OSA Seal Technicalities

Technicalities is a monthly publication of Office of the State Auditor, Department of Technical Assistance. The purpose of this newsletter is to communicate information concerning inquiries to the Office of the State Auditor. The interpretations herein are those of the Department of Technical Assistance.

This is a compilation of the questions and answers found in the issues of Technicalities that are available online.

January | February | March | April | May | June | July | August | September | October | November | December

January 2003

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Q: Must municipal board meetings be open to the public?
A: Yes, except for executive sessions limited to the subjects listed in Section 25-41-7, such as personnel matters and litigation.

Q: Does the "Open Records" law make all municipal records open to the public?
A: No. Section 25-61-11 makes clear that records made confidential by law are not made public by the open records laws. Some exceptions, such as personnel records, are listed under the cross references listed as footnotes to this law.

Q: Must approved claims be paid in the order of their entry in the Section 21-39-7 claims docket?
A: Yes. (" 21-39-9)

Q: May a municipality invest in the stock market?
A: No. Section 21-33-323 limits investments to direct obligations of the federal government, State of Mississippi, and certain Mississippi local governing authorities; municipal depository certificates of deposits and repurchase agreements; and certificates of deposit issued by state depositories in the municipality. Also, Section 183 of the Mississippi Constitution prohibits subscription to capital stock.

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Q: When should municipalities review their contracts with county boards of supervisors?
A: All contracts should be reviewed on a regular basis. However, (this being an election year) a new board of supervisors may not be bound by the current board"s agreements. Non binding contracts should be identified and contingency preparations made.

Q: Must a municipality hold a sale of land on the first Monday in April for delinquent real property ad valorem taxes?
A: No. Section 27-41-59 allows this sale to be optional; however, the last Monday in August sale is mandatory if there are such unpaid taxes at that time.

Q: When a vendor requires cash for purchases, may an employee or officer of the municipality buy commodities for the municipality using his own money, then turn in a bill for repayment?
A: No. Section 25-4-105 of the ethics law prohibits a municipality from contracting with its officers or employees. A reimbursement of this nature would be a contract and a violation of the ethics law.

Q: Must a municipality with a population of 2000 or less maintain a claims docket?
A: No. Section 21-39-7 allows the claims docket to be optional for such municipalities. However, Section 21-39-5 requires each claim to appear in the minutes of the municipality.

Q: May a municipality purchase land from the state when such land was struck to the state in a county ad valorem tax sale?
A: Yes. Section 21-37-49 allows purchases using general fund money. Section 29-1-51 also allows such land to be transferred under certain conditions.

Q: May a municipal board be paid for attending a special board meeting?
A: No. ("21-3-21)

Q: May a municipal employee (such as a police officer) collect fine payments after city hall is closed?
A: No. Section 21-23-11 only provides for the clerk of the court (or deputy clerk) to collect fine money. If a police officer, dispatcher or other municipal employee collects fine money, they must be made a deputy court clerk and collect such funds in that capacity.

March 2003

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Q: When should a municipality start its budget process for the next fiscal year, starting next October first?
A: This office recommends the plan for the development of the budget be adopted in May of this year. Time is required for departments to make requests and a proposed budget to be developed for public hearings in August. A suggested calendar for the budget development process can be found in the Municipal Audit and Accounting Guide.

Q: Who may purchase supplies and services in a municipality?
A: Section 25-1-43 requires municipal employees and officers be authorized by the board/council to enter contracts. The board/council should specify who may purchase and how purchases made will be documented. Documentation (purchase order, signed invoice, etc.) is necessary for the board/council to make a decision when a claim is presented for payment. ("21-39-9)

Q: Is a municipal ordinance valid if it is not entered in the ordinance record book?
A: No. Ordinances not entered are void and of no effect under Section 21-13-13.

Q: Must a mayor or police chief work forty hours a week for the municipality?
A: No, a mayor and police chief (as with other elected and appointed officers) must only perform the duties required of the office. However, the board of aldermen sets the salaries of officers (Section 21-3-5, 21-17-5, etc.). The demands of the position, including time, are factors to be considered when compensation is set.

