Can the same person serve as a Tennessee county's finance director and as a member of the same county's school board?

Subject

Opinion No. 12-19, Same Individual Serving as County Finance Director and Member of School Board, February 22, 2012

Plain-English summary

District Attorney General Phillips asked the AG whether one person could serve simultaneously as a county finance director (under the County Financial Management System of 1981, an optional local-government structure adopted by various Tennessee counties) and as an elected member of the county school board. The AG said yes, walking through four separate prohibitions and finding none applied.

1. The "no county official on the school board" bar. Tenn. Code Ann. § 49-2-202(a)(2) bars any "county legislative body" member or "any other county official" from serving on the county board of education. But the County Financial Management System of 1981 makes the finance director a county employee "for all purposes." Tenn. Code Ann. § 5-21-106(a)(3). A county employee is not a county official. Tenn. Code Ann. § 5-5-120(c)(1) confirms county employees may hold county legislative offices. So § 49-2-202(a)(2) does not bar a finance-director-employee from serving on the school board. (See also prior AG opinions 05-146, 01-144.)

2. The Local Option Act's specific conflict-of-interest provision. Tenn. Code Ann. § 5-21-121(a) bars the finance director, purchasing agent, committee members, county legislative body members, board of education members, and other officials and employees from being "financially interested" or having a "personal beneficial interest" in any purchase for the county. The AG concluded that the act of voting on a contract as a school board member does not, by itself, give the finance director a financial or personal beneficial interest in the contract. "Financial interest" means an actual personal pecuniary interest. Carter v. Bell (Tenn. 2009). The Court of Criminal Appeals construed "personal beneficial interest" under a parallel statute as a "personally favorable" interest, direct or indirect. State v. Whitehead (Tenn. Crim. App. 2000). Voting as a school board member is the exercise of public duty, not a pecuniary stake.

3. The general conflict-of-interest statute (§ 12-4-101). Same result. The finance director has no direct interest (no contract with himself or with a business he controls) and no indirect pecuniary interest in school board contracts simply because of board-membership voting. Even the possibility that the finance director might process payment of his own school board compensation does not create a § 12-4-101 problem: service as an elected official is not an employment contract. Op. Tenn. Att'y Gen. 00-153.

4. Common-law incompatibility of offices. Tennessee law forbids one person from holding two offices when occupying both is detrimental to the public interest, or when one office controls or supervises the other. State ex rel. Little v. Slagle (Tenn. 1905); State ex rel. v. Thompson (Tenn. 1952) (city manager and city council member were incompatible because the council supervised the manager). Here, the finance director is an employee, not an officer; and neither position appoints, removes, or supervises the other. Their functions overlap (the finance director processes school board financial transactions) but neither directly controls the other. So no common-law incompatibility.

Currency note

This opinion was issued in 2012. 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.

The County Financial Management System of 1981 has been amended several times. Tenn. Code Ann. § 49-2-202 and the conflict-of-interest statutes have also been revised. Anyone facing an actual dual-office situation today should pull current law and consult county ethics counsel.

Background and statutory framework

The County Financial Management System of 1981. Tenn. Code Ann. §§ 5-21-101 to -130. An optional act counties may adopt. It creates a financial management committee (county mayor, supervisor of highways, director of schools, plus four members elected by the county legislative body, § 5-21-104(b)(1)). The committee appoints a county finance director, who is a county employee for all purposes. § 5-21-106(a). The director runs purchasing, payroll, budgeting, accounting, and cash management for the entire county including the school board. §§ 5-21-107, -110, -114, -115, -116, -118.

Conflict provisions.

• § 5-21-121(a) (local-option-act specific): bars financial or personal beneficial interests in any county purchase.
• § 12-4-101(a)(1) (general): bars direct interest in contracts the official has a duty to vote for, let out, look over, or supervise.
• § 12-4-101(b): requires disclosure of indirect pecuniary interest in such contracts.

