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HomeMy WebLinkAbout1148 NavishIn Re: Eileen Navish STATE 308 ETHICS COMMISSION FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 File Docket: X -ref: Date Decided: Date Mailed: Before: Daneen E. Reese, Chair Austin M. Lee, Vice Chair Julius Uehlein Louis W. Fryman John J. Bolger Frank M. Brown 99- 020 -C2 Order No. 1148 1/31/2000 2/11/2000 This is a final adjudication of the State Ethics Commission. Procedurally, the Investigative Division of the State Ethics Commission conducted an investigation as to the above -named Respondent regarding a possible violation of the Public Official and Employee Ethics Law, Act 9 of 1989, P.L. 26, 65 P.S. §401 et seg., as codified by the Public Official and Employee Ethics Act ( "Ethics Act "), Act 93 of 1998, Chapter 11, 65 Pa.C.S. §1101 et seq., which inter alia provides for the completion of pending matters under that Act. At the commencement of its investigation, the Investigative Division served upon Respondent written notice of the specific allegation(s). Upon completion of its investigation, the Investigative Division issued and served upon Respondent a Findings Report identified as an "Investigative Complaint." An Answer was not filed and a hearing was deemed waived. The record is complete. A Consent Agreement and Stipulation of Findings were submitted by the parties to the Commission for consideration. The Consent Agreement was subsequently approved and the Stipulation of Findings appears as the Findings in this adjudication. This adjudication of the State Ethics Commission is issued under Act 93 of 1998 and will be made available as a public document thirty days after the mailing date noted above. However, reconsideration may be requested. Any reconsideration request must be received at this Commission within thirty days of the mailing date and must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code §21.29(b). A request for reconsideration will not affect the finality of this adjudication but will defer its public release pending action on the request by the Commission. The files in this case will remain confidential in accordance with the Ethics Act. Any person who violates confidentiality of the Ethics Act is guilty of a misdemeanor subject to a fine of not more than $1,000 or imprisonment for not more than one year. Confidentiality does not preclude discussing this case with an attorney at law. Navish, 99- 020 -C2 Page 2 I. ALLEGATION: That Eileen Navish, a public official /public employee in her capacity as Secretary /Manager of East Pittsburgh Borough, Allegheny County, violated Section 3(a) of the State Ethics Act, 65 Pa.C.S. § 1103(a) when she performed the duties of shared finance officer during the same hours as she was being paid as secretary /manager for the borough and utilized her position as borough manager in order to ensure the receipt of payment from the Borough. II FINDINGS: 1. Eileen Navish has served as Secretary /Manager for the Borough of East Pittsburgh since March 1, 1994. a. Navish held the position of Treasurer from January 3, 1994, through January 31, 1994, when she was appointed Secretary. b. Navish currently serves as the Earned Income Tax and Wage Tax Collector for the Borough of East Pittsburgh. 2. In March 96 om Secretary to that o f Manger ( authorized the change in Navish's title a. The title change came with no additional responsibilities or compensation. 3. Navish has operated her own CPA practice, Eileen M. Navish, Certified Public Accountant, from her residence since April 1991. 4. Navish currently holds positions in municipalities other than the Borough of East Pittsburgh, including: North Braddock Borough Delinquent Tax Coordinator Braddock Borough Finance Director Wilkinsburg Borough Finance Director 5. Navish's compensation as secretary /manager for East Pittsburgh Borough as reported on W -2 Forms is as follows: 1995: 1996: 1997: $16,900.00 $ 16,900.00 $ 17,005.30 6. tIn he l t F nanc al Borough ecovery Act, Act 47 of declared 987 as amended. distressed under the a. Resourcb Development Management (RDM) was appointed the recovery coordinator in December 1992. b. The Recovery Plan was adopted by council in September 1993. 7. In the Recovery Plan, RDM made recommendations to effect needed changes in the administration of the borough including the following: a. Reduce the size of council from nine members to five. Navish, 99- 020 -C2 Page 3 b. Designate specific hours for the borough offices to be open and staffed by the borough secretary. 1. To include not less than 16 hours of service per week during normal daylight business hours. 