Q: May a municipality make regulations that restrict the movement of citizens when there is eminent danger to the public safety?
A: Yes. ("21-19-17)

Q: What should a municipality do if a vacancy occurs in one of its elected positions (mayor, board member, etc.)?
A: Section 23-15-857 provides if the balance of the term does not exceed six months, an appointment is made by the board and certified to the Secretary of State. If the balance of the term exceeds six months, the board shall call a special election as provided in this section.

April 2003

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Notice: New Municipal Audit and Accounting Guide

The draft of the new Municipal Audit and Accounting Guide is available on our website: under "Downloads" for review, comment, and recommendations from April 21, 2003, through May 9, 2003. Please send any comments and recommendations by e-mail to Ronald Robinson, CPA at, by mail to P.O. Box 956, Jackson, MS 39205, or by telephone at (800)321-1275. The final version of the guide is expected to be prescribed in June, 2003. Actions taken by municipalities, CPAs and others in anticipation of rules and regulations presented in this draft are subject to the understanding that substantial changes may be made to the finally prescribed guide as a result of review, comments and recommendations.

Q: Has the use of municipal credit cards for official travel been authorized by new legislation?
A: Yes. Senate Bill 2675, effective March 14, 2003, allows municipalities to acquire one or more credit cards for employee travel purposes.

Q: What are the municipal clerk's duties regarding the new travel credit cards?
A: Receipts must be turned in to the municipal clerk for all credit card use. The municipal clerk must keep accounting records and make an itemized monthly report to the board of credit card expenditures.

Q: What purchase may an employee make with the credit card?
A: Purchases authorized by the board and related to the performance of official duties while in travel status under Section 25-3-41. This includes lodging, meals, transportation (other than personal vehicle), and official duty related expenses. Not included would be expenses of personal vehicles and expenses not associated with the official travel and duties performed while in official travel status.

May 2003

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The new Municipal Audit and Accounting Guide, effective July 1, 2003, is now available for free on our internet website under "Downloads." The Center for Governmental Training and Technology in the Mississippi State University Extension Service plans to provide free printed copies for each municipality at the Mississippi Municipal League Convention in July 2003.

Q: Has new legislation authorized municipalities to recover its cost of wrecker and storage fees from the sale of lost and abandoned property?
A: Yes, House Bill 195, effective 3/28/03, revised Section 21-39-21 to allow the cost of wrecker and storage fees (up to $500) to be deducted from sale proceeds returned to an owner. This cost may not be deducted if the property was stolen and the owner notified the municipality.

Q: Has new legislation authorized the State Department of Transportation to pay the costs of relocating or removing municipal sewer and gas lines or facilities from right of ways of state highways for municipalities with a population of 10,000 or less?
A: Yes. Senate Bill 2250, effective 7/1/03, revised Section 65-1-8 to authorize this payment.

Q: Must all boards and commissions created by municipal authority require their depositories to secure deposits with collateral placed with the State Treasurer?
A: Yes. Senate Bill 2377, effective 7/1/03, revised Section 27-105-5 to make clear this obligation.

Q: What should a code charter municipality do if it has a conflict of official duties due to its Section 21-3-19 regular board meeting being scheduled July 1, 2003 and a need to attend the MS Municipal League Conference in Biloxi on the same date?
A: A letter from the Attorney General"s Office to MML President Mayor Robert Coggins explained the subject matter of the July 1, 2003 regular board meeting may be listed as the subject matter of a special meeting called in accordance with Section 21-3-21.

Q: May a municipality authorize travel advances to its officers and employees to be used to pay for authorized travel to the MML Conference?
A: Yes. Section 25-3-41 authorizes travel expenses and travel advances. The travel advance procedures are in Section III of the Municipal Audit and Accounting Guide issued by the State Auditor.

June 2003

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Note: Please refer to the first question in the "School" section of this issue of Technicalities.

Q: Can a board of aldermen vote to discontinue use of radar by the police department and remove radar units from police cars?
A: Yes. The governing authorities have the authority to make the determination not to use radar speed detection devices to enforce municipal speed limits. This would include the authority to remove radar devices that have already been installed in municipal vehicles. (Attorney General"s Opinion to Stuart dated May 30, 2003)

Q: How will municipalities obtain a copy of the new "Municipal Audit and Accounting Guide" (MAAG)?
A: The Center for Governmental Training and Technology in the Mississippi State University Extension Service (CGT) will distribute one free copy to each municipality at the MML conference or by mail. Additional copies may be purchased by contacting CGT. CGT"s email address is and telephone number is (662) 325-3141.

