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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 3 - Case Studies on Conflicts of Interest

Discussion of Situation 5

The clerk in the town highway superintendent’s office is married to the owner of an equipment repair shop, who operates the business as a sole proprietorship. The clerk’s duties include keeping a record of all highway purchases and checking invoices for accuracy before they are approved by the highway superintendent. It is probable that the town will do business in excess of $750 with the repair shop.

Does the highway department clerk have a prohibited interest in a contract? Why or why not? If she does not, are there any other issues with which the town should be concerned?

The highway department clerk would not have a prohibited interest in a contract with the town.

  1. Each repair would result in a "contract" with the town because: (a) each repair would involve an "agreement" with the town, and (b) each invoice submitted to the town by the clerk’s husband would constitute a a "claim" or "demand" against the town.
  2. The clerk is deemed to have an "interest" in the contracts of her husband.
  3. Because the clerk is subordinate to the highway superintendent, and her duties are limited to recordkeeping and checking invoices for accuracy before approval by the highway superintendent, she does not have Section 801 powers and duties.

Thus, while the highway department clerk would have an "interest" in her husband’s contracts with the town, the interests are not prohibited because the clerk does not have any of the powers and duties that can give rise to a prohibited interest. The clerk, however, would have to disclose both her interest and her husband’s interest in the contracts. The disclosure would have to be written and made publicly to the highway superintendent and the town board.

Other Issues to Consider:

The town’s code of ethics should be examined to determine if it contains any pertinent provisions. To avoid an appearance of favoritism, if the repair contracts are not subject to competitive bidding, the town’s procurement policy and procedures should require solicitation of competition by obtaining quotations or issuing requests for proposals for the repair work. In addition, to maintain the integrity of the highway department’s internal controls, the highway superintendent or another employee should perform the review of the clerk’s husband’s invoices.

  Next: Situation 6