2. The adoption of an administrative code covering the duties and responsibilities of the borough secretary as well as all matters relating to the administration of the borough. c. Maintain the position of borough secretary, however, a shared administrator /finance director should be pursued through the Turtle Creek Valley Council of Governments with Act 47 funding for the long term. 8. Borough council adopted Ordinance No. 833 on January 10, 1994, establishing an Administrative Code for the purpose of outlining and adopting rules, requirements, and procedures for the efficient administration and operation of the Borough of East Pittsburgh. 9. The position of Secretary /Manager established in Part IV, Appointed Officials, Subsection A of the Administrative Code, adopted on January 10, 1994, includes the following powers and duties, in part: the borough secretary shall be the chief administrative officer of the borough; - the secretary shall direct and supervise the administration of all municipal departments, offices, and agencies, except as otherwise provided by law or this administrative code; the secretary shall be responsible for the administration of the budget after it is adopted by council; the secretary shall keep council informed as to the conduct of borough affairs, submit monthly reports on the condition of borough finances and such other reports as council shall request, advise and consult council on matters regarding policy formulation and implementation, and shall make such recommendations to council as the secretary deems necessary; the secretary shall have the duty, through the proper departments or subordinates, to enforce the ordinances and regulations of the borough, including building and housing codes adopted by council; the secretary shall have the duty to sign such papers, contracts, obligations, and documents that are properly presented to him as required by law; the secretary shall have the authority, subject to final ratification of council, to negotiate intergovernmental agreements pursuant to the constitution of the Commonwealth; the secretary shall be the purchasing officer of the borough, and he shall purchase, in accordance with the provisions of the borough code and this administrative code, all supplies and equipment for the various agencies, boards, departments, and other offices of the borough, etc. Navish, 99- 020 -C2 Page 4 a. The secretary had the authority to designate a borough employee to exercise the duties of the secretary /manager. 10. One of the recommendations contained in the Recovery Plan called for council to establish hours for the borough office to be open during the regular business day. a. The borough office hours were established as Monday through Friday, 8:30 a.m. - 12:30 p.m. 11. Navish was hired by Council as the part -time secretary /manager on March 1, 1994, following the adoption of Ordinance 833. a. Navish's duties were essentially the same as established in subsection (a) of the Administrative Code. b. Navish's duties included staffing the borough office, and any other time necessary to effect borough business. 12. Between March 1994 and March 1998, Navish, as secretary /manager, was the sole administrative employee of the Borough of East Pittsburgh. 13. The Borough of East Pittsburgh Recovery Plan adopted by council in September 1993 called for the establishment of a Shared Finance Officer position, funded by Act 47 grant funds, and coordinated through the Turtle Creek Valley Council of Governments (COG). a. Act 47 grant funding required that the grant be awarded to a municipality designated as distressed. b. As a distressed municipality, East Pittsburgh Borough was eligible to receive Act 47 state grant funds through the Department of Community Affairs (DCA). c. The Shared Finance Officer position was intended to benefit all of the municipalities participating in the COG which had been declared distressed, and any other member municipality seeking assistance. 14. The Borough of East Pittsburgh is a member of the Turtle Creek Valley Council of Governments (COG), along with sixteen other municipalities. 15. In 1995, after specifications for the Shared Finance Officer position were prepared by RDM, DCA, and the COG, Requests for Proposals were sent to eight auditing firms and individuals, including Navish. a. Two proposals were received, one of which was submitted by Navish. b. RDM, DCA, and COG participated in the proposal review and interview process. 16. Navish submitted a response to the Request for Proposals for the position of Shared Finance Officer on March 10, 1995, which included the following: a. A fee of $20.00 per hour, not to exceed $12,000.00 per year. b. Any out -of- pocket expenses for travel at 29 cents per mile, plus parking. Navish, 99- 020 -C2 Page 5 c. Navish and two members of her accounting firm staff would perform the required work, with Navish acting as the project leader. d. Navish's proposal was accepted by the COG based on cost and compatibility with existing programs provided by the COG. 17. On June 8, 1995, Navish entered into an Agreement for Professional Services with the COG for the position of Shared Finance Officer. a. Navish notified East Pittsburgh Borough council on June 12, 1995, that she had accepted the position of financial director for the COG. b. Council had previously submitted a letter dated 8/12/94 to Fred Reddig, Chief of the Municipal Programs Division for DCA, recommending Navish for the Shared Financial Administrator position. 