Q: When is the new "Municipal Audit and Accounting Guide" (MAAG) effective?
A: July 1, 2003. This means the next budget and related accounting for the fiscal year starting October 1, 2003 must be in accordance with the regulations in this guide.

Q: Must the municipal audit for the fiscal year ending September 30, 2003 be contracted as required by the new MAAG?
A: Yes. The contract is entered after July 1, 2003, effective date of the MAAG.

Q: Should the municipality budget more money for accounting and audit expense to comply with requirements under the new MAAG?
A: Accounting and audit cost will probably be higher for municipalities that do not qualify for the limited scope audit option (population of 3000 or less with a financial hardship). The MAAG requires financial reporting in accordance with accepted governmental standards. Recent changes in standards (GASB 34) require a new type for financial report. Municipalities should contact their auditor to assist in planning for audit costs (budget) and other requirements (additional records and information).

Q: Has the budget process been changed by the MAAG?
A: No. However, new definitions clarify that each department (court, police, fire, etc.) must have a separate budget.

Q: Must municipalities use the chart of accounts presented in the MAAG?
A: No. However, any alternative chart of accounts must be defined so it can be associated with the accounts in the MAAG and support the cash basis budget.

Q: Does the MAAG present new special regulations (petty cash, travel advances, contracting with collection agencies, etc.)?
A: Generally, no. The MAAG does clarify regulations previously distributed.

Q: With the new MAAG requirements, when should a municipality start its budget process?
A: It should already be started. It takes time to gather information to predict next year"s revenues, expenditures and working cash needs. Also, Sections 21-35-5, 27-39-203 and 27-39-205 require a proposed budget be presented at a hearing in August. If a tax and budget increase is involved, a two-week public notice is required prior to the hearing.

Q: Does the new MAAG clarify when a separate fund is required to account for money?
A: Yes, when money may only be legally spent for a purpose that is more restrictive than general fund money and the money is expected to be an ongoing revenue (used in more than one budget year). An example would be Sec. 83-1-37 insurance rebate funds. Separate funds should also be set up when required by law or contractual agreement.

July 2003

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Q: When must a municipality hold its public hearing for adoption of its budget?
A: The hearing must be held at least one week prior to adoption of the final budget. ("21-35-5).

Q: When must a municipality publish notice of the public hearing to adopt its budget?
A: The notice must be published prior to the public hearing; if there is a proposal to increase ad valorem taxes, the notice must be at published at least seven days prior to the public hearing. Sections 21-35-5 and 27-39-205 provide specific requirements for how the public notice is advertised.

Q: When must a municipality adopt its final budget and tax levy?
A: Sections 21-35-5 and 21-33-45 require adoption by September 15. To meet this deadline and the public hearing and publication requirements, the process should begin in early August.

Q: May a municipality operate after September 30, if it has not adopted a budget for the next fiscal year?
A: No. Section 21-35-17 imposes personal liability upon officers causing a budget to be exceeded. If funds are not budgeted and obligations are incurred, the budget is exceeded.

Q: What are the minimum property value requirements for municipal financial reporting?
A: Page II-C10 of the new July 1, 2003, Municipal Audit and Accounting Guide (MAAG) (See under downloads) provides "Recommended Thresholds". The governing authorities of the municipality must set the actual amounts.

Q: Must a municipality number and account for personal property with a cost over $500 if it has adopted a financial reporting threshold amount higher than $500?
A: Yes. Page II-C8 of the new MAAG requires accounting for legal compliance purposes. Compliance accounting thresholds for all property (land, buildings, etc.) are mandatory and separate from financial reporting thresholds.

Q: Must a municipality hold an annual inventory of property?
A: Yes. Page II-C14 of the new MAAG has not changed the requirement for an inventory at the end of each fiscal year and provides the procedure for theinventory.

August 2003

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Q: Must a municipality publish notice of its revenues, cost and contracts for solid waste services at the end of each fiscal year?
A: Yes, pursuant to Section 17-17-348. Also, Section 17-17-347 requires each user of solid waste services be notified of the average or individual cost of such services.

