The Florida Bar
The Florida Bar Journal
December, 2012 Volume 86, No. 10
Brock v. Board of County Com’rs of Collier County: A Case for Reconciliation

by Patrick T. Kinni

Page 41

The Florida Constitution creates a system of checks and balances with regard to county expenditures that acts to protect public funds from improper disposition. While it is the board of county commissioners that authorizes the expenditure of public funds, it is the clerk of the court who actually approves the warrant for payment.1 The role of the clerk, as auditor and custodian of all county funds, has been a subject of contention between the boards of county commissioners and the clerks of court for decades. This conflict should not be surprising, given that both the county commissioners and the clerks of court are autonomous elected county officers with overlapping authority, duties, and control over county funds. Now, as a result of the Florida Supreme Court’s decision to discharge jurisdiction over the appeal of Brock v. Bd. of County Com’rs of Collier County, 21 So. 3d 844 (Fla. 2d DCA 2009), a case involving the clerk’s relationship with the board as its auditor, the Second District Court of Appeal’s opinion in Brock will have to be reconciled with existing case law on the subject.2

In Brock, a dispute arose between the clerk and the board over the scope of the clerk’s audit and custodial authority over certain funds of a fire district. Those funds had been placed in a bank account under the control of county employees rather than the clerk. The clerk filed suit against the county seeking a declaration by the court that the clerk had the authority to examine and audit any and all accounts operated, controlled, or maintained by the county, wherever situated, and to obtain custody of all county funds contained in those accounts. The board followed by filing a quo warranto action against the clerk alleging usurpation of the board’s power and authority to conduct postpayment audits. The trial court consolidated the proceedings and entered summary judgment in favor of the board ruling that “any auditing necessary to insure the legality of the expenditure [of county funds] prior to payment is proper.”3 However, audits performed “beyond the time that the warrant is signed, unless so directed by the [b]oard,” are impermissible.4 Overturning that decision on appeal, the Second District held that “the trial court’s ruling prohibiting postpayment audits is inconsistent with the Clerk’s statutory power to inspect and examine all county accounts at all times and with the Clerk’s statutory duty to ensure that all payments of county funds comply with applicable legal requirements.”5

In reaching this conclusion, the court explored the constitutional and statutory grants of power to the clerk as county auditor. The division or separation of the clerk’s duties as clerk of court from the clerk’s functions as auditor and custodian of all county funds is established in two articles of the Florida Constitution, one of which provides that “the duties of the clerk of the circuit court may be divided by special or general law between two officers, one serving as clerk of court and one serving as ex officio clerk of the board of county commissioners, auditor, recorder, and custodian of all county funds,” and another, which states that, “the clerk of the circuit court shall be…auditor, recorder and custodian of all county funds.”6 Based on these two constitutional provisions, absent alternative designation under county charter or special law approved by a vote of the electors, the clerk of court is the clerk of the board as a result of his or her office and its auditor and the custodian of all county funds.

There are several implementing statutory provisions that give shape to the role of the clerk in this capacity as clerk of the board and to the numerous and diverse powers and duties of the clerk concerning fiscal matters of the board. For example, the clerk is required to act as the board’s accountant and its accounts,7 checks, or warrants drawn on county accounts must be “attested by the clerk,”8 and all “county accounts of each and every depository…shall at all times be subject to the inspection and examination by the county auditor[.]”9 To emphasize the significance of the clerk as county auditor, the legislature imposes personal liability for the payments of any claim or bill against county funds in excess of the amount permitted by law, or any illegal charge against the county, or any claim not authorized by law, and subjects the clerk to criminal penalties if improper payment is made willfully and knowingly.10

As with the clerk’s powers, the statutory authority of the board with respect to its funds, accounts, and financial records are broad in scope. For example, Florida law requires the board to maintain a complete and accurate set of financial ledgers11 and authorizes the board to “make investigations of county affairs” and “inquire into accounts, records, and transactions of any county department, office, or officer.”12 Further, it is the board that has the power to “employ an independent certified public accounting firm to audit any funds, accounts, and financial records of the county.”13 As in the case of the clerk as county auditor, it is also unlawful for the board to make or require any expenditure that exceeds the budget and it constitutes a criminal act for members of the board to willfully and knowingly vote to pay an illegal charge or claim.14

For years preceding the Brock decision it appeared that the role of the clerk as county auditor had been well settled. In State v. Wheat, 137 So. 277 (Fla. 1931), while describing the constitutional duties of the clerk of the circuit court as ex-officio county auditor, the Florida Supreme Court opined:

the clerk of the circuit court shall audit all claims against the county that are presented for payment by the county, not that such clerk as “ex-officio Auditor of the County” shall audit the books and records of other county officers or perform other auditing duties, or be purchasing agent of the county unless so required by statute.15

Thus, the clerk’s role as county auditor was limited to auditing warrants of the county prior to payment, a function that has come to be known as the “pre-audit” function or prepayment audit.