1. The letter stated that Navish had been doing an excellent job since she became secretary in March 1994. 18. In July 1995, East Pittsburgh Borough was awarded a grant totaling $95,000.00 under Act 47 to fund two positions, Shared Finance Administrator ($45,000.00); and Housing Coordinator ($50,000.00). a. The grant was awarded through DCA Contract Number 225 -93 -0020. 19. On July 10, 1995, the Borough of East Pittsburgh entered into a Memorandum of Understanding with the COG regarding the $45,000.00 the borough received through the Municipalities Financial Recovery Act (Act 47) to implement the Financial and Administrative Services Consultant Project on behalf of Act 47 municipalities in the COG. a. The borough transferred the funds to the COG. b. The COG administered the receipt and disbursement of the funds and kept records of the accounting of the funds. c. Navish signed the Memorandum as a witness, on behalf of the borough. 20. The original grant for the Shared Finance Officer was meant to be shared by East Pittsburgh and North Braddock Boroughs. a. As the Recovery Plan was put into effect, DCA representatives felt it was more viable to have a Shared Finance position within the COG, to service more than just the two municipalities. b. The position of Shared Finance Officer, while initially funded for two years, was intended to be sustained indefinitely. 1. Funding for the position was not sustained past the first two years due to lack of interest by the member municipalities. c. It has not been uncommon for DCA to contract with a municipality and have the funds used to pay existing employees of that municipality. Navish, 99- 020 -C2 Page 6 21. Requirements for the awarding and administration of the grant funds were outlined in the Contract for Municipalities Financial Recovery Program, #225 -93- 0020, approved 6/29/94, by the DCA Comptroller. a. Eileen Navish signed as borough secretary on behalf of the borough, along with James Geric, council president, on 5/9/94. b. Commonwealth of Pennsylvania to act acting through the borough Dpartm Department of Community Affairs. 22. Navish served as Shared Finance Director for the boroughs of East Pittsburgh, Braddock, Rankin, North Braddock and Wilkinsburg from June 8, 1995, until October 1997. a. Navish signed a contract with the COG on June 8, 1995. b. This contract provided Navish be paid at $20.00 /hour plus mileage and parking. 23. Navish's duties as Shared Finance Director included the following: Analyze general ledger, accounts payable, and accounts receivable reports on a monthly basis. - Analyze monthly budget variance reports and provide summary reports to municipalities along with implementation of corrective action as required. - Prepare and assist in the management of management system. - Ensure that proper reporting is completed to county agencies to ensure timely payment of - Report of the annual budget - DCA annual audit report - Auditor General AF -PF -385 - Auditor General Ad Hoc COLA reimbursement AG 490 - PURTA reimbursement - Liquid Fuels reimbursement an investment and cash various state, federal and monies. Reports include: Prepare and evaluate required borrowing to meet the municipalities' short and long term capital requirements. Assist in preparing for tax and revenue anticipation notes. Ensure accurate payroll information and assist in the quarterly and annual tax filings relating to state and federal payroll tax obligations. Analyze municipal financial information. Assist in the design and implementation of manageable programs that will improve the efficiency of the municipality's ability to collect delinquent taxes and fees. Navish, 99- 020 -C2 Page 7 Be available to work with the appointed auditors to ensure timely completion of the annual audit reports. Assist with the implementation of recommendations for improved internal controls and financial management practices by independent auditors. Assist the appointed tax collector to improve efficiency of the tax collection policies and procedures. Assist in the preparation of the annual budget and preparation of multi- year capital budgets. Evaluate current accounting practices, and make recommendations on how to improve overall efficiency of accounting and financial management practices. Ensure that such practices are implemented in a timely manner. Assist municipalities with the utility billing and collection