Attorney General of Colorado — Opinion
November 13, 1980
RE: Responsibility of the state auditor to audit financial transactions of the Cumbres and Toltec Scenic Railroad Compact
J.D. MacFARLANE, Attorney General
John W. Mathews Deputy State Auditor Room 601, 1200 Lincoln St. Denver, Colo. 80203
Dear Mr. Mathews:
This opinion is in response to your June 6, 1980 letter, in which you inquired about the statutory responsibilities of the state auditor in relation to the Cumbres and Toltec Scenic Railroad Compact.
QUESTION PRESENTED AND CONCLUSION
Your request for an attorney general’s opinion presents one question:
1. Does the state auditor have a statutory responsibility to audit financial transactions of the Cumbres and Toltec Scenic Railroad Compact?
My conclusion is “yes.” It is my opinion that the state auditor is required to audit the financial affairs of the Cumbres and Toltec Scenic Railroad Compact since the compact involves the operation of a railroad owned by Colorado and New Mexico; Colorado and New Mexico agreed to permit audits of the railroad by both states’ auditors; and the general assembly incorporated that agreement in its ratification of the compact.
ANALYSIS
1. The state auditor is required to perform or have performed audits of certain entities. That duty is defined in article V, section 49 of the Colorado Constitution as well as in C.R.S. 1973, 2-3-103(1). The constitution provides:
It shall be his duty to conduct post audits of all financial transactions and accounts kept by or for all departments, offices, agencies, and institutions of the state government, including educational institutions notwithstanding the provisions of section 14 of article IX of this constitution, and to perform similar or related duties with respect to such political subdivisions of the state as shall from time to time be required of him by law.
The statutory language is similar to the constitutional mandate, although the former provision requires audits of all “departments, institutions, and agencies of the state government.”
On June 30, 1970, the Colorado Railroad Authority and on July 1, 1970, the New Mexico Railroad Authority executed a document termed a Narrow Gauge Railroad Agreement. The authorities agreed to purchase a narrow gauge interstate railroad and to hold title for all real and personal property acquired by the authorities in the names of the Colorado and New Mexico railroad authorities for and on behalf of the States of Colorado and New Mexico. The agreement established a committee called the Joint Executive Committee which was empowered to, among other things:
(T)ake such action for and on behalf of both parties hereto for the preservation and maintenance of the properties acquired and the management and direction of the same as may be necessary and proper from time to time.
Article 3 of the agreement provided:
Full and complete books of accounts shall be kept and maintained by the Committee at all times. Such books of accounts shall be public records and subject to inspection during regular business hours by any citizen of the State of Colorado or the State of New Mexico. The books of accounts shall be subject to audit by the State Auditor of Colorado and the State Auditor of New Mexico.
C.R.S. 1973, 24-60-1901 indicates that the Governors of the State of Colorado and New Mexico entered into the Cumbres and Toltec Scenic Railroad Compact in 1974 and that the United States Congress approved that compact. Section 24-60-1901 constitutes Colorado’s ratification of the compact by the general assembly.
Article II of the compact, as set forth in section 24-60-1901
indicates that the States of New Mexico and Colorado ratified and affirmed the agreement of July 1, 1970, between the railroad authorities of those states. The July 1, 1970 agreement was later amended. Essentially, the amendment substituted the Cumbres and Toltec Scenic Railroad Commission for the committee created under the prior agreement. The operation of the railroad is leased to Scenic Railways, Inc.
The clear intent of the constitutional and statutory descriptions of the duties of the state auditor is to impose on the auditor a duty to audit financial transactions and accounts kept by or for the State of Colorado. The Cumbres and Toltec Scenic Railroad Commission is charged with the maintenance and operation of a railroad jointly owned by the States of Colorado and New Mexico. Financial affairs of the commission should, therefore, be audited as accounts kept for the state.
I can find no reason militating against an audit of the commission and the railroad it operates. To the contrary, the States of Colorado and New Mexico have sanctioned such an audit.
SUMMARY
In my opinion, the state auditor is required to audit the financial affairs of the Cumbres and Toltec Scenic Railroad Compact because the Cumbres and Toltec Scenic Railroad Commission operates a railroad owned by the States of Colorado and New Mexico, those states have agreed to the performance of an audit, and the general assembly of Colorado has ratified that agreement.
Very truly yours,
J.D. MacFARLANE Attorney General
AUDITORS INTERSTATE COMPACTS RAILROADS STATUTES
C.R.S. 1973, 2-3-103(1) C.R.S. 1973, 24-60-1901
Colo. Const. art. V, § 49
LEGISLATIVE BRANCH Auditor, Office of State
State auditor is required to audit the financial affairs of the Cumbres and Toltec Scenic Railroad Compact which is owned by both Colorado and New Mexico, and which, by terms of the agreement between the states adopted by the Colorado General Assembly, states that the financial affairs shall be subject to audit by each state.