Does the Tennessee State Board of Accountancy alone set its staff's compensation, or does some other state official have to sign off?

Subject

Opinion No. 11-70, State Board of Accountancy's Authority to Establish Compensation for Employees, September 16, 2011

Plain-English summary

Stanley Sawyer, the CPA chair of the Tennessee State Board of Accountancy, asked two practical questions about the Board's authority over its own staff: could the Board alone set the salary of the Executive Director and other professional staff, and could it grant raises on its own authority?

The AG's answer is yes-with-a-condition. The Board has full statutory authority to set compensation and to grant salary increases. Tenn. Code Ann. § 62-1-105(c)(1) is express: "compensation for the executive director shall be established by the board" and the Board has the authority to "retain and establish the qualifications and compensation for investigators and other staff requiring professional qualifications." The Executive Director and the professional staff serve "at the pleasure of the board."

But the condition matters. Tenn. Code Ann. § 62-1-105(c)(2) makes all Board expenditures "subject to approval by the commissioner of finance and administration, pursuant to the board's annual budget submitted to the commissioner of commerce and insurance and approved by the commissioner of finance and administration." Salaries and raises are expenditures. So the Board can set the dollar figure, but cannot actually pay it without the F&A Commissioner's budget approval.

The AG cross-referenced two earlier opinions:
- Op. 04-060 (Apr. 8, 2004): the Board has sole authority to hire and terminate its Executive Director and other professional staff, subject to F&A spending approval.
- Op. 08-166 (Oct. 15, 2008): investigators are a subset of professional staff under the statute and are likewise within the Board's authority.

The opinion is short because the statute is unambiguous. The Board is autonomous on personnel-management decisions about who works there and what they are paid, but is dependent on a separate state actor (the F&A Commissioner) for budget approval. That bifurcation is typical of independent Tennessee licensing boards: they set their internal house in order, but they spend public money only with budget sign-off.

Currency note

This opinion was issued in 2011. 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.

Tenn. Code Ann. § 62-1-105 has been amended over the years. Anyone analyzing current authority over Board of Accountancy staffing should check the current text of the statute.

Background and statutory framework

The Board's hiring and compensation authority. Tenn. Code Ann. § 62-1-105(c)(1): "The board shall have an executive director, who shall be a certified public accountant with an active certificate in the state. The executive director shall be appointed by the board, and compensation for the executive director shall be established by the board. The board shall retain and establish the qualifications and compensation for investigators and other staff requiring professional qualifications. The executive director and all members of the board's staff requiring professional qualifications shall serve at the pleasure of the board." (Emphasis added.)

The budget-approval limit. Tenn. Code Ann. § 62-1-105(c)(2): "Any expenditures of the board shall be subject to approval by the commissioner of finance and administration, pursuant to the board's annual budget submitted to the commissioner of commerce and insurance and approved by the commissioner of finance and administration."

Prior AG guidance. Op. Tenn. Att'y Gen. No. 04-060 (Apr. 8, 2004): Tenn. Code Ann. § 62-1-105(c)(1) "gives the Board of Accountancy the sole authority to hire and terminate its Executive Director and any other member of its staff requiring professional qualifications," with all expenditures subject to F&A approval. Op. Tenn. Att'y Gen. No. 08-166 (Oct. 15, 2008): investigators are a subset of professional staff under the statute, so the Board has sole authority to hire and terminate them.

Common questions

Does the Commissioner of F&A have a line-item veto over individual salaries?

The opinion treats expenditures as approved or not approved through the annual-budget process. The Commissioner of F&A approves the budget; the Board administers the budget. If the Commissioner approves a budget that includes a specified salary, the Board pays it. If the Commissioner cuts the salary line during budget review, the Board cannot exceed the approved amount.

Can the Board fire its Executive Director without F&A approval?

Yes. Termination is personnel management, which the AG previously confirmed is the Board's "sole authority." F&A approval applies to expenditures (paying people), not to who holds the position. Note that some positions require professional qualifications that limit who can fill the role.

Does this analysis apply to non-professional support staff?

The statute specifically addresses the Executive Director, investigators, and "other staff requiring professional qualifications." The opinion does not directly address clerical or other non-professional staff hired by the Board, who are typically subject to standard state-personnel rules.

What if the Commissioner of F&A denies a budgeted raise?

The Board cannot pay an unapproved expenditure. The Board's authority to set compensation is real but conditional on the budget being approved. Denial leaves the Board with a paper authority and no money.

How does this differ from at-will state employment elsewhere?

Most state agencies have their personnel decisions run through the Department of Human Resources and state civil-service rules. The Board of Accountancy and similar professional-licensing boards have specific statutory carve-outs that let them act independently on certain professional positions, subject to the budget-approval condition that protects the State's fiscal interests.

