CONFLICT OF INTEREST

SCHOOL BOARD BUDGET ADVISORY COMMITTEE MEMBER
HAVING CONTRACTUAL RELATIONSHIP WITH CHARTER SCHOOL COMPANY

To:        Name withheld at person's request (West Palm Beach)

SUMMARY:

A prohibited conflict of interest is not created where a member of a school board budget advisory committee provides consulting services, through a limited liability company, to a charter school company that has been granted charters to operate schools in a number of school districts, including the school district of the advisory board member. The budget advisory committee member's contractual relationship is with his limited liability company, not the charter school company, so there is no conflict under the first part of Section 112.313(7)(a), Florida Statutes. Because of the budget advisory committee's limited involvement with charter school funding issues and because of the member's focused work for the charter school company, there also is not a conflict of interest under the second part of Section 112.313(7)(a), Florida Statutes. CEO 09-23, CEO 08-07, and CEO 97-7 are referenced.

QUESTION:

Is a prohibited conflict of interest created where a member of a school board budget advisory committee provides consulting services to a charter school company that has been granted a charter to operate by the school district?

Under the circumstances presented, your question is answered in the negative.

You indicate that you have been authorized to seek this opinion on behalf of . . . , who was appointed by a member of the Palm Beach County School Board to serve on the School Board's Budget Advisory Committee. You relate that the appointee was formerly employed by the Palm Beach County School District and, subsequent to his retirement in October 2011, formed a limited liability company that entered into a consulting contract with a charter school company that has been approved to operate charter schools in several school districts, including Palm Beach County. You ask whether he can serve on the Budget Advisory Committee without violating the Code of Ethics for Public Officers and Employees.

Section 112.313(7)(a), Florida Statutes, provides:

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.]

This provision prohibits a public officer from having a contractual relationship with a business entity doing business with or regulated by his agency, and it also prohibits contractual relationships which create continuing or frequently recurring conflicts between private interests and the performance of public duties, or which impede the full and faithful discharge of public duties.

We previously have opined that a charter school is subject to the regulation of, and doing business with, it's sponsoring school district. See CEO 97-7 and CEO 09-23. However, in this situation, the Budget Advisory Committee member has a contractual relationship with his limited liability company which, in turn, is doing business with the charter school company. See CEO 08-07. Although the charter school company is both doing business with and regulated by the School Board, the Budget Advisory Committee member's limited liability company is not. Therefore, we find that the Budget Advisory Committee member does not have a conflict of interest under the first part of Section 112.313(7)(a), Florida Statutes.

The question then, is whether the Budget Advisory Committee member's contractual relationship with his limited liability company and its work for a charter school company creates a prohibited conflict of interest under the second part of Section 112.313(7)(a), Florida Statutes. Under the circumstances you describe, we do not believe that it does. More specifically, you explain that the responsibilities of the Budget Advisory Committee include advising the School Board on the degree to which the superintendent's proposed budget supports best fiscal practices and the School Board's priorities; making recommendations to the School Board on policies and practices related to the presentation, preparation, and execution of the annual budget; providing, at the Board's request, recommendations on special topics or issues related to the budget and fiscal matters; presenting a written report of the Budget Advisory Committee's work; attending budget-related workshops at the School Board's request; collaborating, as appropriate, with other advisory committees; and other budget or fiscal matters as determined by the School Board. You further advise that in the past, the Budget Advisory Committee has not discussed issues relating to charter schools, and that there have been no items before the Budget Advisory Committee directly impacting charter schools. The Budget Advisory Committee has little or no influence on the funding that flows through to charter schools from the Florida Department of Education as the School District is only the fiduciary agent, you explain. Although the Budget Advisory Committee would not be precluded from discussing charter school funding issues in the future, it is unlikely to make recommendations to the School Board to increase funding since, due to State funding reductions, it is currently looking at ways to save the District money rather than to increase expenditures. We also understand that the member's work for the charter school company involves data reporting, with his efforts directed at working on administrative procedures and student data accuracy where he deals primarily with principals and data processors. Therefore, because of the limited focus of the Budget Advisory Committee and because of the Budget Advisory Committee member's focused work for the charter school company, we do not view his circumstances as creating an impermissible overlap with his duties as a member of the Budget Advisory Committee.

Your question is answered accordingly.

ORDERED by the State of Florida Commission on Ethics meeting in public session on March 30, 2012 and RENDERED this 4th day of April, 2012.

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Robert J. Sniffen, Chairman