Potential conflicts of interest within a Board of Education turn on the application of 18A:12-24(c), which provides:

No school official shall act in his official capacity in any matter where he, a member of his immediate family, or a business organization in which he has an interest, has a direct or indirect financial involvement that might reasonably be expected to impair his objectivity or independence of judgment. No school official shall act in his official capacity in any matter where he or a member of his immediate family has a personal involvement that is or creates some benefit to the school official or member of his immediate family;

A member of the immediate family or "relative" is defined to mean the spouse, natural or adopted child, parent or sibling of a Board member. 18A:12-23. This standard is relevant to a board member's participation in personnel matters, the searching and hiring process as well as negotiations with bargaining units and administration.

In determining whether a conflict with 18A:12-24(c) exists, the Commission must first determine whether the public could reasonably perceive that the board member's objectivity or independence of judgment may be impaired because the board member, or their immediate family member, has some direct or indirect financial involvement in the search for a new superintendent or other personnel matter. Advisory Opinion A30-07 (January 11, 2008). The Commission must next determine whether the board member has a personal involvement that is or creates some benefit to the board member or his or her immediate family. A30-07 at 2. In A16-00, the Commission found that the benefit set forth in 18A:12-24(c) need not be financial; otherwise the "personal involvement" provision would be redundant. The Commission also noted that "it considers an involvement to be personal whenever a school official (board member) has a relationship that the public may perceive as being predominant to the best interest of the district. Id. at 2. Therefore, a benefit can be something of intrinsic value, but no monetary worth." Id.

To establish whether a board member should recuse themselves from discussions and/or voting regarding personnel issues the following information is relevant:

• Relationship of their immediate family members employed by the District (ie. spouse, dependant child, etc.);
• Job title of immediate family member(s); and
• Immediate supervisor, plus "chain of command", of said immediate family member.

In Advisory Opinion A10-00, (June 27, 2000), a board member's spouse was employed as a teacher in the district. In that instance, the Commission advised that it would not be reasonable for the public to expect that a board member, with a spouse who teaches in the district, would choose to appoint administrators who are most likely to be financially favorable to teaching staff, especially since teachers are employed pursuant to a collective bargaining agreement. The Commission also found that the board member and his spouse do not have a personal involvement in the selection of administrators that would create some benefit to them. However, it was specifically cautioned by the Commission that "[t]his may change if the selection is for someone who already knows the board member's spouse." A10-00 at page 2.

The Commission acted on this cautionary statement in a decision and reprimand of a Bound Brook School District board member. I/M/O Carol Ann Koupiaris, Board of Education, Somerset County (February 7, 2005). The member voted on the reappointment of the Principal of Bound Brook Middle/High School who, at that time, supervised and evaluated respondent's husband. Respondent's husband is member of the teaching staff at the school. The Commissioner found the member's vote to be in violation of 18A:12-24(c).

In 2006, the Commission determined through an Advisory Opinion, that when the superintendent (or administrator) was familiar with the board member's spouse, the board member must recuse themselves from the process of searching for and the hiring of a new superintendent. See Advisory Opinion A07-06, (July 31 2006) Advisory Opinion A23-06, (November 15, 2006). If, however, the board member and spouse are not familiar with any of the candidates for the superintendent's position, the board member may participate in the search for the new superintendent. A30-07, supra. at 3.

Advisory Opinion A10-00 (June 27, 2000), speaks to what "restrictions" would be required to be implemented, while the board member may participate in the selection of the administrators in question, specifically that the board member may not participate in discussions and vote on employment issues concerning these administrators who supervise their spouse, after they were appointed. Similarly, in Advisory Opinion A23-06 (November 15, 2006), the Commission held that even if a board member participated in the search for a new superintendent because they were not familiar with any of the candidates, such a board member could not participate in contract negotiations or employment issues related to the new superintendent. A23-06 at page 6. See also Advisory Opinion A30-05 (March 10, 2006), A30-07, supra.

