Can South Carolina school staff move budget money mid-year without board approval?

Official title

Opinion addressing whether a school district may make mid-year budget transfers without the approval of its board.

Requester

Requested by Ms. Rebecca Blackburn Hines, Board Chair, Board of Trustees, Lexington-Richland County School District Five.

Plain-English summary

The board chair of Lexington-Richland County School District Five asked the Attorney General two questions: must a South Carolina school board approve mid-year budget transfers, and if transfers can be made without board approval, are there limits on the type or amount? The district had a policy allowing transfers up to $10,000 without board approval and was considering loosening it further, to unlimited transfers within the same accounts and transfers between accounts up to $250,000, all without a board vote.

The office's answer is that the board cannot delegate this away. Under the constitution, every school district must prepare and maintain annual budgets (art. X, § 7(b)), and § 6-1-80 requires public notice and a public hearing before a district adopts its budget. The board of trustees is charged with the "management and control" of the district (§ 59-19-10), so the responsibility to create and maintain the budget rests with the board. Creating and maintaining a budget is a discretionary function, and the office has long held that administrative bodies cannot subdelegate discretionary authority without express statutory authority. They can delegate administrative and ministerial tasks to employees, but not discretionary judgment. So letting district employees move funds within the budget without board approval could be viewed by a court as an unauthorized delegation of the board's discretionary authority.

The office added a public-transparency point. Section 6-1-80's notice-and-hearing formalities show the Legislature wanted the budgeting process open to the public, so letting staff quietly reorganize the budget after adoption, outside public view, would run counter to that intent. It also drew an analogy to county budgets, where the office had previously said a county council must approve budget transfers by ordinance after adoption; even without a school-specific transfer statute, the same logic means a school board must take formal action to make transfers.

Because the office found no local law giving District Five special budget-transfer authority, it answered from the general law that applies to all districts: the board cannot permit district employees to make budget transfers without the board's approval.

What this means for you

School boards of trustees: The opinion concludes you cannot delegate mid-year budget transfers to staff without board approval. Setting and adjusting the budget is discretionary authority the Legislature vested in the board, and it must be exercised by the board through formal action.

District administrators and finance staff: The opinion treats moving funds within the budget as something requiring board approval, not staff discretion. Ministerial and administrative tasks can still be delegated, but the decision to transfer budget funds cannot.

Parents, taxpayers, and the public: The opinion ties the board-approval requirement to transparency. Because budgets must be adopted after public notice and a hearing, the office viewed letting staff rearrange the budget afterward, out of public view, as contrary to the Legislature's intent.

Districts with their own local laws: The opinion notes some districts have local laws governing budget transfers, and the analysis would start with that local law. For a district without one (like District Five here), the general constitutional and statutory rules control.

Common questions

Does our school board have to approve every mid-year budget transfer? Under this opinion, yes. The board cannot delegate budget-transfer authority to employees because budgeting is a discretionary function reserved to the board.

Can a district policy let staff move small amounts (like up to $10,000) on their own? The opinion suggests not. It treats any delegation of budget-transfer authority to employees, including the existing $10,000 policy and the proposed $250,000 threshold, as a potential unauthorized delegation of discretionary authority.

Why does it matter that budgets get a public hearing?
The office reasoned that the notice-and-hearing requirement (§ 6-1-80) shows the Legislature wanted budgeting done in public. Letting staff rework the budget afterward, outside public view, would undercut that purpose.

Can the board delegate anything to staff?
Yes, administrative and ministerial duties. The opinion draws the line at discretionary authority, like deciding to transfer budget funds, which the board cannot subdelegate without express statutory authority.

Background and statutory framework

The South Carolina Constitution requires each school district to prepare and maintain annual budgets sufficient to meet its expenses (art. X, § 7(b)), and § 6-1-80 requires advertised public notice and a public hearing before a district adopts its budget for the next fiscal year. The board of trustees holds the "management and control" of the district under § 59-19-10, which the office read to include responsibility for creating and maintaining the budget. District Five was organized by county boards of education in 1951 and 1952 rather than by the Legislature, and although later local laws addressed its board and (in 1979 S.C. Acts 280) its taxing authority, the office found no local law on its budget-transfer authority.

