Can a city audit committee meet in closed session to protect sensitive information?

Plain-English summary

Representative Justin Boyd asked whether a municipal audit committee could close a meeting because an investigation involved private or sensitive information. Attorney General Leslie Rutledge answered no for the committee she understood him to mean: one composed of members of a city council or board of directors. She treated that audit committee as a governing body covered by Arkansas FOIA's open-meetings rule. Adding people from outside the council would not change her answer for that committee.

The AG listed four limited grounds for executive sessions: certain personnel matters, state licensing examinations, security of public water systems and municipally owned utilities, and meetings of the General Assembly's Child Maltreatment Investigations Oversight Committee. General sensitivity or privacy concerns were not among those grounds. The opinion does not decide that any particular audit topic qualified for an enumerated exception.

Currency note

This opinion was issued in 2018 and addresses the committee described in Boyd's question. Check current Arkansas open-meetings law and the committee's actual membership before deciding whether a particular meeting may close.

Background and statutory framework

Ark. Code Ann. § 25-19-106(a) required meetings of municipal governing bodies to be public unless a specific law provided otherwise. The AG relied on the statute's limited executive-session categories. She also cited Arkansas Gazette Co. v. Pickens and attached an earlier AG opinion, 2014-124, about subgroups of public bodies.

The attached 2014 opinion discusses several types of subgroup and how their records and meetings may be treated. The 2017 letter makes a narrower application: Boyd's audit committee appeared to include city council or board members, so the AG concluded its meetings were subject to the open-meetings rule even if some outsiders also served on it.

The AG's reasoning

Committee membership. The AG assumed the audit committee included members of the city's governing body. On that stated assumption, she considered it a governing body for FOIA purposes. Her footnote says the same open-meeting requirement would apply if the audit committee also included outside members.

Reason for closing. The proposed reason was that public discussion of the review or investigation might be harmful or sensitive. The AG said generalized privacy and sensitivity did not justify an executive session. A committee would need an applicable statutory ground for closing a meeting.

Limited exceptions. The opinion identifies personnel matters, state licensing examinations, public water and municipal-utility security, and the specified legislative child-maltreatment oversight committee. The opinion does not analyze whether a particular personnel matter was on Boyd's committee's agenda.

Common questions

Can an audit committee close a meeting just because the audit is sensitive?

No, for the council-member committee the AG described. The letter says generalized sensitivity or privacy concerns do not supply an executive-session ground.

Does adding an outside auditor change the answer?

The AG said no for a committee that includes city council or board members. Her footnote treats such a committee as a partial subgroup subject to the same open-meeting rule.

What if the committee only makes recommendations?

The letter does not make its audit-committee conclusion turn on a finding of actual decision-making power. It treats the committee's inclusion of city governing-body members as sufficient on the stated facts. The attached 2014 opinion discusses decision-making authority for other subgroup arrangements; it should not be read as a finding about this audit committee's powers.

What happens if a committee improperly meets in private?

This opinion does not decide the remedies or penalties for a violation. It answers whether the stated privacy and sensitivity reasons permit the described committee to close its meeting.

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

STATE OF ARKAN SAS
ATTORN EY GENERAL
LESLIE RUTLED GE
Opinion No. 2017-118

January 3, 2018

The Honorable Justin Boyd
State Representative
1509 South 37th St.
Fort Smith, AR 72903-2946

Dear Representative Boyd:

This is in response to your request for an opinion on the following question:

Under current Arkansas law, is it permissible for an audit committee of a city, town, or municipality to hold an executive session or meeting that is closed to the general public due to privacy or sensitivity concerns lest any public release of said information could severely or harmfully affect the underlying review/investigation?

RESPONSE

I take it from your question that this "audit committee" is composed of members of a city's governing body. In this light, the answer to your question is "no," in my opinion. It is not permissible for an audit committee so comprised to hold an executive session (that is, a meeting that is closed to the public) because of generalized privacy or sensitivity concerns. The Freedom of Information Act ("FOIA") provides limited grounds for holding an executive session, and privacy or sensitivity concerns are not among those grounds.

