If an Oklahoma school district doesn't spend its full share of School Resource Officer Program money in one fiscal year, does that money roll over to the next year, or does it disappear?

Subject

Attorney General opinion concerning whether unused funds from the School Security Revolving Fund established by House Bill 2903, 2023 Okla. Sess. Laws ch. 281, § 2, 70 O.S.Supp.2023, § 5-148.2(A), may be transitioned, or rolled over, and utilized in the following, or subsequent, fiscal year.

Plain-English summary

In 2023, the Oklahoma Legislature created a three-year pilot called the School Resource Officer Program and funded it with a $150 million appropriation to a new School Security Revolving Fund. The State Department of Education was instructed to distribute up to $50 million per fiscal year to school districts, divided equally among them, for school safety enhancements (resource officers, cameras, gates, lighting, locks, doors, windows, security geofencing, ballistic storm shelters).

The Department's implementation went sideways. Instead of sending money to districts as legislatively directed, the Department required districts to spend their own funds first and seek reimbursement. The Department's original guidance told districts that funds could be carried over throughout the three-year program. Then, "arbitrarily and without notice," the Department reversed course and zeroed out district balances. As of July 1, 2024, the Revolving Fund still had over $128 million sitting in it, undistributed.

Superintendent Ryan Walters then asked the AG whether the unspent funds could be carried over. The AG's answer was an unequivocal yes, with four reasons:

1. No statutory fiscal year limit on districts. § 5-148.2 limits only what the Department may "expend" or distribute (the $50 million per year cap). It says nothing about what districts may carry forward. Per 1983 OK AG 277, the absence of fiscal year limits on a fund is evidence the legislature didn't intend any.

2. Express statutory language. § 5-148.2(A) calls the Revolving Fund "a continuing fund, not subject to fiscal year limitations." That language is decisive.

3. No constitutional fiscal year limit applies. Article V § 55's 30-month appropriation lapse rule applies to ordinary appropriations, but not to special funds like a revolving fund (Edwards v. Childers; State ex rel. Hawkins v. Okla. Tax Comm'n).

4. The Department's own original guidance authorized rollover. Districts relied on this when planning multi-year projects. The Department also requires districts to use their General Fund for Program expenditures, and General Fund balances can be carried over (70 O.S. § 18-200.1(G); Indep. Sch. Dist. No. 52 v. Hofmeister).

The AG closed with notably sharp language: "Because the Department did not distribute the funds as intended and required by law... this corrects the Department's mismanagement that prevented school districts from receiving an equal distribution of Program Fund and an error that, in your own words, concerns and puts at risk the safety of schoolchildren." The opinion directs the Superintendent to "immediate implementation of the Program consistent with this opinion."

What this means for you

For Oklahoma school districts

You can carry over your share of School Resource Officer Program funds from one fiscal year to the next within the three-year pilot. If you have unspent funds from year 1, they're still yours to use in years 2 or 3. The Department cannot sweep them back to the State Treasury or zero out your balance. If your fund balance was zeroed out, this opinion is your authority to demand restoration.

Practically, you should:

1. Audit your Program fund records and reconcile them against what you should have received under the equal-distribution formula in § 5-148.2(C).
2. Document any discrepancy between what you received and what you were entitled to.
3. Submit (or resubmit) reimbursement requests for past or planned safety expenditures eligible under § 5-148.1.
4. Plan your year 2-3 use of carried-over funds for the larger physical security enhancements many districts deferred.

The Department must use the Revolving Fund consistent with the Legislature's intent and cannot redirect Program funds to other uses.

For school boards

Review any Program balances that the Department zeroed out. The opinion concludes that districts may carry unused Program funds forward and directs the Department and State Board to implement the Program consistently with that conclusion.

For school business managers and CFOs

You can plan multi-year capital projects (ballistic storm shelters, comprehensive door/window/lock systems, large-scale camera installations) using carried-over Program funds. Coordinate the funding stream with construction timelines without worrying that unspent year-1 money will be clawed back. The General Fund mechanism the Department prescribed allows General Fund carryover under existing statute.

For the State Department of Education and State Board of Education

The opinion directs immediate implementation of the Program consistent with its carryover conclusion and says the Department and State Board may not sweep Program funds or move them to another purpose. It also says the Department lacks authority to promulgate administrative rules relating to the Program, citing Indep. Sch. Dist. No. 12 v. State in footnote 9. It does not discuss penalties for officials who disregard the opinion.

