Tennessee school boards can't donate funds, AG says

Opinion requested in Loudon amid debate

Hugh G. Willett knoxnews.com

Local school boards in Tennessee do not have the power to donate from their general fund budget to a nonprofit organization, according to an opinion released last week by the State Attorney General's Office.

The opinion was requested by a Loudon County school board member after a debate arose last year about whether or not to donate to the Loudon County Education Foundation, a nonprofit organization.

During a November 2008 board meeting, an amendment to restore $16,000 in funding to LCEF was brought before the board. The funding had been cut during the previous budget cycle.

Board member Van Shaver questioned whether the school system could afford to donate to charity. He also questioned the legality of the donation.

Schools Director Wayne Honeycutt informed the members that the board's attorney, Chuck Cagle, had given his approval of the donation.

Board member Lisa Russell said she supported the goals of the Education Foundation but was not comfortable making the decision to donate taxpayers' money.

The board, with the exception of Russell and Shaver, voted in favor of the donation. Russell later asked state Rep. Jimmy Matlock to seek an opinion from the state attorney general's office.

"The opinion mirrors what some of us had stated, that a (school board) has no authority to give away money," said Shaver.

In hindsight, the donation obviously was not a good choice of how to spend taxpayer funds, Russell said. The board had to cut $7,500 for books from last year's budget, she said.

"Given that the donation was illegal, the foundation should return the money," Shaver said.

The opinion further states the Legislature has expressly provided authority to county and municipal legislative bodies to make charitable contributions under certain conditions.

If the Legislature had intended to provide authority to local school boards to make charitable contributions, it would have expressly provided such authority, the opinion concludes.

Honeycutt said he was surprised by the opinion and feels it will have a negative effect across the state. The Education Foundation is an excellent investment in taxpayer resources, he said.

"I truly believe we receive a three- to five-fold return on the investment we make in the foundation," he said.

The Education Foundation makes classroom grants to teachers that would not have any other source of funding. Recent programs in Loudon County that were funded by the foundation include The Young Achievers Program and the Outstanding Teacher Program.