A further consideration is whether the immediate family member is a permanent employee. In Advisory Opinion A16-00 (November 28, 2000), the Commission found that if a board member's spouse is not a permanent employee, the board member involvement in employment issues related to a new superintendent would not positively or negatively impact the employment of board member spouse. See also Advisory Opinion A14-06 (October 19, 2006) (wherein the Commission determined that a board member would not violate 18A:12-24(c) where his/her spouse served as an on-call substitute teacher). The Commission advised that a board member may participate in the search for a new superintendent, the interview process for the potential candidates, the contract negotiations, the hiring of the new superintendent and in employment issues related to the new superintendent. However, the Commission cautioned that a board member should abstain from voting on the annual hiring for substitute custodians in order to avoid a violation of 18A:12-24(c).

Thus, in light of the above mentioned "advisory" opinions, circumstances may arise wherein a board member may have to recuse themselves from personnel matters in order to avoid a violation of 18A:12-24(c). All board members with relatives employed by the district should be heedful of A30-05. However, as noted previously, these opinions only provide a frame of reference as to how a case may be decided if an actual complaint were filed against a board member for the same type of issue and each matter should be looked at on a case-by-case basis.

Education Commissioner, Lucille E. Davy, issued a 205-page draft of regulations to implement recent laws, including the School District Accountability Act (hereinafter the "Act"). The Accountability Act portion was signed into law on March 15, 2007 by Governor Jon S. Corzine. P.L. 2007, c. 53. As outlined below, this legislation will impact districts in a number of areas, such as board member training, conditions for State Aid, nepotism, travel, expenditures and efficiency standards.

Board Member Training
In addition to training in their first year, this Act will implement and make mandatory, additional advanced training. Members must attend training if they are (1) First Term Board Members in their second and third years, or (2) are reelected/reappointed Board Members. The advanced training program will be offered by the New Jersey School Boards Association and will include information on relevant changes to New Jersey school law and other information deemed appropriate to enable the members to serve more effectively. P.L. 2007, c.53 (codified as N.J.S.A. 18A:12-33(13)).

Conditions for Receipt of State Aid
As a condition for receiving State Aid, Boards must now examine all available group options for every insurance policy held by the District to determine the most cost-efficient selection. The District must further, take steps to maximize the district's participation in the federal Universal Service Program (E-rate), the ACT telecommunications program and the Special Education Medicaid Initiative (SEMI) program. To qualify to receive State Aid, the District must refinance all outstanding debt for which a 3% net present value savings threshold is achievable. P.L. 2007, c. 53 (codified N.J.S.A. 18A:55-3).

Nepotism Policy
With the establishment of the Accountability Act, to receive State Aid, the Board must adopt anti-nepotism policies that prohibit the future hiring of Board Members' or Superintendents' relatives. Pursuant to N.J.S.A.18A:11-12, in pertinent part:

k. A board of education shall require in its policy that a board member recuse himself from voting on travel if the board member, a member of his immediate family, or a business organization in which he has an interest, has a direct or indirect financial involvement that may reasonably be expected to impair his objectivity or independence of judgment.

l. A board of education shall require in its policy that a board member shall not: act in his official capacity in any matter in which he or a member of his immediate family has a personal involvement that is or creates some benefit to the school official or member of his immediate family; or undertake any employment or service, whether compensated or not, which may reasonably be expected to prejudice his independence of judgment in the execution of his official duties.

The draft regulations of Commissioner Davy further requires school boards to establish anti-nepotism policies in order to receive state aid. While this anti-nepotism policy will prohibit the future hiring of Board Members' or Superintendents' relatives, such individuals currently employed would be "grandfathered" in their present positions and further, the District may seek Executive County Superintendent approval to grant such persons promotions or place them in new positions. School Board Notes, Vol. XXXI, No. 37 (May 8, 2008). A section entitled, Conditions Precedent to Disbursement of State Aid provides:

(a) The Commissioner shall not disburse any State aid to a public school district that fails to comply with the efficiency standards and requirements concerning nepotism, contributions to board members and contract awards, internal controls and travel set forth in this subchapter.

