June 9, 1998


FACTS:


You are an elected member of a local School Committee. In
addition, you are an unpaid member of the Board of Directors of a
non-profit corporation ("the Non-Profit") which provides various
services to your town's Public Schools as well as other schools in
the area. You have requested an opinion from the Commission
concerning whether, as a School Committee member, you may sign
Schedules of Departmental Bills Payable (Schedules) prepared by the
School Department for payment of vendors (including the Non-Profit)
which provide goods or services to the school system.

The procedure for preparation of the Schedules is as
follows. First, the vendor submits an invoice to the Office of the
Superintendent. The invoice is examined by the administrative
staff in the Superintendent's Office to ensure that it conforms to
the relevant order/contract for services or goods. The invoice is
then either approved for payment, adjusted for payment or returned
unpaid to the vendor. In cases other than those in which the
invoice is returned unpaid, the Superintendent's staff attaches an
account number to the invoice and forwards it to the appropriate
school administrator for review and approval. For example, invoices
for special education services are forwarded to the Special Education
Director. Once the appropriate administrator confirms that the services
were performed and approves the invoice for payment, it is returned to
the Superintendent's office and placed on a Schedule. The Schedule
is then placed in the office of the School Committee and its members
are advised that the Schedule is ready for signature. Town
procedure requires the signature of three of the five members of
the School Committee for approval. The School Committee does not
vote on these Schedules, or, in the normal course, conduct any
review or investigation of matters on the Schedule. Once three
Committee members' signatures are obtained on the Schedule, the
Superintendent's Office delivers the Schedule to the Town
Accountant's Office. Each Schedule states immediately above the
signatures of the Committee members, "To The Accounting Officer:
The following named bills of the School Department have been
approved by the School Committee, and you are requested to place
them on a warrant for payment." The Town Accountant then creates
a warrant for the payment of the accounts which is delivered to the
Board of Selectmen. Three members of the Board of Selectmen must
approve the warrant. Once these signatures are affixed to the
warrant, it is delivered to the Town Treasurer who reviews the
contents against account records and issues the payment check to
the vendor.


QUESTION:


As a School Committee member, may you sign Schedules of
Departmental Bills Payable which include payments to the Non-Profit
despite the fact that you sit on the Non-Profit's Board of
Directors?


ANSWER:


No, because in so doing you would be participating in a
particular matter in which a business organization that you serve
as a director has a financial interest, in violation of G.L. c.
268A, s. 19(a). We also take this opportunity to reconsider the
reasoning of our opinion in EC-COI-87-32, and to the extent it is
inconsistent with our opinion announced today, we reverse
EC-COI-87-32.


DISCUSSION:


G.L. c. 268A, s. 19(a) provides in relevant part that "a
municipal employee who participates as such an employee in a
particular matter[1] in which to his know-ledge he, his immediate
family or partner, a business organization in which he is serving
as an officer, director, trustee, partner or employee . . . has a
financial interest, shall be punished by a fine of not more than
three thousand dollars or by imprisonment for not more than two
years, or both." It is clear that the payment of the Non-Profit's
invoice is a "particular matter" and that the Non-Profit, a
business organization of which you serve as a director, has a
financial interest in this particular matter. The question
remains, however, whether your signing of the warrant constitutes
"participation" in this particular matter within the meaning of the
statute. In essence, this is a question of whether the action of
each Committee member who signs the Schedules is personal and
substantial or merely ministerial.

"Participation" is defined in G.L. c. 268A, s. 1(j) as

participate in agency action or in a particular matter personally
and substantially as a state, county or municipal employee,
through approval, disapproval, decision, recommendation,
the rendering of advice, investigation or otherwise.

The modifying terms "personally and substantially" are not
further defined in the statute. When construing statutory
language, we begin with the plain meaning of the statute. Int'l
Organization of Masters, etc. v. Woods Hole, Martha's Vineyard &
Nantucket Steamship Authority,
292 Mass. 811, 813 (1984); O'Brien
v. Director of DES
, 393 Mass. 482, 487-88 (1984). The relevant
dictionary definition of "personally" from Webster's Third New
International Dictionary (unabridged) is "so as to be personal: in
a personal manner: as oneself: on or for one's own part." The term
"substantial" is defined as "existing as or in substance: material:
important, essential." Accord, Black's Law Dictionary (6th Ed.).

