April 29, 1993
Sheriff Edward E. Gwyn Avery County Sheriff’s Department Post Office Box 426 Newland, North Carolina 28657
Re: Advisory Opinion — Cash Gifts from Criminal Defendants to Local Law Enforcement Agencies; Propriety and Fiscal Control
Dear Sheriff Gwyn:
You state the Avery County Sheriff’s Department has created and maintains a "Drug Fund" account into which is deposited money received from persons arrested by its deputies and awaiting trial for Controlled Substances Act violations. You further state the money is not paid over as part of plea bargains or under court orders but rather is provided voluntarily on the initiative of the alleged violators without any conditions attached to its use. The "Drug Fund" account is maintained separate and apart from funds appropriated to the Sheriff’s Department by its governing board. We understand "Drug Fund" moneys are expended under the Sheriff’s direct supervision only for official purposes which directly enhance the department’s ability to perform its law enforcement duties. You ask whether Avery County’s finance officer unilaterally may reduce the Sheriff’s Department’s annual appropriations by the value of the cash deposited into the "Drug Fund". You also ask whether the Sheriff’s Department’s annual appropriations may be reduced by the value of property it receives under state and federal forfeiture laws.
Before responding to your questions, the propriety of a law enforcement agency accepting money outside the judicial process from persons its officers have arrested and who are awaiting disposition of criminal charges should be addressed briefly. Although the practice does not violate the criminal law, it has a strong appearance of impropriety. Even if an alleged violator initiates the offer and provides the money without promise of any reciprocal consideration from the law enforcement agency, district attorney’s office or court involved, the practice could be interpreted as improper or secret plea bargaining. The practice also could be seen as inhibiting those agencies’ abilities to exercise impartial judgment in the violator’s case and thereby erode public confidence in the entire judicial system. The Attorney General’s Office does not support the practice and ferverently suggests it be discontinued in favor of court ordered forfeitures or recorded plea agreements providing for restitution of extraordinary costs incurred by law enforcement agencies.
Assuming you desire to continue the "Drug Fund" account, the first question that arises is whether it is appropriate for a local law enforcement agency to establish, maintain and make disbursements from such an account outside the uniform system of budget adoption, administration and fiscal control provided by the Local Government Budget and Fiscal Control Act (hereinafter "Act"). We think not. The Act requires "all taxes and other moneys collected or received by an officer or employee of a local government . . . [to] be deposited in accordance with this section." G.S. 159-32. The scope of the statute’s requirement reasonably can be interpreted to include unconditional gifts of cash similar to those now being deposited in the "Drug Fund". For purposes of the Act, sheriffs are considered officials or employees of local government and are subject to the requirements of the Act. (See letter of April 24, 1980 from Douglas A. Johnston, Assistant Attorney General to Sheriff of Moore County.) Therefore, where a sheriff accepts on behalf of his department an unconditional gift of cash, he must deposit it "with the finance officer or in an official depository" under the supervision of the finance officer.
G.S. 159-32.
Once money is deposited in accordance with the Act, a local government finance officer has the
power and duty to "keep the account" and "disburse all funds . . . in strict compliance with [the
Act] . . . [and] the budget ordinance". G.S. 159-25(a)(1) and (2). Although a governing board "by
appropriate resolution or ordinance may authorize the budget officer to transfer moneys from one
appropriation to another within the same fund", (G.S. 159-15) there is no statutory authority for a
budget officer or finance officer unilaterally to reduce an agency’s annual appropriations based
upon the receipt of unanticipated revenue. Only the local governing board has authority to reduce
or increase appropriations to a local government agency and such action must be accomplished
by formal amendment to the budget ordinance. See G.S. 159-15.
While a local finance officer has no independent authority to reduce an agency’s annual
appropriations, an agency does not have authority to expend unanticipated revenue without with
the approval of its governing board. G.S. 159-8(a) provides "no local government . . . may
expend any moneys, regardless of their source . . . , except in accordance with a budget ordinance
. . . ." Therefore, where a local law enforcement agency receives unanticipated revenue, it must
obtain approval from its governing board, via amendment to its budget, to expend the funds. If
the revenue is received with restrictions or conditions placed upon its use by the provider (e.g. to
purchase law enforcement equipment or to be used as drug "buy money"), the local governing
board must appropriate it for the specified uses or return it.
The question you ask concerning the authority of local governing boards to reduce annual
appropriations to a law enforcement agency based upon receipt of proceeds from equitable
sharing of federally forfeited property, state judicial forfeitures and state controlled substances
excise tax assessments previously has been addressed fully in an advisory letter this office
provided to all local law enforcement agency heads in February, 1992. A copy of the advisory
letter is enclosed for your review and consideration.
The Treasuer’s Office concurs in the legal conclusions set forth in this advisory opinion in so far
as they involve matters within the Treasurer’s statutory authority. Should you need further
clarification of the opinions provided or have additional questions concerning the fiscal control
of asset forfeiture proceeds, you may contact me or Assistant Attorney General Doug Johnston in
the Treasurer’s Office.
Edwin M. Speas, Jr.
Senior Deputy Attorney General
W. Dale Talbert Special Deputy Attorney General