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Illinois School Board Journal
March/April 2006

Setting an example with ethical leadership

by Linda Dawson

Linda Dawson is IASB director of editorial services and Journal editor.

Black or white. Good or evil. Right or wrong. Most school board members and administrators know the difference.

But what about those grey areas? What happens when you're faced with a decision that, on the surface, doesn't seem to harm anyone, but you have the feeling that something's not right? What's a few cents misreported on an expense report? What's the harm in dinner at the local steakhouse with a friend even if that friend happens to be bidding on the contract for the district's office supplies?

Those few cents and seemingly innocent dinners pose ethical problem when it comes to district finances and school board decisions.

After all, according to IASB executive director Michael Johnson, wouldn't it be embarrassing if, following a vote on office supplies, someone says they saw you at that steakhouse with your friend a week before the vote that awarded him the contract?

You might have been friends for many years and have a history of camaraderie and dinners together, but the timing on this one looks suspect. And when just the appearance of impropriety might send a school district into a flurry of publicity, school board members — as the trustees of public funds and the local control closest to the pulse of the community — should want everything to appear aboveboard in their dealings.

With headlines about wrong-doing at many different levels of government, opinion is mixed as to whether the public truly cares about the ethics of its elected officials. In a January 2006 Associated Press story, Sangamon County Republican Party Chairman Tony Libri told reporter Christopher Wills: "People vote with their pocketbooks, not with their ethics." However, Annette Mills, GOP chairman from Peoria, told Wills that voters "figure unethical politicians are likely to waste money and mismanage the budget."

Similar suspicions at all levels led to changes in the state's Ethics Act. And while school board members are not the only ones under suspicion, a well-publicized suburban Chicago scandal is behind a legislative proposal to mandate training for school board members.

Current public law

Questions of conflict of interest and improper gifts after the "licenses for bribes" investigation in Illinois led to passage of the state's current Ethics Act in 2003. The new Act was designed to better delineate what is … and is not … permissible behavior for state officials and employees.

According to the Illinois Council of School Attorneys, "The Act says little that is directly applicable to local public entities like school districts." However, until case law determines otherwise, the ICSA's Ethics Act Committee interprets that the provisions of the Act also extend to school board members and school district employees.

In addition, according to an implementation guide compiled by the Illinois Attorney General's office, all units of local government — including school boards — were required "to adopt ordinances or resolutions regulating political activities and the making and accepting of gifts ‘in a manner no less restrictive' than the provision of the Act."

With these requirements, the whole question of ethics should not be unfamiliar to school board members. IASB regularly offers panels on ethics at its annual conference in November and also has hosted ethics presentations at division meetings. The Illinois School Board Journal featured a cover story on ethics for its November/December 2004 issue and provided a quick explanation of the Ethics Act in an "Ask the staff" question/answer article in September/October of that year.

However, because school boards have new members coming onto the board at regular intervals, the topic of ethics bears repeating because of the complexity of the issue and because Illinois attorneys vary widely in their interpretation of the Act.

"Differences in these interpretations are reflected in IASB's PRESS policy, the Attorney General's model and policies prepared by local board counsel," said Heather Brickman, an attorney with Hodges, Loizzi, Eisenhammer, Rodick & Kohn. "Board policies differ in several key areas, including, with respect to ethics, certain ethical provisions more specific than set forth in the law, and, with respect to political activities, differing definitions of whether and to what extent board members are subject to constraints."

"Thus," she added, "a key issue for board members is to review their own local board policies."

Because Illinois attorneys have not been able to reach a clear consensus on their interpretation of the Act, questions of a specific nature should always be directed to the school district's attorney. However, some general information about the Ethics Act is important for board members and school officials.

Gift ban provisions

Two of the important definitions to note in the Gift Ban portion of the act are "gift" and "prohibited source."

At an October 2005 meeting of the Two Rivers Division, Brickman provided board members with the following definitions from the Act:

"Gift" is defined as "any gratuity, discount, entertainment, hospitality, loan, forbearance, or other tangible or intangible item having monetary value including but not limited to, cash, food and drink, and honoraria for speaking engagements related to or attributable to school district employment or the official position of an employee, member, or officer." (5 ILCS 430/5-1)

"Prohibited source" is any person or entity who (1) is seeking official action by school personnel or the school district or a school board member; (2) does business or seeks to do business with school personnel or the school district or a school board member; (3) is a student in the school district or a relative of a student in the school district; or (4) has interests that may be substantially affected by the performance or non-performance of the official duties of school personnel or the school district or a school board member; or (5) is a registered lobbyist. (5 ILCS 430/5-1)

While that might seem to include everyone and everything, the Act delineates a number of exceptions, she said:

• Opportunities, benefits and services that are available on the same conditions as for the general public;
• Anything for which the employee, officer or his or her spouse or immediate family member pays the fair market value;
• Any (1) contribution that is lawfully made under the Election Code or (2) activities associated with a fundraising event in support of a political organization or candidate;
• Educational materials and missions;
• Travel expenses for a meeting to discuss school district business;
• A gift from a relative, meaning those people related to the individual, including blood relatives, in-laws, step-relatives and an individual's fiancé or fiancée;
• Anything provided by an individual on the basis of a personal friendship, unless the recipient has reason to believe that, under the circumstances, the gift was provided because of the official position or employment of the recipient or his or her spouse or immediate family member and not because of a personal relationship;
• Determinants of personal friendship include:
• A history of the relationship and previous exchange of gifts;
• Whether, to the actual knowledge of the recipient, the giver personally paid for the gift or sought a tax deduction or business reimbursement;
• Whether, to the actual knowledge of the recipient, the same or similar gifts were given to other officers or employees, or their spouses or immediate family;
• Food or refreshments not exceeding $75 per person in value on a single calendar day, provided that the food or refreshments are consumed on the premises from which they were purchased or prepared, or were catered.
• Food, refreshments, lodging, transportation and other benefits resulting from outside business or employment activities (those not related to their official duties as a school board member or district employee);
• Intra-governmental and inter-governmental gifts, including from one employee to another or from an officer to an employee, whether in the district or from another governmental entity;
• Bequests, inheritances and other transfers at death;
• Any item or items from any one prohibited source during any calendar year having a cumulative total value of less than $100.