DISCUSSION

In Op. Att'y Gen. 2014-124, which I have attached for your convenience, my predecessor in this office analyzed the FOIA in detail as it relates to meetings held by governing bodies of entities subject to the FOIA. Given that the law remains the same in all material respects, it is unnecessary to repeat the entirety of that analysis.

323 CEN TER STREET. SU ITE 200 · LI TTLE RO C K. ARKAN SAS 7220 1 TELE PH ONE (50 1) 682-2007 ·FAX (501) 682-8084 ARKAN SASAG. GOV

The Honorable Justin Boyd
State Representative
Opinion No. 2017-118
Page 2

Because your question, as you have posed it, appears to implicate the open- meetings portion of the FOIA, I take it that this "audit committee" is composed of members of a city council or board of directors, and would, therefore, be a governing body for purposes of the FOIA. 1 Ark. Code Ann. § 25-19-106 (Repl. 2017) contains the FOIA's requirements for open meetings with respect to governing bodies:

Except as otherwise specifically provided by law, all meetings, formal or informal, special or regular, of the governing bodies of all municipalities, counties, townships, and school districts and all boards, bureaus, commissions, or organizations of the State of Arkansas, except grand juries, supported wholly or in part by public funds or expending public funds, shall be public meetings. 2

However, the Act permits "executive sessions"-meetings closed to the public- based on four limited categories of exemptions: consideration of certain personnel matters, preparation and administration of state licensing examinations, discussion of the security of public water systems and municipally owned utility systems, or meetings of the General Assembly's Child Maltreatment Investigations Oversight Committee. 3 It thus follows, in my opinion, that general sensitivity or privacy concerns do not justify executive sessions. 4 Only the above-referenced statutory grounds would justify executive sessions.

1
The inclusion of members of the city council or city board of directors warrants the determination, in my opinion, that the audit committee is a governing body under the FOIA. See generally Arkansas Gazette Co. v. Pickens, 258 Ark. 69, 522 S.W.2d 350 (1975). This outcome does not change even if some members from outside the city council are members of the audit committee. In such a case, the audit committee would still be a "partial subgroup" for purposes of the FOIA, and its meetings would fall under the same open meeting requirement, subject to the same narrowly-tailored exemptions. See Op. Att'y Gen. 2014-124. 2 Ark. Code Ann.§ 25-19-106(a).
3
Id. at§ 25-19-106(c)(I), (5), (6) and (7). See also John J. Watkins, Richard J. Peltz-Steele, & Robe1t Steinbuch, THE ARKANSAS FREEDOM OF INFORMATION ACT 346-47 (Arkansas Law Press, 6th ed., 2017). Section 25-19-106(a) likewise "includes a provision incorporating other statutes that specifically provide for closed meetings, but few statutes fall into that category." Watkins, et al. at 347. 4 Op. Att'y Gen. 2006-194 ("The sensitivity of the matters discussed is irrelevant, in my opinion."). See also Watkins, et al. at 347 (stating that "a city council, state board, or other entity may find itself discussing potentially sensitive matters in an open session.").

The Honorable Justin Boyd
State Representative
Opinion No. 2017-118
Page 3

Because an "audit committee" as contemplated and considered in this opinion is a governing body for purposes of the FOIA, its meetings must be open to the public absent an exemption under the FOIA justifying an executive session. And because the grounds on which executive sessions may be held are so limited, it is my opinion that it is impermissible for the audit committee to hold an executive session based on generalized privacy or sensitivity concerns.

Sincerely,

~ /A--
RUTLED~E 0
LESLIE
Attorney General

Enclosure

STATE OF ARKANSAS
THE ATTORNEY GENERAL
DusnN McDANIEL

Opinion No. 2014-124

November 19, 2014

The Honorable Linda P. Chesterfield
State Senator

12 Keo Drive

Little Rock, Arkansas 72206

Dear Senator Chesterfield:

You have asked for my opinion regarding the following two questions on the Freedom of Information Act (FOJA):

1. Under Arkansas law, when the state board of a state agency appoints (or nominates) a committee/subcommittee to serve in any capacity, is the committee/subcommittee and any actions taken by it or its members subject to the FOIA?