School board statutes.

• § 49-2-201: school board members are elected officials.
• § 49-2-202(a)(2): bars county legislative body members and county officials from school board membership.
• § 49-2-202(d): county commission sets school board salaries.
• § 49-2-203(a)(2): board "manages and controls" public schools.

Common-law incompatibility. A judge-made rule against holding two offices where the duties of one interfere with the other, or where one office supervises the other.

Common questions

Q: Can the same person be a county finance director and a city council member?
A: The opinion addresses school board membership specifically, but the same logic likely applies to any elected county legislative position the finance director holds. Confirm with current AG opinions and county ethics counsel.

Q: What if the finance director's spouse or business owns property the school board contracts with?
A: That can create both direct and indirect interests in the relevant contracts under § 12-4-101 and § 5-21-121(a). The opinion's clean answer presumed no actual pecuniary stake. Real fact patterns can change the result.

Q: Why is voting on a school board contract not a "personal beneficial interest"?
A: Because the vote is public-duty conduct, not a way to obtain personal benefit. The interest the statute targets is the official's own pocket, not the official's role in approving public expenditures.

Q: Does the finance director need to abstain from processing payments related to school board contracts they voted on?
A: The opinion did not require abstention. It treated the dual role as compatible. Best practice for the cautious dual-office holder is to document the dual capacity and follow strict accounting controls; consult ethics counsel.

Q: Are there counties where this dual service would be banned?
A: A county charter, a private act, or a metropolitan government's charter can impose stricter rules than the general state law. Check local sources before relying on this opinion.

Citations and references

Statutes:

• Tenn. Code Ann. §§ 5-21-101 to -130 (County Financial Management System of 1981)
• Tenn. Code Ann. § 5-21-121(a)
• Tenn. Code Ann. § 12-4-101(a)(1), (b)
• Tenn. Code Ann. § 49-2-202(a)(2)
• Tenn. Code Ann. § 5-5-120(c)(1)

Cases:

• Carter v. Bell, 279 S.W.3d 560 (Tenn. 2009)
• State v. Whitehead, 43 S.W.3d 921 (Tenn. Crim. App. 2000)
• State ex rel. Little v. Slagle, 89 S.W. 326 (Tenn. 1905)
• State ex rel. v. Thompson, 246 S.W.2d 59 (Tenn. 1952)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2012/op12-019.pdf