Each of these gift ban exceptions is mutually exclusive and independent of every other, Brickman said. The ban also is not violated if the recipient of a gift from a prohibited source takes reasonable action to return it or gives the gift (or an amount equal to its value) to an appropriate tax-exempt charity.

Political activities

The Ethics Act also governs "political activities" that might take place in a school district, and states that no officer or employee shall intentionally perform any "prohibited political activity" during any "compensated time."

According to IASB General Counsel Melinda Selbee, the Act defines "prohibited political activity" broadly.

"It includes circulating a petition on behalf of a candidate for elective office or referendum as well as producing or distributing campaign literature," she said. It also "includes soliciting votes for or working on a campaign for a referendum during compensated time."

Defining "compensated time" is key to following the provisions of the Act. For board members, who are not paid, Selbee said engaging in "prohibited political activity" would apply to their use of district property or resources in connection with any such activity, as well as prohibiting them from requiring other board members or employees to perform such activities. It also would prohibit them from "awarding other board members or employees additional compensation or benefit for participating in those activities."

It should be easy to tell when an hourly district employee is working, but "determining whether a salaried employee is supporting a referendum during ‘compensated time' depends on the facts in each case," Selbee said.

For more on the issue, Selbee also refers school board members and administrators to "Law chills superintendents from campaigning for funds" in the July 26, 2004, issue of the Illinois School Board Newsbulletin, available online at

http://iasb.com/files/nb0704.htm#isd1.

And, as was stated with the Gift Ban provisions above, specific questions about the legalities of political activities should always be directed to local school attorneys.

Reimbursements

While the subject of reimbursements for legitimate expenses incurred by board members and district employees was covered in the "Ask the staff" answer in the November/December 2005 Journal, some ideas may bear repeating.

Board members and district employees should:

• Be responsible for submitting itemized vouchers, with receipts, in order to claim reimbursement.
• Be responsible for any expenses that are incurred for incidentals, like movies and mini-bar purchases, charged to a hotel room.
• Be responsible for meal charges and room expenses incurred by their spouse or other family members who might accompany them.
• Ask for mileage reimbursement only if they are the one who drove the vehicle, not if they rode with another board member.

The best practice, according to IASB's executive director Johnson, is to keep good records and receipts. With provisions of the Ethics Act now governing how much board members and district employees can accept from someone seeking to do business with the district, it might be good to have a log to keep track of the dollar value of meals or the value of an outing.

Knowing the right thing to do and following through is just one more facet of fulfilling a leadership role with the district. While ethics is at the core of personal values and experience, sometimes experts can provide some guidance on how to look at these situations.

In Ethical Leadership, Robert J. Starratt looks primarily at questions surrounding the educational environment in schools. However, his interpretation of how to look at ethics also could apply to finances:

"In reality, leaders do not start their day by asking, ‘How can I enact my core ethical principles today?' Rather, ethical principles are kept in a supply closet in one of the back rooms of our consciousness. They are maps that we consult only when the familiar terrain we are traversing becomes a tangle of underbrush with barely discernible and uncertain trails. In the course of a busy workweek involving budget adjustments, school district planning meetings, political negotiations with teacher union representatives, and reviews of building maintenance needs, educational leaders encounter certain situations that are challenging, not because of the technical problems they entail but because of the messy human problems or serious human consequences involved in the situation. … That is when the leader goes back to his or her supply closet to consult the codes of ethics, the map with the large ethical topology (but not the details about the barely discernible trails in this particular situation), for guidance."

Sources

Heather Brickman, "The Ethics Act and School Boards: Where Does It Start and Where Does It End?" presented to the Two Rivers Division meeting, October 25, 2005

Illinois Council of School Attorneys, "Answers to FAQs Regarding the State Officials and Employee Ethics Act," available at http://www.iasb.com/GBFAQ.pdf

Robert J. Starrat, Ethical Leadership, John Wiley & Sons, Inc., 2004

Abiding by a Code of Conduct

In 1976, the board of directors of the Illinois Association of School Boards adopted a Code of Conduct to guide school board members both within the context of meetings and in their daily dealings with the community.

According to Marina C. Bear, an ethicist writing for degree.net, "many areas of human endeavor are not covered by such codes." "Nonetheless," she added, "by appealing to more general principles widely held to be important for the health of our society, we can usually figure out the right thing to do using reason and common sense."

Bear, in "Who Did What to Whom: An ethicist looks at [Plaintiff] v [City] Area Schools," writes about ethical principles being just, with equal application to all involved, and with the added implication to do no harm. But she also says people "have a responsibility to learn the laws and rules under which we live and a duty to follow them."

Much of the information presented in the three-part series on audits, bidding procedures and ethics/reimbursements has a legal basis in The Illinois School Code. But just because something may be legal does not necessarily mean it is entirely ethical.

By adhering to a Code of Conduct, board members can take their community service to a higher level. The following is taken from IASB's Web site and is available for download at http://www.iasb.com/files/sch_bd_ resources.htm