiving the money directly.

The audit also questioned spending on copiers, projector bulbs, and school security equipment. The opinion did not adopt a categorical ban on those items. It said each could reasonably enhance instruction, but a spending request needed justification, a statement, or research supporting a reasonable conclusion that instruction and student performance would improve. It identified additional factors the board might consider, including whether an item created a continuing cost or fell within an expressly prohibited category.

Currency note

This opinion was issued in 2000. 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.

School board members at the time

The opinion placed responsibility for spending the fund's withdrawn earnings with the Caddo Parish School Board. It suggested a purchase requisition process in which schools submitted requests and the board reviewed, approved, and paid them.

School principals and finance officers at the time

The opinion did not treat a copier or security system as automatically disqualified. It tied eligibility to a reasonable, supported instructional benefit and noted the statute's express exclusions for added administrators, salary or benefit increases, and maintenance or custodial costs.

Legislative auditors at the time

The audit had challenged both the transfer of earnings and several types of purchase. The office agreed that the board had to spend the earnings, while saying the questioned purchases could reasonably enhance instruction on an adequately supported request.

Common questions

Q: Could Caddo Parish transfer fund earnings to schools for each school to spend?
A: The opinion said no. It read LSA-R.S. 17:408.1(C) to require expenditures by the school board itself and suggested school purchase requisitions for board approval and payment.

Q: Were copiers and projector bulbs barred from the fund?
A: The office said these items could reasonably enhance instruction. It called for support connecting a requested expense to improved instruction and student performance.

Q: Could the fund pay for school security equipment?
A: The opinion said a safe, secure environment could improve learning and that the questioned security expense could reasonably lead to enhanced instruction. It still required a supported instructional justification for a spending request.

Q: What spending did the statute expressly exclude?
A: The statute quoted in the opinion excluded additional administrators, employee salary or benefit increases, and maintenance or custodial costs from instructional enhancement spending.

Background and statutory framework

The Caddo Educational Excellence Fund was a permanent trust fund held and invested on behalf of the school board. The opinion quoted LSA-R.S. 17:408.1(C), which directed the board to spend withdrawals solely for instructional enhancement, and LSA-R.S. 17:414.3(A), which addressed money held in individual school funds. The Legislative Auditor had questioned direct transfers to schools and purchases it deemed outside instructional enhancement. The office resolved the transfer question against direct school disbursement, then evaluated the purchases by their reasonable instructional effect and supporting justification.

Citations and references

• LSA-R.S. 17:408.1(C) (board expenditures for instructional enhancement)
• LSA-R.S. 17:414.3(A) (individual school funds)

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/00-0373

Original opinion text

December 1, 2000
OPINION No. 00-373
94 - Schools and School Districts - Administration Government and Officers
LSA-R.S. 17:408.1
LSA-R.S. 4:552(A)(2)(d)
LSA-R.S. 17:414.3(A) LSA-R.S. 24:513(A(4)(f) LSA-R.S. 4:552(A)

Mr. Fred H. Sutherland
1) It is the opinion of our office that LSA-R.S. 17:408.1(C) requires the
Attorney at Law
Caddo Parish School Board to expend the Caddo Educational Excellence
Fund earnings instead of distributing the funds directly to the individual
400 Travis Street
schools. It appears that this could be accomplished by requiring the
Suite 1103
schools to submit purchase requisitions to the School Board for their
Shreveport, LA 71101-5564 review, approval and payment.
2) Appropriate expenditures are for those things that would reasonably advance, augment or increase the instructional program and improve
Dear Mr. Sutherland: student learning.

I am in receipt of your request for an Attorney General=s opinion concerning the Caddo Educational Excellence Fund established by LSA-R.S. 17:408.1. You have indicated that the office of the Legislative Auditor for the State of Louisiana audited the Caddo Educational Excellence Fund and among its findings and recommendations contained in the audit are the following concerns:

(1) the school board=s transfer of Caddo Educational Fund earnings to individual schools Αmay≅ violate the provisions of state law [particularly, R.S.
17:414.3 (A) and R.S. 17:408.1 (C)]; and (2) certain expenditures made by the schools are not authorized by the legislation creating the fund in that they do not constitute Αinstructional enhancements≅ specified in R.S 17:408.1 (C).

You have also indicated that:

[T]he legislative auditor has suggested that the school board should either request an opinion from the Louisiana Attorney General on the current disbursement procedure or centralize the fund earnings disbursement function at the school board level. The school board believes the fund earnings disbursement method currently utilized and the questioned expenditures thereof are consistent with the legislation creating the fund and therefore respectfully request an opinion from the Louisiana Attorney General on each of these two issues.

The Legislative Auditor=s report states the following specific conclusions concerning these two issues. The specific findings and recommendations are as follows:

CEEF Earnings Transferred to Individual Schools

Page 2

Mr. Fred H. Sutherland
OPINION NO. 00-373
Page - 2 -

The school board=s transfer of CEEF earnings to the individual schools may violate state laws. R.S. 17:414.3(A) provides that money received from the state, city, or parish school system for support of the regular instructional program should not be included in the individual schools= funds. In addition, R.S 17:408.1(C) requires all money withdrawn from the CEEF to be expended by the Caddo Parish School Board.

