AO-05-001
May
19, 2005
Hearing Aid Dealers & Fitters Board
c/o Ms. Mary Ann Stone, Executive Secretary
2462 Statonsburg Road #214
Greenville,
North Carolina 27834
Re:
Hearing Aid Dealers & Fitters Board
Board Members’ Involvement with In-House
Licensing Examinations and Instructional
Programs (Continuing Education Programs)
AO-05-001
Dear
Ms. Stone, President Adkins, and Board Members:
I
am happy to respond to your April 22, 2005, e-mail request regarding issues
related to North Carolina State Hearing Aid Dealers & Fitters Board (“HADF” or “the Board”) members’
involvement with in-house licensing examinations and instructional programs
(continuing education). Before I do, however, you need to be aware of several
limitations on the scope of this response. First, the Board is covered by other
laws which appear to apply to this situation. For example, North Carolina
General Statutes ("N.C.G.S.") §93D-3 sets out the Board’s powers and
duties; §93D-5 and -8 deal with licensing exams; and §93D-11 sets out annual
continuing “occupational instruction” requirements.[1] Definitive interpretation
of these and other applicable statutes, rules, and policies, as well as their
specific application to your situation, is a matter for the Board’s legal
counsel. The Board of Ethics ("BOE") is charged with interpreting and
enforcing Executive Order Number One ("EO One" or "the
Order"). Any conflict between a provision of the Order and other North
Carolina law is resolved in favor of the law. EO One, §5 (a) (3).
With
the foregoing limitations in mind, the following preliminary advisory opinion
is issued by Board staff according to the Board's "Internal Operating
Procedures" and may be relied upon until and unless it is formally
modified or rescinded by the full Board. Once the Board formally approves,
modifies, or otherwise disposes of the preliminary opinion, all pertinent
parties will be so notified.
All
advisory opinions, both preliminary and final, are based upon the particular
facts presented and issues raised in the specific request for an advisory
opinion. As such, the scope of each
opinion is limited to the request made and should only serve as a
recommendation to the particular parties involved. It may, however, serve as a general guide to other individuals
similarly situated.
I
understand the basic facts to be as follows. The Board is the State’s primary
licensing and regulatory body for the fitting and selling of hearing aids. See
N.C.G.S. §93D-1, -2, & -3. It is unlawful for any person to fit or sell
hearing aids unless first licensed by the Board or authorized as an apprentice
under the supervision of a Board licensee. N.C.G.S. §93D-2. The Board is
composed of seven members appointed by the Governor. N.C.G.S. §93D-3 (a).
Accordingly, all Board members are covered by the Order and subject to the
Board of Ethics’ jurisdiction. See EO One, §3.
Among
other things, the Board is required by statute to “[s]upervise and administer qualifying examinations to
test and determine the knowledge and proficiency of applicants for licenses”
and “[f]und, establish, conduct,
approve and sponsor instructional programs for registered apprentices and for
persons who hold a license as well as for persons interested in obtaining
adequate instruction or programs of study to qualify them for registration to
the extent that the Board deems such instructional programs to be beneficial or
necessary." N.C.G.S. §93D-3 (c) (2) & (12) (emphasis added). In
addition, the legislature appears to give the Board several options for providing
the “occupational instruction” required for license renewal: the Board can
fund, conduct or approve, or sponsor such a course. N.C.G.S.
§93D-11 (emphasis added). Moreover, the legislature appears to set up a
bifurcated system of Board-provided and non-Board-provided education services. For
example, the Board can provide a
continuing education make-up class or a license examination preparation course;
or it can approve of an outside
continuing education program provider. N.C.G.S. §93D-3 (c) (14). The Board is
also authorized to set and collect a fee for “verifying and recording
attendance at a continuing education program not provided by the Board.” N.C.G.S. §93D-3 (c) (14) d (emphasis
added).
The
Board conducts an annual two-day continuing education make-up program for the
benefit of those licensees who did not complete their continuing education
requirements for license renewal. The Board has a committee that selects the
topics and the speakers for this program. When "short" a speaker(s), the Board Members and/or the
Board’s Executive Secretary have served as presenters. A Board Member
and/or the Executive Secretary also serve as the program monitor who registers
the attendees, collects fees, and/or introduces the presenters. This program is
“in-house” in the sense that it is not a private program or course provided by
outside contractors, organizations, or individuals on a for-profit basis. Any
Board member’s involvement is as an agent or representative of the Board
itself, not himself or herself individually, and participating Board members
receive no payment, fee, or compensation other than the statutorily-allowed per
diem and travel reimbursement. Many Board members decline these modest
allowances.
