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COMMONWEALTH PENNSYLVANIA v. PENNSYLVANIA STATE UNIVERSITY (03/29/74)

decided: March 29, 1974.

COMMONWEALTH OF PENNSYLVANIA, ROBERT P. CASEY, AUDITOR GENERAL, PLAINTIFF,
v.
THE PENNSYLVANIA STATE UNIVERSITY, DEFENDANT



Original jurisdiction in case of Commonwealth of Pennsylvania, Robert P. Casey, Auditor General, v. The Pennsylvania State University.

COUNSEL

William H. Smith, Deputy Auditor General and Chief Counsel, with him Robert P. Meehan, Deputy Counsel, for plaintiff.

Delbert J. McQuaide, with him McQuaide, Blasko, Brown & Geiser, for defendant.

President Judge Bowman and Judges Kramer, Mencer, Rogers and Blatt. Judges Crumlish, Jr. and Wilkinson, Jr. did not participate. Opinion by Judge Mencer.

Author: Mencer

[ 12 Pa. Commw. Page 562]

On August 29, 1973, Robert P. Casey, Auditor General of the Commonwealth of Pennsylvania, commenced

[ 12 Pa. Commw. Page 563]

    an action in assumpsit against The Pennsylvania State University. The Auditor General's complaint alleges that the defendant university is indebted to the Commonwealth in the amount of $271,055. The complaint further alleges that the basis of the debt is the receipt by defendant from the Commonwealth, pursuant to the provisions of Act 61-A of August 31, 1971, of that amount in excess of its net costs for certain educational programs during fiscal year July 1, 1971 through June 30, 1972. The complaint was filed following an audit by the Auditor General for the fiscal year involved and after a demand on the defendant for repayment of the sum of $271,055, plus interest, to the State Treasury.

On September 18, 1973, defendant filed preliminary objections to the complaint in the nature of (1) a petition raising the defense of lack of capacity to sue or, in the alternative, (2) a demurrer for failure to state a claim upon which relief can be granted.*fn1

The single but very important question to be answered here is whether or not the Auditor General of the Commonwealth of Pennsylvania has the legal authority to bring this suit against the defendant to collect funds allegedly due the Commonwealth.

There is no serious disagreement that between the years 1915 and 1970 the Auditor General had no authority to institute such actions. Section 23 of the Act of April 28, 1840, P.L. 467, 72 P.S. § 4342, granted to the Auditor General specific authority to collect sums due the Commonwealth by taking "all such legal measures as may be by him deemed expedient." However, the Act of June 7, 1915, P.L. 876,*fn2 repealed the Act of April 28, 1840.

[ 12 Pa. Commw. Page 564]

Likewise, under the original provisions of The Administrative Code of 1929, Act of April 9, 1929, P.L. 177 (Administrative Code), 71 P.S. § 51 et seq., and of The Fiscal Code, Act of April 9, 1929, P.L. 343, 72 P.S. § 1 et seq., the Auditor General would not have had the authority to institute the present suit for collection of an alleged debt. The Administrative Code placed the authority to institute suit to collect sums due the Commonwealth with the Attorney General and the Department of Justice.*fn3 The Fiscal Code imposed an affirmative duty upon the Auditor General to audit the accounts of every agency receiving funds from the State Treasury.*fn4

Under Section 706 of the Administrative Code, 71 P.S. § 246, the Auditor General did retain such powers as were vested in him at the time of the enactment of the Administrative Code. However, as we have previously noted, in 1929 the Auditor General had no authority to institute suit because his authority to do so had been removed from him by the Act of June 7, 1915.

With this background in mind, we consider the significant relevant amendments made in 1970 to the Administrative Code. The Act of December 17, 1970, P.L. 935, amended several provisions of the Administrative Code to authorize separate legal counsel for the Auditor General. Specifically, Section 512, 71 P.S. § 192; Section 902, 71 P.S. § 292; subsection (b) of Section 903, 71 P.S. § 293(b); and ...


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