Q: Where can the State Auditor's municipal audit contract requirements be found?
A: Page IV-B1 of the new (effective July 1, 2003) Municipal Audit and Accounting Guide (MAAG) details these requirements. This Guide is at the State Auditor"s web site ( under "downloads."

Q: Must a municipality send copies of its audit reports to the State Auditor's Office?
A: Yes. Two hard copies and the new MAAG requirement for one electronic copy must be sent to: State Auditor"s Office, P. O. Box 956, Jackson, Ms. 39205. The electronic copy is requested, but not required for audit contract years prior to July 1, 2003.

Q: Must a municipal board complete a municipal compliance questionnaire at the end of each fiscal year?
A: Yes. See pages IV-B1 and IV-B5 of the MAAG.

Q: Are municipal boards/councils required to complete a Management's Discussion and Analysis of its financial activities for the fiscal year to be included in its audit report?
A: Yes, if the municipality is issuing a full scope audit report. No, if the municipality has a population of 3,000 or less and contracted a limited scope audit report. See Section 21-35-31and page IV-B1 of the MAAG for guidelines and an example of the analysis.

Q: When should a municipality adopt its ad valorem tax levy and final budget?
A: Sections 21-35-5 and 21-33-45 require municipalities to adopt the tax levy and final budget by September 15.

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Q: Must the municipal board approve the blank local privilege licenses to be issued by the municipal clerk?
A: Yes. ("27-17-477)

Q: Has the Public Service Commission changed its rule regulating the amount of interest a municipality subject to their jurisdiction must pay on utility service (water, etc.) deposits?
A: Yes. Rule 9G(1) effective October 1, 2003, will require municipalities to pay customers in service areas outside one mile of the municipal corporate limits interest on deposits held for one year or more at a simple interest rate to be posted on the commission"s website ( by December 15th of each year. (Attorney General"s Opinion to Null dated September 13, 2002 and PSC order June 7, 2003 Docket No. 2003-AD-161)

Q: How many hours may a municipal employee work before membership in the Public Employee"s Retirement System (PERS) is required and contributionspaid?
A: PERS regulation 36 (clarified in PERS memorandum of September 14, 1992 to all reporting agencies) explains employees working 20 or more hours per week or 80 hours per month must be members of PERS and contributions paid.

Q: May an alderman review records of city employees" use of city cellular telephones?
A: Yes. Aldermen may and should review all records necessary to perform their duties. In order to determine the legality of a claim for cellular telephones, aldermen may review such records. (Attorney General"s Opinion to Balch dated February 18, 1993)

Q: Does a municipal clerk have to determine if a business is legal to issue a local privilege license?
A: No. Section 27-17-473 explains that a privilege license to do business does not make a business legal. However, Section 27-17-453 allows the application for the license to contain other information, which may be used for purposes such as zoning compliance.

October 2003

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Q: May a municipality purchase group health insurance for dependants of its employees?
A: Yes. ("25-15-103)

Q: May a municipality adopt a policy for employees to authorize withholdings for health and accident insurance?
A: Yes. ("25-3-67)

Q: Must littering fine money collected under Section 97-15-29 be spent only for listed litter prevention programs?
A: Yes.

Q: How may a municipality spend its insurance rebate money?
A: On things that have long term benefit for the fire department. This may include training, equipment assigned to the fire department and capital outlay for the fire department. (" 83-1-37)

Q: May a municipality give insurance rebate money to a volunteer fire department?
A: No, there is no authority for a municipality to donate to a volunteer fire department; however, it may contract with a volunteer fire department for fire services and pay for the services with insurance rebate money. The contract must require the money to be spent in accordance with Section 83-1-37.

Q: When must a municipal board approve claims?
A: At the first regular meeting of each month. ("21-39-9)

Q: When may a municipal board revise its budget?
A: At any regular board meeting or special meeting with a budget revision as a listed agenda item. ("21-35-25, page 1-G1 of the Municipal Audit and Accounting Guide)

Q: Should a municipal board adopt a holiday policy?
A: Yes. Section 3-3-7 lists official state holidays. A municipality should adopt a policy to provide which holidays from the state list it intends to allow. The list also allows one substitution that must be specified by board order.