Board
members may attend licensing examinations and administer and grade the
practicum portion of the exam. However, only Board members are selected who are
not competitors of either the particular applicant who is being graded or the
applicant's sponsor. Board members do not prepare the actual exam questions,
but they do determine what materials will constitute the questions, the format
of the questions, and the number of questions what will be asked. The Executive
Secretary actually prepares the exam questions and is the only one with access
to them. Board members do not have access to the exam question bank. The Board
has a committee that reviews the exam results after each exam, and another committee meets with the applicants
who failed the exam and are seeking to renew their apprenticeship certificates.
The two committees discuss the reasons the applicants thought that they failed
the exam and they recommend changes to the exam. The full Board meets to
hear the Exam Committee's report and discuss/vote on recommended changes.
The Executive Secretary implements the changes.
The
Board member who currently assists with the Board's licensing exam does not
sponsor any registered apprentice or person who is preparing to take such exam;
nor does she "sell" hearing aids in her current employment setting
within the North Carolina Public School System. Therefore, she is not a
competitor of any registered apprentice, sponsor, or examination candidate. Others
assisting with and grading the exam are Board office staff who do not fit or
sell hearing aids.
The
Executive Secretary is the Board’s only instructor for the Board-sponsored
training classes for registered apprentices and exam-preparation instructional
programs. She has no competitors as she does not actively fit or sell
hearing aids. She does not tutor apprentices or conduct paid or unpaid
apprentice training or exam preparation classes for anyone other than the Board
pursuant to her personal services contract. If I am mistaken about any of the foregoing facts, or if there is
additional relevant information needed for a complete understanding of the
issues involved, please let me know at once.
Again,
while definitive legal interpretations of applicable statutes are for the Board
and its counsel, there appears little doubt that “the Board” not only can but
also must administer licensing exams
and conduct appropriate continuing education and instructional programs.
Properly fulfilling one’s statutory obligations and duties in the proper
context cannot be deemed a conflict of interest. There is perhaps a question of
what the General Assembly meant when it directed “the Board” to perform these
functions, but if the directive did not include actual Board members
themselves, it did not make that intent clear. Perhaps staff could exclusively “conduct” the Board’s in-house educational
programs, but I see no indication of such a legislative directive in the
Board’s enabling act. Regardless, these are not questions covered by Executive
Order Number One.
The
Order’s basic rule of conduct for covered Public Officials is that they must
perform their official duties in a manner to promote the best interests of the
public. EO One, § 7. This encompasses avoiding both conflicts of interest and
the appearance of conflicts of interest. Conflict of interest rules are aimed primarily
at avoiding undue financial gain as
a result of one's official position. The basic conflict provision is found in
section 7 (a) (1). A Public Official shall not
knowingly use his or her position in any manner which will result in financial
benefit, direct or indirect, to not only the Official or his family but also a
business, organization, or group with which the Official is associated. EO One,
§ 7 (a) (1). Moreover, a Public Official cannot use or disclose information
gained in the course of, or by reason of, his official responsibilities in a
way that would affect a personal financial interest of the Public Official, a
member of the Official’s family, or a person with whom or business,
organization, or group with which the Pubic Official is associated. EO One, § 7
(a) (4).
Since
none of the Board members involved in the examination or continuing education
programs here receive any payment or compensation for their services, there is
no undue financial gain involved.[2] Nor are any members
privately teaching examination review or continuing education courses for pay
while sitting Board members. This distinguishes the present case from several
earlier BOE opinions, which I will briefly summarize below.
In 1989,
the BOE Chairman issued a series of letters addressing the extent to which
members of the North Carolina State Board of Cosmetology Examiners could
conduct outside seminars or make presentations to current or prospective
licensees for a fee.[3] Noting that the Public
Official was clearly identified as a member of the Cosmetology Board, the
Chairman told one member that he was “in a conflict of interest situation” when
he accepted a fee for presentations attended by persons who are or will be
licensed by the board he was representing. September 6, 1989, AO-89-002. In a
follow-up letter to the same Official, the Chairman wrote,
“Again, it is the position of the Board of Ethics
that you are in a conflict of interest situation when you appear before persons
who are licensed or about to be licensed by [your board] wherein you are paid a
fee when you allow yourself to be identified as a board member….”
September
28, 1989, part of AO-89-002. In the final word to this Official, the Chairman
wrote,
“When a board member appears privately for pay, or
for board sponsored seminars with state compensation, before a group which is
subject to the board’s jurisdiction, it is impossible to completely erase the
fact that he or she is a board member. Thus, because of the potential for
conflict of interest on the part of the board member, it is recommended that
the member not appear privately for pay before individuals who must be licensed
by the board.”
