Advisory Opinion No. 2012-21 Advisory Opinion No. 2012-21 Re: George M. Muksian, Esq. QUESTION PRESENTED The Petitioner, chief legal counsel for the Rhode Island Department of Elementary and Secondary Education, a state employee position, requests an advisory opinion regarding whether members of a governing body or board of a charter school are persons subject to the provisions of the Code of Ethics. RESPONSE It is the opinion of the Rhode Island Ethics Commission that members of a governing body or board of directors of a charter school are persons subject to the provisions of the Code of Ethics. The Petitioner is chief legal counsel for the Rhode Island Department of Elementary and Secondary Education. He has provided the following representations regarding charter schools. There are currently sixteen (16) charter schools in Rhode Island, which are all considered public schools under state law. All charter schools are under the sole jurisdiction of the Board of Regents for Elementary and Secondary Education (“Board of Regents”). All charter school students are deemed to be public school students and no tuition or mandatory fees may be charged. Similar to all other public schools, charter schools are funded with a combination of state and local funds pursuant to Rhode Island’s funding formula. R.I. Gen. Laws § 16-77.1-2. Charter schools cannot be affiliated in any way with a sectarian school or religious institution and the overall operation or education program cannot be managed by a for-profit entity. R.I. Gen. Laws § 16-77-3.1(d). Additionally, all charter schools are required to adhere to financial record keeping, reporting, auditing requirements and procedures as required by the Rhode Island Department of Education and in accordance with federal and state laws and regulations. Section 16-77-3.1(f). Charter applications are extensive and must be submitted to the Commissioner of Elementary and Secondary Education (“Commissioner”). Upon a recommendation from the Commissioner, the Board of Regents may award a charter to a school for a period of up to five (5) years. Throughout the duration of a charter’s term, the Department of Education’s Office of Transformation, acting on the Board of Regent’s behalf, collects evidence for performance reviews. This rigorous performance review process includes analysis of student outcome data, site visits, a review of key organizational outcomes, identifying mission-specific goals and submitting annual reports to the Department of Education. At the end of their charter term, this review process could result in the non-renewal of their charters. The Petitioner advises that charter schools are managed by a Board of Directors, which is most often a private, non-profit, 501(c)(3) corporation formed for the purpose of administering the operations of the charter school. While the bylaws of the corporation outline the powers and duties of each particular Board of Directors of a particular charter school, the Charter Public School Act of Rhode Island[1] (“Act”) and the Board of Regents’ regulations[2]require charter applications to provide extensive information, including but not limited to: resumes of the current members of the Board of Directors; the role of the Board and how it differs from the role of administrators; detailed plans for the governance of the school and its organizational structure; as well as how the school will make key decisions about curriculum, instruction, student achievement, fiscal planning and operations. The Act also mandates that the governing body of a charter school, usually the Board of Directors, is subject to the Open Meetings Law (R.I. Gen. Laws §§ 42-46-1 to -14). Additionally, charter school teachers are members of the state retirement system. The Petitioner’s representations concerning the nature, duties and powers of charter school boards lead to the conclusion that such board members are public officials subject to the Code of Ethics. For example, charter school boards of directors exercise decision-making authority over the expenditure of public funds; operate public schools; hold meetings subject to the requirements of the Open Meetings Law; only operate with the approval and under the exclusive jurisdiction of a state agency, the Board of Regents; and are required to submit annual reports and regular financial reporting to the state. Additionally, the Commission has previously opined that a charter school, as a public school, is not a “business” as it is defined in the Code because the definition of business does not extend to public entities. A.O. 2007-24 (opining, inter alia, that the Chair of the Cranston School Committee, who was also a member of the Board of Directors of the New England Laborers’/Cranston Public Schools Construction Career Academy, was not required to recuse from participating and voting on School Committee matters involving the Construction Academy because as a charter school it was a public school and therefore, was not considered to be a “business” or “business associate” under the Code of Ethics). Furthermore, the General Assembly has expressly provided that board members of charter schools are required to file annual financial disclosure statements. Rhode Island General Laws § 36-14-16(a) provides that (a) On or before the last Friday in April of each year, the following officials and employees subject to this code of ethics shall file with the commission a financial statement complying with the requirements of this chapter: (1) all state elected officials; (2) all state appointed officials; (3) all state appointed officials and employees who hold a major decision-making position in a state agency; (4) all municipal elected officials; and (5) all municipal appointed officials whose official duties and responsibilities include exercising decision-making authority over the expenditure of more than fifty thousand dollars ($50,000) in public funds in any fiscal or calendar year, and expressly including solicitors and assistant solicitors, police chiefs, fire chiefs, superintendents of schools, principals, superintendents and administrators of charter schools, board members of charter schools, principals, superintendents and administrators of state schools, board members of state schools, building inspectors, members of planning boards, zoning boards, licensing boards and tax appeal boards. This subsection shall also include all municipal appointed officials whose official duties and responsibilities include nominating, appointing or hiring any persons that will receive compensation of more than fifty thousand dollars ($50,000) in public funds in any fiscal or calendar year. (Emphasis added.) In 2004, the General Assembly amended § 36-14-16(a), the part of the Code of Ethics which states who is required to file an annual financial disclosure statement.[3] Prior to this amendment, paragraph (a) was a thirty-five (35) word sentence simply providing that state and municipal elected officials and state and municipal appointed officials were the only persons required to file annual financial disclosure statements. The 2004 amendment made significant changes to § 36-14-16(a): paragraph (a) became a preamble and subsections (1) through (5) were added to enumerate groups of public officials and employees who were subject to the Code of Ethics as well as the financial disclosure requirement. Notably, the new subsection (5) specifically identified “superintendents and administrators of charter schools [and] board members of charter schools” as “officials and employees subject to this code of ethics.” In the present matter, the 2004 amendment to § 36-14-16(a) clearly and unambiguously demonstrates that the General Assembly intended to include board members of charter schools in the group of public officials who are subject to this Code of Ethics and are required to file annual financial disclosure statements. For all of these reasons, it is the opinion of the Ethics Commission that members of a governing body or board of directors of a charter school are persons subject to the provisions of the Code of Ethics. Code Citations: § 36-14-16 Related Advisory Opinions: A.O. 2007-24 Keywords: Code Jurisdiction Keywords: Public Employment Revolving Door [1] Chapters 16-77, 16-77.1, 16-77.2, 16-77.3, and 16-77.4 of the general laws shall be known and may be cited collectively as the "Charter Public School Act of Rhode Island" or as the "Act". R.I. Gen. Laws § 16-77-1. [2] The Board of Regents’ Regulations Governing Rhode Island Public Charter Schools: http://www.ride.ri.gov/regents/Docs/RegentsRegulations/Charter_%20Regul… [3] The 2004 amendment is the current version of § 36-14-16(a) and is reproduced in its entirety above.