In counties with a population over 225,000, a contract for work, labor, services, or materials and supplies is not binding until the county auditor certifies that the budget contains an ample provision for the obligation and that funds are or will be available to pay the obligation when due. Any opinions on how this certification must occur? Is oral certification enough or must it be written? Can certification be inferred from the auditor's act in asking the commissioners court to designate a funding source or his/her act in approving the payment of an invoice? How does the auditor certify an hourly rate contract that is open-ended, e.g., a contract with a consultant, or a contract inked mid-way through a budget year and that wasn't contemplated in the budget? How does your county handle this issue?

There is an overlay of statutory processes, many of which have been coded into our financial system. Below is a quick summary of our certificaton related processes.

We separate the individually drafted "specialty" contract from the standard purchase order contract. An individually drafted contract is (usually) provided to the auditor in advance of it going to CCrt for approval. The auditor will sign those contracts when funding is secure. Our CCrt likes to have all of the i's dotted before they approve a contract. However, there have been rare occasions when a contract gets executed by the court without certification. When that happens, the auditor will remind the department certification is needed and that they should not start receiving goods or services until it has occured.

If there is no budget, the department will need to secure a funding source by working with the budget office before certification is completed. For specialty contracts the signature line for the auditor references available funding.

If budget statutes don't allow for a mid-year budget amendment, the issue would be available funding as well as properly budgeted per LGC 113.043. The auditor's approval of the invoice also means in his/her opinion the bill was legally incurred (LGC 113.065). Our system requires that the department show the goods as received and approve the invoice before payment is made. Under most circumstances the various edit checks and approval wickets moot issues that might be alleged in a contract dispute where certification/ enforceability might be challenged.

If there are intricate funding issues (such as bond issuances) the CA will work with the auditor's staff on contract financial terms during the drafting phase.

The Requisition/Purchase Order is generated electronically. The PO has standard terms & conditions and functions as a contract. The financial system checks for budget then automatically encumbers the funds. The software stops processing if there is insufficient funds for the requested item. The programming sends requisitions that cannot be processed (not enough budget,for example) to the "auditor's queue." If the CCrt addresses the budget issue, the requisition comes out of the queue with encumbered funds. The automated encumbrance process functions as an electronic verification that funds are secured for payment. The auditor's queue is not an approval of the requisition, but a check to make sure funds will be available for payment when invoiced.

Certain contracts, such as consulting/legal services, etc. may be drafted with a not-to-exceed amount. The NTE amount is budgeted and encumbered. The department is responsible for monitoring the account and securing additional budget if they need to spend more than originally expected. Where a contract has no set quantities and no NTE (for example, office supply catalogue purchases), a requisition/PO is required to purchase under the master specialty contract so the auditor review/encumbrance process creates the funding assurance at the point of requisition.

If less than an encumbered amount is used, the auditor can liquidate the PO/contract (ie: release the remaining encumbered funds for other use), but only upon approval by the department. At the end of the year, encumbered funds for a contract that is only partially completed will be rolled over by CCrt in the budget process.

So many of the various statutory checks and balances, as well as CCrt policies, are programmed into our financial system for high volume compliance checks/electronic approval. Since certification is a discretionary duty of the auditor I would suggest it is up to him/her to decide her comfort level (electronic signature vs. pen & paper, ratification of presumed approval, etc.)For purposes of determining enforceability of a contract I imagine there should be documentation of that decision in some form.

Since the LGC is short on prescriptive details, there are probably many ways to accomplish the certification. This is just how we do it.

I am not sure who AB is but he seems like a future speaker for TDCAA Civil.

Thanks for your thorough response. I'm printing it for the information of our auditor and others in our office.

Untraditional career path, but I started as an ACA years ago. Prosecuted for the DA some, ran the law enforcement division of the SO for a while, am now a lawyer in the auditor's office where I lend a broad perspective to various issues. I consider myself lucky, in that our county attorney's office is very good at providing us with opinions in what is a very arcane area with little case law for guidance. A large part of my job is translating the grey areas of those opinions (since there is rarely a single clear path one can take)for a very sincere profession that typically only has black and white crayons in its coloring box. An interesting challenge since I usually grab my grey crayon first.

I am always happy to talk about the statutes that drive an auditor's office and how they approach them, which is usually in a conservative (ie: risk adverse) manner. The statutes charge them with ensuring strict compliance with financial law (sort of like a prosecutors charge to ensure justice) and they take the duty seriously.

Your auditor will probably know me.