Could Maryland's Legislative Auditor get access to the financial records of a University of Maryland medical school doctors' private-practice corporation?

Plain-English summary

Maryland's Legislative Auditor asked the Attorney General whether his office could use its statutory audit-access power to examine the records of University Physicians, Inc., the nonprofit corporation that administered the University of Maryland School of Medicine's Medical Service Plan, the arrangement under which full-time faculty clinicians ran fee-for-service private practices alongside their teaching duties, sharing a portion of their earnings with the School. The Auditor also asked, if his office could not reach those records directly, whether the University of Maryland System's Board of Regents even had authority to approve the creation of an entity structured that way in the first place.

The Attorney General answered the access question no and the authority question yes. On access, the opinion found University Physicians, Inc. was neither a "unit of State government" (despite its board being made up entirely of School of Medicine officials) nor a recipient of "State funds" within the meaning of the audit statute, because the fees the corporation collected from patients were private money earned by faculty in their private capacity, becoming State funds only after being disbursed on to the University. On authority, the opinion found the Board of Regents had ample statutory power under the Education Article to approve the Plan, since it directly served the School of Medicine's interests in maintaining a qualified faculty and generating revenue. The opinion was careful to flag, unprompted, that this was a policy gap rather than an endorsement: it recommended a change in the law if lawmakers wanted the Auditor to be able to see these records.

Currency note

This opinion was issued in 1992. 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

Could Maryland's Legislative Auditor demand to see the financial records of University Physicians, Inc. in 1992? No. The opinion concluded that SG §2-1218(a) did not authorize the Division of Audits to obtain access to the records of University Physicians, Inc. or its affiliated professional associations, because the corporation was neither a unit of State government nor a recipient of State funds under that statute.

Why wasn't a corporation run entirely by University of Maryland officials treated as a "unit of State government"? The opinion explained that while the corporation's board of trustees was made up of the Dean and clinical department chairmen, that fact carried little weight here because the corporation existed specifically to regulate faculty members' private employment, something that could hardly be governed by outsiders. Weighing all the links between the corporation and the School, the opinion still concluded the corporation was a private entity, not a government unit.

Were the fees paid to the faculty doctors considered "State funds" while held by the corporation? No. The opinion concluded those fees were private money earned by faculty clinicians in their private capacity as physicians, not their capacity as State employees, and that the money became "State funds" only once disbursed from the corporation to the University itself.

Did the Board of Regents have the legal authority to approve this kind of private-practice arrangement for faculty doctors? Yes. The opinion concluded the Board of Regents had statutory authority under the Education Article to approve the Medical Service Plan, since it directly benefited the School of Medicine, but the opinion limited that conclusion to the specific facts presented and did not endorse a broader authority to hand off faculty responsibilities to private corporations generally.

Background and statutory framework

The Medical Service Plan traced back to the 1960s and 1970s, when the School of Medicine moved from relying on part-time, unaffiliated volunteer clinical faculty toward full-time faculty clinicians who practiced medicine privately (individually or through department partnerships and professional corporations) while sharing a portion of their fee income with the School. In 1983, the Plan was restructured around a new nonprofit corporation, University Physicians, Inc., managed by the Dean of the School of Medicine and the clinical department chairmen, which centralized billing for all 16 departmental practice groups and disbursed pooled fees according to a fixed formula: a share to the Dean's office for operational support, a share to a special-projects trust fund, and the remainder split between defraying practice costs, augmenting faculty salaries, and funding departmental education and research. The opinion noted the School and its departments derived over $17.5 million through the Plan in fiscal year 1991 alone.