The Florida Attorney General further described the county auditor duty of the clerk as one which:

includes more than the arithmetical determination as to the amount of the claim being presented for payment and the clerk has a duty to determine the legality of an expenditure before dispensing public funds. When an examination by the clerk as auditor of a particular claim presented for payment leads him to believe that the expenditure is not authorized by law, or is otherwise illegal, the clerk may properly withhold his approval of payment. This action by the clerk is in accord with the apparent purpose of the constitutional provision, making the clerk of the circuit court ex officio auditor of the county, which is to provide a check and balance system that insures proper expenditure of public funds.16

In Alachua County v. Powers, 351 So. 2d 32 (Fla. 1977), the Florida Supreme Court reviewed a case in which the clerk had sought a declaratory judgment to clarify his duties as clerk of the board in the following capacities: auditor, accountant, custodian, and investor of county funds. The court, in discussing the clerk’s role as county auditor, found the clerk to be both accountant and custodian of county funds pursuant to grant of authority under both constitutional and statutory provisions. The court further held:

[t]he clerk, as auditor is required by law to refuse to sign and deliver a county warrant for an unlawful expenditure, even though approved by the board of county commissioners.…Although an appropriation of county funds may serve a county purpose, there must be some type of pre-audit review of the disbursement in order to be sure that the funds will not be used for an unlawful purpose.17

Clearly, the clerk’s role in this regard is to do more than merely ensure that county expenditures are made for a public purpose. It is this pre-audit function that serves as an important “check and balance” in the process by which public expenditures are made,18 and “taxpayers look to the clerk’s audits to shield them from the…misuse of public funds[.]”19

The county auditing department created by ordinance in Alachua County was established to provide a post-audit of county fiscal affairs. The court found this to be improper, holding that “[a]ny effort…to create an independent county auditing department, which is not an independent auditing firm, is beyond the authority of the board.”20 While the court did recognize that the board had the authority to effectuate a post-audit, it disapproved of the manner by which the post-audit was to be accomplished. The clerk as county auditor may conduct auditing efforts of all county funds or at the request or direction of the board, but only in accordance with Florida law, which does not authorize a post-audit.21

Seemingly at odds with the Alachua County decision, the Second District Court in Brock held that prohibiting postpayment audits by the clerk “would compromise the Clerk’s duty and power to guard against the illegal use of county funds” because “[v]erification of the legality of payments already directly related to ensuring that future payments are legal.”22 Despite the court’s conclusion that the authority to conduct a postpayment audit is necessarily implied by the clerk’s duties as auditor and custodian of county funds, the power to conduct a postpayment audit appeared at first glance to constitute a new and substantive authority, contrary to the principle that an implied power can never give rise to a substantive power.23 It also appeared that the court in Brock failed to follow the rule of law set forth in Alachua County when it held that the clerk’s ability to determine the legality of county expenditures after the prepayment audit could continue indefinitely. It is fundamental that the district courts of appeal are authorized to certify questions of great public importance to the Supreme Court, “and even to state their reasons for advocating change. They are, however, bound to follow the case law set forth by this Court.”24 Nevertheless, first glances are often deceiving, and with the decision of the Florida Supreme Court to discharge jurisdiction in Brock, boards of county commissioners and clerks are left to harmonize the opinion of the Second District Court in Brock with the Supreme Court’s prior decision in Alachua County.

It is not unusual for the Florida Supreme Court initially to accept jurisdiction to review a decision of a court of appeals, only subsequently to discharge jurisdiction and dismiss the review proceeding. For example, in Florida Hematology & Oncology Specialists v. Tummala, 969 So. 2d 316 (Fla. 2007), the court originally accepted jurisdiction based on an express and direct conflict; however, subsequent to the case being briefed and argued, the court exercised its discretion and determined that jurisdiction had been improvidently granted.

