CEO 75-215 -- December 15, 1975

CONFLICT OF INTEREST

BOARD MEMBER'S FIRM PREPARING MATERIAL FOR BOARD

To: Douglas H. Thompson, Jr., Executive Director, State Board of Accountancy, Department of Professional and Occupational Regulation, Gainesville

Prepared by: Bonnie Johnson

SUMMARY:

Although s. 112.313(3) prohibits a public officer from acting in his official capacity to purchase services from a business of which he is a partner, the section stipulates that any such contracts entered into prior to the effective date of the law (October 1, 1975) shall not be affected. Therefore, where the State Board of Accountancy contracted with a board member's firm for the preparation of foreign language accounting exams on September 11, 1975, the business arrangement is "grandfathered" in. Prior to October 1, the law prohibited an officer from owning a material interest in any business entity doing business with his public agency. Inasmuch as the subject board member does not own a material interest in the accounting firm, the contract entered into in September was in accordance with the law.

QUESTION:

Does a prohibited conflict of interest exist where the State Board of Accountancy contracted in September of 1975 with Coopers and Lybrand, CPAs, for the preparation of a CPA examination written in Spanish where Mr. Robert C. Ellyson, a member of the State Board of Accountancy, is a member of, and partner in, such firm?

Your question is answered in the negative.

It is our understanding, based on your letter of inquiry, that pursuant to s. 20.30, F. S., the State Board of Accountancy is obliged to offer the state CPA certification examination in Spanish and to provide for the grading of such exams. It was decided by the board, at five public meetings in 1975, that in the interests of security and quality control, the responsibility for preparation of the test would be delegated to a board member, Mr. Robert C. Ellyson, and his firm, Coopers & Lybrand, CPAs. Mr. Ellyson would serve without compensation as project coordinator, the work being performed by five individuals, four of whom are employees of Coopers & Lybrand. A project proposal was submitted to the board by Coopers & Lybrand and was approved at a meeting of the board on September 11, 1975, pending clearance from this commission.

Section 112.313(3), F. S., amended by Ch. 75-208, Laws of Florida, provides as follows:

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 for his own agency purchase, rent, or lease any realty, goods, or services from any business entity of which he, his spouse, or child is an officer, partner, director, or proprietor, or in which such officer or employee, 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, if he is serving as an officer or employee of any political subdivision, to that subdivision or to any agency thereof. 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 nor be construed to prohibit contracts entered into prior to:

(a) The effective date of this act;

(b) Qualifications for elective office;

(d) Beginning public employment (Emphasis supplied.)

Chapter 75-208, Laws of Florida, took effect on October 1 of this year. The agreement to accept the proposal, made on September 11, thus is "grandfathered" in pursuant to the italicized language above and therefore constitutes no violation under the present law.

Prior to October 1, however, s. 112.313(2), F. S. (1974 Supp.), governed business transaction with one's agency. That provision is as follows:

Conflicts Prohibited. -- No public officer or employee of an agency shall own a material interest in any business entity doing business with the agency of which he is an officer or employee, except in those cases when the business is contracted with full public competition and award is made to the lowest or best bidder or to a consultant in accordance with Chapter 287.055, Florida Statutes.

You inform us in your letter of inquiry that Mr. Ellyson is one of 560 partners of Coopers & Lybrand and does not own a material interest in the firm. Therefore, neither was a conflict created in awarding the project to Coopers & Lybrand.