2. Under Arkansas law, when the state board of a state agency appoints (or nominates) a committee/subcommittee to serve in any capacity, arc the committee/subcommittee meetings open to the public?

RESPONSE

I must start by clarifying your first question. The FOIA applies to all government organizations, including groups created by or from such organizations. Strictly speaking, therefore, a committee or subcommittee of a state agency is "subject to the FOIA." Your first question seems to be asking whether such a group's records qualify as ''public records" under the FOJA. And your second question is whether such a group's meetings qualify as "public meetings" under the FOJA. 1 1 Because you do not ask, I will not address any potential records exemptions or meetings provisions that might allow the meetings to be held in closed session (i.e. an "executive session").

323 CENTER STREET, SUITE 200 • L!ITLE ROCK, ARKANSAS 7220 I TELEPHONE (501) 682-2007 •FAX (501) 682-8084 INTERNET WEBSITE. http://www.ag.state.ar.us/

The Honorable Linda P. Chesterfield
State Senator
Opinion No. 2014-124
Page 2

There are three general types of groups created by or from a public organization. Depending on the facts, the FOIA applies differently to each type:

• Type I-complete subgroup. This type of group is composed entirely of members from the parent, governing body. The records and meetings of a complete subgroup are both subject to the FOIA. 2 So, if you are asking about a complete subgroup, then the answer to both your questions is "yes."

• Type 2-partial subgroup. This type of group is composed of more than one member of the parent body together with members from outside the governing body. The records of a partial subgroup arc subject to the FOIA. 3 Whether a partial subgroup's meetings are subject to the FOJA. ordinarily depends on the nature of the group's decision-making authority, which is explained more fully below. So, if you arc asking about a partial subgroup, then the answer to your first question is "yes," and the answer to your second question depends on the analysis below.

• Type 3-outsiclc group. This type of group has no members of the parent body and is composed entirely of members who arc selected from outside the parent body. The records of an outside group that was created by the parent, governmental body are subject to the FOIA.. 4 Whether a partial subgroup's meetings are subject to the FOIA depends on the nature of the

' This is because the Type I group, which essentially is the parent body on a smaller scale, is itself a governmental body. See generally Arkansas Gazette Co. v. Pickens, 258 Ark. 69, 522 S.W.2d 350 (1975); John J. Watkins & Richard J. Peltz, THE ARKANSAS FREEDOM Of INFORMATION ACT 77-79, 84 (Arkansas Law Press, 5th ed., 2009) ("ln ... Pickens, the Court held that committees made up of members of a governing body must meet in public, even if they possess only the power to make recommendations."); Op. Att'y Gen. Nos. 2003- 170 ("The meetings of a subcommittee made up wholly of members of the governing body must be held in public."), 98- 169 ("If the parent body is subject to the FOIA's open meeting requirements, the same requirement attaches to meetings of subgroups of the governing body."). 1
· This is because the Type 2 group, like most groups created by or from public governing bodies, is supported in whole or part by public funds and is inte1twined with public business. E.g. Watkins & Peltz, supra note 2, at 82 ("Because advisory bodies established by government agencies generally receive direct public funding for their activities and are involved in matters of public concern, their records arc subject to the act.").

The Honorable Linda P. Chesterfield
State Senator
Opinion No. 2014-124
Page 3

group's decision-making authority, which is explained more fully below.
So, if you are asking about an outside group, the answer to your first question is "yes," and the answer to your second question depends on the analysis below.

