Who gets to keep the bank interest on state welfare funds handled by the Baltimore City Department of Social Services, the state or the city?

Plain-English summary

Maryland's Secretary of Human Resources asked the Attorney General to resolve a dispute with Baltimore City over control of State and federal welfare funds administered by the Baltimore City Department of Social Services (BCDSS). The State's Department of Human Resources (DHR) had issued Circular Letter 82-17, directing all local social services departments to put their funds into interest-bearing bank accounts and periodically send the earned interest back to the State Treasury. After BCDSS began handling its own State-allocated funds directly in mid-1981 (rather than routing them through the City Treasury as before), City auditors and the Baltimore City Solicitor concluded that BCDSS was a City agency whose funds, including the interest they earned, belonged to the City and were subject to City budgeting and accounting rules rather than DHR's directive.

The opinion sided with the State on all three points DHR asked about. It found that Article 88A of the Maryland Code gives the State Social Services Administration supervisory, directive, and controlling authority over local departments' activities financed by State funds, including activities in Baltimore City, and that this authority extends to how those funds are held and accounted for, so Circular Letter 82-17 validly applies to BCDSS. It further found that neither the Circular Letter nor any other authority permits depositing State or federal welfare funds in an account in the City's own name, and that interest earned on those funds belongs to the State regardless of which account holds them. Finally, it concluded that a City Charter provision the City Solicitor had relied on, preserved by an exception in Article 88A, §2(e), did not override the State's statutory control over State-appropriated funds, because that same section carves out an exception for matters Article 88A itself addresses, and the State's supervisory provisions fall within that exception. The opinion also noted that the underlying legal question, whether BCDSS should be treated differently from other local social services departments, had largely been resolved by statutory changes in 1967 and 1974 that erased most of the historical distinctions between Baltimore City's department and its county counterparts.

Currency note

This opinion was issued in 1982. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The opinion's own text notes that the General Assembly responded to this exact dispute by enacting Chapter 110, Laws of Maryland 1983, which repealed Article 88A, §2(e) as "obsolete" and amended Article 88A, §13(a) to expressly clarify that the Baltimore City Department of Social Services has the same status relative to DHR as other local departments. Maryland's social services and human resources statutes have been further recodified since 1983. Anyone researching current fiscal or administrative control over Baltimore City social services funding should look to the current statutory framework rather than relying on this opinion's analysis of the now-repealed §2(e).

Common questions

Why did it matter whether BCDSS counted as a "City agency" or something more like a State-supervised local department?
Because the City Solicitor's argument that BCDSS could keep control over State funds, and the interest on them, depended on treating BCDSS as fundamentally a City department covered by the Baltimore City Charter's welfare provisions. The opinion traced how statutory amendments in 1967 and 1974, which added "duties" and "obligations" language applicable to BCDSS and transferred its employees to the State Merit System, had already eroded the historical basis for treating BCDSS differently from county social services departments, which the opinion said the State clearly supervises.

Didn't the Baltimore City Charter give BCDSS its own independent authority over welfare funds?
The opinion recognized that Article VII, §48(1) of the City Charter gives BCDSS authority to administer relief and care programs within its budget appropriations, and that Article 88A, §2(e) generally preserves BCDSS's Charter powers. But it read §2(e)'s own text as carving out an exception for anything Article 88A "herein provided," and found the State's supervisory and fund-control provisions elsewhere in Article 88A fell squarely within that carve-out, so the Charter provision did not shield BCDSS's handling of State funds from State direction.

How much money was actually at stake in this dispute?
The opinion noted that in fiscal year 1982, BCDSS spent about $171.9 million total, of which State funds made up 57%, federal funds appropriated through the State made up 41%, and the City's own voluntary contribution made up about 2%. BCDSS earned roughly $770,000 in interest on the State and federal funds it had begun holding directly, money the opinion concluded belonged to the State given how little of the underlying funding actually came from the City.

What ultimately happened with this dispute?
According to the opinion's own editor's note, the General Assembly resolved the underlying ambiguity the following year by enacting Chapter 110, Laws of Maryland 1983, which repealed Article 88A, §2(e) entirely as obsolete and amended a related section to expressly put Baltimore City on the same footing as other local social services departments.