Travel
Detailed controls to reduce travel costs are included in the Act, codified as N.J.S.A. 18A:11-12, wherein, for example, the Act places a ban on car rentals and limousine service, and if available, the District facilities must be used for retreats. Each Board must establish a maximum travel expenditure for the year. If this amount is exceeded, the District risks a State Aid reduction or other sanction. Further, District travel policy must require detailed documentation and a report to Board after each trip. A majority of the Board must approve itemized travel requests in advance. Travel advances and general or blanket preapproval is prohibited.

With respect to staff travel, Board Policy must require that district employees can only travel after receiving (1) written approval from the District's chief administrator and (2) approval from majority of full Board in advance to traveling. For regular business travel a district travel policy can set an annual maximum amount per an employee, which would not require Board approval.

The policy allows board members and employees to be reimbursed for travel and related expenses that are directly related to the school district professional plan; that are limited in scope, educationally necessary, and fiscally prudent. Travel shall be critical to the instructional needs of the district or further the efficient operation of the district. Reimbursement is limited to the guidelines established by the Department of Treasury in the NJOMB circular letter 06-02 (found at http://www.state.nj.us/infobank/circular/cir0602b.htm) and OMB circular A-87 (found at http://www.whitehouse.gov/omb/ circular/a087/a87_2004.html). Any violation of these established maximum travel expenditures as set forth in the above policy may be subject to reduction of state aid in an amount equal to the excess expenditure. There are additional personal "treble damages" penalties for unauthorized travel.

As outlined above, this multi-faceted legislation impacts school boards in a variety of ways and one key area is board member training. For further information, please see the NJSBA website which has updated several model policies in the Critical Policy Reference Manual to comply with requirements in the recently adopted accountability regulations.

Mr. Taylor is an associate with Florio Perrucci Steinhardt & Fader, where he works with the firm's practice groups of Litigation Defense, Labor and Employment, Municipal, Education, and Construction and Public Contracting law.

Lester received a bachelor of arts degree in political science from Montclair State University and a Juris Doctorate from Howard University School of Law. While in law school, he served as a legislative associate for Dominion, a Virginia-based electric utility, in its Washington, D.C., office.

Following graduation from law school, Lester served as a law clerk to the Honorable Zinora M. Mitchell-Rankin, Associate Judge, Superior Court of the District of Columbia. He then worked as an associate engaged in all phases of litigation with Hunt, Hamlin & Ridley in Newark, N.J., before joining Florio Perrucci Steinhardt & Fader, L.L.C.

In the past few years, Lester has gained significant experience in representing school boards for general as well as labor and employment matters. He has represented the Boards of Education in Asbury Park, Irvington, East Orange and Pleasantville, N.J.

Lester is admitted to practice law in New Jersey and Maryland.

ltaylor@florioperrucci.com

Donald E. Souders, Jr.

Mr. Souders is a partner in Florio Perrucci Steinhardt & Fader, working in several practice groups including Litigation Defense, Real Estate/Land Use, and Family Law.

Don has more than 15 years of trial experience, achieving favorable settlements and verdicts for his clients in many jurisdictions. His trial work has included civil and criminal jury trials primarily in Hunterdon and Warren Counties, N.J., and Lehigh and Northampton Counties, Pa., as well as throughout both states, including in Federal Court in Trenton, N.J., and Philadelphia, Pa.

As a sole practitioner in Phillipsburg, Don worked with real estate, land use, workers' compensation, business formation, criminal defense, commercial litigation and family law matters. For the past four years, he has served as Special Sewer Counsel for the Borough of Alpha, N.J., where he previously served as the borough's Municipal Prosecutor.

