JEFFERSON CITY - The Missouri Supreme Court heard arguments from attorney's representing two offices of Missouri's executive branch Wednesday about the governor's ability to withhold funds from the state budget and whether the state auditor has the authority to question those withholds.

The state's high court took up the case after State Auditor Tom Schweich sued Gov. Jay Nixon for not providing documents validating the withholds from the 2012 fiscal budget. 

Nixon issued an executive order in June of 2011 withholding about $172.2 million from the 2012 fiscal budget. The circuit court ruled that the governor is allowed to withhold funds regardless of when the actual revenue is less than the estimated revenue. However, the court also ruled that the governor did not have the right to transfer withheld funds for other reasons than it was appropriated.

While Schweich appealed the circuit court ruling that the governor had the right to withhold the funds, the governor's office is arguing that the auditor does not have the right to sue him in the first place.

Darrell Moore, who represented the auditor, said the governor should have parceled out the money the best he could over the four quarters of the fiscal year appropriately. He said the governor violated the state Constitution by refusing to present Schweich with documentation showing the governor's justification for the allotments made after the withholds. Moore said this diminishes accountability.  

James Layton, the attorney for the governor's office, said the auditor does not have the authority to ask the governor for justification of his actions.

"The auditor does not have the power to demand documents with regard to policy decisions made by the governor," Layton said.

Layton said the auditor can ask to see anything having to do with checks being written, or money flowing from one bank account to another. However, he said there is no law that says the auditor can investigate the formulation of the budget.

Moore defended the auditor by explaining why the documents were necessary.

“This is not about the auditor wanting to second guess or make policy decisions," Moore said. "This is about the standing of the auditor to fulfill his constitutional statutory duties ... to audit the office of the governor.” 

Under Article IV Section 13 of the state Constitution, the auditor has the authority to "establish an appropriate system of accounting for all public officials of the state, post-audit the accounts of all state agencies and audit the treasury at least once annually. He shall make all other audits and investigations required by law, and shall make an annual report to the governor and General Assembly."

The auditor's case brief said the governor's office did not provide documentation on the money when asked for it.

"According to the auditor's brief, the governor withheld $6,000 from the legislature, $300,000 from the auditor's office and $6 million from the judiciary. But he did not withhold any of his own budget or a statewide elected official who is a member of the democratic party. Is that a fact?" Tietleman asked Layton.

Layton said he could not answer that question because the record does not show what happened between February and the end of June of 2012. Layton did say, however, that the money was never used inappropriately, although the auditor did mention a "slush fund" multiple times.

“...the governor can never spend money unless it’s appropriated, the governor has never spent money unless it is appropriated, the treasurer cannot pay out money unless it is appropriated, there is no extra legislation slush fund, and there’s no credible claim that is has happened here," Layton said.

Moore closed by saying that the governor has to be held accountable, and that as an independent elected official, the state auditor will be the person to make sure appropriations are handled appropriately and legally.

The justices did not hand down a decision on the case.