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HomeMy WebLinkAbout10-517 Teti ADVICE OF COUNSEL January 12, 2010 Ralph J. Teti, Esquire Willig, Williams & Davidson Twenty-Fourth Floor 1845 Walnut Street Philadelphia, PA 19103 10-517 Dear Mr. Teti: This responds to your letters dated October 26, 2009, and November 12, 2009, by which you requested an advisory from the Pennsylvania State Ethics Commission. Issue: Whether an individual employed as a Cost Accountant with the City of Philadelphia Streets Department under job class specification 2A27 would be considered a “public employee” subject to the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq., and the Regulations of the State Ethics Commission, 51 Pa. Code § 11.1 et seq., and particularly, the requirements for filing Statements of Financial Interests. Facts: You have been authorized by Andrea Jordan (“Ms. Jordan”) to request an advisory from the Pennsylvania State Ethics Commission on her behalf. You have submitted facts, the material portion of which may be fairly summarized as follows. Ms. Jordan is employed as a Cost Accountant with the City of Philadelphia (“City”) Streets Department under job class specification 2A27. You have submitted a copy of job class specification 2A27 for Ms. Jordan’s position as a Cost Accountant, which document is incorporated herein by reference. Job class specification 2A27 provides, in pertinent part, as follows: GENERAL DEFINITION This is cost accounting work supervising and participating in the development, installation and maintenance of cost accounting systems. Work involves the preparation of cost figures reflecting departmental operations. Contact with departmental officials and technical personnel in developing cost accounting systems and reporting procedures is a significant aspect of the work. Teti/Jordan, 10-517 January 12, 2010 Page 2 Work is performed under the direction of an accounting or an administrative supervisor. Assignments require evaluative thinking and work is performed in accordance with precedents and well defined policies. The employee has responsibility for the analysis of the operational costs of an assigned department and provides management with cost information for use in planning programs and budgets. ------------------------------------------------------ TYPICAL EXAMPLES OF WORK (ILLUSTRATIVE ONLY) Plans, develops, installs and maintains control systems for determining costs of services rendered by assigned department; meets with administrators, accounts [sic], cost accountants and computer personnel to discuss, adapt and install computer processed cost accounting and management information systems; revises systems and develops sub-systems to reflect changes in operations; establishes cost centers, classifications and accounts for the maintenance of records to collect, compute and assign costs to a service, an operational unit or to administrative support. Calculates and assigns costs such as labor, materials and supplies to determine direct costs of services rendered; calculates job order, unit costs and cost data for rate schedules and billing charges to city agencies, governmental jurisdictions, third party payers and private firms. Develops overheads such as equipment or fixed asset depreciation, utility costs, payroll fringe benefits and administrative support services; assigns, analyzes and distributes applicable overheads to job orders and departmental services; distributes overheads using procedures specified by appropriate parties such as the water utility industry and thirty-party [sic] payers. Maintains cost and operational data; measures actual performance against standards; reports costs which reflect possible inefficiency in use of equipment, material and personnel; meets with administrators to discuss cost allocations; prepares periodic and special analytical cost reports relating dollar costs with operational data for specific service units, departmental functions or proposed service contracts. Plans, assigns and reviews the work of a group of subordinates engaged in maintaining payroll, labor cost and inventory control data; implements new accounting procedures; trains subordinates and reviews their work for completeness and accuracy. Performs related work as required. . . . . Job Class Specification 2A27, at 1-2. You state that Ms. Jordan provides financial reporting regarding grants secured by the Streets Department, monitors accounts receivable, and attends meetings regarding her analyses. You state that Ms. Jordan does not make decisions on the day- Teti/Jordan, 10-517 January 12, 2010 Page 3 to-day finances of the Streets Department. You state that Ms. Jordan does not have responsibility over funding for the Street Department and that she does not write or secure grants. You state that Ms. Jordan does not have responsibility over vendor contracts or purchasing of materials or other items for the Streets Department. You state that Ms. Jordan is not the supervisor of the highest level in the Streets Department where she is assigned or of the division in which she works. Ms. Jordan is supervised by higher level person(s) within