It is also important to note that the Supreme Court never directly found a conflict between Brock and Alachua County when it originally accepted jurisdiction. Rather, the court accepted jurisdiction to hear the matter based on the decision of the district court affecting a class of constitutional officers. After hearing oral argument by the parties, the Supreme Court found that “[a]fter further, full consideration, we have determined that we should exercise our discretion and discharge jurisdiction. Accordingly, this case is dismissed.”25 The effect of the court’s discharge of jurisdiction and dismissal of a review proceeding is that the decision of the district court of appeal stands.26

Any attempt to reconcile or harmonize the Florida Supreme Court’s decision in Alachua County with the Second District Court of Appeal’s ruling in Brock concerning post-audit and postpayment audit authority will require a fresh look at the court’s discussion concerning these two terms.

In Alachua County, the court held that the clerk has the authority and responsibility to act “as a watchdog of the board in the case of pre-auditing accounts of the board in determining [the] legality of expenditure,” and that determining the “legality of expenditure” entails determining that a public purpose is served by the disbursement; that the monies are paid out in compliance with public purchasing or bidding requirements; and that the expenditure does not exceed any account or fund of the adopted budget. Then, “[i]f the board becomes concerned, it has the authority to require a performance audit or post-audit by an independent accounting firm.” However, a post-audit by the clerk was not statutorily authorized and, therefore, impermissible.27

The term “post-audit” at the time of the court’s ruling in Alachua County referred to the definition contained in F.S. §11.45(1)(c), as an “audit made at some point after the completion of a transaction or group of transactions.”28 That term was thereafter removed by the legislature and replaced with the term “financial audit,” which has a significantly different meaning.29 Arguably, with the removal of the term “post-audit” from F.S. §11.45, it follows that the prohibition on the clerk in conducting a post-audit set forth in Alachua County became a nullity. The issue then becomes what constitutes a postpayment audit as described in Brock. While the term “postpayment audit” is not statutorily defined, we do know that it is not a financial, operational, or performance audit, as those terms are legislatively described. A “financial audit” consists of an examination of financial statements in accordance with generally accepted accounting principles; an “operational audit” is an audit “whose purpose is to evaluate management’s performance in establishing and maintaining internal controls,” including controls to “prevent and detect fraud, waste and abuse”; and a “performance audit” refers to an “examination of a program, activity, or function of a governmental entity” for purposes of economy, efficiency, or effectiveness, and the like.30 Prepayment audits by the clerk are authorized, but not performance audits, which are to be conducted by independent certified public accountants (or independent auditing firm), nor are financial audits, which are to be conducted by the auditor general or an independent accounting firm.31

The court in Brock concluded that postpayment audits are necessary to ensure that county funds are not improperly expended and that conducting a postpayment audit is consistent with the “Clerk’s statutory power to inspect and examine all county accounts at all times” and with the “Clerk’s statutory duty to ensure that all payments of county funds comply with applicable legal requirements.” Thus, “verification of the legality of payments already made — a process which tests the soundness of existing internal controls — is directly related to ensuring that future payments are legal.” Effectively, a postpayment audit is “a process which tests the soundness of existing internal controls.”32 Since an internal audit is defined as one “performed by an organization’s personnel to ensure that internal procedures, operations and accounting practices are in proper order,”33 it follows that such audit would consist of an examination of a financial transaction occurring after a warrant has been approved or bill paid, to test the integrity of the internal operations of the clerk’s office as county auditor. Otherwise, the postpayment audit of county expenditures by the clerk would eclipse the prepayment audit function, and render the finality of board transactions in serious doubt.

Furthermore, unlike the required prepayment audit of all county expenditures, the court in Brock did not hold that the clerk is required to conduct a postpayment audit on all or any county expenditures. Thus, any postpayment internal audit by the clerk is not mandatory, but permissive. Once the warrant has been approved or the bill has been paid, then, consistent with the decision in Alachua County, it is the board that has the authority to take any necessary further action. If the board “becomes concerned” with the propriety of a transaction, it is the board that may require a performance audit or financial audit.34 Presumably, if the board is not concerned, then the board will take no further action.

In conclusion, the clerk may perform a postpayment internal audit to act as a check on a public expenditure that has already occurred. The postpayment internal audit mentioned in Brock, however, is clearly distinct from the prepayment audit described in Alachua County and the financial, operational, and performance audits defined under Florida law. It simply does not follow that the clerk obtains a second or continuing opportunity to conduct a prepayment audit verification as described in Alachua County after the bill has been paid. Rather, reading the Brock decision to permit the clerk to perform a postpayment internal audit to determine the appropriateness or effectiveness of internal procedures, operations, and practices of its own office with regard to county expenditures, fully reconciles that ruling with the Supreme Court decision in Alachua County and serves as an important additional layer of protection or safeguard over public funds.

1 The term “warrant” is defined as “an order by which a drawer authorizes someone to pay a particular sum of money to another.” Black’s Law Dictionary 1580 (7th ed. 1999).

