CEO 77-2 -- February 1, 1977

CONFLICT OF INTEREST

EXECUTIVE DIRECTOR OF STATE BOARD OF ACCOUNTANCY SERVING ON BOARD OF GOVERNORS OF THE FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS

To: Douglas H. Thompson, Jr., Executive Director, State Board of Accountancy, Gainesville

Prepared by: Phil Claypool

SUMMARY:

Section 112.313(11), F. S. 1975, prohibits a member of a state licensing board for a profession from also serving as an officer or director of a Florida state or regional association of members of that profession. However, the provision does not apply to the Executive Director of the State Board of Accountancy, who is a state employee rather than an officer. However, the legislative intent of the provision clearly is that public officers and employees are agents of the people and hold their positions for the benefit of the public and, accordingly, should not have any interests which are in substantial conflict with the discharge of their public duties. As the goals of a professional licensing board and those of a professional association are not necessarily the same -- as one body exists to protect public interest and the other to protect the interests of members of the profession -- the spirit of the law is to prohibit the potential compromise of the public interest in favor of the special interest. There is little difference in reality between the policymaking authority of the members of a state professional licensing board and the broad administrative and enforcement powers delegated to the executive director of such a board. However, as s. 112.313(11) specifies within its prohibition only board members, the commission cannot rule that it also applies to employees of the board.

The Executive Director of the State Board of Accountancy constitutes a "specified employee" within the meaning of s. 112.3145(1)(b)3., F. S. 1975, and therefore is subject to the disclosure requirements of s. 112.313(9), disclosure of specified interests, and s. 112.3145, disclosure of financial interests and clients represented before agencies.

QUESTIONS:

1. Would a prohibited conflict of interest exist were I to serve as a member of the Board of Governors of the Florida Institute of Certified Public Accountants while being employed as Executive Director of the State Board of Accountancy?

2. What disclosures would be required by the Code of Ethics were I to serve as a member of the Board of Governors of the Florida Institute of Certified Public Accountants while being employed as Executive Director of the State Board of Accountancy?

As to question 1, although we perceive a conflict of interest in your serving in these two capacities, we find that such conflict is not prohibited by law, and accordingly we answer this question in the negative.

You have stated in your letter of request that you are the Executive Director of the State Board of Accountancy and a certified public accountant who is currently President-Elect of the North Central Chapter of the Florida Institute of Certified Public Accountants (FICPA). As president-elect, you will become president of the local chapter in 1977 and thereby will become a member of the FICPA's Board of Governors, the chief governing body of the FICPA. You will not receive any compensation for serving in either position.

The State Board of Accountancy is responsible for the administration and enforcement of Ch. 473, F. S., which concerns public accountancy. Under that chapter the board has the authority to examine and certify public accountants, to prescribe standards of professional conduct, to provide continuing educational programs, to investigate violations of Ch. 473, and to revoke certifications. As executive director of the board, you are its chief administrative officer, you are responsible for drafting its regulations, and you implement all board decisions.

The FICPA is a voluntary, private, incorporated association of certified public accountants which has no functions delegated to it by the state. The purpose of the FICPA, as set out in Art. II of its charter, includes promoting higher standards in accountancy, safeguarding the interests of the members, encouraging fair enforcement of laws relating to accountancy, promoting closer relations between accountants and business and the public, and upholding the ethical and educational standards of the profession. You have acknowledged that the FICPA does engage in lobbying activities before the Legislature and occasionally takes positions on issues concerning the State Board of Accountancy.

Under its charter and bylaws, the Board of Governors of the FICPA has charge of the corporation's business, although its officers manage its affairs. The board of governors also has the authority to fill vacancies among the officers, to amend the charter and bylaws, and to make recommendations to the Governor for the appointment of the members of the State Board of Accountancy, among other powers and duties.

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

PROFESSIONAL AND OCCUPATIONAL LICENSING BOARD MEMBERS. -- No officer, director, or administrator of a Florida state, county, or regional professional or occupational organization or association, while holding such position, shall be eligible to serve as a member of a state examining or licensing board for the profession or occupation. [Section 112.313(11), F. S. 1975.]

This provision prohibits a member of a state licensing board for a profession from also serving as an officer or director of a Florida state or regional association of members of that profession. As you are the Executive Director of, and are not a member of, the State Board of Accountancy, which is a professional licensing board, this provision does not apply to you. However, the legislative policy behind this provision is clear; public officers and employees are agents of the people and hold their positions for the benefit of the public. Public officials must be independent and impartial and they should not have any interests, financial or otherwise, which are in substantial conflict with the proper discharge of their duties in the public interest. Section 112.311, F. S. Consequently, members of a professional licensing board are prohibited from active involvement as officers or directors in a state, regional, or county professional association. The reason for this prohibition is that the goals of each body, while they may not always conflict, necessarily clash at some point -- one body exists to protect the public and the other to protect the interests of its members.

The conflict is apparent between the State Board of Accountancy and the FICPA. The board was created to protect the public. For example, the purpose of the rules promulgated by the board is

to promote and protect the public interest by implementing Chapter 473, Florida Statutes, to better define and more clearly specify portions thereof for the guidance of certified public accountants and those persons who rely upon the services of certified public accountants. [Rule 21A-1.01, F.A.C.]

On the other hand, one of the objects and purposes of the FICPA, as set forth in Art. II of its charter, is to safeguard the interests of the members of the corporation. These purposes may directly conflict in at least two situations. First, the FICPA engages in lobbying for legislation which directly affects the powers and responsibilities of the board, and all communications in respect to state or federal legislation to a legislative body or member thereof must be approved by the Board of Governors of the FICPA, according to its bylaws.

Secondly, the Board of Governors of the FICPA approves and submits the names of certified public accountants to the Governor for appointment to the State Board of Accountancy, although the Governor retains full discretion in these appointments.

We perceive little difference in reality between the policymaking authority of the members of a state professional licensing board and the broad administrative and enforcement powers delegated to the executive director of such a board. However, the Legislature has made that distinction in s. 112.313(11), F. S., and we have been charged by law to determine the application of the Code of Ethics as it has been established by the Legislature.

Since s. 112.313(11) does not apply to an executive director and since your situation does not present any issues which are addressed by the other provisions of the Code of Ethics, we find that no prohibited conflict of interest would exist were you to serve as a member of the Board of Governors of the Florida Institute of Certified Public Accountants.

As to question 2, the Code of Ethics for Public Officers and Employees specifies four types of disclosures that must be made when appropriate. As Executive Director of the State Board of Accountancy, you are a public employee and also a "specified employee," as defined by s. 112.3145(1)(b)3., F. S. (1976 Supp.). Therefore you are subject to the disclosure requirements of s. 112.313(9), disclosure of specified interests, and of s. 112.3145, disclosure of financial interests and clients represented before agencies.

However, since neither of these sections requires disclosure of your service as an officer or director of your professional association, there is no special disclosure you must make as a result of your serving as a member of the Board of Governors of the FICPA. Please note that as executive director you are still required to comply with ss. 112.313(9) and 112.3145, F. S., which means that you are required to file financial disclosure and that you are required to disclose clients represented before state agencies and specified business interests where appropriate.