The Honorable Suzanne Crouch
AGO 2016-2
Official Opinion No. 2016-2
Indiana Attorney General Opinions
State of Indiana Office of the Attorney General
January 5, 2016
The
Honorable Suzanne Crouch
Auditor
of State
200 W.
Washington St.
Indianapolis,
IN 46204
RE:
Electronic Payment Policy and Electronic Funds Transfer
Dear
Auditor Crouch:
You
requested the opinion of the Office of the Attorney General
(OAG) regarding the authority of the Auditor of the State to
institute an electronic payment policy that would require
political subdivisions and others to utilize an electronic
funds transfer for certain remittances. Your specific
questions are delineated below.
QUESTIONS
PRESENTED
1. Can
the Auditor of State (AOS) require political subdivisions to
remit State funds using an electronic funds transfer (EFT)?
2. If
the AOS can mandate the use of EFTs, how can the AOS enforce
compliance with such a mandate?
BRIEF
ANSWERS
1. Yes,
the AOS can require political subdivisions to remit State
funds using an EFT so long as in doing so it complies with
the conditions provided in Ind. Code § 4-7-1-4.1.
2. The
AOS can enforce the use of EFTs by rejecting payments made
through other means; a political subdivision that does not
make an acceptable payment by the time such payment is due is
subject to statutory enforcement mechanisms.
ANALYSIS
1.
The AOS has conditional authority to require political
subdivisions to use EFTs when remitting State funds.
The AOS
has the power and duty to "[d]irect and superintend the
collection of all money due to the state." Ind. Code
§ 4-7-1-2(7). The AOS also has the power and duty to
"[s]uperintend the fiscal concerns of the state and
their management in the manner required by law and furnish
the proper forms to [various officials of political
subdivisions]." Ind. Code § 4-7-1-2(10). Ind. Code
§ 4-7-1-4.1(b) directly addresses the use of forms:
"The auditor of state shall approve forms and reports
used by the auditor of state in a paper form, as a facsimile,
or in an electronic form …." Ind. Code §
4-7-1-4.1(c) empowers the AOS to facilitate this function:
"The auditor of state may require that a form or report
submitted to the auditor of state for processing must be
submitted in paper form, as a facsimile, or electronically
…."
Though
none of these sections explicitly directs the AOS to compel
the use of EFTs, such a power is implicit in the AOS's
power to direct the use of particular forms. As a practical
matter, before banks will make an EFT out of one account and
into another, they require an authorization form giving them
the authority to do so. Such a form must be properly
authorized by...