operations by the COG. Develop procedures to streamline billing processes, insure that all those receiving service are billed and strengthen collection practices with the emphasis on delinquent collections. Review and evaluate employee benefit programs and make recommendations relating to cost containment procedures. Assist in the preparation of personnel costing information as it relates to labor negotiations and Act 1 11 /195 collective bargaining. Assist with the implementation of recommendations contained in the Turtle Creek Valley Council of Governments' computer system analysis report. Ensure the proper administration of municipal pension plans to include the following: Monitor the investment progress of the individual accounts confirm that reporting requirements are completed ensure calculation and submission of annual minimum municipal obligation to the governing body complete quarterly reports of the various plans assist in preparation for the annual audit Attend council meetings and work sessions on an as needed basis. 24. In addition, Navish was also required to provide a weekly schedule to each participating municipality as to on -site activities and provide the COG with monthly monitoring reports. 25. As Shared Financial Director, Navish was under the direction of the COG Executive Director. 26. Navish was paid $46,51 1.20 as Shared Finance Officer between June 8, 1995 and October 1997. a. Navish continued to perform the functions of the Shared Finance position on a volunteer basis after the term of the grant expired. Navish, 99- 020 -C2 Page 8 27. Between June 8, 1995, and October 1997 Navish simultaneously held the positions of East Pittsburgh Borough Manager and Shared Finance Director. 28. East Pittsburgh Borough Council members generally agreed that Navish was responsible for staffing the borough office during the posted hours. a. Council found it acceptable for Navish to perform duties of the Shared Finance position while she staffed the borough office, as long as she was getting the borough work done. b. Council also found it acceptable for Navish to close the borough office during posted hours to conduct business related to the administration of East Pittsburgh Borough. c. Council permitted Navish to have flexibility with her schedule because Navish was known to work evenings and weekends to complete borough business. 29. In or about February 1996 Council President Dennis Simon began receiving complaints that the borough office was closed during the posted hours. a. Council Members Simon, Whitney and Coles discussed with Navish the necessity of keeping the borough office open during the scheduled hours of 8:30 a.m. to 12:30 p.m. 30. On some occasions Navish would close the borough office to conduct the duties of Shared Finance Director. 31. As Shared Finance Officer /Finance Director for the COG, Navish submitted time sheets to account for the hours she was working in that position. a. Time sheets were typed on the letterhead of Eileen M. Navish, C.P.A. b. Time sheets listed the date of the work, start and stop time, total hours worked each day, and a description of the work performed. c. Expenses were itemized at the end of the time sheet. d. Time sheets generally covered numerous dates. 32. Navish performed duties as Shared Finance Officer for the COG during the same hours that she was paid by the Borough of East Pittsburgh to staff the borough office. 33. Navish worked total hours, as Shared Finance Director, during her hours as East Pittsburgh Borough Manager, as follows which were not related to the affairs of East Pittsburgh borough. Year 1995 1996 1997 Number of Hours 19 23.5 9.0 51.5 Navish, 99- 020 -C2 Page 9 34. As secretary /manager for the borough, Navish was responsible for submitting payroll information to the COG, which prepared the payroll checks for the borough. a. Payroll checks were prepared by the COG based on information provided to them by Navish. b. Payroll checks required the signature of two council members and the secretary /manager. 35. Navish's hourly rate of pay as manager for East Pittsburgh Borough was: 1995: 1996: 1997: III. DISCUSSION: $16.25 /hour $16.25 /hour $16.36 /hour 36. Navish received payment from the borough for hours identified in Finding No. 34 as follows: 1995: $308.75 ($16.25 x 19 hours) 1996: $381.88 ($16.25 x 23.5 hours) 1997: $147.15 ($16.35 x 9 hours) Total: $837.78 At all times relevant to this matter, the Respondent, Eileen Navish, hereinafter Navish, has been a public employee subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), Act 9 of 1989, P.L. 26, 65 P.S. §401, et sec. as codified by Act 93 of 1998, Chapter 11, 65 Pa.C.S. §1101, et seq. The issue is whether Navish violated Section 3(a) as to the allegation(s) that she performed the duties of Shared Finance Officer during the same hours she was being paid as the Borough Secretary /Manager and utilized her position as Borough Manager to ensure payment from the Borough. Section 1 103(a) of the Ethics Act provides as follows: Section 1 103. Restricted activities. (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. §1103(a). The term "conflict of interest" is defined under the Ethics Act as follows: Section 1102. Definitions. "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member Navish, 99- 020 -C2 Page 10 of his immediate family is associated. The term does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or a member of his immediate family is associated. 