Original opinion text

Same Individual Serving as County Finance Director and Member of School Board
QUESTION
May an individual serve as county director of finance while also serving on the school
board in a county that has adopted the Financial Management System of 1981?
OPINION
Yes. A county finance director is not "financially interested" and does not have a direct
or indirect "personal beneficial interest" in county school board contracts that he or she may have
approved as a member of the county school board. Thus, the dual service does not violate Tenn.
Code Ann. § 5-21-121(a), the specific conflict of interest provision for the Financial
Management System of 1981. For the same reason, the arrangement does not violate the general
conflict of interest statute, Tenn. Code Ann. § 12-4-101, which prohibits an official from having
a personal financial interest in a contract he or she has a duty to vote for, overlook, let out, or
supervise. No other statute appears to prohibit this dual service, nor does it violate the common
law prohibition against holding incompatible offices.
ANALYSIS
This opinion addresses whether the same individual may serve on the county school
board while also serving as the county finance director in counties that have adopted the local
option County Financial Management System of 1981 (hereinafter the "Local Option Act"). The
Local Option Act creates a financial management committee in a county that adopts it. See Tenn.
Code Ann. §§ 5-21-101 to -130. The committee consists of the county mayor, supervisor of
highways, director of schools, and four members elected by the county legislative body. Tenn.
Code Ann. § 5-21-104(b)(1).
The county financial management committee is charged with establishing policies,
procedures, and regulations in addition to the act's specific provisions for implementing a sound
and efficient financial system for administering county funds. Tenn. Code Ann. § 5-21-104(e).
The system must include budgeting, accounting, purchasing, payroll, cash management, and such
other financial matters as are necessary to an efficient system. Id. The committee appoints a
county director of finance, and "[t]he director shall for all purposes be an employee of the
county." Tenn. Code Ann. § 5-21-106(a)(1) & (3). Subject to the county commission's
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approval, the committee establishes the director’s compensation and may dismiss him or her.
Tenn. Code Ann. § 5-21-106(a)(2) & (c).
The director’s powers and duties are as follows:
(a) The director shall oversee the operation of the department in the functions
established by this chapter, and shall be responsible for the implementation of the
policies of the committees or such special committees established by the county
legislative body.
(b) The director shall, among the director’s duties, install and maintain a
purchasing, payroll, budgeting, accounting and cash financial management system
for the county.
(c) The director shall assist other county officials and employees in achieving an
efficient financial management system for the county.
(d) The director has the authority to hire personnel for the finance department;
provided, that the positions are funded in the annual budget and the personnel so
hired meet the written job requirements as recommended by the director and
approved by the committee.
Tenn. Code Ann. § 5-21-107.
The finance director also prepares the proposed county budget, which is then reviewed by
the budget committee before being presented to the county commission. Tenn. Code Ann. § 5-
21-110. The director must prepare monthly reports for each county department showing its
expenditures under the budget. Tenn. Code Ann. § 5-21-114. Other duties of the director are to
establish a system for preauditing county invoices and to cosign warrants for disbursements of
county funds submitted to the county trustee. Tenn. Code Ann. §§ 5-21-115 & -116. The
director, or a deputy appointed by the director, is the county’s purchasing agent. Tenn. Code
Ann. § 5-21-118.
The Local Option Act’s conflict of interest provision is applicable to the director and
states as follows:
The director, purchasing agent, members of the committee, members of the county
legislative body, or other officials, employees, or members of the board of
education or highway commission shall not be financially interested or have any
personal beneficial interest, either directly or indirectly, in the purchase of any
supplies, materials or equipment for the county.
Tenn. Code Ann. § 5-21-121(a).
County school board members are elected officials. Tenn. Code Ann. § 49-2-201. A
county board of education is authorized, among other powers, to “[m]anage and control all public
approval, the committee establishes the director's compensation and may dismiss him or her.
Tenn. Code Ann. § 5-21-106(a)(2) & (c).
The director's powers and duties are as follows:
The finance director also prepares the proposed county budget, which is then reviewed by
the budget committee before being presented to the county commission. Tenn. Code Ann. § 5-
21-110. The director must prepare monthly reports for each county department showing its