The only remaining question is whether the meetings of a partial subgroup and an outside group (respectively) are considered "public meetings" under the FOIA. Partial subgroups and outside groups can be classified as either "governing bodies" or "advisory bodies." The FOIA's open-meetings provisions only apply to "governing bodies": "[A]ll meetings, formal or informal, special or regular, of the governing bodies of all. .. organizations of the State of Arkansas ... shall be public meetings." 5 Neither the FOlA nor Arkansas's appellate courts have addressed what it means to be a "governing body." Nevertheless, this office (and the leading commentators on the FOIA) have consistently opined that a governing body is one with decision-making authority. 6

Type 2 and Type 3 groups can have decision-making authority that is either delegated or de facto. An example of the former would be where a search committee was delegated the authority to whittle the entire pool of candidates for a position down to a shorter list and submit the short list to the parent body for its decision from among the remaining candidates. 7 An example of the latter would be where, though no formal decision-making authority was delegated to a Type 2

5
A.C.A. § 25-16-106(a) (emphasis added); Op. Att'y Gen. 2006-059.
6
See Op. Att'y Gen. No. 2006-059; Watkins & Peltz, supra note 2, at 74-85.
7
Op. Att'y Gen. No. 94-339; Baxter County Newspapers, Inc. v. Medical StC!ff of Baxter General J!osp., 273 Ark. 511, 622 S.W.2d 495 (1981) (holding that a committee composed of members entirely outside the parent, governing body must hold open meetings because the committee had been delegated the authority to determine whether doctors could practice at the hospital); Watkins & Peltz, supra, at 84, n 175 (Note: in this footnote the professors treat a search committee as a "de facto" governing body "if it has the power to screen candidates from review by the purported final decision-maker." If the committee has such "power," then it must have been delegated by the parent body. Accordingly, it is probably more accurate to consider such a committee as having delegated authority, not de facto authority. Of course, a similar committee could lack such a delegated power in law (de j ure ), but have it in fact (de facto) ir the parent body automatically accepted the group's short list).

The Honorable Linda P. Chesterfield
State Senator
Opinion No. 2014-124
Page 4

or 3 group upon its creation, the group's recommendations arc "rubber-stamped" by the parent entity. 8

If a Type 2 or 3 group lacks decision-making authority (whether delegated or de facto) then it is considered an "advisory body," which means that it exists only to make recommendations, collect information, or give advice. The upshot of a group being classified as an "advisory body" is that, though its records are subject to the FOIA, its meetings ar.e not. 9 Two leading commentators on the FOIA note that, though this result is "seemingly contradictory," it is required by the language of the FOIA:

Insofar as records arc concerned, the Arkansas courts need not draw a line between a governing body and one that is merely advisory, for the FOIA applies to the records of any entity "wholly or partially supported by public funds or expending public funds." Because advisory bodies established by government agencies [which are the only type under consideration in this opinion] generally receive direct public funding for their activities and are involved in matters of public concern, their records are subject to the act .... A different result is required with respect to the meetings of advisory committees, because the POIA's open meeting provisions apply only 10 to "governing bodics."

In summary, if you are asking about a complete subgroup, then the answer to your two questions is "yes." If you arc asking about either a partial subgroup or an outside group, then the answer to your first question (i.e., whether the records are

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8
See, e.g., Op. Att'y Gen. No. 2003-170, 98-169, 92-241; Watkins & Peltz, supra note 2, at 83-

84. This is, clearly, a highly factual inquiry. Y ct it is important to note that such an inquiry looks
    to the manner in which the parent group reviews (or fails to review) the recommendations, not the mere fact that the parent group reaches the same conclusion as the Type 2 or 3 group. 9 There is one potential exception to this rule when it comes to Type 2 groups. This office has occasionally opined that if the Type 2 group is composed of a "significant number" of members of the parent body, then the group would have to hold open meetings. But this is not because the group was a numerically distinct governing body-advisory bodies simply are not "governing bodies." Rather, th<:! basis for this conclusion is that the group's meetings would essentially be a meeting of the parent body. Tho.ugh such a scenario is probably rare, it is possible. And this ofiice has noted it. See Op. Att'y Gen. Nos. 2000-260, 2003-170, 2006-194. 10
    Watkins & Peltz, supra note 2, at 81--82 (internal citations omitted).

The Honorable Linda P. Chesterfield
State Senator
Opinion No. 2014-124
Page 5

covered) is "yes"; and, with the possible exception mentioned in note nine, the answer to your second question (i.e., whether the meetings are covered) depends on the nature of the group's decision-making authority.

Assistant Attorney General Ryan Owsley prepared this opinion, which I hereby approve.

DM/RO:cyh