Monday, May 9, 2016

Personal liability for over-budget spending

It's a rare breed of cat who, as a city executive, knowingly spends more than the city's legislative branch authorized in an annual budget. Doing that is unusual because of the personal liability involved.

KRS 91A.030(13) provides, "No city agency, or member, director, officer, or employee of a city agency, may bind the city in any way to any extent beyond the amount of money at that time appropriated for the purpose of the agency. All contracts, agreements, and obligations, express or implied, beyond existing appropriations are void; nor shall any city officer issue any bond, certificate, or warrant for the payment of money by the city in any way to any extent beyond the unexpended balance of any appropriation made for the purpose."

KRS 92.340
" **** Any indebtedness contracted by a city of the home rule class in
violation of this subsection or of KRS 92.330 or 91A.030(13) shall be void, the
contract shall not be enforceable by the person with whom made, the city shall never
assume the same, and money paid under any such contract may be recovered back
by the city."
This is the reason most public officials are careful to not go over budget allocations. The excess spending may come out of the officer's own pockets. Plus, it's likely Official Misconduct in the First Degree, KRS 522.020

Tom Fox, J. D.
Southern Specialty Law Publishing Company
Louisville, Kentucky

A division of Accountable Kentucky Incorporated
a Kentucky Non-profit corporation

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This is not legal advice and I am not a lawyer.

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