expenditures under the budget. Tenn. Code Ann. § 5-21-114. Other duties of the director are to
establish a system for preauditing county invoices and to cosign warrants for disbursements of
county funds submitted to the county trustee. Tenn. Code Ann. §§ 5-21-115 & -116. The
director, or a deputy appointed by the director, is the county's purchasing agent. Tenn. Code
The Local Option Act's conflict of interest provision is applicable to the director and
legislative body, or other officials, employees, or members of the board of
education or highway commission shall not be financially interested or have any
personal beneficial interest, either directly or indirectly, in the purchase of any
County school board members are elected officials. Tenn. Code Ann. § 49-2-201. A
county board of education is authorized, among other powers, to "[m]anage and control all public
schools established or that may be established under its jurisdiction." Tenn. Code Ann. § 49-2-
203(a)(2). The county commission determines the salary of county school board members.
Tenn. Code Ann. § 49-2-202(d). Tenn. Code Ann. § 49-2-202(a)(2) provides that "[n]o member
of the county legislative body nor any other county official shall be eligible for election as a
member of the county board of education." This statute does not prohibit the finance director
from serving on the county board of education since the director is a county employee "for all
purposes" under Tenn. Code Ann. § 5-21-106(a)(3), as opposed to a county official. See Tenn.
Code Ann. § 5-5-120(c)(1) (stating a county employee is not disqualified from holding a county
legislative office). See also Op. Tenn. Att'y Gen. 05-146 (Sept. 27, 2005); Op. Tenn. Att'y Gen.
01-144 (Sept. 4, 2001) (both concluding a county employee may hold a county legislative office).
The question then becomes whether Tenn. Code Ann. § 5-21-121(a), the Act's specific
conflict of interest provision, prohibits the same person from serving as the county finance
director and as a member of the county board of education. Under this statute, a director may not
be "financially interested" or have a "personal beneficial interest, either directly or indirectly," in
the purchase of any supplies, materials, or equipment for the county. A county finance director
oversees and implements the day-to-day financial operations of all county departments, including
the county school board. The director, thus, is in a position to supervise and implement contracts
and other transactions that he or she voted on as a school board member. This authority would
include contracts for the purchase of supplies, materials, or equipment for the school board. But
the mere voting by a school board member on such contracts does not give rise to the member
actually having a "financial interest" in the contract, which refers to the existence of an actual
personal pecuniary interest. See Carter v. Bell, 279 S.W. 3d 560, 564 (Tenn. 2009) (stating that
when statutory language is clear and unambiguous courts will apply the plain meaning of the
This Office further is on the opinion that the director has no "personal beneficial interest"
in contracts solely because he or she votes on such contracts as a school board member. The
Court of Criminal Appeals considered the meaning of the term "personal beneficial interest" as
used in Tenn. Code Ann. § 5-14-114, another local option county purchasing law. State v.
Whitehead, 43 S.W.3d 921 (Tenn. Crim. App. 2000). The Court found that the statute prohibited
a county official "from having any personally favorable interest in a county contract, regardless
of whether that interest is direct or circuitous." Id. at 929 (emphasis added). A finance director
does not gain a personally favorable interest, either direct or indirect, in a contract by voting on
the contract in his or her official capacity as a school board member. Accordingly, a county
finance director is not "financially interested" and does not have a "personal beneficial interest,
either directly or indirectly" in county school board contracts that he or she may have approved
Nor does any conflict exist under the general conflict of interest law. Tenn. Code Ann. §
12-4-101 (a)(1) states it is unlawful for a person "whose duty it is to vote for, let out, overlook, or
in any manner to superintend any work or any contract" in which a governmental entity may be
interested to be directly interested in such contract. "Directly interested" means "any contract
with the official personally or with any business in which the official is the sole proprietor, a
partner, or the person having the controlling interest." Tenn. Code Ann. § 12-4-101(a)(1).
Page 3
schools established or that may be established under its jurisdiction.” Tenn. Code Ann. § 49-2-
203(a)(2). The county commission determines the salary of county school board members.
Tenn. Code Ann. § 49-2-202(d). Tenn. Code Ann. § 49-2-202(a)(2) provides that “[n]o member
of the county legislative body nor any other county official shall be eligible for election as a
member of the county board of education.” This statute does not prohibit the finance director
