OFFICIAL OPINION No. 31

OFFICIAL OPINION No. 31 Workmens' Compensation Appeal Board-Reimbursement/or Expenses-Approval by Labor and Industry required. 1. The Workmens' Compensation Appeal Board. as a departmental administrative board, must submit requests for expense reimbursement to the Department of Labor and Industry for approval. 2. The Department of Labor and Industry must render its approval decision in ac- cordance with the broad policies of the Executive Board Regulations rather than the specific requirements of these regulations. 3. These broad policies include, inter alia, reimbursement only for amounts actually expended and review and audit by the Department to which a board is assigned. Honorable Paul J. Smith Secretary Department of Labor and Industry Harrisburg, Pennsylvania Dear Secretary Smith: Harrisburg, Pa. June 11, 1974 You have requested our opinion as to the responsibility of the Department of Labor and Industry for the approval of the expense accounts of the members of Workmens' Compensation Appeal Board (hereafter Board). 4 The Attorney G~neral being directly affected by this opinion took no part in its preparation or issuance. OPINIONS OF THE ATTORNEY GENERAL 113 It is our opinion that, subject to the restrictions noted below, the Board must obtain the Department's approval before reimburse- ment can be made. The Board is a departmental administrative board under Sec- tion 202 of the Administrative Code, 71 P.S. §62. As a departmen- tal administrative board, it must turn to the Department of Labor and Industry in all matters involving expenditures of money. This is set forth in Section 503 of the Administrative Code, 71 P.S. §183 which states: "But in all matters involving the expenditure of money all such departmental administrative boards and com- missions shall be subject and responsible to the departments with which they are respectively connected." Under Section 216 of the Code 71 P.S. §76 a departmental ad- ministrative board must make requisition to the department with which it is associated for expense money and that requisition is sub- ject to the approval of that department. However, the full text of Section 216 of the Administrative Code when read with 4 Pa. Code §40.2 seems to establish a contradiction in the determination of the authority of your department over the expenses of the Workmens' Compensation Appeal Board. Section 216 begins, "Subject to the rules and regulations of the Executive Board, the heads of ad- ministrative departments ... the members of departmental ad- ministrative bodies, boards, and commissions ... shall be entitled to receive their travel and other necessary expenses actually incurred in the performance of their public duties .... " 4 Pa. Code §40.2 reads: "All employees under the jurisdiction of the Governor ex- cept ... paid and non-paid members of duly authorized boards ... are subject to these regulations." It is the position of the Workmens' Compensation Appeal Board that these two sections exempt the Board from the approval procedures of the Department of Labor and Industry as regards their expense accounts. However, it is our opinion that these two sections do not create such an exemption and, as explained below, the Board is subject to the approval of the Department of its request for expense allowances. The analysis must begin with a look at several sections of the Ad- ministrative Code. Section 503 of the Code, cited above, specifically requires that all departmental administrative boards shall be sub- ject and responsible to the departments with which they are respectively connected in matters involving the expenditure of money. It adds that the departments may inspect records of the · boards to enable them to pass upon the "necessity and propriety of any expenditure or proposed expenditure." In Section 216 of the 114 OPINIONS OF THE ATTORNEY GENERAL Code administrative boards are specifically required to make req- uisitions for expense. reimbursements to the department with which they are associated and that department must render its ap- proval of the requisition before payment can be made. In view of this clear requirement of the Administrative Code, we must inter- pret the qualifying phrase at the beginning of Section 216 of the Code, i.e. "subject to the rules and regulations of the Executive Board" to modify and refer only to the part of the sentence which immediately follows that phrase, and not to the last clause providing for departmental approval. Chapter 40 of Title 4 of the Pennsylvania Code sets forth Ex- ecutive Board regulations on the reimbursement for travel and subsistence expenses. Pursuant to the phrase at the beginning of Section 216 of the Code, the Executive Board has exempted members of departmental boards from these regulations concern- ing expense reimbursement. However, in recognition of the above-quoted sections, which still require the approval of the department with which the board is associated, the Executive Board added Section 40.2(b) which states, "those exempted from these regulations are nevertheless expected to observe the policies set forth in this chapter and to limit requests for reimbursement to reasonable amounts consistent with fulfilling the duties of their position." The policies set forth in this chapter, which the ex- empted board members are expected to observe, include reim- bursement only for amounts actually expended (40.3(b)) and the fact that all travel and subsistence expenses are subject to audit by the department including a review of the propriety of the expenses incurred. (Section 40.5(b)). The overall scheme of these provisions is as follows. Although members of the Workm.ei:s' Compensation Appeal Board, as one of the ~~partm~i:tal admm1strative boards, are not subject to the spec1f1c prov1s10ns of Chapter 40 of the regulations for reimburse- ment for ~r.avel and su~sistence accounts, they are subject to the broad policies set forth m that chapter which include a review and apI?roval by the.department to which the board is assigned. In ad- d1t10n, two sect10ns of the Administrative Code require that the depart.n:ent review and approve, if proper, the reimbursement for req!-11s1t10ned expenses. Therefore, the department has the duty to review the requested expense reimbursement for members of the J?oard in order to detern:ii~e whether these expenses are proper \n hght of the general pohc1es of the Executive Board, keepmg m mn~d th3:t only expenses actually incurred in the performance of their duties may. be law.fully reimbursed. The department is not to fo~low.the spec1f1c reqmrements of Chapter 40 in making its deter- mmat10n but should apply a standard of reasonableness as describ- ed above. Also any refusal to reimburse must not be made arbitrari- OPINIONS OF THE ATTORNEY GENERAL 115 ly, so that the department must apply with care the above noted policies. Very truly yours, Larry B. Selkowitz Deputy Attorney General Israel Packel Attorney General