Which Kentucky school employees were barred from selling goods or services to their districts in 1994?

Plain-English summary

In 1994, Kentucky's Attorney General interpreted an amended school employee conflict statute. The office said its restriction on doing business with a district applied to employees who could make or meaningfully influence district financial decisions. That included superintendents, assistant superintendents, principals, school council members, and employees who controlled purchases in a narrower area.

The AG contrasted a food service director choosing the quantity and brand of milk with a classroom teacher who merely suggested a textbook or equipment. The director had purchasing influence and fell within the restriction; the teacher ordinarily did not if the suggestion carried no decision-making authority. For employees outside the named leadership positions, the AG said the answer depended on the person's actual duties and influence.

Currency note

This opinion was issued in 1994. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Historical summary

District leaders

The opinion placed superintendents, assistant superintendents, principals, and school council members within the statute because of their broad authority over the district's financial position. It said the 1994 amendment narrowed the former rule that had prohibited all school employees and their spouses from doing business with the system.

Employees controlling particular purchases

The AG said financial authority need not cover the district's entire budget. An employee with power over a category of goods or services, or who recommended expenditure items with real influence, could also be covered. The food service director who determined milk purchases was its example. The opinion said the covered employee and spouse were prohibited from doing business with the district under the provision as it then stood.

Employees offering suggestions

The AG distinguished classroom teachers who suggested instructional materials without power beyond that suggestion. It said they ordinarily fell outside the conflict provision. For other employees, the office called for a case-by-case review of job descriptions and influence over district purchases.

Common questions

Did the 1994 rule apply to every school employee?

No. The AG said the amendment focused the prohibition on employees with decision-making authority over the district's finances, instead of the former all-employee rule.

Could authority over one type of purchase be enough?

Yes. The AG used a food service director who selected the quantity and brand of cafeteria milk as an example of an employee with enough influence to be covered.

Was recommending an expenditure the same as merely suggesting a textbook?

The opinion distinguished them by the employee's actual influence. It treated authority to recommend expenditure items as potentially covered, while a teacher's suggestion without further decision-making power ordinarily was not.

How did the AG say close cases should be assessed?

It said employees outside the named leadership roles required case-by-case analysis of their duties, job descriptions, and influence over district purchases.

Background and statutory framework

Senate Bill 174 amended KRS 156.480(2) during the 1994 General Assembly. The opinion quoted the provision's restriction on a covered employee's pecuniary interest exceeding $25 per year in supplying goods, services, property, or merchandise bought with school funds. The AG read “decision-making authority over the financial position of the school district” by focusing on a person's actual ability to direct or influence spending. It answered two interpretive questions about which employees had that authority and whether its scope mattered.

Citations and references

• KRS 156.480(2): school employee financial conflict provision interpreted by the AG.
• Senate Bill 174: 1994 amendment discussed in the opinion.

Source

• Landing page: https://www.ag.ky.gov/Resources/Opinions/Opinions/OAG94-061.htm

Original opinion text

OAG 94-61

September 8, 1994

Hon. J. Stephen Kirby

Kentucky School Boards Association

260 Democrat Drive

Frankfort, Ky. 40601

Dear Mr. Kirby:

As General Counsel for the Kentucky School Boards Association, you have asked our office for an interpretation of KRS 156.480 which was recently amended in Senate Bill 174 during the 1994 General Assembly and prohibits some school employees from doing business with the school district. Historically, all school employees and their spouses were prohibited from doing business with the school system. Senate Bill 174 greatly reduced the number of employees prohibited from doing business with the school districts and clarified that the conflict provision applies to those employees with decision-making authority over the financial position of the school district.

KRS 156.480(2) was amended by Senate Bill 174 and provides:

No employee of any county or independent school district with decision-making authority over the financial position of the school district shall have any pecuniary interest, either directly or indirectly, in an amount exceeding twenty-five dollars ($25) per year, either at the time of or after his appointment to office, in supplying any goods, services, property, merchandise, or services, except personal services that are in addition to those required by contract for employment, of any nature whatsoever for which school funds are expended. If any person specified in this subsection receives, directly or indirectly, any gift, reward, or promise of reward for his influence in recommending or procuring the use of any goods, services, property, or merchandise of any kind whatsoever for which school funds are expended, he shall upon conviction be fined not less than fifty dollars ($50) nor more than five hundred dollars ($500), and his office or appointment shall without further action be vacant.

In your first question you ask:

1. Which school district employees have "decision making authority over the financial position of the school district" as provided in the new language of KRS 156.480? What are the characteristics of "decision-making authority"?

It is the opinion of this office that an "employee with decision-making authority over the financial position of the school district" includes, first of all, certain school officials with broad authority over the financial position of the school district including the superintendent, the assistant superintendents, principals and school council members.

Other school employees with power to make financial and budgetary decisions with regard to the allocation of funds and the purchase of goods, services, property, or merchandise, also have "decision-making authority." The authority to recommend expenditure items also represents such authority. These employees also have an impermissible conflict and are prohibited pursuant to KRS 156.480(2) from doing business with the school district. An example of a school employee included within the conflict provision of KRS 156.480(2) is a food service director who determines the quantity and brand of milk to be purchased for the cafeteria. This employee has the authority to make a financial decision and could not directly or indirectly do business with the school district. We provide an analysis of this situation in response to your next question.

2. Does the scope of the employee's authority have any effect on whether the employee has decision-making authority?

Yes, we believe that the scope of the school employee's authority is directly related to whether the employee has decision-making authority. The purpose of the conflict provision in KRS 156.480 is to prevent school employees with "influence," or the authority to make certain financial decisions, from using that influence in order to advance their own interests.

As previously mentioned, certain school officials with broad authority over budgetary and financial questions would be covered under the conflict statute regardless of the situation. Additionally some employees make financial decisions only in certain areas; however, in that particular area the employee has a great deal of influence. This latter group of employees is also within the purview of KRS 156.480 as this statute excludes all employees with "decision-making authority" over the financial position of the school district from doing any business with the school system. The employee and his or her spouse would be prohibited from conducting business with the school district.

Except those employees specifically delineated in our response to question one, the determination of whether an employee is included within the conflict provisions of KRS 156.480(2) requires an analysis on a case by case basis.

In order to conclude whether an employee is covered under KRS 156.480(2) it may be necessary to review the employee's job description and determine the extent of influence extended over purchases by the school system. Some school employees, especially classroom teachers, may suggest that the school purchase a particular textbook, lab equipment, art supplies, or athletic equipment but have no decision-making authority beyond the mere suggestion. These school employees would ordinarily not be included within the conflict provisions of KRS 156.480(2). This conflict statute is geared at removing the possibility of personal financial gain from those in charge of expending school funds. This statute should not foreclose the exchange of ideas and recommendations by school employees who are seeking valuable methods of educating children and efficient ways to operate a school system.

Sincerely yours,

CHRIS GORMAN

ATTORNEY GENERAL

Lynne Schroering

Assistant Attorney General