2 Bd. of County Com’rs of Collier County v. Brock, 48 So. 3d 810 (Fla. 2010). The author drafted an amicus brief on behalf of Collier County for the Florida Association of County Attorneys, Inc., in this case.

3 Brock v. Bd. of County Com’rs of Collier County, 21 So. 3d at 844, 846 (Fla. 2d DCA 2009) (denied review in Bd. of County Com’rs of Collier County v. Brock,48 So. 3d 810 (Fla. 2010)).

4 Id.

5 Id. at 847.

6 Fla. Const. art. V, §16; Fla. Const. art. VIII, §1(d).

7 Fla. Stat. §§28.12, 125.17, (2011).

8 Fla. Stat. §136.06(1).

9 Fla. Stat. §136.08.

10 Fla. Stat. §129.09.

11 Fla. Stat. §136.05.

12 Fla. Stat. §125.01(s).

13 Fla. Stat. §125.01(1)(x).

14 Fla. Stat. §§129.07, 129.08.

15 State v. Wheat, 137 So. 277, 283 (Fla. 1931); in this case the state Supreme Court construed Fla. Const. art. V, §15 (1885). See, e.g., Op. Att’y Gen. Fla. 86-38 (1986), in which the Florida attorney general stated “[i]t is the rule that decisions construing predecessor provisions of the Constitution having the same import as current provisions are sources of, or authority for, the construction of the successor provisions. State v. Miami Beach Redevelopment Agency, 392 So. 2d 875, 885 (Fla. 1980); Weber v. Smathers, 338 So. 2d 819 (Fla. 1976); In re Advisory Opinion to the Governor, 112 So. 2d 843 (Fla. 1959). Thus, the Court’s analysis of the provision of s. 15, Art. V, State Const. 1885, is relevant to s. 1(d), Art. VIII, State Const., which is, in all material respects pertinent to the instant inquiry, a continuation of the 1885 constitutional provision. See Commentary, s. 1(d), Art. 8, State Const., 26A F.S.A.”

16 Op. Att’y. Gen. Fla. 058-236 (1958) (emphasis in text).

17 Alachua County v. Powers, 351 So. 2d 32, 36 (Fla. 1977) (citation omitted).

18 Id. at 37.

19 W and F Ltd. v. Dunkle, 444 So. 2d 554, 558 (Fla. 4th DCA 1984).

20 Id.

21 Id.

22 Brock, 21 So. 3d at 847 (Fla. 2d DCA 2009).

23 Molwin Inv. Co. v. Turner, 167 So. 33 (Fla. 1936); Gessner v. Del-Air Corp., 17 So. 2d 522 (Fla. 1944).

24 See also State v. Dwyer, 332 So. 2d 333, 335 (Fla. 1976) (stare decisis requires lower courts to adhere to a higher court’s ruling when considering similar issues), Hoffman v. Jones, 280 So. 2d 431, 434 (Fla. 1973).

25 Bd. of County Com’rs of Collier County v. Brock, 48 So. 3d 810, 811 (Fla. 2010).

26 Ramirez v. McCravy, 37 So. 3d 240, 242 (Fla. 2010) (Pariente, J., concurring) (“I agree with the decision to discharge jurisdiction and allow the…Court of Appeal decision to stand.”)

27 Alachua County, 351 So. 2d at 37 (Fla. 1977).

28 Id. at 36; Fla. Stat. §11.45 (Supp. 1976).

29 Ch. 79-589, §1, Laws of Fla.; see also Brock, 21 So. 3d at 852 (Fla. 2d DCA 2009) (Silberman concurring in part and dissenting in part).

30 See Fla. Stat. §§11.45(1)(c), (g), (h) (2011).

31 Alachua County, 351 So. 2d at 37 (Fla. 1977); see also, Fla. Stat. §11.45(3)(a), (2011).

32 Brock, 21 So. 3d at 847 (Fla. 2d DCA 2009) (emphasis added).

33 Black’s Law Dictionary 126 (7th ed. 1999).

34 Alachua County, 351 So. 2d at 37 (Fla. 1977).

Patrick T. Kinni has been with the Leon County Attorney’s Office since 1996, and currently serves as deputy county attorney. He has litigated various issues of interest to local governments at both the trial and appellate levels. Since 2007, Kinni has taught civil pretrial practice as an adjunct professor at the Florida State University College of Law.

This column is submitted on behalf of the City, County and Local Government Section, Mary Jewel White, chair, and David Miller, editor.

[Revised: 11-27-2012]