The Legislative Auditor's access authority under SG §2-1218(a) reaches "any unit of the State Government" and any "person or other body receiving State funds." Because the State Government Article uses but never defines "unit of State government," the opinion applied prior Maryland case law holding that corporate form is not dispositive and that all aspects of the relationship between the State and the entity must be examined, drawing on A. S. Abell Pub. Co. v. Mezzanotte. Ordinarily, a board composed entirely of State employees would weigh heavily toward treating an entity as a government unit, as in Mezzanotte itself, but the opinion found that factor carried little force here precisely because the corporation's function was to regulate the faculty's own private economic interests, something an outside board could not sensibly do. Balancing the corporation's close institutional ties to the School against its role administering what the opinion treated as private income, the opinion concluded University Physicians, Inc. remained a private corporation, not a unit of State government, and that the fees it held before disbursing them to the University were private funds rather than State funds under SG §2-1218(a).

On the Board of Regents' authority, the opinion found ample statutory basis in the Education Article, ED §12-104(b)(1) and (b)(3) giving the Board management authority and the general powers of a Maryland corporation, and ED §12-110(a)(1) and (a)(2) authorizing the Board to set standards governing faculty appointment, compensation, and tenure tailored to each institution's mission, together with the Corporations and Associations Article's general grant of corporate contracting and benefit-plan authority. Given the Plan's direct benefit to the School (funding, faculty retention, and clinical instruction), the opinion found the Board acted within its authority approving it, while expressly declining to endorse a broader principle that the Board could hand off any faculty responsibilities to private corporations under different facts.

Citations and references

Statutes:

• SG §2-1218(a), the Legislative Auditor's audit-access authority
• SG §2-1215(a)(2), audit authority over units of State government
• SG §2-1215(b), audit authority over corporations receiving appropriated State funds
• ED §12-104(b)(1), Board of Regents' general management authority
• ED §12-104(b)(3), Board of Regents' corporate powers
• ED §12-104(c), related Board of Regents authority
• ED §12-110(a)(1), Board's authority to set faculty appointment and compensation standards
• ED §12-110(a)(2), authority to tailor those standards to each institution's mission
• §2-103(5), (8), and (14) of the Corporations and Associations Article, general Maryland corporate powers

Cases:

• University of Maryland Physicians, P.A. v. Commissioner, T.C. Memo. 1981-23, 42 T.C.M. (CCH) Dec. 37,633, at 732 (1981), United States Tax Court
• Moberly v. Herboldsheimer, 276 Md. 211, 345 A.2d 855 (1975), Maryland Court of Appeals
• A. S. Abell Pub. Co. v. Mezzanotte, 297 Md. 26, 35, 464 A.2d 1068 (1983), Maryland Court of Appeals

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/1992/Volume77_1992.pdf (this opinion appears at printed page 88 of the bound annual volume; Maryland's site does not publish a standalone PDF of this opinion)

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

GENERAL ASSEMBLY

Legislative Auditor - Colleges and Universities - University of Maryland System - Corporation Administering Faculty Members' Private Medical Practice Not Required By Law to Provide Auditor With Access to its Records

September 1, 1992

Mr. Anthony J. Verdecchia
Legislative Auditor

You have requested our opinion whether certain records of the Medical Service Plan ("the Plan") of the University of Maryland School of Medicine are subject to access by the Legislative Auditor under current law. Specifically, you ask whether §2-1218(a) of the State Government Article ("SG" Article) authorizes the Division of Audits to obtain access to the records of University Physicians, Inc., the non-profit corporation that administers the practice of faculty clinicians under the Plan; and, if SG §2-1218 does not authorize such access, whether the Board of Regents of the University of Maryland System has the authority to approve the creation of such an entity outside the purview of the Division of Audits.

For the reasons stated below, we conclude as follows:

1. SG §2-1218(a) does not authorize the Division of Audits to obtain access to the records of University Physicians, Inc., or the professional associations affiliated with it.

2. The Board of Regents of the University of Maryland System had statutory authority to approve the Medical Service Plan that led to the creation of University Physicians, Inc.

