You have asked for my opinion regarding the ability of the State to recover overpayments made to local school systems pursuant to O.C.G.A. § 20-2-153 and other state funding statutes. I have concluded that overpayments may be recovered.

Official Code of Georgia Annotated § 20-2-153 provides for a special instructional assistance program for students with developmental disabilities. The State Board of Education ("State Board") is authorized to determine eligibility criteria and the local school systems are required to "annually report by grade level the number of eligible students, the number of students served . . . and the average achievement of students served." After the first year of operation, the "amount of funds appropriated and allocated for this program shall be based on the actual count of students served during the preceding year." Id.

The question is whether the State may collect amounts which may be erroneously paid to a local school system if it is later determined that the number of eligible students was incorrectly reported by a local school system. Although O.C.G.A. § 20-2-153 contains no authorization for collecting overpayments, there is a specific mechanism for adjusting a local system's "fair share" and thereby decreasing state Quality Basic Education ("QBE") payments when the State Auditor finds that a local system should return funds to the State. O.C.G.A. § 20-2-164(h). I understand that the State Auditor will be auditing school systems. In the event he finds an audit exception and determines that some amounts should be refunded, the State Board may add that amount to the local "fair share" thus decreasing the QBE payment.

There are other remedies available to the State in addition to the "fair share" adjustment. The local school systems are clearly not entitled to retain money which has come into their hands through mistake. See Department of Public Health v. Perry, 123 Ga. App. 816 (1971). Cf. Department of Medical Assistance v. Presbyterian Home, Inc., 200 Ga. App. 885 (1991). See also 1979 Op Att'y Gen. 79-73.

Thus, the State could institute a legal action against the local school system for money had and received. See Department of Public Health v. Perry, supra. The same analysis would apply to any other overpayment to a local school system based on an inaccurate student count such as an inaccurate full-time equivalent count pursuant to O.C.G.A. § 20-2-160.

In summary, it is my official opinion that the State may recover from local school systems any overpayments occasioned by the school system's inaccurate count of students eligible for the special instructional assistance program and for any other overpayment caused by an inaccurate student count.

Prepared by:

Senior Assistant Attorney General