from serving on the county board of education since the director is a county employee “for all
purposes” under Tenn. Code Ann. § 5-21-106(a)(3), as opposed to a county official. See Tenn.
Code Ann. § 5-5-120(c)(1) (stating a county employee is not disqualified from holding a county
legislative office). See also Op. Tenn. Att’y Gen. 05-146 (Sept. 27, 2005); Op. Tenn. Att’y Gen.
01-144 (Sept. 4, 2001) (both concluding a county employee may hold a county legislative office).
The question then becomes whether Tenn. Code Ann. § 5-21-121(a), the Act’s specific
conflict of interest provision, prohibits the same person from serving as the county finance
director and as a member of the county board of education. Under this statute, a director may not
be “financially interested” or have a “personal beneficial interest, either directly or indirectly,” in
the purchase of any supplies, materials, or equipment for the county. A county finance director
oversees and implements the day-to-day financial operations of all county departments, including
the county school board. The director, thus, is in a position to supervise and implement contracts
and other transactions that he or she voted on as a school board member. This authority would
include contracts for the purchase of supplies, materials, or equipment for the school board. But
the mere voting by a school board member on such contracts does not give rise to the member
actually having a “financial interest” in the contract, which refers to the existence of an actual
personal pecuniary interest. See Carter v. Bell, 279 S.W. 3d 560, 564 (Tenn. 2009) (stating that
when statutory language is clear and unambiguous courts will apply the plain meaning of the
words used and not force an interpretation that would extend the meaning of the language).
This Office further is on the opinion that the director has no “personal beneficial interest”
in contracts solely because he or she votes on such contracts as a school board member. The
Court of Criminal Appeals considered the meaning of the term “personal beneficial interest” as
used in Tenn. Code Ann. § 5-14-114, another local option county purchasing law. State v.
Whitehead, 43 S.W.3d 921 (Tenn. Crim. App. 2000). The Court found that the statute prohibited
a county official “from having any personally favorable interest in a county contract, regardless
of whether that interest is direct or circuitous.” Id. at 929 (emphasis added). A finance director
does not gain a personally favorable interest, either direct or indirect, in a contract by voting on
the contract in his or her official capacity as a school board member. Accordingly, a county
finance director is not “financially interested” and does not have a “personal beneficial interest,
either directly or indirectly” in county school board contracts that he or she may have approved
as a member of the county school board.
Nor does any conflict exist under the general conflict of interest law. Tenn. Code Ann. §
12-4-101 (a)(1) states it is unlawful for a person “whose duty it is to vote for, let out, overlook, or
in any manner to superintend any work or any contract” in which a governmental entity may be
interested to be directly interested in such contract. “Directly interested” means “any contract
with the official personally or with any business in which the official is the sole proprietor, a
partner, or the person having the controlling interest.” Tenn. Code Ann. § 12-4-101(a)(1).
Page 4
“Controlling interest” includes “the individual with the ownership or control of the largest
number of outstanding shares owned by any single individual or corporation.” Id. Under Tenn.
Code Ann. § 12-4-101(b), a state or local officer must disclose any indirect interest in a contract
that he or she has the official duty to vote for, let out, overlook, or superintend. The statute
includes any contract in which the officer is interested, but not directly so. This Office has stated
that the term “indirectly interested” refers to a pecuniary interest. Op. Tenn. Att’y Gen. 09-175
(November 6, 2009).
For the reasons discussed above, a county finance director does not have a personal,
pecuniary interest in contracts solely because he or she may have voted on such contracts as a
member of the school board. It is possible that the finance director may play some role in
approving payment of his or her compensation as a school board member. But service as an
elected official does not create an employment contract which would invoke the provisions of
Tenn. Code Ann. § 12-4-101, and again under Tennessee law county employees are expressly
allowed to hold a county legislative office. See Tenn. Code Ann. §5-5-102(c)(1). See also Op.
Tenn. Att’y Gen. 00-153 (Oct. 9, 2000) (membership in a county legislative body is not
“employment” as that term is generally defined by state law). For these reasons, one person
holding both of these positions does not violate Tenn. Code Ann. § 12-4-101. Nor does any
other statute appear to prohibit this arrangement.
Finally, in addition to the conflict of interest statutes, there is a common law prohibition