As we readily acknowledge and explain in detail in Part I below, intimate links exist between the corporation and the School of Medicine. If there are problems in the way that the Plan is administered, the School would be hurt. We take no position on the policy question whether, under such circumstances, the records of the corporation should be open to the Legislative Auditor. It is our opinion, however, that a change in the law is needed to accomplish that end.

I

The Medical Service Plan

A. Introduction

Full-time faculty members at the University of Maryland School of Medicine, like their counterparts in other disciplines, teach, conduct research, and help in the governance of the institution through service on committees. But unlike faculty members in some other professional schools, faculty clinicians at the School of Medicine must demonstrate the science and art of their profession through regular practice:

Clinical instruction refers to teaching medical knowledge, skills, and procedures in the course of rendering medical care to patients. It includes the performance of medical services by faculty members in the presence of students and patient care by students under supervision. Clinical instruction is an indispensable primary component of training undergraduate and graduate students at the Medical School.

University of Maryland Physicians, P.A. v. Commissioner, T.C. Memo. 1981-23, 42 T.C.M. (CCH) Dec. 37,633, at 732 (1981).

That faculty clinicians treat patients is a given, and this activity bears a direct relation to the physicians' role as teachers in a State school. And, indeed, one could hypothesize arrangements under which patient care would fall under the aegis of the State - if, for example, the faculty clinicians supervised students who themselves treated patients at a University-affiliated clinic.1

But an economic reality pervades this issue: The institutional arrangements for patient care by full-time faculty clinicians reflect the need to bridge a chasm between what physicians expect to earn and what the State in fact pays them with tax dollars.

In 1990 the median income of physicians in the United States was $141,720. Owens, Doctors Struggle to Stay Ahead of Inflation, Medical Economics, Sep. 2, 1991, at 122. For some specialties, median income was much higher - for example, the median for orthopedic surgeons was $237,120. Id. at 123. The University of Maryland School of Medicine employs 479 full-time clinical faculty. If these faculty members were all to be paid from State appropriations at the 1990 national median, the required appropriation for their salaries would be $67.9 million. In fact, for fiscal year 1992, the appropriation for their salaries was $15.1 million.

In short, while it is undoubtedly true that the instructional needs of the School of Medicine dictate that faculty clinicians practice medicine, so that the teachers can remain proficient and the students can observe, the economics of the situation dictate that this practice be a private one, augmenting the teachers' income with fees derived from their services to patients. Indeed, the danger is that a profit-maximizing physician will give short shrift to core faculty responsibilities in pursuit of these fees.

The Medical Service Plan is in part a response to this danger. The Plan is a regulatory scheme for the full-time faculty's private practice, ensuring that the fees earned for patient care services benefit the School as well as the individual faculty members and that faculty clinicians give primary attention to their responsibilities to the School.2

B. Origin and History of the Medical Service Plan3

In the 1960s, appropriated tax revenues for clinical faculty salaries were quite limited, and there were almost no full-time faculty in the clinical departments of the School of Medicine.4 Faculty support in the 1960s was provided chiefly by a part-time or volunteer clinical faculty, comprising community physicians who might receive a stipend from the School but who supported themselves with an outside private practice. The faculty could benefit economically from the prestige of association with the School, but the School and Hospital did not benefit academically or economically from the practice activities of the faculty. They had no incentive to admit their patients to University Hospital, where the care of the patients would provide teaching cases for students, a patient base for research protocols, and a revenue source to defray the Hospital's costs of operation. Moreover, the outside practices were a distraction from the business of teaching.

The School began to experiment with the idea of making part-time faculty full-time, allowing them to conduct outside practices on an individual basis but requiring them to turn over their net income to the School. It was understood that a good part of the income would be turned back to the faculty members as salary, and the School would determine in general terms when the faculty would be on campus and when they would be in their practices. The faculty members' respective medical practices remained independent of the School in all respects. Faculty within a department did not practice together as a group. Oversight of this situation was difficult. Monitoring of outside practice income caused conflict between the School and its faculty. Faculty practices often were under the auspices of groups of physicians having no connection to the School of Medicine, and no cooperation was obtainable to verify faculty income.

