July 17, 1989

Mr. James E. McCulloch
Minick, Nelson & McCulloch
P.O. Box 335
Vermillion, South Dakota 57069-0335

OFFICIAL OPINION NO. 89-21

County commissioner and school district auditor

Dear Mr. McCulloch:

You have been requested by the Vermillion School District to seek my official opinion concerning the following:

FACTS:

The Vermillion School District No. 13-1 annually has an audit conducted of its business office by a certified public accountant. There are more than one accountants in the area, and price quotations are requested from each.

The lowest quotation this year came from an accountant who is also a county commissioner on a three-member board and votes on tax requests involving the school district. The price quotation exceeds $100. This same accountant has performed the annual audit in the past, and once, when a tax request issue involving the school district arose, abstained from the voting process as a county commissioner. This resulted in a one-to-one deadlock between the commissioners and the concomitant failure of action requested.

Based upon those facts, you have asked the following:

QUESTIONS.

1. Does SDCL 6-1-1 in letter or spirit prohibit the county commissioner from entering into a contract with a school district for auditing services?

2. If so, does SDCL 6-1-2 create an exception to SDCL 6-1-1 which would permit such contract?

3. Assuming that the answer to question 1 is "no" or that the answer to question 2 is "yes," does the existence of such a contract relationship between the school district and the accountant/county commissioner necessitate abstention by that commissioner during commission votes on tax request issues that either generally or specifically involve the school district?

SDCL 6-1-1 provides:

It shall be unlawful for any officer of a county, municipality, township or school district, who has been elected or appointed, to be interested, either by himself or agent, in any contract entered into by said county, municipality, township or school district, either for labor or services to be rendered, or for the purchase of commodities, materials, supplies, or equipment of any kind, the expense, price or consideration of which is paid from public funds or from any assessment levied by said county, municipality, township or school district, or in the purchase of any real or personal property belonging to the county, municipality, township or school district or which shall be sold for taxes or assessments or by virtue of legal process at the suit of such county, municipality, township or school district. Such contract shall be null and void from the beginning.

IN RE QUESTIONS NO. 1 and 2:

The statute set out above clearly prohibits a county officer from being interested in the contract "entered into by said county." The prohibition is to stop the commissioner from doing business with his county where he is the commissioner. The statute simply does not address the factual situation you present. Accordingly, I am compelled to conclude that there is no statutory conflict of interest for the county commissioner to provide professional services to the school district as a certified public accountant.

Since the school district is not required to bid for or accept the lowest bid for professional services such as audits, see SDCL 5-18-18.1, the district is not obliged to employ the county commissioner to undertake its audits. The district may wish to avoid this entire issue by employing some other accountant to undertake its audits even if the cost is marginally higher. My answer to your question is that SDCL 6-1-1 does not identify a conflict of interest in the relationship between the school district and the county commissioner, nor does it prohibit the contract you describe.

IN RE QUESTION NO. 3:

By the same token, I see no situation in which the county commissioner would be required to abstain from a vote involving the school district. School districts are required by statute to undertake audits and it is an extremely remote possibility that any tax decision by the county commission would place the school district in such financial jeopardy it would be unable to undertake an audit or pay an auditor. The county commissioner should not abstain from voting under the circumstances you describe.

Respectfully submitted,

ROGER A. TELLINGHUISEN
ATTORNEY GENERAL

RAT:mas