against a public officer=s holding two incompatible offices at the same time. State ex rel. Little v.
Slagle, 115 Tenn. 336, 341, 89 S.W. 326, 327 (Tenn. 1905). The question of incompatibility
depends on the circumstances of each individual case, and the issue is whether the occupancy of
both offices by the same person is detrimental to the public interest, or whether the performance
of the duties of one interferes with the performance of those of the other. 67 C.J.S. Officers § 38
(2011). Tennessee courts have recognized that an inherent inconsistency exists where one office
is subject to the supervision or control of the other. State ex rel. v. Thompson, 193 Tenn. 395,
399, 246 S.W.2d 59, 61 (Tenn. 1952). In Thompson, the Tennessee Supreme Court concluded
that the offices of city manager and member of the city council were incompatible because the
council had the authority to appoint, remove, and supervise the city manager, and no statute then
in effect permitted the same individual to hold these offices. The Court found, therefore, that the
common law principle of incompatible offices prohibited the same individual from acting as city
manager and city council member. Id.
Serving as the county director of finance and as a member of the county school board in a
county that has adopted the Local Option Act does not violate this prohibition. First, under the
statute creating the position, the director of finance is not an official but instead is a county
employee. Second, while the functions of the two positions overlap, neither directly supervises
or appoints the other. Thus, the dual service does not violate the common law prohibition
against the same individual serving in incompatible offices.
ROBERT E. COOPER, JR.
Attorney General and Reporter
"Controlling interest" includes "the individual with the ownership or control of the largest
number of outstanding shares owned by any single individual or corporation." Id. Under Tenn.
Code Ann. § 12-4-101(b), a state or local officer must disclose any indirect interest in a contract
that he or she has the official duty to vote for, let out, overlook, or superintend. The statute
includes any contract in which the officer is interested, but not directly so. This Office has stated
that the term "indirectly interested" refers to a pecuniary interest. Op. Tenn. Att'y Gen. 09-175
For the reasons discussed above, a county finance director does not have a personal,
pecuniary interest in contracts solely because he or she may have voted on such contracts as a
member of the school board. It is possible that the finance director may play some role in
approving payment of his or her compensation as a school board member. But service as an
elected official does not create an employment contract which would invoke the provisions of
Tenn. Code Ann. § 12-4-101, and again under Tennessee law county employees are expressly
allowed to hold a county legislative office. See Tenn. Code Ann. §5-5-102(c)(1). See also Op.
Tenn. Att'y Gen. 00-153 (Oct. 9, 2000) (membership in a county legislative body is not
"employment" as that term is generally defined by state law). For these reasons, one person
holding both of these positions does not violate Tenn. Code Ann. § 12-4-101. Nor does any
Finally, in addition to the conflict of interest statutes, there is a common law prohibition
against a public officer's holding two incompatible offices at the same time. State ex rel. Little v.
Slagle, 115 Tenn. 336, 341, 89 S.W. 326, 327 (Tenn. 1905). The question of incompatibility
depends on the circumstances of each individual case, and the issue is whether the occupancy of
both offices by the same person is detrimental to the public interest, or whether the performance
of the duties of one interferes with the performance of those of the other. 67 C.J.S. Officers § 38
(2011). Tennessee courts have recognized that an inherent inconsistency exists where one office
is subject to the supervision or control of the other. State ex rel. v. Thompson, 193 Tenn. 395,
399, 246 S.W.2d 59, 61 (Tenn. 1952). In Thompson, the Tennessee Supreme Court concluded
that the offices of city manager and member of the city council were incompatible because the
council had the authority to appoint, remove, and supervise the city manager, and no statute then
in effect permitted the same individual to hold these offices. The Court found, therefore, that the
common law principle of incompatible offices prohibited the same individual from acting as city
Serving as the county director of finance and as a member of the county school board in a
county that has adopted the Local Option Act does not violate this prohibition. First, under the
statute creating the position, the director of finance is not an official but instead is a county
employee. Second, while the functions of the two positions overlap, neither directly supervises
or appoints the other. Thus, the dual service does not violate the common law prohibition
Page 5
WILLIAM E. YOUNG
Solicitor General
ANN LOUISE VIX
Senior Counsel
Requested by:
The Honorable Wm. Paul Phillips
District Attorney General, 8th Judicial District
Post Office Box 10, 575 Scott Hugh Drive
Huntsville, Tennessee 37756