This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.
STATE COMPTROLLER -- Powers and Duties (municipalities - scope of audit authority)
MUNICIPALITIES -- Officers and Employees (authority of State Comptroller to request information for the purpose of determining conflicts of interest)
CONFLICTS OF INTEREST -- Disclosure of Interest (authority of State Comptroller to request information for the purpose of determining conflicts of interest)
STATE CONSTITUTION, ARTICLE V, §1; GENERAL MUNICIPAL LAW, §§33, 34, 800, 801, 802: In connection with the State Comptroller's authority to oversee the accounts of political subdivisions, the Comptroller may request officers and employees of a city to complete a form listing certain outside employment and business interests in order for the Comptroller to determine the possible existence of conflicts of interest.
You ask about the authority of the State Comptroller to obtain information relative to potential conflicts of interest in connection with an examination into the accounts and financial affairs of a city. Specifically, this Office has requested that certain city officers complete a form listing certain outside employment and business interests. You note that while certain officers and employees of municipal corporations with populations of 50,000 or more are required by article 18 of the General Municipal Law to file annual financial disclosure forms (see General Municipal Law, §§810, 811, 812), officers and employees of municipal corporations with populations below 50,000, such as your city, are not required by statute to file such forms.
This Office has previously expressed the opinion that the State Comptroller, in connection with an audit of an off-track betting corporation (OTB), may request officials of an OTB to complete a form listing certain outside employment and business interests in order to determine the possible existence of conflicts of interest (1991 Opns St Comp No. 91-2, p 5). We based our conclusion on the broad scope of the Comptroller's constitutional and statutory powers to supervise the accounts of public corporations, including OTBs (NY Const, art X, §5; Racing, Pari-Mutuel Wagering and Breeding Law, §516; Patterson v Carey, 41 NY2d 714, 395 NYS2d 411; Ronan v Levitt, 73 Misc 2d 35, 341 NYS2d 176 affd 42 AD2d 10, 344 NYS2d 624, mot for lv to app den 33 NY2d 514, 347 NYS2d 1027). Although the Comptroller's constitutional authority in connection with political subdivisions (NY Const, art V, §1) is different from his constitutional authority over other public corporations (NY Const, art X, §5; Patterson, supra), we believe that the conclusion in Opn No. 91-2, supra, is equally applicable to officials of political subdivisions.
Article V, §1 of the State Constitution authorizes the Legislature to assign to the State Comptroller certain powers and duties, including "the supervision of the accounts of any political subdivision of the state". The State Legislature has exercised this delegation of authority, in part, in sections 33 and 34 of article 3 the General Municipal Law. Section 33 of the General Municipal Law provides that the Comptroller shall cause the accounts of officials of municipal corporations to be inspected and examined for such periods as the Comptroller shall deem necessary. Section 34 further provides that the Comptroller shall have power to examine into the financial affairs of municipal corporations, and compel the attendance of persons for purposes of the examination, the production of books and papers, and the taking of testimony under oath (see Levitt v Wanamaker, 12 AD2d 149, 209 NYS2d 75). Article 3 does not prescribe how the Comptroller is to conduct an audit (cf. Ronan, supra, pertaining to a similar grant of authority in Public Authorities Law, §2503). Thus, General Municipal Law, §§33 and 34, like the constitutional and statutory provisions discussed in Opn No. 91-2, supra, constitute a broad grant of authority to the Comptroller with respect to the conduct of an audit.
Given the broad authority conferred upon the Comptroller by article 3 of the General Municipal Law to examine the accounts of municipal officials and the financial affairs of municipal corporations, it is our opinion that the Comptroller can conduct an examination to determine the existence of conflicts of interest of officials of a municipality. Officers and employees of all "municipalities", regardless of population, are prohibited in certain circumstances from having interests in contracts of the municipality (see General Municipal Law, §§800, 801, 802) and are required to disclose certain interests in contracts (see General Municipal Law, §803). There is nothing in the financial disclosure provisions of article 18 of the General Municipal Law which in any way restricts the audit powers of the State Comptroller and, hence, the Comptroller's authority to request information from municipal officials relevant to potential conflicts of interest. Consequently, we believe that it is a reasonable and proper exercise of the Comptroller's discretion to request municipal officials to identify their outside employment and business interests because the information is reasonably related to the subject matter of the examination (cf. Levitt, supra). In the event that our request is not complied with, the Comptroller, pursuant to his authority to compel testimony under oath, could obtain the information pertaining to outside employment and business interests by subpoena (General Municipal Law, §34; State Finance Law, §9).
January 8, 1992
William R. Bridgeo, City Manager
City of Canandaigua