In 1972, the School and its faculty agreed on the first Medical Service Plan, which permitted faculty with partial State support from tax money to be recognized as full-time faculty. They were given the academic status of full-time staff and consequently were eligible for tenure and appointment to the more prestigious academic ranks and titles in the School of Medicine. In exchange, the faculty limited their professional activities to teaching and research for the School and private practice with their University colleagues through a department partnership or professional corporation.

The 1972 plan was not a "privatization" of activities previously undertaken by the School. Private practice was considered secondary to the faculty's functions qua faculty - teaching, research, and public service. The Medical Service Plan was an effort to make the private practices more complementary to the School's functions by having colleagues practice together, preferably at or near the campus. The Medical Service Plan also was an effort to capture a portion of the potential revenues of private practice for the School itself by transfer of a portion of earnings from the practice plan groups to funds earmarked for the School's benefit. Further the Plan was an effort to impose reasonable control over outside earning potential so that faculty had no incentive to shortchange their time commitments to the teaching program. It is for this reason (as recited in the 1972 and 1983 Plans) that faculty salaries, including the portion derived from practice under the Plan, are subject to the approval of the Dean of the School and the President of the University of Maryland at Baltimore.

When the 1972 Plan was adopted, the possibility of establishing it as a University operation was not considered because of an assumption that the State would not venture support for the personnel positions (for example, billing and appointment clerks), required to carry out fee-for- service billing. There is no record of discussion of the possibility of operating the Medical Service Plan as a University business activity or "auxiliary enterprise." The faculty clinicians' practice of medicine was viewed as totally outside the purview of the School of Medicine itself.

The 1983 amendments to the Medical Service Plan added the concept of University Physicians, Inc. as a tax-exempt organization managed by the clinical department chairmen and the Dean of the School.5 The corporation was established to provide a structure for coordinated business activities by the clinical departments' various faculty practices. Subsequent to the 1983 amendments, all 16 departmental practice groups have become tax-exempt professional associations.

C. Nature of the Current Medical Service Plan

The current plan was approved by the Board of Regents on June 17, 1983, and has not been changed substantially since then. The Plan recites that it has the following purposes:

1. To attract and retain high quality faculty to teach, do research and engage in patient care.

2. To enable faculty of the School to maintain their skill as health care providers in addition to their duties as teachers and researchers.

3. To encourage and assist each clinical department to develop and mature within itself in relation to other departments so that the full clinical potential of the school and the University of Maryland Medical System can be reached.

4. To assist the department chairman in utilizing their personnel, space, and finances such that all departmental functions and duties are carried out in this most efficient manner.

5. To assist the faculty in understanding and influencing outside economic forces such as third- party carriers, governmental agencies and public, regarding health care provided by the faculty of the school.

6. To create a mechanism where competitive fringe benefits and amenities are provided to each faculty member.

Plan at 2-3.

At the heart of the Plan is the requirement that any full-time faculty member in a clinical department who earns fees for direct patient care participate in the Plan. Although the faculty clinicians practice in separate professional associations paralleling the School's clinical departments, University Physicians, Inc. is the focal point of billing and other administrative functions; such centralization achieves economies of scale. The corporation is managed by a board of trustees comprising the Dean of the School of Medicine and the chairmen of the various clinical departments. Articles of Incorporation ¶6. "Each person who holds full- time or part-time faculty appointment in a clinical department of the School [and who] receives a salary for patient care which is set by the Dean of the School and approved by the Chancellor. . shall be a member of [University Physicians]." Bylaws Article II, § 1.

