CEO 97-7 -- March 6, 1997

CONFLICT OF INTEREST

SCHOOL BOARD EMPLOYEE SERVING ON BOARD OF DIRECTORS

OF PROPOSED CHARTER SCHOOL

To: Dorothy J. Orr, Ed.D., Executive Assistant to the Superintendent and Board Liaison (Ft. Lauderdale)

SUMMARY:

A prohibited conflict of interest would be created under Section 112.313(3), Florida Statutes, where a school board employee serves on the board of directors of a charter school which is seeking the school board's approval to operate. The employee would be acting in her private capacity as a member of the charter school's board to sell services to her agency, and the interests of her employer may not always be allied with the charter school. Thus, there is no unity of interests present that would justify applying Section 112.316, Florida Statutes, to exempt the conflict. Section 112.313(7)(a) is inapplicable to the situation because, although the school board may both regulate and do business with a charter school, the director would not receive compensation for serving as a director and therefore would have neither an employment nor a contractual relationship with the charter school.

QUESTION:

Would a prohibited conflict of interest be created were a school board employee to serve on the board of a proposed charter school which must be approved by the school board?

Your question is answered in the affirmative.

In your letter of inquiry, we are advised that you are employed by the Broward County School Board as an Executive Assistant to the Superintendent and Board Liaison. From our review of your position description we recognize that this is a high-level position of significant responsibility and that you report directly to the Superintendent. The materials you submitted also reveal that due to your 40 plus years of experience in education as a teacher, principal, and administrator, you have been asked to serve on the board of directors of a proposed charter school which, pursuant to Section 228.056, Florida Statutes (1996 Supp.), has submitted an application to the School Board for approval. You question whether service on the charter school's board while also employed by the School Board creates a conflict of interest prohibited by the Code of Ethics for Public Officers and Employees.

Charter schools are a recent development in Florida's education system. Legislation was enacted in 1996 permitting the formation and operation of charter schools after they have undergone a rigorous application process culminating in a school board's approval and sponsorship. Thereafter, and for the life of the school's charter, there continues to be substantial interaction between the school board and the charter school, particularly since students enrolled in a charter school are funded the same as students enrolled at other public schools in the school district. In essence, school boards reimburse charter schools for the education they provide to their students.

Two provisions of the Code of Ethics govern your inquiry--Sections 112.313(3) and 112.313(7)(a), Florida Statutes. They state:

DOING BUSINESS WITH ONE'S AGENCY.--No employee of an agency acting in his or her official capacity as a purchasing agent, or public officer acting in his or her official capacity, shall either directly or indirectly purchase, rent, or lease any realty, goods, or services for his or her own agency from any business entity of which the officer or employee or the officer's or employee's spouse or child is an officer, partner, director, or proprietor or in which such officer or employee or the officer's or employee's spouse or child, or any combination of them, has a material interest. Nor shall a public officer or employee, acting in a private capacity, rent, lease, or sell any realty, goods, or services to the officer's or employee's own agency, if he or she is a state officer or employee, or to any political subdivision of any agency thereof, if he or she is serving as an officer or employee of that political subdivision. The foregoing shall not apply to district offices maintained by legislators when such offices are located in the legislator's place of business or when such offices are on property wholly or partially owned by the legislator. This subsection shall not affect or be construed to prohibit contracts entered into prior to:

(a) October 1, 1975.

(b) Qualification for elective office.

(c) Appointment to public office.

(d) Beginning public employment.

[Section 112.313(3), Florida Statutes (1995).]

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 or she 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 or her private interests and the performance of his or her public duties, or that would impede the full and faithful discharge of his or her public duties. [Section 112.313(7)(a), Florida Statutes (1995).]

Before addressing Section 112.313(3), let us first state that Section 112.313(7)(a) is inapplicable to your inquiry. Although Section 112.313(7)(a) prohibits a public employee from having an employment or contractual relationship with a business entity which is doing business with or regulated by her agency, because you would not be compensated for serving on the charter school's board, our opinion precedent concludes that you would not have an employment or contractual relationship with the charter school for purposes of Section 112.313(7)(a). See CEO 94-17 and the opinions referenced therein. Thus, notwithstanding whether the School Board regulates charter schools and does business with them, because it clearly does, Section 112.313(7)(a) would not apply to your situation.

Turning now to Section 112.313(3), the first sentence of this provision would prohibit you, acting in your position with the School Board, from purchasing services from the charter school where you serve as a director of the school. However, inasmuch as your official duties as Executive Assistant and Board Liaison do not formally include any involvement in the Board's decision to approve and sponsor a charter school, we view the first portion of Section 112.313(3) as inapplicable to your situation.

The second sentence within Section 112.313(3) would also prohibit you, acting in your private capacity, from selling services to the School Board. School districts provide the funding for charter schools and, in turn, charter schools educate a segment of the school district's student population. In numerous opinions we have opined that a director of a private corporation acts in a private capacity to sell services to her agency when the corporation takes action. In CEO 94-17, we examined whether this language would prohibit an HRS district administrator from serving on the board of a nonprofit corporation contracting with the district. There, we concluded that a "unity of interests" rather than a conflict existed and that Section 112.316, Florida Statutes, operated to exempt what otherwise would have been a violation of Section 112.313(3). The criteria we have applied in determining whether it is appropriate to make such a finding include: (1) the individual does not stand to benefit privately; (2) the individual is appointed to the organization's board because of her public position; and (3) the organization was created for the benefit of the individual's agency. See also CEO's 87-5, 85-59, and 81-40. However, with the exception of the first element, these criteria are not present in your situation.

Although it may be advantageous for the charter school to have a School Board employee serving on its board, neither the law authorizing charter schools nor the School Board's policy implementing Section 228.056 suggest that the directors of a proposed charter school should be comprised of School Board administrators. Further, although charter schools and traditional schools share the same mission of educating students, charter schools are intended to achieve that objective differently, with fewer constraints, than traditional public schools. Therefore, we do not find there to be a "unity of interests" between your employment with the School Board and your service on the board of directors of a charter school that would justify the application of Section 112.316, Florida Statutes, to exempt you from the prohibition of Section 112.313(3).

Accordingly, we find that a prohibited conflict of interest would be created where you serve on the board of directors of a charter school seeking approval and sponsorship by your employer, the School Board.

ORDERED by the State of Florida Commission on Ethics meeting in public session on March 6, 1997, and RENDERED this 12th day of March, 1997.

_____________________________

Mary Alice Phelan

Chair