Q In our district, building principals sign an agreement with the district stating that they will be responsible for any and all fixed assets in their building. Each year, the principal also agrees to audit the assets and agrees to be responsible for missing assets, unless properly documented as stolen. Several items are missing from this year’s audit. May the district hold an employee’s paycheck if a dispute has arisen whether the employee owes the district for a missing fixed asset?

A Section 7-7-43 applies to school districts, and provides that a “fiscal officer . . . shall not issue a warrant . . . in favor of any person . . . who shall be indebted to the State.” While this Section is mandatory, it only applies when there exist lawful debts, so a district may not withhold an employee’s check pending resolution of a dispute. The district must provide appropriate due process protections and should also consider the effect of federal tax laws and minimum wage laws. Additionally, the district should determine whether any prior claims, judgments, withholding orders or other legal obligations exist that predate and/or take precedence over the district’s claims. (Attorney General’s Opinions to Jacks, October 31, 2014)