Additionally, in its precedent, the Commission has relied on the
interpretation of the federal Office of Government Ethics in construing
the term "personal and substantial", as the Legislature, in promulgating
c. 268A, sought guidance from and adopted portions of the federal conflict
of interest statute, including the phrase "personal and substantial."
See Report of the Special Commission on Code of Ethics, H. 3650,
March 15, 1962 at 8 (as to format and pattern of proposed conflict
legislation used bill HR 8140 pending in Congress; much of language
of proposed conflict law taken and adopted from federal bill);
EC-COI-87-33 (expressly relying on federal regulation). By regulation,
5 C.F.R. § 2637.201, the Office of Government Ethics has further
described and clarified the phrase "personal and substantial participation"
in a manner consistent with the dictionary definition, stating:

To participate 'personally' means directly, and includes the
participation of a subordinate when actually directed by the
former government employee in the matter. 'Substantially,' means
that the employee's involvement must be of significance to the
matter, or form a basis for a reasonable appearance of such
significance. It requires more than official responsibility,
knowledge, perfunctory involvement, or involvement on an
administrative or peripheral issue. A finding of substantiality
should be based not only on the effort devoted to a matter,
but on the importance of the effort.

In determining whether School Committee members "participate" in the
particular matter of the payment of an item on the schedule of bills payable,
we look to the statutory scheme underlying the process. G.L. c. 41, §56
provides the basis for the procedure followed by the Town of Oxford, as
outlined in the "Facts" section of this opinion. The statute provides in
relevant part:

The selectmen and all boards, committees, heads of departments
and officers authorized to expend money shall approve and transmit
to the town accountant as often as once each month all bills, drafts,
orders and pay rolls chargeable to the respective appropriations of
which they have the expenditure. Such approval shall be given only
after an examination to determine that the charges are correct and
that the goods, materials or services charged for were ordered and
that such goods and materials were delivered and that the services
were actually rendered to or for the town
. . . The town accountant
shall examine all such bills, drafts, orders and pay rolls, and, if
found correct and approved as herein provided, shall draw a warrant
upon the treasury for the payment of the same, and the treasurer
shall pay no money except upon such warrant approved by the
selectmen . . .The town accountant may disallow and refuse to
approve for payment, in whole or in part any claim as fraudulent,
unlawful or excessive, and in such case he shall file with the town
treasurer a written statement of the reasons for such refusal.
The treasurer shall not pay any claim or bill so disallowed by
the town accountant . . . (Emphasis added.)

As set forth above, the duty to determine that the charges are
correct and that goods and services ordered were actually delivered
or rendered falls on the "boards, committees, heads of departments
and officers authorized to expend money," in this case, the School
Committee. Your town has established a system whereby the propriety
of a given bill is determined by the administrator responsible for
that matter and the final Schedule of accounts payable is
thereafter forwarded to the School Committee for a final "sign-off"
by a majority of members of the Committee. In essence, the School
Committee has delegated to school administrators its responsibility
under the statute to determine the correctness of all accounts
payable. Upon receiving the assurance of the appropriate
administrators that the charges are correct, the School Committee
approves them, in the normal course, without further review or
investigation. While this system may be reasonable and efficient
for the conduct of school department business, we do not believe
that it renders the actions of the Committee members merely
ministerial. Where, by statute, it is the responsibility of the
Committee to certify the correctness of accounts payable, the
Committee's decision to delegate this responsibility to school
department staff cannot make the actions of the members of the
Committee who signify their approval of the expenditures by signing
the Schedules insubstantial. G.L. c. 41, s. 56 clearly gives the
members not only the power to approve bills which are correct, but
the concomitant power to disapprove those bills which are not
correct. Such power, whether exercised or implies discretion and
judgment, and removes the signing of the Schedules from the realm
of the ministerial.

We take this opportunity to reconsider our ruling in
EC-COI-87-32. In that opinion, the Commission considered whether
members of a Fire District Prudential Committee could sign a
payroll warrant for firefighters where three Committee members had
immediate family members who were on the payroll. The
authorization process in that case required the fire chief (who was
not a member of the Committee) to review and approve the accuracy
of the payroll and to verify the hours in which each firefighter
performed services during the payroll period. The Commission
concluded that the Committee members may properly sign the payroll
warrants, stating:

In this case the signing of the warrant is peripheral to
the determination of the correctness of the hours worked.
It is the fire chief and not the Committee who certifies the
hours of each firefighter. If the hours are certified by the
fire chief, the firefighter is entitled to the appropriate compensation.
The signing of the warrant which authorizes the paycheck is
therefore ministerial and cannot be characterized as substantial.[2]
If the number of hours certified by the fire chief became an
issue or the subject of dispute, however, then the signing of
the warrant by any member of the Committee could constitute
substantial participation. In such a case abstention will generally
be required if the dispute concerns an immediate family member.
See G.L. c. 268A, s. 19.

