CEO 82-39 -- July 1, 1982

CONFLICT OF INTEREST

DEPARTMENT OF EDUCATION EMPLOYEE TEACHING COURSE FOR SCHOOL DISTRICT

To: Mr. Ted J. Meredith, Administrator, Internal Auditing Services, Department of Education

SUMMARY:

A prohibited conflict of interest would be created were an auditor employed by the Department of Education to teach a course for a school district whose programs are audited by her under the Florida Education Finance Program. Although the school district is not subject to the regulation of the employee's agency, the Department's Division of Administration, employment as a teacher by a school district which is subject to audit by the employee would threaten the independence and impartiality necessary for proper auditing of the school district. Therefore, a continuing conflict of interest would be created, in violation of Section 112.313(7), Florida Statutes.

QUESTION:

Would a prohibited conflict of interest be created were an auditor employed by the Department of Education to teach a course for a school district whose programs are audited by her under the Florida Education Finance Program?

Your question is answered in the affirmative.

In your letter of inquiry you advise that Mrs. Cynthia Mooneyham has been employed as an Auditor for the Department of Education with the responsibility of auditing programs in school districts financed under the Florida Education Finance Program. As a result of these audits, adjustments may be made in the State funding provided to the school districts. You also advise that the subject employee has requested permission to teach a bookkeeping course in a school district which is one of the auditees in her area of responsibility.

The Code of Ethics for Public Officers and Employees provides in relevant part:

CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP. -- No public officer or employee of an agency shall have or hold any employment or contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business with, an agency of which he is an officer or employee . . . ; nor shall an officer or employee of an agency have or hold any employment or contractual relationship that will create a continuing or frequently recurring conflict between his private interests and the performance of his public duties or that would impede the full and faithful discharge of his public duties. [Section 112.313(7)(a), Florida Statutes (1981).]

This provision prohibits a public employee from having any employment with an agency which is subject to the regulation of her agency and from having any employment which would create a continuing or frequently recurring conflict of interest.

In a telephone conversation with our staff, you advised that the subject employee is employed within an internal auditing unit of the Division of Administration of the Department of Education. This unit, together with the Division of Public Schools and the Division of Vocational Education, is responsible for auditing school district programs and data reported by school districts in determining the allocation of State funds to school districts under the Florida Education Finance Program. Section 236.081, Florida Statutes, and Rule 6A-1.453, F.A.C. Upon receipt of an official audit report, the Director of the Division of Public Schools computes the amount of adjustment to the district's allocation of State funds necessary to compensate for errors or deficiencies noted in the report. The Division then is responsible for making the required adjustments in funding, subject to administrative proceedings in the event the district disputes the adjustments. Rule 6A-1.453, F.A.C.

We find that the subject employee's "agency" for purposes of the Code of Ethics is the Division of Administration of the Department of Education. See Section 112.312(2), Florida Statutes, defining the term "agency." However, under the circumstances presented here, we do not find that a school district is subject to the regulation of the Division of Administration. The Division's role is not to regulate, but merely to examine and verify the accuracy of data reported by the School District.

Nevertheless, the subject employee performs an important function in the Department's determination of the amount of funding to be allocated to the District. Both the Department and the school districts are entitled to complete independence and impartiality during the Department's audits of the districts. In our view, this independence would be threatened by partiality toward one's employer, in this case the school district which would employ the subject Auditor. Conflict of interest legislation is founded upon the well- recognized principle that one cannot serve two masters at the same time. City of Coral Gables v. Weksler, 164 So. 2d 260 (Fla. 3d D.C.A. 1964), cert. discharged, 170 So. 2d 844 (Fla. 1964). As determined by the Legislature which enacted the Code of Ethics, "It is essential to the proper conduct and operation of government that public officials be independent and impartial . . . ." Section 112.311(1), Florida Statutes. In our view, employment with an entity which is subject to audit by the subject employee would tend to erode her independence and impartiality. As a result, we perceive that the subject employee's employment as a teacher would create a continuing conflict of interest between her audit responsibilities for the Department and her employment as a teacher within the District, in violation of Section 112.313(7)(a), above.

Accordingly, we find that a prohibited conflict of interest would be created were the subject employee to teach a course for a school district whose programs are audited by her under the Florida Education Finance Program.