January 20, 1998
H. Martin Lancaster, President
N.C. Community College System 200 West Jones Street Raleigh, NC 27603-1379
RE: Advisory Opinion; Community Colleges; Authority to enter into Lease Purchase and Installment Purchase Contracts; N.C.G.S. §§ 115D-58.5 and 143-49
Dear President Lancaster:
This is a follow up to our recent telephone conversations concerning the authority of community colleges to enter into lease purchase and installment contracts. As you know, in October of last year our office advised Clay Hines by advisory letter that community colleges did not have such authority. Although the advisory letter presents a responsible argument to support its conclusion, it is the opinion of the Attorney General that N.C.G.S. §§ 115D-58.5(b) and 143- 49(1) authorize community colleges to enter into lease purchase and installment contracts so long as these contracts are made by or with the approval of the Purchase and Contract Division of the North Carolina Department of Administration. However, because there is a very plausible argument to the contrary, we strongly suggest that your Department ask the General Assembly at its very next session to enact legislation that clearly and specifically gives to community colleges this authority, as the legislature has already done for units of local government and elementary and secondary public schools. See, respectively, N.C.G.S. §§ 160A-20 and 115C-528.
N.C.G.S. § 115D-58.5, which deals generally with the accounting systems for community colleges, provides in pertinent part as follows: "Each institution shall be governed in its purchasing of all supplies, equipment, and materials by contracts made by or with the approval of the Purchase and Contract Division of the Department of Administration."
The powers and duties of the Secretary of the Department of Administration are set forth in
N.C.G.S. § 143-49. Subsection (1) of that statute authorizes the Secretary of the Department of Administration: "To canvass sources of supply, including sources of supply of materials and supplies with recycled content, and to purchase or to contract for the purchase, lease and lease purchase of all supplies, materials, equipment and other tangible personal property required by the State government, or any of its departments, institutions or agencies under competitive bidding or otherwise as here and after provided." (Emphasis added). Over the past many years, by custom and practice, the Purchase and Contract Division of the Department of Administration has authorized and approved numerous lease purchase and installment purchase contracts entered into by community colleges, relying upon the authority of N.C.G.S. §§ 115D-58.5 and 143-49(1). We believe this reliance upon these statutes by the Purchase and Contract Division was reasonable and responsible. However, as we have already noted, so that there is absolutely no question that community colleges have this authority, we reiterate our suggestion that specific legislation to that effect be enacted by the General Assembly.
Should you have any questions, please feel free to contact me.
signed by:
Andrew A. Vanore, Jr.
Chief Deputy Attorney General