Q: May a municipality allow paid holidays not listed in Section 3-3-7 of state law?
A: No. Section 21-17-5 (home rule law) explains the municipality may not exercise authority inconsistent with state law. Payment of unearned salaries violates Section 96 of the Mississippi Constitution.

Q: Is there an elector"s petition provision for recall of a municipal elected official?
A: No, Section 25-5-7 only provides for petition of county officials. Section 175, Mississippi Constitution and Section 25-5-1 Mississippi Code provide for removal of municipal officials from office for certain criminal convictions.

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Q: What are the surety bond requirements for officers and employees of municipalities?
A: The following officers and employees must be bonded prior to assuming duties, as specified. MUNICIPAL CLERKS, CITY MANAGERS, MUNICIPAL ADMINISTRATORS, AND CHIEF ADMINISTRATIVE OFFICERS - not less than $ 50,000. (§ 21-15-38) DEPUTY CITY CLERKS - not less than $10,000. (§ 21-15-23) CHIEFS OF POLICE - not less than $50,000. (§ 21-21-1) DEPUTY POLICE OFFICERS - $25,000 when hired under Section 45-5-9. OFFICERS OR EMPLOYEES HANDLING OR HAVING CUSTODY OF PUBLIC FUNDS - not less than $10,000. [§21-3-5 (Code Charter), §21-8-23 (Mayor/Council), and §21-9-21 (Council/Manager)]. BOARD OF COUNCIL MEMBERS - the lessor of $100,000 or five percent of assessed tax collections. (§ 21-17-5) Note: Special Charter municipality provisions must be reviewed for other requirements.

Q: Does state law require a MUNICIPAL MAYOR to be bonded?
A: No, this is optional. However, if the mayor intends to sign checks (§21-39-13), the aforementioned "Officer or Employee Handling or Having Custody of Public Funds" bond (at least) should be obtained.

Q: May a municipality establish a clothing allowance for plainclothes police officers to be used while on duty?
A: Yes. Section 21-17-5 allows a municipality by order duly passed and spread on its minutes to provide within certain limits to plainclothes police officers an allowance for clothes to be used by them on duty. However, such clothes remain the property of the municipality. (Attorney General(s Opinion to Rogers dated March 11, 1992)

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Q: Are appraisal records for the purchase or disposal of real or personal property public records under Section 25-61-5?
A: Not until the announcement of the purchase or sale, when the release of the record would not have a detrimental effect on the sale or purchase. (§ 31-1-27)

Q: Must a municipality get an appraisal when disposing of real property?
A: Only if the governing authority determines that selling to a particular purchaser rather than having a public sale will promote the provisions listed in Section 21-17-1.

Q: Must a municipality get an appraisal when disposing of real property by public advertised sale under Section 21-17-1, or negotiated commercial/industrial sale under Section 57-7-1?
A: No; however, an appraisal may be obtained if the municipality wants the information. (§21-17-5, home rule authority)

Q: Should municipalities having contracts with counties be concerned that a new board of supervisors will take office on January 5, 2004?
A: Yes. Boards of Supervisors are elected for four year terms only. This means the board may not enter a binding contract for more than its term unless a state law authorizes a contract for a longer period of time.

Q: What action should be taken by a municipality having contracts with counties?
A: All contracts should be reviewed to determine if they are binding upon the new board of supervisors. Those found not to be binding should be brought to the attention of the new county board for their confirmation or renegotiation.

Q: May a municipality contract with the county to maintain municipal streets in lieu of the required payment to the municipality of one half of county road maintenance taxes collected by the county from within municipal corporate limits?
A: Yes. (§§65-15-21, 65-15-23; see also §§ 65-7-79 through 65-7-83)

Q: May a municipality contract with a county to collect its ad valorem taxes?
A: Yes, for ad valorem tax collections (§27-41-2), and tax collector and assessor fees and compensation (§25-7-21, 25-3-3, & 25-3-5).

Q: May a municipality enter contracts with the county related to local and private bills or interlocal cooperative agreements?
A: Yes. Sections 88, 89 & 90 of the Mississippi Constitution provide for local and private authority; and Sections 17-13-3 and 17-13-9 of the Mississippi Code contain interlocal agreement provisions.

Q: May a municipality enter contracts with the county for fire protection?
A: Yes. (§ 83-1-39)

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