Background and statutory framework

Until July 1, 1981, State and federal welfare funds for Baltimore City had been routed through the City's own Ordinance of Estimates and City Treasury, similar to how a City department's own money would flow, while county social services departments received their State-allocated funds directly into their own accounts. In mid-1981, with City officials' approval, BCDSS switched to the direct-deposit model used by the counties, receiving its State-allocated funds directly into its own interest-bearing account. Following a State Division of Audits recommendation that all local departments deposit cash advances in interest-bearing accounts and remit the interest to the State, DHR's Social Services Administration issued Circular Letter 82-17 in January 1982, directing exactly that. When independent auditors reviewing the City's fiscal year 1982 accounts concluded BCDSS was a City agency whose transactions belonged in the City's own financial statements, the Baltimore City Solicitor issued two opinions concluding that State funds held by BCDSS could be retained by City government and that BCDSS was, for budgeting, fund receipt and expenditure, and reporting purposes, a municipal agency of the City. That set up the dispute the Secretary of Human Resources brought to the Attorney General.

The opinion worked through three questions. First, whether Circular Letter 82-17 applied to BCDSS at all: the opinion found that Article 88A vests the State Director of Social Services with supervisory responsibility over local departments, gives local department directors "general administrative responsibility to the State Administration," and, under §3(a)(2), subjects "[a]ll of the activities of the local departments in the counties and in Baltimore City" financed by State funds to State "supervision, direction and control." Because the use and disposition of State-appropriated funds counts as an activity the State finances, the opinion concluded the Circular Letter validly bound BCDSS just as it bound county departments.

Second, whether State or federal funds could be deposited in an account in the City's own name, and who owned the resulting interest: the opinion rejected the City Solicitor's reliance on Article 88A, §2(e), which generally preserves BCDSS's Charter-derived rights and powers under Article VII, §48 of the Baltimore City Charter, because §2(e)'s own text excepts matters otherwise addressed in Article 88A, and the State's fund-supervision provisions fell within that exception. The opinion also distinguished the City Solicitor's reliance on a 1961 Attorney General opinion that had treated BCDSS as more City-like than State-supervised, explaining that 1967 amendments added "duties" and "obligations" language applying State-level responsibilities to BCDSS, 1974 amendments moved BCDSS employees onto the State Merit System and phased out mandatory local funding under the former "James Formula," and a 1976 Attorney General opinion had already revisited the 1961 opinion in light of these changes and concluded local departments, including BCDSS, function within the Executive Branch of State government for reorganization purposes. The opinion also noted, as a practical matter, that letting the City keep interest earned overwhelmingly on State and federal money (98% of BCDSS's FY1982 funding) while the City itself contributed only about 2% would be an anomalous result.

Third, on the general scope of Article 88A, §2(e) for BCDSS's fiscal and administrative procedures, the opinion concluded that, to the extent DHR exercises its statutory administrative authority over BCDSS, BCDSS must accommodate DHR's directives, without addressing procedures for any purely City-funded activities or voluntarily contributed local funds, which fell outside the scope of the questions asked. The opinion closed by noting that §2(e)'s original 1935 scope had been largely eroded by subsequent amendments and suggested the provision's continuing utility was a matter deserving legislative attention, a recommendation the General Assembly acted on the following year.

Citations

Statutes:

• Article 88A, §2(b) of the Maryland Code
• Article 88A, §2(e) of the Maryland Code
• Article 88A, §3(a)(2) of the Maryland Code
• Article 88A, §13(c) of the Maryland Code
• Article 88A, §13(d) of the Maryland Code
• Article VII, §48(1) of the Baltimore City Charter
• Chapter 586, Laws of Maryland 1935
• Chapter 148, Laws of Maryland 1967
• Chapter 709, Laws of Maryland 1974
• Article II, §24 of the Maryland Constitution
• Article 88A, §14A(9) of the Maryland Code
• Article 15A, §7 of the Maryland Code
• Section 5 of Chapter 125, Laws of Maryland 1982
• COMAR 07.01.05.06C(1)
• COMAR 07.01.05.06C(2)
• COMAR 07.01.05.06C(3)
• Article 88A, §14A(8) of the Maryland Code
• Chapter 110, Laws of Maryland 1983