65 Pa.C.S. §1102. Section 1103(a) of the Ethics Act prohibits a public official /public employee from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. Having noted the issues and applicable law, we shall now summarize the relevant facts. Navish has served as Secretary /Manager for the Borough of East Pittsburgh (Borough) since March 1, 1994. Between June 8, 1995 and October 1997, Navish simultaneously held the positions of Borough Manager and Shared Finance Director for the Turtle Creek Valley Council of Governments (COG). The Borough and sixteen other municipalities are members of the COG. In October 1992, the Borough was declared distressed under the Municipalities Financial Recovery Act, Act 47 of 1987, as amended. As a distressed municipality, the Borough was eligible to receive Act 47 state grant funds through the Department of Community Affairs (DCA). In December 1992, the Resource Development Management (RDM) was appointed as the Recovery Coordinator. In September 1993, Council adopted a recovery plan which contained RDM's recommendations for changes in the administration of the Borough. Some of the recommended changes included adopting an administrative code covering the duties and responsibilities of the Borough Secretary and all matters relating to the administration of the Borough; maintaining the position of Borough Secretary, but pursuing a Shared Administrator /Finance Director through the COG with Act 47 funding for the long term; and designating specific hours for the Borough to be open and staffed by the Borough Secretary. On January 10, 1994, Council adopted Ordinance No. 833 establishing the Administrative Code (Code). The Code provides that the powers and duties of the Borough Secretary shall include: serving as the Chief Administrative Officer of the Borough; directing and supervising the administration of all municipal departments, offices and agencies except as otherwise provided by law or the Code; effectuating the administration of the budget after adoption by Council; apprising Council as to the conduct of Borough affairs; signing papers, contracts, obligations, and documents that are properly presented as required by law; and negotiating intergovernmental agreements pursuant to the Constitution of the Commonwealth subject to the final ratification by Council. On March 1, 1994, following the adoption of Ordinance No. 833, Council hired Navish as the Borough's part-time Secretary /Manager with essentially the same duties as those set forth in the Code. Navish, 99- 020 -C2 Page 11 On May 9, 1994, the Borough entered into the Contract for Municipalities Financial Recovery Program with the Commonwealth of Pennsylvania acting through DCA. DCA, RDM and the COG prepared specifications for the position of Shared Finance Officer followed by the issuance of requests for proposals to eight auditing firms and individuals, including Navish. Navish submitted a proposal which was accepted by the COG based upon cost and compatibility with existing programs provided by the COG. On June 8, 1995, Navish entered into an Agreement for Professional Services with the COG for the Shared Finance Officer position and on June 12, 1995, she notified the Borough that she had accepted that position. In July 1995, the Borough was awarded a grant through DCA to fund two positions, one of which was that of Shared Finance Administrator. The original grant for this position was intended to be shared by the Borough and the Borough of North Braddock; however, as the recovery plan was put into effect, DCA representatives felt it was more viable for the Shared Finance Officer to serve more than two municipalities. Navish served as Shared Finance Director for the Boroughs of East Pittsburgh, Braddock, Rankin, North Braddock, and Wilkinsburg from June 8, 1995 to October 1997 and continued in this capacity on a volunteer basis after the term of the grant expired. During that time, Navish also held the position of Borough Manager and had the responsibility for staffing the Borough office during the posted office hours. Council did not object to Navish performing her duties as the Shared Finance Officer while she staffed the Borough office as long as she completed her work for