Citations

• Tenn. Code Ann. § 62-1-105(c)(1)
• Tenn. Code Ann. § 62-1-105(c)(2)
• Op. Tenn. Att'y Gen. No. 04-060 (Apr. 8, 2004)
• Op. Tenn. Att'y Gen. No. 08-166 (Oct. 15, 2008)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2011/op11-070.pdf

Original opinion text

September 16, 2011
Opinion No. 11-70
State Board of Accountancy's Authority to Establish Compensation for Employees

QUESTIONS

1. Does the Tennessee State Board of Accountancy have the sole authority to establish the compensation for the Executive Director and other professional staff?

2. Does the Board also have the sole discretion to authorize salary increases for the Executive Director and other professional staff?

OPINIONS

1. The Board of Accountancy has the authority to establish the compensation for the Executive Director and other professional staff. Tenn. Code Ann. § 62-1-105(c)(1). This authority is limited by the requirement that expenditures of the Board must be approved by the Commissioner of Finance and Administration as part of the Board's annual budget. Tenn. Code Ann. § 62-1-105(c)(2).

2. The Board's authority to establish the compensation for the Executive Director and other professional staff includes the power to provide for salary increases. See Tenn. Code Ann. § 62-1-105(c)(2). This authority is likewise limited by the requirement that expenditures of the Board must be approved by the Commissioner of Finance and Administration as part of the Board's annual budget. Tenn. Code Ann. § 62-1-105(c)(2).

ANALYSIS

1. Tennessee Code Annotated 62-1-105 governs the authority of the Tennessee State Board of Accountancy to retain and compensate the Board's staff, including the Board's Executive Director. Section 62-1-105(c)(1) provides in pertinent part:

The board shall have an executive director, who shall be a certified public accountant with an active certificate in the state. The executive director shall be appointed by the board, and compensation for the executive director shall be established by the board. The board shall retain and establish the qualifications and compensation for investigators and other staff requiring professional qualifications. The executive director and all members of the board's staff requiring professional qualifications shall serve at the pleasure of the board.

Tenn. Code Ann. § 62-1-105(c)(1) (emphasis added).

Section 62-1-105(c)(2), however, limits the Board's authority under Section 62-1-105(c)(1) by requiring that any expenditures "shall be subject to approval by the commissioner of finance and administration, pursuant to the board's annual budget submitted to the commissioner of commerce and insurance and approved by the commissioner of finance and administration." Tenn. Code Ann. § 62-1-105(c)(2).

This Office has previously opined that Tennessee Code Annotated § 62-1-105(c)(1) "gives the Board of Accountancy the sole authority to hire and terminate its Executive Director and any other member of its staff requiring professional qualifications." Op. Tenn. Att'y Gen. No. 04-060 (Apr. 8, 2004). We further opined that "[t]he Executive Director and all members of the Board's professional staff requiring professional qualifications serve at the pleasure of the Board, although all expenditures of the Board are subject to approval by the Commissioner of Finance and Administration." Id. (emphasis added). In a later opinion, we explained that the Board has the sole authority to hire and terminate investigators because investigators are a subset of professional staff under the statute. Op. Tenn. Att'y Gen. No. 08-166 (Oct. 15, 2008).

We are now asked whether the Board has the sole authority to establish the compensation of the Executive Director and other professional staff. Tennessee Code Annotated § 62-1-105(c)(1) specifically provides that "compensation for the executive director shall be established by the board" and grants the Board the authority to establish the "compensation for investigators and other staff requiring professional qualifications." Tenn. Code Ann. § 62-1-105(c)(1). The Board thus has the authority to establish the compensation for the Executive Director and other professional staff. However, such expenditures of the Board are "subject to approval by the commissioner of finance and administration, pursuant to the board's annual budget submitted to the commissioner of commerce and insurance and approved by the commissioner of finance and administration." Tenn. Code Ann. § 62-1-105(c)(2).

2. The authority to establish compensation necessarily includes the authority to authorize salary increases. This authority is likewise limited by the requirement that expenditures of the Board must be approved by the Commissioner of Finance and Administration as part of the annual approval of the Board's budget.

ROBERT E. COOPER, JR.
Attorney General and Reporter

WILLIAM E. YOUNG
Solicitor General

R. MITCHELL PORCELLO
Assistant Attorney General

Requested by:
The Honorable Stanley B. Sawyer, CPA
Chair, Tennessee State Board of Accountancy
Banks, Finley, White & Co.
Certified Public Accountants
P.O. Box 1774
Memphis, Tennessee 38101