Cases:

• Valentine v. Board of License Commissioners, 291 Md. 523, 533-34 (1981)
• Twinbrook Swimming Pool Corp. v. Comptroller of the Treasury, 274 Md. 88, 94-95 (1975)
• Comptroller of the Treasury v. M. E. Rockhill, Inc., 205 Md. 226, 233 (1953)

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/1982/Volume67_1982.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

SOCIAL SERVICES

Local Departments—Baltimore City Department—Local Departments Subject to State Fiscal Procedures—Interest Earned on "Moneys of State" Belong to State

August 10, 1982

The Honorable Kalman R. Hettleman
Secretary of Human Resources

You have requested our opinion on the following questions concerning whether and to what extent State or City fiscal budgeting and accounting procedures and requirements apply to the Baltimore City Department of Social Services:

"(1) A directive of the [State] Social Services Administration, Circular Letter No. 82-17, dated January 14, 1982, requires all local departments [of social services] to convert bank accounts used for the funds which they administer to interest bearing accounts and periodically revert the interest on these accounts to the [State] Department of Human Resources. Does this directive apply to the [Baltimore City Department of Social Services]?

(2) Does that Circular Letter or any other State statute or directive permit the deposit of State/Federal funds which the [Baltimore City Department of Social Services] administers in a bank account in the name of the City of Baltimore?

(3) Does §2(e) of Article 88A of the Maryland Code require the City government to impose on the [Baltimore City Department of Social Services] the budgeting, fund receipt and expenditure, record keeping and reporting and other fiscal or administrative requirements of the City government, regardless of Department of Human Resources or other State government requirements in these areas?"

These questions result from two recent Opinions of the Baltimore City Solicitor concerning the use and accounting of funds by the Baltimore City Department of Social Services. In the first, dated June 10, 1982, the City Solicitor concluded that "State monies held by the [Baltimore City] Department of Social Services . . . may be retained by City government". Opinion of Benjamin L. Brown, City Solicitor, to George G. Musgrove, Director, Baltimore City Department of Social Services, et alia (June 10, 1982). In the second, dated June 25, 1982, the City Solicitor more specifically concluded that the Baltimore City Department of Social Services "is a municipal agency of the City . . . for the purposes of (1) budgeting, (2) receipt of and expenditure of funds[, including interest accrual], and (3) recording and reporting [of these funds] in the City's accounts and financial statements". Opinion of Benjamin L. Brown, City Solicitor, to Charles L. Benton, Director, Baltimore City Department of Finance (June 25, 1982).

For the reasons given below, it is our opinion that:

(1) Circular Letter 82-17 of the Social Services Administration of the Department of Human Resources applies to the Baltimore City Department of Social Services.

(2) Neither the Circular Letter nor any other authority permits the deposit of State or Federal funds allocated to the Baltimore City Department of Social Services in a bank account in the name of the City of Baltimore. Moreover, the interest earned on all deposits of these funds, however the account may be denominated, belongs to the State, not the City.

(3) With respect to the State and Federal funds appropriated to the Department of Human Resources for the use of the Baltimore City Department of Social Services, neither Article 88A, §2(e) of the Maryland Code nor any other authority authorizes the City government to impose its budgeting, fund receipt and expenditure, record keeping and reporting, and other administrative requirements on the Baltimore City Department of Social Services, if those requirements conflict or are otherwise inconsistent with requirements lawfully issued by the Department of Human Resources or other State agencies.

I
Background

Until July 1, 1981, all State and Federal funds allocated by the Department of Human Resources ("DHR") for the operation of welfare programs in Baltimore City, in addition to all local funds, were appropriated in the City's Ordinance of Estimates. They were subjected to the City's record keeping and accounting procedures and were transmitted to the City Treasurer for deposit in the City's bank account. The City government then either (i) made the funds available to the Baltimore City Department of Social Services ("BCDSS") as needed for benefit payments and other costs or (ii) paid those costs itself. In contrast, funds allocated to the other local departments of social services in the counties were paid directly to those agencies, which deposited them in their own bank accounts and were responsible for accounting for their expenditures.