The fees that the physicians earn are to be disbursed in accordance with the Plan. That is, the fees are pooled and are allocated in specified ways. Seven and a half percent of the gross is allocated to the Dean of the School of Medicine, to be used for the School's operational support, and another 1.5% goes to a trust fund for special projects. Plan at 7-8. The balance of the pooled fees is then to be used to defray the operating costs associated with the faculty members' fee-for-service practice and to augment the salary of faculty members (the latter in amounts approved by the University). Plan at 8. Finally, the remainder of the fee income is allocated to the departments in the School of Medicine, for the support of their education and research mission, and to an account "for incentive practice income and supplemental fringe benefits." Plan 8-9. We are told that, in fiscal year 1991, the School and its departments derived over $17.5 million under the Plan.

II

Legislative Auditor Access

SG §2-1218(a) provides as follows: "Except as prohibited by the federal Internal Revenue Code, during an audit, the employees of the Division of Audits shall have access to and may inspect the records, including those that are confidential by law, of any unit of the State Government or of a person or other body receiving State funds, with respect to any matter under the jurisdiction of the Division of Audits." The "jurisdiction of the Division of Audits" is broad: "[I]n general terms the Legislative Auditor has broad authority to inquire into the performance of State agencies and to examine their records in making an assessment of their performance." 63 Opinions of the Attorney General 453, 455 (1978). We have described SG §2-1218(a) as affording "those conducting an audit ... a comparably broad right of access to records." 76 Opinions of the Attorney General 287, 290 (1991).

This "broad right of access," however, is limited by the statute to two categories of recordholders - "any unit of the State government," or any "person or other body receiving State funds." The question, then, is whether University Physicians, Inc. falls within either category.6

A. Unit of State Government

The term "unit of State government" is used throughout the State Government Article but is not defined. The Revisor's Note explains that "[t]he term 'unit' is used as the general term for an organization in the State government, because it is broad enough to include all such entities." General Revisor's Note to Article, State Government Article at 428 (1984).

University Physicians, Inc. is a non-profit, private corporation incorporated in 1983 for charitable, scientific, and educational purposes. In form, then, it is not a "unit of State government."

The corporate form is not dispositive, however. See Moberly v.
Herboldsheimer, 276 Md. 211, 345 A.2d 855 (1975). Cf. 77 Opinions of the Attorney General 173, 178 (1992) (a "corporation can be treated as a unit of State government even if not created by statute"). Nor is there a litmus test. "All aspects of the interrelationship between the State and the
... entity must be examined in order to determine its status." A. S. Abell Pub. Co. v. Mezzanotte, 297 Md. 26, 35, 464 A.2d 1068 (1983).7

Applying the "unit of State government" rubric to the University Physicians, Inc. poses uniquely difficult problems. The corporation, or more exactly the Medical Service Plan that is its raison d'etre, is both intimately linked to the public purposes of the School of Medicine and yet designed to regulate the private interest of faculty clinicians in earning competitive incomes. Given this dual function, the corporation may not be susceptible to the same analysis as State-created entities that are unconcerned with the private employment of State employees.

For example, ordinarily we would give considerable weight to the fact that the corporation's board of trustees is composed entirely of State employees. See Mezzanotte, 297 Md. at 38. See also 76 Opinions of the Attorney General 59 (1991) (Director and staff of Maryland Environmental Trust are State employees). Cf. 77 Opinions of the Attorney General at 180 (1992) (board of Maryland Corporate Partnership, Inc. composed primarily of individuals from outside State government). In this instance, however, that fact is of little analytical importance, because an entity that exists to regulate the private employment of State employees could hardly be governed by outsiders.

Enumerating the links between the corporation and the School of Medicine, via the medium of the Plan, would merely prove what no one could deny: The corporation is closely linked to the School. Indeed, the corporation's basic documents recite that its purposes include "improving and developing the quality of medical education at the University of Maryland School of Medicine through the operation and maintenance of the Medical Service Plan ... [and] assisting the School in remaining competitive with other medical schools in order to continue the high degree of excellence in the pursuit of academic and clinical education ..." Articles of Incorporation ¶3(a); Bylaws Article I, §2. As described in Part I above, the Medical Service Plan provides substantial funding to the School and its departments.

