This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.
CLAIMS -- Audit (necessity to pre-audit claims for compensation of village officers and employees)
VILLAGE BOARD -- Powers and Duties (pre-audit of compensation paid to village officers and employees)
VILLAGE LAW, §§5-524(2), (4), (5): The compensation of appointive village officers and employees for services may be paid without prior audit by the board of trustees, upon certification of the officer or employee having direct supervision, unless the board determines to require such prior audit.
You ask whether budgeted compensation for appointive village officers and employees may be paid without prior audit by the board of trustees. Your inquiry makes specific reference to officers who are compensated on an hourly basis. If payment may be made without prior audit by the board, you ask whether board members could be held liable for a wrongful payment.
Section 5-524 of the Village Law pertains to the audit and payment of claims in a village. Section 5-524(2) provides, in pertinent part, as follows:
In a village which has not established the office of auditor, the board of trustees shall audit all claims against the village... [Emphasis added]
Subdivision (4) of that section generally requires the audit of claims before payment. However, subdivision (5) of the statute provides the following exception to the requirement of prior audit:
5. Fixed salaries... and the compensation for services of employees or officers regularly engaged by the village at agreed wages by the hour, day, week, month or year may be paid without prior audit. All payrolls, or other claims for compensation, for personal services rendered to the village by any person other than an elective village officer shall be certified by the village officer or employee having direct supervision of the claimant to the effect that such services indicated on such payroll or claim were actually performed by the person or persons mentioned therein. *** [Emphasis added]
Thus, subdivision 5 of section 5-524 clearly authorizes the payment of compensation to a village employee or appointive officer without prior audit upon certification of the officer or employee having direct supervision of the claimant. As you will note, this statute encompasses compensation paid to officers and employees on an hourly basis.
We have also expressed the view, however, that since the provisions of subdivision 5 appear to be permissive, a village board might, nonetheless, require prior audit by the board before making payment of such compensation (1982 Opns St Comp No. 82-227, p 286). If the board does not require prior audit and payment is made pursuant to the permissive language of subdivision (5) of section 5-524, it is our opinion that the general obligation of that statute for the board of trustees to audit continues. The audit, however, would be conducted on a post audit basis; that is, after the compensation has been paid.
With respect to liability of village officials in connection with a wrongful payment, this, of course, is dependent on the particular facts and circumstances and we will not speculate in this regard. We note only that, depending on the specific factual situation, if wrongful payment has been made upon certification without prior audit, liability could conceivably rest not only with the certifying official, but also with the village treasurer who disbursed the payment and the body or official vested with the auditing function (see Village Law, §4-412; 5-524; Tillinghast v Merrill, 151 NY 135; Byrd v McGoldrick, 277 NY 492; 4 McQuillin, Municipal Corporation, §12.217). We would, however, stress that the certifying officer must have a proper basis for making his or her certification. In this regard, it is our opinion that certification for hourly services should be based, at a minimum, on an itemized statement from the employee detailing what services were rendered and the time spent rendering each of the services; knowledge that the services were properly authorized; and knowledge that the services were actually performed.
August 28, 1989
Patrick Michael McKenna, Esq., Village Attorney
Village of Malverne