On July 1, 1981, with the approval of City officials, BCDSS assumed direct responsibility for accounting for these State allocated funds in a manner similar to the other local departments. Since then, these funds have been transmitted directly to BCDSS, for deposit in its own interest-bearing account, and BCDSS has handled their expenditure.

In August of 1981, the State Division of Audits recommended that DHR "establish a specific written policy applicable to all local departments requiring that all cash advances be deposited into interest-bearing accounts and that such interest earnings be remitted to the State at the end of each fiscal year and deposited as general fund revenue". Memorandum from Peter J. Klemans, Assistant Legislative Auditor, to Howard Albert, Director, Division of Budget and Finance, at p. 24 (August 17, 1982). In response to that recommendation, DHR (through its Social Services Administration) issued Circular Letter 82-17, dated January 14, 1982, which directed all local departments of social services to deposit their funds immediately in interest-bearing accounts and to transmit the interest earned on these accounts periodically to DHR for deposit in the State Treasury.

This spring, independent auditors examining the City's accounts for Fiscal Year 1982 took the position that BCDSS was a City agency and that, as such, all of its financial transactions must be reflected in the City's accounts and financial statements. That conclusion led to the request for the views of the City Solicitor on the propriety of the recently changed fiscal and accounting procedures of BCDSS. City officials initially indicated that, if City government procedures were held to apply to BCDSS, then BCDSS officials would be directed: (1) to deposit all State funds allocated to BCDSS to the credit of the Mayor and City Council of Baltimore; (2) to expend and account for these funds in FY 1983 pursuant to regular City procedures; and (3) to reconstruct the FY 1982 financial transactions in accord with these procedures.

In your request to us, you indicated that City officials now have agreed that, before any action is taken, an Opinion of the Attorney General on these issues would be helpful. You further stated that, depending on the nature of our advice, legislation might be proposed to resolve these issues in accord with the interests of both the State and City governments.

II
Impact of Circular Letter 82-17

Your first two questions concern the applicability and impact of Circular Letter 82-17 on the funds allocated by DHR to BCDSS.

Article 88A clearly provides that a DHR directive to local departments of social services with regard to State funds applies to BCDSS. Under §2(b), the State Director of Social Services, a DHR official, is "responsible for . . . the supervision of local departments, and other agencies and institutions under the supervision of the State [Social Services] Administration". Moreover, under §13(c), directors of local departments of social services, including BCDSS, have a "general administrative responsibility to the State Administration" and, in addition to various other specified duties, have such "[o]ther responsibilities as may from time to time be required by the State Administration or by other applicable laws, rules and regulations".

Section 3(a)(2) more specifically provides that:

"All of the activities of the local departments in the counties and in Baltimore City, which the State [Social Services] Administration finances, in whole or in part, shall be subject to the supervision, direction and control of the State Administration."

If an activity financed "in whole or in part" by State funds is subject to State "supervision, direction and control", both in the counties "and in Baltimore City", it follows that the underlying funds themselves, their allocation, transmittal receipt, accounting, and disposition, must be similarly subject to State "supervision, direction and control". Obviously, the use and disposition of State appropriated funds is an "activity . . . which the State Administration finances". Indeed, under §13(d), the administrative costs of local departments of social services "shall be paid out of funds derived from local sources or out of allotments from State or federal funds, or any of them, as the State [Social Services Administration] may prescribe". (Emphasis added.)

In our opinion, these statutory provisions vest the control of DHR funding in the State, and they authorized the issuance of Circular Letter 82-17 to the local departments, including BCDSS. Thus, the directive lawfully governs the use of interest by BCDSS, unless some other provision of law exempts BCDSS from the directive's requirements.