The core principle is the bar on subdelegating discretionary authority. The office relied on its prior opinions holding that discretionary authority generally may not be subdelegated without express statutory authority, distinguishing delegable administrative and ministerial duties. It applied the rule that the primary goal of statutory construction is legislative intent (Mid-State Auto Auction of Lexington, Inc. v. Altman), and reasoned by analogy to county budgets, where it had concluded a county council must approve transfers by formal action after a budget is adopted.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/opinion-addressing-whether-a-school-district-may-make-mid-year-budget-transfers-without-the-approval-of-its-board/
• Original PDF: https://www.scag.gov/media/uzkjuyn3/03580093.pdf

Original opinion text

Alan Wilson
attorney General

May 6, 2024
Ms. Rebecca Blackbum Hines
Chair

Board of Trustees
Lexington-Richland School District Five

1 020 Dutch Fork Road
Irmo, South Carolina 29063

Dear Ms. Blackbum Hines:
We received your letter requesting an opinion of this Office concerning budget transfers within Lexington-Richland School District Five’s (the “District’s”) operating budget after it has been

approved by the District’s board.

Specifically, you ask “whether or not, South Carolina school

boards must approve mid-year budget transfers” and “if mid-year budget transfers may be done without board approval, are there any limitations as to the type or amount of budget transfers which can be made without approval?” Law/Analysis

The South Carolina Constitution provides: “each school district of this State shall prepare and maintain annual budgets which provide for sufficient income to meet its estimated expenses for

each year.” S.C. Const, art. X, § 7(b) (2009). Additionally, section 6-1 -80(A) of the South Carolina Code (2004) requires school districts “provide notice to the public by advertising the public hearing before the adoption of its budget for the next fiscal year in at least one South Carolina newspaper of general circulation in the area.” This statute also states the “notice must be given

not less than fifteen days in advance of the public hearing and must be a minimum of two columns wide with a bold headline” and goes on to describe what must be included in the notice. S.C. Code Ann. § 6-1-80. As we stated in a 201 1 opinion:

Public schools of this State are governed by boards of trustees. Op. S.C. Atty. Gen., March 13, 1996 [noting that S.C. Code Ann. §59-19-10 bestows upon school trustees the authority for the “management and control” of each school

district]. An opinion of this office dated February 16, 1983, further indicated that “. . . the board of trustees of a school district is responsible for the management and control of the district, subject only to the supervision and orders of the county board of education if there is a county board. . . (and) . . . has the power to make rules and regulations and to adopt policies.”

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Ms. Rebecca Blackburn Hines
Page 2

May 6, 2024

Op. Att’v Gen., 201 1 WL 3918179 (S.C.A.G. Aug. 25, 201 1). As such, we believe a school’s board of trustees is responsible for establishing a district’s budget and ensuring compliance with section 6-1-80.

In addition to these constitutional and statutory provisions, some districts’ budgetary authority is

provided for by local law.1 Therefore, to answer your question regarding school boards in general, we would have to look at each individual district’s local law to determine how to handle mid-year budget transfers. We presume you are specifically interested in the District, and therefore will consider its local laws. Initially, we note the unique creation of the District, which according to

the District’s website “was organized by action of the Lexington County Board of Education in 1951 and the Richland County Board of Education in 1952.” district/our-district.

https://www. Iexrich5 .org/our-

Therefore, unlike many school districts in this state, the District was not

created through an act of the Legislature. However, throughout the years, the Legislature adopted local laws concerning the District.

While most of these local laws primarily pertain to the
composition of the District’s board, a 1979 act vested authority in the District’s board to determine

and levy its school tax. 1979 S.C. Acts 280. However, we did not find any local laws addressing the District’s budgetary authority or how to handle budget transfers, therefore we find the District’s responsibility to create and maintain a budget comes from the constitutional and statutory law set forth above. Moreover, we believe this authority and responsibility rests with the District’s board as it is charged with the management and control of the District. Your letter indicates that while the District’s board approves an annual budget, a District policy allows budget transfers of up to $10,000 without board approval and the board is considering allowing “unlimited transfers within the same accounts/functions (without increasing the total budget) without board approval and transfers between accounts/functions up to $250,000 without board approval.” We believe allowing budget transfers without board approval could be viewed by a court as an unauthorized delegation of the board’s discretionary authority.