the Streets Department. You assert that Ms. Jordan does not have the authority to make final decisions or to forward or stop recommendations from being sent to final decision makers and that she does not make recommendations or take such actions that would affect other departments, divisions or commissions within the City. You further assert that an individual employed in the position of Cost Accountant is not responsible for taking or recommending official action of a nonministerial nature that would bring such individual within the definition of “public employee” as set forth in the Ethics Act. Based upon the above, you ask whether Ms. Jordan, in her position as a Cost Accountant with the City Streets Department under job class specification 2A27, would be considered a public employee subject to the Ethics Act, and in particular, the requirements for filing Statements of Financial Interests pursuant to the Ethics Act. Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all of the material facts. The Ethics Act defines the term “public employee” as follows: § 1102. Definitions "Public employee." Any individual employed by the Commonwealth or a political subdivision who is responsible for taking or recommending official action of a nonministerial nature with regard to: (1) contracting or procurement; (2) administering or monitoring grants or subsidies; (3) planning or zoning; (4) inspecting, licensing, regulating or auditing any person; or (5) any other activity where the official action has an economic impact of greater than a de minimis nature on the interests of any person. The term shall not include individuals who are employed by this Commonwealth or any political subdivision thereof in teaching as distinguished from administrative duties. Teti/Jordan, 10-517 January 12, 2010 Page 4 65 Pa.C.S. § 1102. The Regulations of the State Ethics Commission similarly define the term “public employee” and set forth the following additional criteria: (ii) The following criteria will be used, in part, to determine whether an individual is within the definition of "public employe": (A) The individual normally performs his responsibility in the field without onsite supervision. (B) The individual is the immediate supervisor of a person who normally performs his responsibility in the field without onsite supervision. (C) The individual is the supervisor of a highest level field office. (D) The individual has the authority to make final decisions. (E) The individual has the authority to forward or stop recommendations from being sent to the person or body with the authority to make final decisions. (F) The individual prepares or supervises the preparation of final recommendations. (G) The individual makes final technical recommen- dations. (H) The individual's recommendations or actions are an inherent and recurring part of his position. (I) The individual's recommendations or actions affect organizations other than his own organization. (iii) The term does not include individuals who are employed by the Commonwealth or a political subdivision of the Commonwealth in teaching as distinguished from administrative duties. (iv) Persons in the following positions are generally considered public employes: (A) Executive and special directors or assistants reporting directly to the agency head or governing body. (B) Commonwealth bureau directors, division chiefs or heads of equivalent organization elements and other governmental body department heads. (C) Staff attorneys engaged in representing the department, agency or other governmental bodies. Teti/Jordan, 10-517 January 12, 2010 Page 5 (D) Engineers, managers and secretary-treasurers acting as managers, police chiefs, chief clerks, chief purchasing agents, grant and contract managers, administrative officers, housing and building inspectors, investigators, auditors, sewer enforcement officers and zoning officers in all governmental bodies. (E) Court administrators, assistants for fiscal affairs and deputies for the minor judiciary. (F) School superintendents, assistant superintendents, school business managers and principals. (G) Persons who report directly to heads of executive, legislative and independent agencies, boards and commissions except clerical personnel. (v) Persons in the following positions are generally not considered public employes: (A) City clerks, other clerical staff, road masters, secretaries, police officers, maintenance workers, construction workers, equipment operators and recreation directors. (B) Law clerks, court criers, court reporters, probation officers, security guards and writ servers. (C) School teachers and clerks of the schools. 