III
Effect of Article 88A, §2(e)

A. Position of City Solicitor

The City Solicitor concluded that, notwithstanding the State directive, the funds allocated by DHR to BCDSS are subject to City control once they have been transferred to BCDSS. In reaching this conclusion, he relied primarily on Article 88A, §2(e), which states:

"The organization, rights, powers, duties, obligations and functions of the department of social services of Baltimore City as prescribed in §48 of Article VII of the said Charter of Baltimore City shall not be affected by this article, except as herein provided, and said department of social services in Baltimore City is hereby vested with all the rights, powers, duties, obligations, and functions which are vested in the local departments in the counties under this article."

This statutory provision, the City Solicitor concluded, preserves the City's authority over funds derived from the State.1

In this context, the City Solicitor emphasized the applicability of Article VII, §48(1) of the City Charter, which provides:

"[T]he [Baltimore City] Department of Social Services is hereby authorized and empowered to make and put into effect, within the limits of appropriations therefor in the Ordinance of Estimates, such plans and procedures as in its judgment may be necessary or advisable for the relief and care of needy persons in Baltimore City."

According to his Opinion of June 25, this Charter provision requires that "all the monies granted to the City's Department of Social Services for welfare purposes by the Federal, State or local governments . . . be appropriated in the Ordinance of Estimates and are therefore subject, by law, to the control of the City". With respect to any interest generated by accounts containing the funds allocated to BCDSS by DHR, he determined that these funds belong to the City.2

B. Analysis

The funds in question are State and Federal funds appropriated in the State Budget to DHR. The appropriation is made under such categories as public assistance payments, funds for social services, and administrative costs. There is no specific appropriation made by the General Assembly to the City of Baltimore or to BCDSS for any of these purposes.

In our view, Article 88A, §2(e) does not authorize the City to treat funds allocated by DHR to BCDSS as if they were City funds. Although §2(e) generally preserves the "rights, powers, duties, obligations and functions" of BCDSS under Article VII, §48 of the City Charter, §2(e) nevertheless contains an express exception with regard to all matters that are otherwise "herein [i.e., in Article 88A] provided". We believe that the several provisions of Article 88A discussed above fall within that exception and, as such, provide the framework within which State administrators may supervise, direct, and control, and issue detailed instructions governing, the use by BCDSS of State appropriated funds. These instructions are therefore binding on BCDSS in accordance with the express exception in §2(e).

The City Solicitor's interpretation of §2(e) follows from his broader view that BCDSS is an entity of the City, not of the State. He relied heavily on a 1961 Opinion of this Office so concluding. 46 Opinions of the Attorney General 158 (1961). However, subsequent changes in §2(e) and in other provisions of Article 88A, as well as a later Opinion of this Office, lead us to a different conclusion.

The original version of §2(e), enacted in 1935 as then Article 88A, §8G, provided as follows.

"The organization, rights, powers, duties, obligations and functions of the Department of Welfare of Baltimore City as prescribed in Section 171A of the Charter of Baltimore City shall not be affected by this act, except as hereinbefore provided, but said Department of Welfare is hereby vested with all the rights, powers and functions which are vested in the County Boards under this Act." Chapter 586, Laws of Maryland 1935.

That provision remained virtually intact (despite some renumbering) until it was amended in 1967 to add the words "duties" and "obligations" after the reference to the "powers" vested in the local departments. Chapter 148, Laws of Maryland 1967. Thus, in 1967, BCDSS was made subject to the same "duties [and] obligations" as are imposed on the other local departments of social services in the counties. Significantly, this change was made by the same amendment that enacted §13(c), delineating the various "responsibilities" of all local departments, subject to the "administrative authority" of the then State Department of Public Welfare (now the Social Services Administration).

Reinforcing the parity between BCDSS and other local departments, 1974 amendments to Article 88A transferred all employees of the Baltimore City Department of Social Services from the Baltimore City Merit System to the State Merit System. These amendments also phased out the so-called "James Formula", which had required local funding to be provided for local departments of social services. Chapter 709, Laws of Maryland 1974.

