
    Investment of Funds by State Boards.
    Oct. 19, 1930.
   Schnader, Special Dep. Att’y-Gen.,

We have your request to be advised respecting the legality of investments made by boards of trustees of state institutions which have the right to make investments of funds donated to such boards to be held in trust for certain specific purposes stated by the donors of the funds.

A number of boards having such funds have made investments without submitting them to the Governor for approval. You desire to know whether this can lawfully be done.

Prior to the passage of the Act of April 13, 1927, P. L. 207, the boards of trustees having such funds in their care were free to make investments in their discretion and without referring their action to any other officer for approval. Section 39 of the Act of 1927, amending section 701 of The Administrative Code of 1923, provided that:

“The Governor shall have the power and it shall be his duty. . . .

“(f) To approve or disapprove all investments by departments, boards, or commissions of funds administered by such departments, boards or commissions.”

This same provision was reenacted in section 701 of The Administrative Code of 1929 (Act of April 9, 1929, P. L. 177).

In view of the fact that the same act in which occurs the provision above quoted provides for the organization and specifies the powers and duties of all of the administrative departments, boards and commissions of the state government, there can be no doubt whatever that the power conferred upon the Governor to approve or disapprove all investments by departments, boards and commissions necessarily renders it the duty of all departments, boards and commissions to submit to the Governor proposals for investment so that he may either approve or disapprove them. As all boards of trustees of state institutions are departmental administrative boards, they are, of course, embraced within the meaning of section 701 (f) of the Code.

Accordingly, since April 13, 1927, it has not been lawful for any department, board or commission to make any investment of funds in its charge or under its control without first obtaining the approval of the Governor.

Prom C. P. Addams, Harrisburg, Pa.  