Reference Number: 
CTAS-1844

Every county official handling public funds is required to maintain an official bank account in a bank or banks within this state.  Within three days after the receipt of any public funds, the official must deposit the funds in the official’s official bank account.  T.C.A. § 5-8-207(a)(1).  A violation of T.C.A. § 5-8-207 is a Class C misdemeanor.

The requirement to maintain an official bank account does not apply to the chief administrative officer (CAO) of the county highway department because T.C.A. § 54-7-113(a) provides that all “funds received by any person for the county for road or highway purposes shall be promptly deposited with the county trustee and shall be expended only upon a disbursement warrant drawn on the trustee in accordance with law.  Op. Tenn. Atty. Gen. 85-088 (March 22, 1985).

All disbursements of public funds shall be made by consecutively prenumbered warrants or consecutively prenumbered checks drawn on the county official’s official bank account or bank accounts.  T.C.A. § 5-8-207(b).

The requirement to maintain an official bank account shall not prohibit a county official handling public funds from maintaining a petty cash fund in an account sufficient for the transaction of the official business of the county official’s office.  T.C.A. § 5-8-207(a)(3).

Collateralization of Funds.  Each county official maintaining an official bank account is authorized to enter into such agreements with banks and other financial institutions as necessary for the maintenance of collateral to secure the funds on deposit.  All funds deposited with a bank or other financial institution shall be secured by collateral in the same manner and under the same conditions as state deposits under Title 9, Chapter 4, Parts 1 and 4, or as provided in a collateral pool created under Title 9, Chapter 4, Part 5.  T.C.A. § 5-8-207(a)(1) and (2).

Application to Schools.  The provisions of T.C.A. § 5-8-207 do not apply to county school officials because of the more specific provisions of T.C.A. §§ 49-2-103 and 49-2-110.  The latter statutes are more specific and therefore control.  See Watts v. Putnam County, 525 S.W.2d 488, 492 (Tenn.1975).  Op. Tenn. Atty. Gen. 85-088 (March 22, 1985).