The 1967 and 1974 statutory amendments, when considered with the Statewide nature of the programs administered by local departments, subsequently led this Office to conclude that local departments of social services, including BCDSS, are within the Executive Branch of State government for purposes of the Governor's reorganization authority under Article II, §24 of the Maryland Constitution. 61 Opinions of the Attorney General 786 (1976).

In that Opinion, this Office reassessed its prior views in light of the subsequent statutory changes, as well as the other changes in the State's social service programs, which effected a dramatic change in the character of local departments.3 In so doing, the Opinion explicitly identified BCDSS as being subject to the same analysis as that applicable to other local departments.4 We concur with the conclusions reached in that Opinion.5

We might also note that, in practical terms, reversion to the City of interest earned on State appropriated funds would be somewhat anomalous given the relative amounts contributed by the State and Baltimore City toward these programs and the amount of interest involved. For example, we understand that, in fiscal year 1982, the total amount expended by BCDSS for benefits, programs, and administrative costs was approximately $171,900,000. State general funds constituted about $97,900,000 or 57% of that amount; Federal funds paid to and appropriated by the State for these expenditures constituted $71,100,000 or 41%; and Baltimore City contributions constituted about $3,100,000 or 2%.6 As a result of its new interest-bearing accounts, BCDSS earned approximately $770,000 on the State and Federal funds formerly transmitted to the City government. Inasmuch as that interest was earned on "moneys of the State", funds appropriated to DHR in the State Budget,7 that interest inures to the benefit of the State.8

Your third question also concerned the general effect of §2(e) on the fiscal and administrative procedures to be followed by BCDSS. The City Solicitor concluded that City, not State, procedures applied to BCDSS and that the funds allocated to BCDSS were subject to those procedures. However, for the reasons already stated, to the extent that DHR exercises its administrative authority over BCDSS, it is our view that the BCDSS is under an obligation to accommodate those directives. When, pursuant to §13 or other applicable provisions of State law, DHR and its constituent agencies issue directives to local departments concerning State financed activities, those directives are binding on the local departments.

IV
Conclusion

In summary, it is our opinion that all local departments of social services, including BCDSS, must comply with Circular Letter 82-17 and the administrative and fiscal procedures that DHR determines to be necessary or reasonable for the proper administration of the State and Federal funds that it provides to the local departments.9 For purposes of State fiscal administration, Article 88A, §2(e) does not place BCDSS in a different position from other local departments.

In so concluding, we recognize that the original scope and effect of Article 88A, §2(e), as enacted in 1935, have since been largely eroded. Whether and to what extent §2(e) continues to serve a viable administrative purpose is a matter that, we believe, deserves legislative attention and clarification.

Stephen H. Sachs, Attorney General
Joel J. Rabin, Assistant Attorney General
Avery Aisenstark
Chief Counsel,
Opinions and Advice

Editor's Note: Since the issuance of this Opinion, the General Assembly enacted Chapter 110, Laws of Maryland 1983, for "the purpose of . . . clarifying that the Baltimore City Department of Social Services has the same status with respect to the Department of Human Resources as other local departments of Social Services." The new law, effective July 1, 1983, repealed Article 88A, §2(e) as "obsolete" and amended Article 88A, §13(a) to add references to Baltimore City.

1 A memorandum accompanying the City Solicitor's Opinion of July 10 also suggested that DHR's own fiscal regulations should be understood as having adopted the pre-July 1, 1981, arrangement, whereby funds were transmitted directly to the City Treasury for a "pass through" to BCDSS. Memorandum from Al Kramer, Legal Assistant, to Benjamin L. Brown, City Solicitor (June 9, 1982).

In our view, however, the fiscal regulations adopted by DHR do not mandate that the funds allocated by DHR under Article 88A be deposited either with the City or with BCDSS. COMAR 07.01.05.06C(1) merely provides that funds allocated to BCDSS shall be deposited in a bank in the area of the local office of BCDSS and that they shall be given the same fiscal protection as "other funds received and disbursed by Baltimore City". COMAR 07.01.05.06C(2) and .06C(3), in turn, authorize the use of bank accounts in the name of the local department and the access of the Director and Assistant Director for Financial Management of BCDSS, as well as the Baltimore City Treasurer and Director of Finance, for the purpose of withdrawals. This language does not require payments directly to the City under the former "pass-through" arrangement, nor does it preclude the deposit of funds in BCDSS bank accounts.