The $50 million per-fiscal-year cap applies to your distributions, not to district expenditures. If you under-distributed in year 1 (which the AG implies you did), you can correct that in subsequent years through equal-distribution catch-up payments, which the opinion notes "would not create an inequality of expenditures or unequal division of the funds, but would merely correct an error."

For Oklahoma legislators with education oversight

This opinion documents Department mismanagement of an appropriation the Legislature intended to be reach school districts directly. If you're considering future safety appropriations, the opinion's recital of what happened (Department withholding, surprise zeroing of balances, reimbursement-only distribution model) is useful background for whether to add procedural protections.

Common questions

What kinds of expenditures qualify under the Program?

Per § 5-148.1: school resource officers, cameras, gates, lighting, locks, doors, windows, security geofencing, and ballistic storm shelters. The list is not necessarily exclusive but indicates the Legislature's intent toward physical security enhancements.

Can the Department change the rules through guidance documents?

The opinion states that the Department lacks authority to promulgate administrative rules relating to the Program. Footnote 9 cites 75 O.S. § 250.3(17)'s definition of a rule and Indep. Sch. Dist. No. 12 v. State. It discusses the Department's changed guidance but does not decide the legal force of every guidance document.

What about funds that have been swept already? Can districts get them back?

The opinion says yes, in effect. The Department's "incorrect" interpretation of the $50 million cap was the basis for the sweeps. The opinion explicitly tells the Department that retroactive equal-distribution catch-up payments are permitted and required to correct the error.

Does the three-year pilot end deadline limit carryover?

The opinion quotes the Department's original guidance: "all monies must be encumbered by the end of year three." It does not decide what happens to unencumbered funds after the pilot ends.

Can the Department use Program funds for other purposes?

No. The opinion states: "The Department and State Board of Education are not authorized to sweep or move Program funds to a different account or use them for a purpose other than that intended by the Legislature."

Is the opinion binding on the Department?

The opinion directs the Superintendent to implement the Program immediately and says the Department and State Board are not authorized to sweep or redirect its funds. It does not discuss the legal consequences of disregarding that directive.

Background and statutory framework

In 2023, the Oklahoma Legislature passed two companion bills:

• House Bill 2903 (chap. 281, § 2; codified at 70 O.S. § 5-148.1, § 5-148.2): Created the three-year School Resource Officer Program pilot, authorized the State Department to "establish and maintain" it, and established the School Security Revolving Fund as a "continuing fund, not subject to fiscal year limitations."

• House Bill 2904 (chap. 282, § 1): Appropriated $150 million from the General Revenue Fund to the Revolving Fund.

The Department was directed to distribute "no more than Fifty Million Dollars per fiscal year" for the Program, divided equally among public school districts (§ 5-148.2(C)). That gives each district a per-fiscal-year share for safety improvements.

The Department's actual implementation deviated from the statute's design:

• Required districts to spend first, then seek reimbursement.
• Originally guided districts that rollover was permitted, then reversed without notice and zeroed balances.
• As of June 30, 2024, $128 million of the $150 million appropriation remained undistributed.

The constitutional issue: Article V § 55 requires state agencies to expend appropriated funds within 30 months or the appropriation lapses. But that rule "do[es] not apply to special funds" (Edwards v. Childers). A revolving fund is a special fund. The Legislature's express "not subject to fiscal year limitations" language confirms that § 55 doesn't constrain this Fund.

Citations

• 70 O.S. § 5-148.1 (School Resource Officer Program; eligible expenditures)
• 70 O.S. § 5-148.2 (School Security Revolving Fund)
• 70 O.S. § 5-148.2(A) ("continuing fund, not subject to fiscal year limitations")
• 70 O.S. § 5-148.2(B-C) (Department expenditure limits)
• 70 O.S. § 5-148.2(C) ($50 million per fiscal year cap; equal distribution among districts)
• 70 O.S. § 18-200.1(G) (school district general fund carryover)
• 75 O.S. § 250.3(17) (definition of "rule," cited in footnote 9)
• House Bill 2903, 2023 Okla. Sess. Laws ch. 281, § 2 (Program creation)
• House Bill 2904, 2023 Okla. Sess. Laws ch. 282, § 1 ($150 million appropriation)
• Okla. Const. art. V, § 35 (legislative spending power)
• Okla. Const. art. V, § 55 (30-month appropriation lapse; not applicable to special funds)
• Edwards v. Childers, 1924 OK 652, 228 P. 472 (Article V § 55 inapplicable to special funds)
• State ex rel. Hawkins v. Okla. Tax Comm'n, 1969 OK 118, 462 P.2d 536
• Indep. Sch. Dist. No. 52 of Okla. County v. Hofmeister, 2020 OK 56, 473 P.3d 475 (general fund carryover; appropriation expenditure limits)
• Indep. Sch. Dist. No. 12 v. State, 2024 OK 39 (Department's rulemaking authority, cited in footnote 9)
• 1983 OK AG 277 (absence of fiscal year limits indicates none was intended)
• 2005 OK AG 23 (surplus fund transfer to next fiscal year)