the Borough. Council neither objected to Navish closing the Borough office during posted office hours to conduct business related to the administration of the Borough. Council allowed Navish to have flexibility with her schedule because she was known to work during evenings and on weekends to complete Borough business. Occasionally, Navish would close the Borough office to conduct the duties of Shared Finance Officer. As Secretary /Manager for the Borough, Navish was responsible for submitting payroll information to the COG which prepared the payroll checks for the Borough. Payroll checks required the signature of two Council members and the Secretary /Manager. Navish submitted 19.0 hours in 1995, 23.5 hours in 1996, and 9.0 hours in 1997 for both her positions as Borough Manager and as Shared Finance Officer. A comparison of the payroll information submitted by Navish reflects that Navish performed her duties as Shared Finance Officer during the same hours that she was being paid to work as Borough Manager. Having summarized the above relevant facts, we must now determine whether the actions of Navish violated Section 3(a) of the Ethics Act. The parties have submitted a Consent Agreement together with a Stipulation of Findings wherein it is proposed to resolve this case by finding an unintentional technical violation of Section 3(a) of the Ethics Act when Navish received compensation as the East Pittsburgh Borough Secretary/Manager for performing duties as the Council of Government Shared Finance Officer on Borough time, together with a payment of $500 by Navish within 30 days of the issuance of this Order through this Commission to East Pittsburgh Borough. Accordingly, Navish is directed to make the payment of $ 500 to East Pittsburgh Borough within 30 days of the date of this Order. Compliance with the foregoing will result in the closing of this case with no Navish, 99- 020 -C2 Page 12 further action. Noncompliance will result in the institution of an order enforcement action. We approve the Consent Agreement based upon our review of the totality of the facts and circumstances. With regard to Navish performing the duties of Shared Finance Officer during the same hours that she was being paid to work as Borough Secretary /Manager, the stipulated findings establish an unintentional technical violation of Section 3(a) of the Ethics Law. As Borough Secretary /Manager, Navish was responsible for staffing the Borough office during the office hours posted by the Borough. Payroll information submitted by Navish reflects that during those hours, she was performing her duties as Shared Finance Officer for the COG. In addition, Navish used the authority of her office to approve Borough payroll checks for herself for performing such services. Such action by Navish resulted in a private pecuniary benefit to her. The pecuniary benefit was private in that it was not compensation provided for by law because such activities should not have occurred during the hours she was scheduled to work for the Borough. Accordingly, Navish committed an unintentional technical violation of Section 3(a) of the Ethics Act when she engaged in the above activities. Given the totality of facts and circumstances, including the volunteer work done by Navish in the Shared Finance Officer position, we believe that an unintentional technical violation is appropriate. Lastly, as to the Consent Agreement filed by the parties, we believe it to be the proper disposition for this case based upon the above analysis. IV. CONCLUSIONS OF LAW: 1. Eileen Navish, as a Secretary /Manager in East Pittsburgh Borough, is a public employee subject to the provisions of Act 9 of 1989 as codified by Act 93 of 1998, Chapter 11. 2. Navish committed an unintentional technical violation of Section 1103(a) of the Ethics Act in relation to the pay she received as East Pittsburgh Secretary/Manager while performing duties as the Council of Government shared Finance Officer on Borough time. In Re: Eileen Navish ORDER NO. 1148 File Docket: 99- 020 -C2 Date Decided: 1/31/2000 Date Mailed: 2/11/2000 1. Eileen Navish, as a Secretary /Manager in East Pittsburgh Borough, committed an unintentional technical violation of Section 1103(a) of the Ethics Act in relation to the pay she received as East Pittsburgh Secretary /Manager while performing duties as the Council of Government shared Finance Officer on Borough time. 2. Per the Consent Agreement of the parties, Navish is directed to make payment of $500 through this Commission to East Pittsburgh Borough within 30 days of the issuance of this Order. a. Compliance with the foregoing will result in the closing of this case with no further action by the Commission. b. Non - compliance will result in the institution of an order enforcement action. BY THE COMMISSION, otti 1, 1 i 6 a u f,_ DANEEN E. REESE, CHAIR