Nevertheless, the corporation, like the Medical Service Plan itself, reflects an accord between the school and its faculty to regulate the faculty's private practice. The faculty clinicians engage in private practice because they cannot otherwise achieve competitive incomes and because, from the School's point of view, they cannot effectively teach what they do not practice. Since the faculty want to be affiliated with a high-quality medical school, they have agreed to share their fees with the School and to be governed by the School in the conduct of their private practices. But, in our view, these accords do not transform a private corporation that operates the faculty's private practice into a "unit of State government."8

B. Recipient of State Funds

The corporation's records would be accessible to the Division of Audits if the corporation were "receiving State funds." In our view, however, the fees collected and held by the corporation prior to their disbursement to the School of Medicine are private funds that in part later become State funds; they are not State funds when held by the corporation.

This conclusion follows from our analysis of the Medical Service Plan and University Physicians, Inc. Because we view the Plan and the corporation as methods by which the faculty have organized their private practice, subject to close regulation by the School of Medicine, the fees that they earn under the Plan are earned in their private capacity, not in their capacity as State employees.

In their capacity as teachers at the University, the faculty clinicians receive funds from two main sources: appropriated State funds and payments under the Plan that, upon receipt by the University, become State funds.9 In their capacity as physicians providing services for fees to private patients, the faculty clinicians receive payments that flow to the corporation and that in part are used for wholly private purposes - defraying the operational costs of the physicians' private practice. When a patient, or, more likely, a third-party payor, sends money to the corporation to pay a bill rendered by a physician who is also a faculty member, the money is simply a medium of exchange in the private transaction.10 That the use of the money is subject to University-ordained regulation pursuant to the Plan and will subsequently be partially disbursed to the School of Medicine no more makes the money "State funds" at that point than a statute requiring the physician to withhold and remit a portion of the money to the State for employees' income tax.

In short, University Physicians, Inc. in this respect is like any other fundraising foundation affiliated with the University: The money generated by a foundation, whether through traditional solicitation or the provision of professional services, is private money until the fundraising entity transmits it to the University. Only then does the money become "State funds."

III

Authority of Board of Regents

You asked whether the Board of Regents of the University of Maryland System has the authority to approve the Medical Service Plan.11

Under §12-104(b)(1) of the Education Article ("ED" Article), the Board of Regents "[i]s responsible for the management of the University of Maryland System and has all the powers, rights, and privileges that go with that responsibility, including the power to conduct or maintain any institutions, schools, or departments in the University at the locations the Board determines." The Board also has "all the powers of a Maryland corporation which are not expressly limited by law." ED §12-104(b)(3). See also ED §12-104(c). In addition, the Board of Regents is to "establish general standards and guidelines governing the appointment, compensation, advancement, tenure, and termination of all faculty and administrative personnel in the University of Maryland System." ED §12- 110(a)(1). These "standards and guidelines" may be tailored in order to "recognize the diverse missions of the constituent institutions." ED §12- 110(a)(2). Finally, under the General Corporation Law, a Maryland corporation (and therefore, by virtue of ED §12-104(b)(3), the Board of Regents) has broad authority to make contracts, accept personal property including money, and "adopt and carry into effect employee ... benefit plans." §2-103(5), (8), and (14) of the Corporations and Associations Article.

The Plan directly promotes the interests of the School of Medicine.
The Plan not only generates sizeable sums for the School and its departments but also promotes clinical instruction and fosters faculty commitment by preventing private practice from becoming all-consuming. Given the beneficial effects of the Medical Service Plan for the School of Medicine, we have no doubt that the Board of Regents acted within the scope of its statutory authority when it approved the Plan. See generally 77 Opinions of the Attorney General 173 (1992).