Annually, the school board transfers the CEEF investment earnings to the individual schools. The individual schools deposit the monies into their school fund account, disburse the monies, and maintain the supporting documentation.

The school board=s current method of transferring CEEF earnings to individual schools for disbursement appears to contradict state laws.
Therefore, the school board should consider either requesting a legal opinion from the Louisiana Attorney General or centralizing the CEEF disbursement function at the school board level.

Fund Expenditures

Certain Caddo Parish schools disbursed CEEF monies in violation of state law. R.S. 17:408.1(C) requires earnings from the fund to be disbursed only for the purposes of instructional enhancement. The law provides that such enhancement includes (1) materials and supplies, including computers and technological upgrades; (2) training for students, faculty, and administrators on the use of materials; (3) professional development of teachers; and (4) establishment of exemplary programs of instruction. In addition, the law prohibits costs for additional administrators, increases in salaries or benefits of employees, or maintenance or custodial costs.

We reviewed the supporting documentation for CEEF expenditures made by eight of the 74 (10%) Caddo Parish schools for the period July 1, 1998, through December 31, 1999. We found that five of the schools expended CEEF monies in violation of state law. The following provides details of those expenditures violating state law:

• • • Expenditures for (1) copier rental/maintenance costs; (2) the purchase of copiers; (3) overhead projection bulbs; and (4) security system equipment and installation costs are not for the purposes of instructional enhancement.

Page 3

Mr. Fred H. Sutherland
OPINION NO. 00-373
Page - 3 -

The expenditures made in violation of law, by individual schools, emphasize the need for stronger controls over CEEF monies. The school board should implement stronger controls over CEEF monies by centralizing the disbursement functions at the school board level, as mentioned in the previous finding.

Detailed Information for CEEF Not Adequately Reported

Detailed information relating to the collection, investment and individual schools= specific expenditures made are not adequately reported. R.S.
17:408.1 provides for the collection, investment, and disbursement of CEEF monies by the school board. Therefore, the school board has a fiduciary responsibility to properly report specifically how the funds are being administered.

Although the CEEF is reported as a nonexpendable trust fund in the school board=s Comprehensive Annual Financial Report (CAFR), there is inadequate disclosure as to the individual schools= specific expenditures made (e.g., Fair Park High School - three Dell Computers $3,125, etc.).
Also, disclosures do not include specific information relating to the collection of the gaming fees (e.g., Harrah=s - $800,000, etc.). In addition, disclosures do not include specific information relating to the investment of the CEEF principal (e.g., $3,000,000 Federal Home Loan Bank, etc).

The school board should provide detailed information relating to the collection, investment, and individual schools= specific expenditures made.
This can be accomplished by expanding the note disclosure in the notes to the financial statements (CAFR), or including the information in a supplemental schedule in the CAFR, or by issuing a separate report.

The Caddo Educational Excellence Fund was created by LSA-R.S. 17:408.1. It provides the following:

A. There is hereby established the Caddo Educational Excellence Fund, hereafter in this Section called the Αfund,≅ which shall be a permanent trust fund in the official repository of the Caddo Parish School Board, held and invested on behalf of the Caddo Parish School Board, the investment income of which may be withdrawn by the Caddo Parish School Board during January of each calendar year on its own warrant. All money thus withdrawn shall be expended only as authorized in Subsection C of this Section.

B. Funds collected pursuant to R.S. 4:552(A) and allocated pursuant to R.S.

Page 4

Mr. Fred H. Sutherland
OPINION NO. 00-373
Page - 4 -

4:552(A)(2)(d) shall be periodically transferred to the official repository of the Caddo Parish School Board. The funds shall be invested in the same manner as monies in the state general fund are invested. Earnings on principal may also be invested. However, the amount of earnings shall be kept account of separately from fund principal and shall be available for the school board to withdraw as provided in this Section.

C. All money withdrawn from the fund shall be expended by the Caddo Parish School Board solely for the purposes of instructional enhancement.
Such enhancement may include: provision of materials and supplies, including computers and other technological upgrades; training for students, faculty, and administrators on the use of materials; professional development of teachers; establishment of exemplary programs of instruction. Such enhancement may not include costs of additional administrators, increases in salaries or benefits or employees, or maintenance or custodial costs. Audits of the Caddo Parish School Board by the legislative auditor shall specifically address compliance with the provisions of this Section.

Additionally, LSA-R.S. 17:414.3(A) provides the following:

A. The principal of every public elementary and secondary school shall maintain a school fund as provided for in this Section for the management of any money which accrues to benefit his school. The money provided by the state or the city or parish school system for support of the regular instructional program or the school facility shall not be included in the school fund provided for in this Section; such money shall be managed as directed by the agency from which it is received.

