CEO 87-45 -- June 11, 1987

CONFLICT OF INTEREST

DHRS EMPLOYEE SERVING AS DIRECTOR OF NONPROFIT ORGANIZATION

RECEIVING FUNDING FROM DHRS

To: Lula Brown, Volunteer Services Center Specialist, District IV, Department of Health and Rehabilitative Services, Jacksonville

SUMMARY:

No prohibited conflict of interest would be created were a volunteer services center specialist for the Department of Health and Rehabilitative Services to serve on the board of a nonprofit corporation which receives funding from the Department. Noncompensated service as a board member of a nonprofit corporation does not constitute an employment or contractual relationship for purposes of Section 112.313(7)(a), Florida Statutes. Section 112.313(3), Florida Statutes, also would not be violated as the employee has no responsibilities for the contract between the Department and the corporation.

QUESTION:

Would a prohibited conflict of interest be created were you, a volunteer services center specialist for the Department of Health and Rehabilitative Services, to serve on the board of a nonprofit corporation which receives funding from the Department?

Your question is answered in the negative.

In your letter of inquiry you advise that you are a Volunteer Services Center Specialist in District IV of the Department of Health and Rehabilitative Services. In that position, you primarily are responsible for the recruiting, screening, and training of individuals to work in the District's volunteer services program. You have been asked to serve on the board of directors of a nonprofit corporation which provides practical and cultural education for dependent and ungovernable adolescent girls. You would receive no compensation for serving as a director. You also advise that D.H.R.S. has contracted with the organization and provides some of its funding. However, in your position with the Department you have no responsibilities regarding contracts.

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 (1985).]

This provision would prohibit you from having any employment or contractual relationship with a business entity which is doing business with your agency. As the Commission previously has advised, noncompensated service on the board of directors of a nonprofit corporation does not constitute an employment or contractual relationship with that entity. See CEO 82-37. Therefore, no conflict of interest would exist under this Code of Ethics provision.

The Code of Ethics also provides:

DOING BUSINESS WITH ONE'S AGENCY. -- No employee of an agency acting in his official capacity as a purchasing agent, or public officer acting in his official capacity, shall either directly or indirectly purchase, rent, or lease any realty, goods, or services for his own agency from any business entity of which he or his spouse or child is an officer, partner, director, or proprietor or in which such officer or employee or his 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 his own agency, if he is a state officer or employee, or to any political subdivision or any agency thereof, if he 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. 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 (1985).]

Under this provision, a public employee may not act in a private capacity to rent, lease, or sell any realty, goods, or services to her own agency. We previously have advised that a public employee is acting in a private capacity whenever a corporation of which she is a director takes action. See CEO 82-37. In CEO 82-9, the Commission advised that where a department has the responsibility of providing for specified services to a particular clientele, a contract with another entity to provide those services is a purchase of those services for the department. Here, your agency is contracting with the nonprofit corporation to provide educational services to adolescent girls. Therefore, you seemingly are prohibited from serving on the board of directors.

However, you have no involvement in the contractual relationship between the nonprofit corporation and your agency. When construing provisions of the Code of Ethics, the following section must be taken into account:

CONSTRUCTION. -- It is not the intent of this part, nor shall it be construed, to prevent any officer or employee of a state agency or county, city, or other political subdivision of the state or any legislator or legislative employee from accepting other employment or following any pursuit which does not interfere with the full and faithful discharge by such officer, employee, legislator, or legislative employee of his duties to the state or the county, city, or other political subdivision of the state involved. [Section 112.316, Florida Statutes (1985).]

In CEO 85-32, an administrative assistant to the director of a county health department was chairman of the board of directors of a nonprofit corporation which had contracted with a district of D.H.R.S. to provide child day care services. Our conclusion that no conflict of interest existed under Section 112.313(3), Florida Statutes, was supported by the fact that the employee had no involvement with the contract between the nonprofit corporation and the district.

Accordingly, we find that no prohibited conflict of interest would be created were you to serve on the board of directors of the nonprofit corporation while being employed as a Volunteer Services Center Specialist.