Source

• Landing page: https://oklahoma.gov/oag/opinions/ag-opinions/2024/ag-opinion-24-11.html
• Original PDF: https://oklahoma.gov/content/dam/ok/en/oag/opinions/ag-opinions/2024/AGO24-29%202024%20OK%20AG%2011.pdf

Original opinion text

GENTNER DRUMMOND
ATTORNEY GENERAL
ATTORNEY GENERAL OPINION
2024-11

The Honorable Ryan Walters
August 18, 2024
State Superintendent of Public Instruction
Oliver Hodge Building
2500 N. Lincoln Blvd.
Oklahoma City, OK 73105

Dear Superintendent Walters:

This office has received your request for an official Attorney General Opinion in which you ask, in effect, the following question:

Whether unused funds from the School Security Revolving Fund established by House Bill 2903, 2023 Okla. Sess. Laws ch. 281, § 2, 70 O.S.Supp.2023, § 5- 148.2(A), may be transitioned, or rolled over, and utilized in the following, or subsequent, fiscal year?

I.
SUMMARY

Yes, consistent with the analysis and determinations below, a school district may carry over unused funds from the School Security Revolving Fund from one year to another.

II.
BACKGROUND

In 2023, the Legislature enacted House Bill 2903, directing the State Department of Education to “establish and maintain a three-year pilot program known as the School Resource Officer Program.” 70 O.S.Supp.2023, § 5-148.1. The Program was created for the express purpose of providing funds to schools for safety and security enhancements. 1 To implement the Program, the Legislature established the School Security Revolving Fund (the “Revolving Fund”) and appropriated $150,000,000.00 from the State’s General Revenue Fund to be “budgeted and expended by the State Department” for purposes of the Program. 70 O.S.Supp.2023, § 5-148.2. (emphasis added); House Bill 2904, 2023 Okla. Sess. Laws ch. 282, § 1.2 Under the Program, the

1
School districts can use funds for physical security enhancements, including “school resource officers, cameras, gates, lighting, locks, doors, windows, security geofencing, and ballistic storm shelters.” 70 O.S.Supp.2023, § 5-148.1.
2
As a companion bill to House Bill 2903, House Bill 2904 appropriated $150,000,000.00 from the State’s General Revenue Fund to the Revolving Fund.

313 N.E. 21ST STREET • OKLAHOMA CITY, OK 73105 • (405) 521-3921 • FAX: (405) 521-6246
The Honorable Ryan Walters
A.G. Opinion
Superintendent of Public Instruction
Page 2

Department is directed to distribute no more than Fifty Million Dollars per fiscal year for the program and distributions shall be divided equally among every public school district in the state. 70 O.S.Supp.2023, § 5-148.2(C). Taken together, House Bills 2903 and 2904 require, beginning July 1, 2023, the Department to annually distribute $50,000,000.00.3

Yet the Department inexplicably did not send the available $50,000,000.00 to school districts to protect and enhance school safety. Instead of sending the funds directly to schools as legislatively directed - a process the Department has followed with some vendors - the Department required a school district to first expend its own funds and then wait on reimbursement from the Department. 4 The Department also advised school districts that their funds were available for carryover throughout the three-year program period but, arbitrarily and without notice, reversed course and zeroed out the district balances.5 Original Program Guidance https://sde.ok.gov/sites/default/files/SRO%20Funding%20Guidance%20%281%29.pdf, compare with Updated Program Guidance (https://sde.ok.gov/sro-funding). Worse, the Department waited more than a year after the effective date of the Program to ask for this office’s opinion on a question that has a clear answer.6 As detailed herein, school districts may carry over and utilize the funds consistent with the purposes of the program in future years. This outcome is indisputable for four reasons.