October
26, 1989, part of AO-89-002.
The
BOE was faced with a similar question in 1998. In AO-98-020, the BOE was asked
whether a member of the Board of Examiners for Engineers and Surveyors could
participate in continuing education for profit or accept fees for speaking to
trade and other associations. The easy case involves a Public Official overtly using
his or her board position to promote private educational programs. This could
occur through advertising or other promotional materials and would clearly
constitute “using” a public position for private gain in violation of the
Order. However, such overt promotion is not necessary for there to be a
prohibited appearance of conflict. The BOE concluded that board members should
not appear privately for pay before individuals who must be licensed by their
board, either as providers of continuing education programs or as speakers
before organizations whose members are licensed by the board.[4]
The
same Engineers and Surveyors board member became the subject of yet another
opinion, this one involving teaching outside examination review classes for a
fee. See AO-99-005 (February 15, 1999). While the licensing exams were
prepared by a national organization rather than the Engineers and Surveyors
board, board members had access to the exams, routinely reviewed them, and
sometimes participated in preparing portions of them. Relying on the
confidentiality provision of section 7 of the Order,[5] the BOE stated that board
members could not teach licensing exam review classes under these
circumstances:
“[Exposure to the confidential licensing exam] may
cause the members of the profession and members of the public to question the
ability of these Board members to teach exam review classes in an unbiased
manner and could compromise the integrity of the exam process. Therefore, to
allow members to teach these classes would create a conflict of interest.”
As touched upon in AO-98-020 discussed above, these
situations can create significant appearance
of conflict issues covered by section 7 (b) of the Order. Public Officials must
make every effort to avoid even the appearance of a conflict of interest. This
is a flexible, open-ended standard applicable on a case-by-case basis. An
appearance of conflict exists when a reasonable person would conclude from the
circumstances that the Official's ability to protect the public interest, or
perform public duties, is compromised by personal interests. An appearance of conflict may
exist even in the absence of a true conflict of interest. EO One, §
7 (b) (1).
One such appearance of conflict prevented a Public
Official from performing outside reviews for a fee. See AO-99-017 (September 20, 1999). A
new appointee to the Board of Dietetics/Nutrition asked whether she could
continue to act as a paid “certified reviewer” of weight control programs.
Certified reviewers evaluated programs and recommended either approval or
denial to the full board. The Official acknowledged that she could not
participate in her board’s decision regarding any program on which she had
performed a certification review. The key question was whether she could
continue to perform certified reviews at all. The BOE concluded that,
“Your participation in the Board’s
certification decisions regarding reviews conducted by other certified weight
control program reviewers while independently performing reviews yourself
could, at a minimum, create the appearance of a conflict of interest.
Conducting program reviews while an active Board member could appear to give
you a competitive advantage over the other certified reviewers…. Thus, to
completely remove any appearance of conflict of interest, you should refrain
from conducting program reviews during your tenure with the Board.”
The common, and I think key, factor in all of the preceding cases is that the Public Officials were performing or seeking to perform outside, independent services somehow connected to their boards’ public functions for pay. There was a clear financial interest aspect of each situation. In the present situation, Board members are not engaging in outside teaching activities, whether continuing professional education or license exam preparation, for pay. Instead, they are performing their statutorily-mandated duties as part of their public service. Safeguards are in place to ensure that members neither benefit themselves nor harm competitors. Thus under the present facts, I see neither a conflict of interest nor a reasonable appearance of conflict.
I
hope this opinion adequately addresses the specific questions raised in your
request, but if it does not, please do not hesitate to call on me for further
discussion and analysis.
Sincerely,
Perry Y. Newson
Executive
Director
cc: Mr.
George F. Bason, Chairman, NC Board of Ethics
All
Board of Ethics Members (via e-mail)
[1] A comprehensive search of all potentially applicable laws, rules, or regulations is beyond the scope of this opinion.
[2] The receipt
of a statutory per diem payment or travel reimbursement is not a “financial
benefit” contemplated by section 7 (a) (1) of the Order.
[3] All of the
letters are collected as part of advisory opinion AO-89-002.
[4] Under extenuating
factual and historical circumstances, the BOE backed away from its earlier
decision (AO-98-020) and allowed the board member to teach continuing education
courses. See AO-99-003 (February 1, 1999). This later opinion (AO-99-003) is
severely limited to its facts and should not be considered guiding precedent
for the basic question involved.
[5] A Public
Official cannot use or disclose information gained in the course of, or by
reason of, his official responsibilities in a way that would affect a personal
financial interest of the Public Official. EO One, § 7 (a) (4).