We should not be taken as broadly endorsing the Board's authority to devolve the conduct of faculty responsibilities to private corporations. The key to our thinking on all of the questions that you posed is that direct patient care by faculty clinicians has been defined by the faculty and School of Medicine together as beyond the scope of the faculty's responsibility to the University, though plainly the consequences of that private clinical practice are important to the School and so the private practice is extensively regulated. Under different facts, our answers might well be different.12

IV

Conclusion

In summary, it is our opinion that:

1. SG §2-1218(a) does not authorize the Division of Audits to obtain access to the records of University Physicians, Inc., or the professional associations affiliated with it.

2. The Board of Regents of the University of Maryland System was authorized by law to approve the Medical Service Plan of the University of Maryland School of Medicine.

J. Joseph Curran, Jr.
Attorney General

Jack Schwartz
Chief Counsel
Opinions & Advice

1
See note 10 below.

2
The University of Maryland School of Medicine is hardly unique in this regard. Nearly every major medical school has some kind of practice plan. See Association of American Medical Colleges, Faculty Practice Plans: The Organization and Characteristics of Academic Medical Practice (1991).

3
This narrative relies on information that we received from the University.

4
The clinical departments (for example, internal medicine, pediatrics, and surgery) are those that instruct students and residents in hands-on care, providing most of this instruction in the third and fourth years of medical school and the subsequent residency programs.

5
University Physicians is described in the 1983 Plan document as University of Maryland Medical Faculty Foundation, Inc. As a result of an amendment of the Plan and subsequent corporate action in 1991, the name of the entity now is University Physicians, Inc.

6
If the corporation is a "unit of the State government," it would be not only required to disclose its records to the Division of Audits but also subject to audit by the Division under SG §2-1215(a)(2). If it is not a unit of State government, it is not subject to audit, for it is not "a corporation ... to which the General Assembly has appropriated money from the State Treasury." SG §2- 1215(b). That the Corporation would not itself be subject to audit under SG §2-1215 does not foreclose the possibility that its records would be open to inspection under SG §2-1218(a). That is, if the Division of Audits were conducting an audit of a unit of State government (the University) and if the corporation were a recipient of State funds (albeit unappropriated funds), the corporation's records would be open to the Division of Audits. In Part IIB below, however, we conclude that the corporation is not a recipient of State funds.

7
In both Moberly and Mezzanotte, the entities were created by statute. This fact, while undoubtedly relevant, is not itself dispositive. Cf. 77 Opinions of the Attorney General 178 (1992).

8
Our conclusion is consistent with that of the Comptroller's office, which determined that "the Medical Service Plan was not meant to be part of the entity of the University of Maryland." Letter from Arnold G. Holz, Director of the General Accounting Division, to Dr. John S. Toll, President of the University of Maryland (March 31, 1983).

9
Some clinicians are also awarded federal and other research grants.

10
The line-drawing in this area is difficult, to say the least. This office has advised that fees paid by patients at a clinic operated by the University of Maryland School of Dentistry are "moneys of the State." Letter from Attorney General Curran to Dr. James A. (Dolph) Norton (July 2, 1990). At the Dental School clinic, students were the primary caregivers to patients, and the students performed these services to satisfy a curriculum requirement. Here, by contrast, the teacher- physicians are rendering services in their private capacity, not in their capacity as University faculty members; the fact that medical students observe the physicians (without themselves performing billable services) does not transform these privately earned fees into public funds.

11
Your question was phrased somewhat more generally, inquiring whether the Board of Regents has authority to approve the creation of affiliated entities like University Physicians, Inc. Because these issues are best dealt with in light of particular facts, we limit our opinion to the authority of the Board of Regents to approve the Medical Service Plan that led to the incorporation of University Physicians, Inc.

12
Further, we do not address any issues that might arise under the Maryland Public Ethics Law. Interpretations of that law are the prerogative of the State Ethics Commission.