Thus, the regulations appear to permit both the practice existing before July 1, 1981, and the action taken by DHR in July (with the concurrence of City and BCDSS officials) to transmit the State funds directly to BCDSS for deposit in its own bank account.

2 The memorandum accompanying his first Opinion of June 10 (see note 1 above) indicated that this interest was to be spent "mainly, in great part" for the relief of the needy; the second Opinion of June 25, however, does not mention that limitation.

3 In reviewing the history of the administration of social service programs in this State, the Opinion noted the independent assessment of the Maryland Commission on the Functions of Government that, by reason of these changes, social services had become a "'solely state function', one in which the 'funding, administration and policy making are the sole responsibility of State government.'" Id. at 794-95 (quoting I Report of the Maryland Commission on the Functions of Government, at p. 3 (July, 1975)).

4 Specifically, the Opinion noted:

"It is true that in the past this office has advised officials of the Department of Human Resources and the Social Services Administration that the local departments appeared to be departments of local governments rather than units of the State government and, particularly in the case of the Baltimore City Department of Social Services, that such agencies were subject to the administrative requirements imposed by the local government, e.g. 46 Opinions of the Attorney General 158 (1961). That advice, however, was based upon the State statutes as they existed prior to the legislative changes made in 1974." Id. at 796.

5 Subsequent administrative practices have endorsed the views expressed in that Opinion. For example, Executive Orders of the Governor, one involving an automated income maintenance system [Executive Order 01.01.1978.13 (November 14, 1978)] and another involving the leasing of office space [Executive Order 01.01.1977.04 (June 30, 1977)], have considered local departments of social services as "units of the Executive Branch of State Government", "principally" supported and funded by State and Federal funds appropriated to DHR through the State Budget.

In this regard, we understand that BCDSS has implicitly acquiesced in this view of its status by adhering to the State leasing procedures mandated by Executive Order 01.01.1977.04 (June 30, 1977). Moreover, acquiescence by the General Assembly itself in this view of the status of local departments, including BCDSS, might well be inferred from the absence of subsequent legislative "correction" of either this Office's 1976 interpretation of Article 88A or any of the administrative practices relying on that interpretation, notwithstanding numerous amendments made to Article 88A since the issuance of the 1976 Opinion. See, e.g., Valentine v. Board of License Commissioners, 291 Md. 523, 533-34 (1981); Twinbrook Swimming Pool Corp. v. Comptroller of the Treasury, 274 Md. 88, 94-95 (1975); Comptroller of the Treasury v. M. E. Rockhill, Inc., 205 Md. 226, 233 (1953).

6 Thus, mandatory local contributions under the "James Formula", former §18A of Article 88A, were phased out by Chapter 709, Laws of Maryland 1974. Consequently, the Baltimore City contribution toward BCDSS costs was a voluntary one under Article 88A, §14A(9).

7 For an analysis of the definition and treatment of "moneys of the State" in differing contexts, see, e.g., 58 Opinions of the Attorney General 88 (1973); 53 Opinions of the Attorney General 3 (1968); 52 Opinions of the Attorney General 481 (1967). [Editor's Note: See also Opinion No. 83-004 (January 20, 1983) (to be published at 68 Opinions of the Attorney General (1983)), discussing the treatment of federal "block grants" as "moneys of the State".]

8 Thus, the disposition of such interest is governed by Article 15A, §7 of the Maryland Code, as incorporated in the State Budget. See, e.g., Section 5 of Chapter 125, Laws of Maryland 1982.

9 We do not here address the procedures to be followed by BCDSS with respect to local funds that have been voluntarily contributed by the City to BCDSS (see note 6 above) or with respect to any of BCDSS's activities that are wholly funded by the City. Compare Article 88A, §3(a)(2) with Article 88A, §§13(d) and 14A(8) and (9).