In your first inquiry, you ask about whether the Caddo Parish School Board=s transfer of Caddo Educational Fund earnings to individual schools Αmay≅ violate the provisions of state law [particularly, R.S. 17:414.3 and R.S. 17:408.1(C)]. R.S. 17:408.1(C) clearly states that:

All money withdrawn from the fund shall be expended by the Caddo Parish School Board solely for the purpose of instructional enhancement.

Additionally, in 17:408.1(A), it states that:

Α[a]ll money thus withdrawn shall be expended only as authorized in Subsection C of this Section.≅

Also, LSA-R.S. 17:414.3(A) requires that monies provided for the regular instructional program or school facility shall not be included in the school fund.

Page 5

Mr. Fred H. Sutherland
OPINION NO. 00-373
Page - 5 -

Therefore, it is the opinion of our office that LSA-R.S. 17:408.1(C) requires the Caddo Parish School Board to expend the Caddo Educational Excellence Fund earnings instead of distributing the funds directly to the individual schools. It appears that this could be accomplished by requiring the schools to submit purchase requisitions to the School Board for their review, approval and payment.

In your second concern, you seek an opinion as to whether certain expenditures made by the schools are not authorized by the legislation creating the fund in that they do not constitute Αinstructional enhancements≅ specified in R.S. 17:408.1(C). The Legislative Auditor=s office has determined that the expenditures for (1) copier rental/maintenance costs; (2) the purchase of copiers; (3) overhead projection bulbs; and (4) security system equipment and installation costs are not for the purpose of instructional enhancement.

In your request, you state that:

It is the opinion of the school system that the purchase of overhead projection bulbs and copier purchase/rental and maintenance are directly related to enhancement of the educational programs in which they are used and are therefore appropriate expenditures under the state statute. We have however, suggested that the purchase and installation of the security system at a particular elementary school may not be an expenditure which should be paid out of earnings from the Caddo Educational Excellence Fund.≅

The phrase Αinstructional enhancement≅ is not defined by statute. It should, therefore, be given its generally prevailing meaning. La. C.C. Art. II. Appropriate expenditures would consequently include the purchase of anything that would reasonably enhance instruction. In other words, eligible expenditures would not include the purchase of items that would not reasonably benefit instruction. However, eligible expenditures would include the purchase of those things that would reasonably advance, augment or increase the instructional program and improve student learning.

Prior to approving payments from the fund, the school board might consider certain factors to identify expenditures that would enhance instruction. For example, is the request for expenditure supported by any research, justification or statement that would support the conclusion that it would benefit instruction or would result in improving student performance. Second, is the expenditure complete in one or several years, or does it obligate dollars from the CEEF on a continuing basis. Third, is the expenditure within any of the categories prohibited. Fourth, is the request for expenditure accompanied by any means of assessing its impact upon instructional enhancement or student performance. The above are only examples. The school board can develop its own, as long as they are consistent with law. Finally, the school board might desire to develop a review team.

Page 6

Mr. Fred H. Sutherland
OPINION NO. 00-373
Page - 6 -

Applying the above factors to the purchases at issue, it appears to this office that all the above expenditures could reasonably lead to enhanced instruction. Materials of instruction and computers are examples referenced in the legislation of permitted purchases. Copiers may be used by teachers to supply materials of instruction. An overhead projector may be used by a teacher to discuss the material projected. And certainly, learning may be improved when a safe and secure environment is provided for the children, and school equipment and facilities are protected from vandalism. This office is not inclined to confine expenditures to any technical categories or arcane classifications. In the end, the request for expenditure should be accompanied and supported by some justification, or statement or research that would reasonably lead to the conclusion that instruction would be enhanced and student performance will be improved.

I hope this opinion has sufficiently addressed your concerns. If I can be of further assistance, please let me know.

Very truly yours,

RICHARD P. IEYOUB
ATTORNEY GENERAL

BY:_____
BETH CONRAD LANGSTON
ASSISTANT ATTORNEY GENERAL

RPI/BCL/sc
a:\00-373.op

Page 7

Mr. Fred H. Sutherland
OPINION NO. 00-373
Page - 7 -

OPINION NO. 00-373

94 - Schools and School Districts - Administration Government and Officers

LSA-R.S. 17:408.1
LSA-R.S. 4:552(A)(2)(d)
LSA-R.S. 17:414.3(A)
LSA-R.S. 24:513(A(4)(f)
LSA-R.S. 4:552(A)

1) It is the opinion of our office that LSA-R.S. 17:408.1(C) requires the Caddo
Parish School Board to expend the Caddo Educational Excellence Fund
earnings instead of distributing the funds directly to the individual schools. It
appears that this could be accomplished by requiring the schools to submit
purchase requisitions to the School Board for their review, approval and
payment.

2) Appropriate expenditures are for those things that would reasonably
advance, augment or increase the instructional program and improve student
learning.

Mr. Fred H. Sutherland
Attorney at Law
400 Travis Street, Suite 1103
Shreveport, LA 71101-5564

DATE RECEIVED: 09/15/00BR DATE RECEIVED: 09/18/00SH DATE RELEASED: December 1, 2000

BETH CONRAD LANGSTON
ASSISTANT ATTORNEY GENERAL