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NYS Comptroller

THOMAS P. DiNAPOLI

The Academy for New York State's Local Officials

Protecting the Public’s Interest: A Tutorial on Local Government Ethics and Transparency in New York State

Module 1 - Conflict of Interest of Municipal Officers and Employees

Prohibition on Interests in Contracts

Article 18 of the General Municipal Law limits the ability of municipal officers and employees to enter into contracts in which both their personal financial interests and their public powers and duties come into play. It does so by prohibiting municipal officers and employees from having interests in contracts with the municipality for which they serve, but only under certain circumstances.

The general rule is that, unless a statutory exception applies, a municipal officer or employee is prohibited from having an interest in a contract when he or she has certain official powers or duties relating to the contract. To apply the general rule, you need to answer four questions. Let’s hear what Mark has to say about these four questions.

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(Text for Video - Prohibition of Interests in Contracts)

As Mark has explained, there are four basic questions that need to be addressed when determining whether a municipal officer or employee has a prohibited interest in a contract:

  1. Is there a “contract”?
  2. Does the officer or employee have an “interest” in the contract?
  3. Does the officer or employee have any of the powers or duties that can give rise to a prohibited interest?
  4. Are any statutory exceptions applicable?

If the first three questions are answered “yes,” then an interest in a contract is prohibited unless one or more statutory exceptions apply.

We will discuss each of these questions in detail in this module.

  Next: What Is a Contract?