III.
DISCUSSION

First, the statutes do not put any fiscal year limitations on a school district’s use of such funds. This office previously determined that a statute without fiscal year limitations on a specific use or restriction of a fund is evidence of legislative intent to not impose fiscal year limitations on the funds. 1983 OK AG 277, ¶ 3; see also 2005 OK AG 23 (determining that surplus funds from a tax levied for specific purpose may be transferred for use in the next fiscal year). Here, the only statutory limitations regarding the Program and the Revolving Fund are that (1) the funds must be used to establish and maintain the Program, and to provide physical security enhancement grants, consistent with the enhancement set forth therein; (2) the funds shall not be used to supplant existing school security funding; and (3) the Department shall not expend more than $50,000,000 in any of the three years of the pilot program. Without any reason to disavow the 1983

3
The Department must expend funds upon warrants issued by the State Treasurer against claims filed by the Department with the Office of Management and Enterprise Services. 70 O.S.Supp.2023, § 5-148.2(C).
4 https://pig.omes.ok.gov/risk-assessment-compliance (Sole Source and Direct POs, Department search and export data).
5
This office understands that a number of school districts, understandably, relied on this advice and carried the funds forward from year one, planning to use the funds for larger enhancement projects in years 2 and 3 of the Program. Furthermore, this office understands that at the close of the most recent fiscal year (June 30, 2024); there was $128,000,000.00 remaining in the Revolving Fund.
6
To date, the Revolving Fund has a balance of more than $128,000,000.00. State of Oklahoma Summary of Receipts and Expenditures for Fund 293 (on file with this office). Because the Department did not distribute the funds as intended, the Department asserts that it cannot now authorize expending the prior year funds that were carried over into a subsequent fiscal year without violating the “expenditure shall not exceed $50 million in any year” language in 70 O.S.Supp.2023, § 5-148.2(C). This is incorrect. Any distribution from the Revolving Fund that would give a school district the funding it should have received in a previous fiscal year would not create an inequality of expenditures or unequal division of the funds but would merely correct an error that prevented a school district from receiving its equal distribution and correct the inequality of distributions previously created.
The Honorable Ryan Walters
A.G. Opinion
Superintendent of Public Instruction
Page 3

determination, this office affirms that opinion as relating to the Program and the Revolving Fund. There are thus no statutory fiscal year limitations on a school district with respect to its use of Program funds.

Second, the statutes establishing the Program, the Revolving Fund, and appropriating funds use “expend” or “expenditure” only when addressing the State Department. 70 O.S. § 5-148.2(B–C) (e.g., “expended by the State Department”). Aside from generally identifying what the funds can be used for, the statutes are silent on limitations on school district methodologies and time for expending the funds. Consequently, any statutory limitations on the carryover and expenditure of funds would apply solely to the Department, not the school districts.

Third, there are no constitutional fiscal year limitations restricting the ability to carry the funds forward into a subsequent fiscal year. The Revolving Fund plainly states it is a “continuing fund, not subject to fiscal year limitations.” 70 O.S.Supp.2023, § 5-148.2(A). This is significant because only the Oklahoma Constitution limits the Legislature’s appropriation of money to the various State purposes and agencies; otherwise, the authority rests in the sole discretion of the Legislature. Board of Commissioners of Okla. County v. Ryan, 1924 OK 1075, 232 P. 834; In re Thomas’ Estate, 1943 OK 115, 136 P.2d 929; Herndon v. Anderson, 1933 OK 490, 25 P.2d 326. One such constitutional limitation is in article V, section 55 of the Oklahoma Constitution, providing that a state agency must expend appropriated funds within thirty months or the appropriation lapses. Okla. Const. art. V, § 55. If the expenditure of funds occurs later than thirty months following the appropriation, the expenditure is invalid. Indep. Sch. Dist. No. 52 of Okla. County v. Hofmeister, 2020 OK 56, ¶ 77, 473 P.3d 475, 507. But constitutional provisions relating to appropriations and limitations thereon do not apply to special funds. Edwards v. Childers, 1924 OK 652, 228 P. 472; State ex rel. Hawkins v. Okla. Tax Comm’n, 1969 OK 118, 462 P.2d 536.7

Relevant here, a revolving fund, like the School Security Revolving Fund, is a special fund in the State Treasury created by legislative act. The Legislature removed any doubt of its intent by establishing the Revolving fund and unambiguously stating it was “not subject to fiscal year limitations.” As a result, there are no limitations on the ability to carryover the funds in the Revolving Fund.8