51 Pa. Code § 11.1. Status as a "public employee" subject to the Ethics Act is determined by an objective test. The objective test applies the Ethics Act’s definition of the term “public employee” and the related regulatory criteria to the powers and duties of the position itself. Typically, the powers and duties of the position are established by objective sources that define the position, such as the job description, job classification specifications, and organizational chart. The objective test considers what an individual has the authority to do in a given position based upon these objective sources, rather than the variable functions that the individual may actually perform in the position. See, Phillips v. State Ethics Commission, 470 A.2d 659 (Pa. Commw. Ct. 1984); Eiben, Opinion 04-002;Shienvold, Opinion 04-001; Shearer, Opinion 03-011. The Commonwealth Court of Pennsylvania has specifically considered and approved the Commission’s objective test and has directed that coverage under the Ethics Act be construed broadly and that exclusions under the Ethics Act be construed narrowly. See, Phillips, supra. The first portion of the statutory definition of “public employee” includes individuals with authority to take or recommend official action of a nonministerial nature. 65 Pa.C.S . § 1102. Likewise, the regulatory criteria for determining status as a public employee, as set forth in 51 Pa. Code § 11.1(“public employee”)(ii), include not only individuals with authority to make final decisions but also individuals with authority to forward or stop recommendations from being sent to final decision-makers; individuals who prepare or supervise the preparation of final recommendations; individuals who make final technical recommendations; and individuals whose recommendations are an Teti/Jordan, 10-517 January 12, 2010 Page 6 inherent and recurring part of their positions. See, e.g., Reese/Gilliland, Opinion 05- 005. Based upon the above judicial directives, the provisions of the Ethics Act, the State Ethics Commission Regulations, and the opinions of the State Ethics Commission, in light of Ms. Jordan’s duties and responsibilities, the necessary conclusion is that in her position as a Cost Accountant with the City Streets Department under job class specification 2A27, Ms. Jordan is a "public employee" subject to the Ethics Act, including the financial reporting and disclosure requirements of the Ethics Act. It is clear that in her capacity as a Cost Accountant under job class specification 2A27, Ms. Jordan has the ability to take or recommend official action of a nonministerial nature with respect to subparagraph (5) within the definition of “public employee” as set forth in the Ethics Act, 65 Pa.C.S. § 1102. The following duties and authority establish Ms. Jordan’s status as a public employee: ? Performing cost accounting work supervising and participating in the development, installation and maintenance of cost accounting systems; ? Analyzing the operational costs of an assigned department and providing management with cost information for use in planning programs and budgets; ? Developing, installing and maintaining control systems for determining costs of services rendered by assigned department; ? Revising systems and developing sub-systems to reflect changes in operations; ? Calculating and assigning costs and developing and assigning overheads to job orders; ? Calculating job orders, unit costs and cost data for rate schedules and billing charges to City agencies, governmental jurisdictions, third party payers and private firms; ? Supervising and reviewing the work of a group of subordinates engaged in various accounting functions/operations; ? Implementing new accounting procedures; and ? Monitoring accounts receivable. The foregoing duties/authority would also meet the criteria for determining Ms. Jordan’s status as a public employee under the Regulations of the State Ethics Commission, specifically at 51 Pa. Code § 11.1, “public employee,” subparagraphs (i) and (ii). Therefore, you are advised that in her position as a Cost Accountant with the City Streets Department under job class specification 2A27, Ms. Jordan is a “public employee” subject to the provisions of the Ethics Act and the Regulations of the State Ethics Commission, and in particular, the requirements for filing Statements of Financial Interests pursuant to the Ethics Act. Conclusion: As a Cost Accountant with the City of Philadelphia Streets Department under job class specification 2A27, Andrea Jordan is a “public employee” subject to the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 Teti/Jordan, 10-517 January 12, 2010 Page 7 et seq., and the Regulations of the State Ethics Commission, 51 Pa. Code § 11.1 et seq., and in particular, the requirements for filing Statements of Financial Interests pursuant to the Ethics Act. Pursuant to Section 1107(11) of the Ethics Act, an Advice is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any other civil or criminal proceeding, provided the requester has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. This letter is a public record and will be made available as such. Finally, if you disagree with this Advice or if you have any reason to challenge same, you may appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writing and must be actually received at the Commission within thirty (30) days of the date of this Advice pursuant to 51 Pa. Code § 13.2(h). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (717-787-0806). Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Sincerely, Robin M. Hittie Chief Counsel