As explained above, the Legislature vested authority over the management and control of school districts with their boards of trustees and we believe this included the responsibility to create and maintain its budget in accordance with section 6-1-80. Creating and maintaining a budget involves

and exercise of discretionary authority. While we recognize the board may delegate administrative and ministerial duties to the District employees, we have long recognized administrative bodies cannot delegate their discretionary authority. See Op. Att’v Gen., 2005 WL 1024603 (S.C.A.G. Apr. 14, 2005) (stating “discretionary authority generally may not be subdelegated without express statutory authority.”); Op. Att’v Gen., 1985 WL 166051 (S.C.A.G. Aug. 8, 1985) (“Its is well recognized that there must exist statutory authority for an administrative officer or agency to subdelegate any portion of the authority which has been delegated to him by statute.”); Op. Att’v 1 In past opinions, we discussed various local laws governing school district budgets. For example, in a 2015 opinion we discussed the local law governing the budget for School District Four in McCormick County. Op. Att’v Gen.. 2015 WL 8773706 (S.C.A.G. Nov. 24, 2015). Additionally, in 2016 we discussed the local law governing the budget for the Charleston County School District, which included a provision on budget transfers. Op. Att’v Gen., 2016 WL 6496887 (S.C.A.G Oct. 25, 2016).

Ms. Rebecca Blackbum Hines
Page 3

May 6, 2024

Gen., 1979 WL 42873 (S.C.A.G. Mar. 19, 1979) (“Unless provided otherwise by statute, governmental entities cannot further delegate any discretionary powers.”). As such, it is our opinion that the District’s board may not delegate authority to employees of the District to transfer funds within its budget without express approval of the District’s board. Moreover, we believe a contrary interpretation would run afoul of the Legislature’s intent regarding the formalities required under section 6-1-80. “The primary rule of statutory

construction is to ascertain and give effect to the intent of the legislature.” Mid-State Auto Auction of Lexington, Inc, v. Altman, 324 S.C. 65, 69, 476 S.E.2d 690, 692 (1996) (citation omitted). By requiring notice and a public hearing prior to the adoption of an annual budget, we gather the Legislature intended for the budgeting process to be open to the public. We believe allowing District employees to subsequently reorganize the budget outside the view of the public is contrary to the Legislature’s intent regarding section 6-1-80. In your opinion request, you referred to a 2006 opinion in which we discussed the ability of a county council to transfer funds from one county department to another after the adoption of the

county’s budget. Op. Att’y Gen., 2006 WL 1376908 (S.C.A.G. May 8, 2006). We cited section 49-140 of the South Carolina Code, which in addition to requiring county councils to adopt operating and capital budgets, specifically allows for budget transfers so long as they are approved by the county council. Id. We determined this approval required must come in the form of an ordinance adopted by the council. Id. While we did not find specific authority under state law specifying school districts may make budget transfers so long as their board approve them, given the responsibility of school districts to similarly adopt annual budgets and the fact that we believe

the Legislature intended for this responsibility to be carried out by their boards in accordance with section 6-1-80, we similarly believe a school board must also take formal action to make budget transfers. Conclusion

Some school districts have local laws pertaining to their budgetary authority and more specifically when and how budget transfers may be authorized. We found no local law pertaining to the District in this regard and therefore rely solely on the general law applicable to all districts to answer your

question. Article X, § 7(b) of the South Carolina Constitution requires school districts to create annual budgets. Section 6-1-80 of the South Carolina Code specifies notice and a public hearing are required for a school district to adopt a budget. The formalities required under 6-1-80 indicate the Legislature’s intent for budgetary authority to rest with school boards, which are charged with management and control of school districts. Because creating and maintaining a budget is a discretionary function, we do not believe the District’s board, without authority from the

Legislature to the contrary, may delegate this function to District employees. As such, we do not believe the District’s board can permit District employees to make budget transfers without the approval of the board.

Ms. Rebecca Blackburn Hines
Page 4

May 6, 2024

Sincerely,

Cydncy^Milling
Assistant Attorney General

REVIEWED AND APPROVED BY:

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Robert D. Cook
Solicitor General