Finally, the Department has authorized—and continues to authorize—school districts to carryover Program funds. Notwithstanding the lack of authority to promulgate administrative rules relating to the Program and because it now ostensibly knows when it does and when it does not have rulemaking authority, the Department has instead established “House Bill 2903 Guidance” (“Guidance”).9 In the original version of the Guidance document, the Department states as follows:

7
Because the Program funds are state, and not federal, funds, this opinion does not address any limitations or requirements imposed by federal law or regulation.
8
The use of a revolving fund for funding specific needs in public education is not uncommon. Indep. Sch.
Dist. No. 52, n.139.
9
75 O.S.2021, § 250.3(17) (defining “rule” to mean any agency statement of general applicability and effect that implements, interprets or prescribes law or policy, or describes the procedure or practice requirements of the agency); see also Indep. Sch. Dist. No. 12 v. State, 2024 OK 39, ¶¶ 34-35, ___ P.3d ___, 2024 WL 2931057 (discussing the Department lacking express authority to promulgate administrative rules).
The Honorable Ryan Walters
A.G. Opinion
Superintendent of Public Instruction
Page 4

Is rollover allowable? Yes, unspent monies from previous years may be rolled over to future years. However, all monies must be encumbered by the end of year three. https://sde.ok.gov/sites/default/files/SRO%20Funding%20Guidance%20%281%29.pdf.

Without notice, the Department removed this question and answer from the Guidance. Setting this aside for now, the Guidance also requires a school district to “only” use its General Fund for Program expenditures and reimbursements. https://sde.ok.gov/sro-funding. A school district may carry over the funds in the General Fund from one year to the next. 70 O.S.Supp.2023, § 18- 200.1(G); see also Indep. Sch. Dist. No. 52 of Okla. County v. Hofmeister, 2020 OK 56, ¶ 78, 473 P.3d 475, 508 (acknowledging school districts “may have a carryover in the school district’s general fund”). Accordingly, because the Department requires a school district to use its General Fund for the Program, and because state law allows a school district to carry over General Fund balances, school districts are, therefore, permitted to carry forward Program funds from one year to a subsequent year. Critically, all legislatively appropriated funds for school districts to make security enhancements under the Program must remain available to every school district.

As of July 1, 2024, the Revolving Fund has a balance of more than $128,000,000.00. See State of Oklahoma Summary of Receipts and Expenditures for Fund 293 (on file with this office). Because the Department did not distribute the funds as intended and required by law, the Department asserts that it cannot now authorize expending the prior year funds that were carried over into a subsequent fiscal year without violating the “expenditure shall not exceed $50 million in any year” language in 70 O.S.Supp.2023, § 5-148.2(C). This is incorrect. A plain reading of the statute demonstrates legislative intent to provide $50,000,000 in each of the three years of the Program. Any distribution from the Revolving Fund that would give a school district the funding it should have received in a previous fiscal year would not create an inequality of expenditures or unequal division of the funds. Instead, this corrects the Department’s mismanagement that prevented school districts from receiving an equal distribution of Program Fund and an error that, in your own words, concerns and puts at risk the safety of schoolchildren.

                                      *      *       *

The Honorable Ryan Walters
A.G. Opinion
Superintendent of Public Instruction
Page 5

It is, therefore, the official Opinion of the Attorney General that:

Consistent with parameters in title 70, sections 5-148.1 and 5-148.2, unused funds from the School Security Revolving Fund established by House Bill 2903, 2023 Okla. Sess. Laws ch. 281, § 2, 70 O.S.Supp.2023, § 5-148.2(A), may be transitioned, or rolled over, and utilized in the following, or subsequent, fiscal year by local school districts. The Department and State Board of Education are not authorized to sweep or move Program funds to a different account or use them for a purpose other than that intended by the Legislature as detailed herein.10 The safety of our State’s schoolchildren requires, and this opinion directs, your immediate implementation of the Program consistent with this opinion.

GENTNER DRUMMOND
ATTORNEY GENERAL OF OKLAHOMA

10
Indep. Sch. Dist. No. 52, ¶¶ 89-92, 473 P.3d at 512-14 (discussing Executive Branch’s discretion concerning the expenditure of appropriated funds, legislative direction to the Executive Branch on spending appropriations, and Executive Branch officer diversion from the Legislature’s will).