New Legislation Requires Township Clerks to "Attest" to "Payouts"
Governor Rauner recently signed
Public Act 100-0983 into law. This law
amends the Township Code, the Highway Code and the Public Graveyards Act by
adding cryptic language requiring township clerks to “attest” to certain
“payouts” of funds. This law adds a new
section 7-27 to the Township Code specifying that, “If a township supervisor
issues a payout of funds from the township treasury, the township clerk shall
attest to such payment.” The Highway
Code is amended by adding a new section 6-114.5 which states, “If a road
district treasurer issues a payout from the road district’s treasury or the
township treasury, the road district clerk shall attest to all moneys paid
out.” The Public Graveyards Act was
amended to also include a similar provision.
Unfortunately, the legislation
does not define the manner in which the clerk is to “attest” to the payouts –
does that mean that the clerk is attesting that the funds were expended? Or that they were expended for the purposes
specified? Or that there are sufficient
funds available to make the payout? Or
is the clerk attesting that the township board or the Supervisor approved the
expenditure of the funds? Nor does the
legislation define what a “payout” is.
Does “payout” cover credit card payments, auto payment of utility bills
and electronic fund transfers? What
about townships which have passed resolutions authorizing the payment of
routine utility bills? There is no
record of legislative history or substantive debate available to help determine
the General Assembly’s intent behind this new law.
In the absence of clarity,
townships may choose to satisfy this law in different ways based on how they
interpret it. The Township Officials of
Illinois association is recommending that township clerks attest “to the
signature of the supervisor on all checks written.” Certainly, townships may do that if they
would like. However, the law does not
state anything about attesting to a signature – it specifies that the
attestation is to the “payout of funds,” a “payment” or “all moneys paid
out.” It does not state anything about
clerks endorsing a check or a signature, nor does it require that the
attestation of the payout must occur prior to the payout. Further, even if a township clerk certifies a
supervisor’s signature on a check, it is not clear whether that act would
satisfy the legislation’s requirement to attest to a “payout of funds” or to
“all moneys paid out.”
While the legislation was
apparently intended to promote transparency – which is a good thing - and to
prevent situations where township supervisors were issuing checks without
township board approval, (which was already illegal), it will be challenging
for townships to comply with this legislation without further clarification
about the scope of a clerk’s attestation to a payout. If the legislation was intending to require
township clerks to witness the township supervisor’s signature and endorse
every check, it could have said that – but that is not what this says. We have heard from some townships whose banks
have indicated that they will not accept and process checks bearing a second
signature of someone who is not a signatory to a financial account. In addition, banks that have reviewed this
ambiguous new law are not interpreting it to require them to have to accept an
additional signature.
Perhaps a simpler option for
township clerks would be to maintain a copy of all expenditures or “payouts,”
develop a separate sheet attesting that the payouts at issue were authorized by
the township board, expended for the purposes specified, provided for in the budget and directed to be
paid out by the Township Supervisor.
That action would seem broad enough to comply with the requirements of
this legislation, and it would perhaps be easier for clerks to accomplish.
This law becomes effective on
January 1, 2019.
Post Authored by Keri-Lyn Krafthefer, Ancel Glink