The function of a fire district prudential committee, at least
as to the question of expenditure of funds, is equivalent to the
function of the selectmen as to town funds. G.L. c. 48, s. 72
provides: "Such [fire] districts shall choose a prudential
committee, which shall expend, for the purposes prescribed by the
district, the money so raised or borrowed, and shall choose a
treasurer, who shall give bond for the faithful performance of his
official duties in a sum and with sureties approved by the
prudential committees. He shall receive all money belonging to the
district, and shall pay over and account for the same according to
its order or that of the prudential committee."

As is clear from our opinion in EC-COI-87-32, the prudential
committee's power to expend funds necessarily implies the power to
withhold funds for questioned or disputed items. Indeed, as to
selectmen, that power is statutorily explicit. G.L. c. 41, s. 52
provides, in relevant part, that selectmen may "disallow and refuse
to approve for payment, in whole or in part, any claim as
fraudulent, unlawful, or excessive . . ." In Treasurer of Rowley
v. Rowley
, 393 Mass. 1 (1984), the court considered a claim by a
town treasurer that he had the right to disallow a payment
authorized by the selectmen which he considered improper. The
court contrasted the statutory duty of the selectmen to disallow
certain payments under s. 52 with the limited powers of the
treasurer under G.L. c. 41, s. 35 which it deemed "largely
ministerial" and held that the treasurer was without authority to
withhold payment. Id. at 7, quoting Graton v. Cambridge, 259 Mass.
310, 314 (1927). Accord, Weiner v. Boston, 342 Mass. 67, 69
(1961); Lenox v. City of Medford, 330 Mass 593 (1953); King v.
Mayor of Quincy
, 270 Mass. 185, 187 (1930).

In essence, once the prescribed procedure has been followed
by a city council or town board of selectmen or a prudential
committee, the treasurer's duty to disburse funds is mandatory and
not discretionary, and therefore is simply ministerial. The power
of city councilors, town selectmen or prudential committee members
to approve payment warrants, however, includes a large measure of
discretion. For this reason, we do not consider the approval of
payment warrants by members of such bodies to be ministerial.
Rather, such approval is significant and important to the
particular matter, and therefore "participation" within the meaning
of the G.L. c. 268A, s. 1(j).[3] We conclude, therefore, that
individuals who sit on such bodies, or other bodies capable of
authorizing expenditures, may not participate in any particular
matter, including the approval of payment warrants, where such
participation implicates a financial interest under G.L. c. 268A,
s. 19. We note that EC-COI-87-32 was explicitly limited to the
certification of a payroll by an appointing authority which does
not actively supervise employees. We recognize, however, that the
reasoning of EC-COI-87-32 is inconsistent with the reasoning of the
opinion we reach in this case. Therefore, to the extent
EC-COI-87-32 is inconsistent with the opinion we announce today,
we now reverse.

Based on the foregoing, we conclude that you may not approve
(in this case, by signing) Schedules of accounts payable which
include payments to the Non-Profit, because in so doing you would
be participating personally and substantially in a matter in which
a business organization that you serve as a director has a
financial interest, in violation of G.L. c. 268A, s. 19 (a).

------------------------

[1] "Particular matter" is defined as "any judicial or other
proceeding, application, submission, request for a ruling or other
determination, contract, claim, controversy, charge, accusation,
arrest, decision, determination, finding, but excluding enactment
of general legislation by the general court and petitions of
cities, towns, counties and districts for special laws related to
their governmental organizations, powers, duties, finances and
property." G.L. c. 268A, s. 1(k).

[2] This opinion is limited to the certification of a payroll by an
appointing authority which does not actively supervise employees.
[Footnote in original.]

[3] Indeed, "through approval" comprises part of the statutory
definition of "participate." G.L. c. 268A, s. 1(j).

End of Decision