Don holds a bachelor of science degree in criminal justice from the University of Delaware and a Juris Doctorate from Widener University School of Law. Following graduation from law school, he was an associate attorney with Mudge Rose Guthrie Alexander & Ferdon in New York City and New Jersey for two years before opening his own law office.

He is admitted to practice law in New Jersey and Pennsylvania.

dsouders@florioperrucci.com

Brian R. Tipon
Mr. Tipton is a partner in Florio Perrucci Steinhardt & Fader and chairs the firm's Litigation Defense Group focusing on litigating matters involving insurance defense, employment law, Federal Employer's Liability Act (FELA) defense, commercial law and other general litigation matters. In addition, Brian is a member of the Real Estate and Land Use Group where he focuses on the areas of land use, real estate and zoning.

Prior to joining the firm, Brian was an associate for five years at the law firm of Fischbein Badillo Wagner Harding in Phillipsburg, N.J. He was a member of the firm's litigation group, handling a variety of matters involving real estate and land use, commercial litigation and employment law.

Brian received his undergraduate degree from Washington College and his Juris Doctorate from Vermont Law School. While in law school, Brian worked as a law clerk for Florio & Perrucci, P.C., in Piscataway, N.J.

He is licensed to practice in New York, New Jersey, Pennsylvania, the U.S. District Court in New Jersey, the U.S. District Court in the Eastern District of Pennsylvania, and the U.S. District Court in the Middle District of Pennsylvania. He is a member of the Warren County, N.J., Bar Association and the Northampton County, Pa., Bar Association.

Brian is the Mayor of Harmony Township, N.J. Previously, he served on the Harmony Township Land Use board for three years, including two years as chairman.

btipton@florioperrucci.com"

Louis Cappelli, Jr.
Louis Cappelli, Jr. joined the law firm of Florio Perrucci Steinhardt & Fader, L.L.C. as the managing attorney in its Woodbury, New Jersey, office on March 1, 2008. Lou provides Florio Perrucci Steinhardt & Fader with his extensive experience in governmental and regulatory affairs, real estate, family, personal injury and worker's compensation law. He has served as prosecutor and planning board attorney in nine municipalities.

A native of South Jersey, Lou graduated Albright College with a B.S. degree in accounting and received a J.D. degree from the Rutgers University School of Law - Camden. In addition to practicing law in the Supreme Court of New Jersey, Lou is admitted to the Supreme Court of Pennsylvania, the U.S. District Court of New Jersey, the U.S. Court of Appeals for the Third Circuit and the U.S. Supreme Court. He is a member of the Camden County Bar Association.

Lou currently serves as Director of the Camden County Board of Chosen Freeholders. He was elected to the Camden County Board of Chosen Freeholders in 2003, and was unanimously elected by the Freeholder Board as its Director in 2006. Prior to becoming Freeholder Director, Lou served as a member of the Board of Commissioners in the Borough of Collingswood and as a member of the Collingswood Board of Education. Lou also serves as a member of the boards of the Delaware Valley Regional Planning Commission and the Greater Camden Partnership.

lcappelli@florioperrucci.com

J. Andrew Kinsey

Mr. Kinsey is the chair of the Labor and Employment Group and a partner in the firm. He works with day-to-day desk counseling for clients faced with workplace issues; he drafts personnel policies and procedures to comport with federal and state laws, and he handles all forms of employment litigation, including civil trials and appeals. Andrew has extensive experience defending healthcare, utility, construction, railroad, hotel, restaurant and public-sector clients from various types of discrimination, whistle blower, FELA and civil rights claims. In the field of traditional labor law, he negotiates collective bargaining agreements, and handles arbitration, NLRB, PERC and Merit Systems Board proceedings. In addition, Andrew handles commercial and construction law matters.

Andrew received a bachelor of science degree cum laude from American University where he interned for a member of Congress and a member of British Parliament. He earned his Juris Doctorate cum laude from New York School of Law where he served as Chief Articles Editor for the Journal of Human Rights, and thereafter clerked for the Honorable F. Michael Caruso, Judge of the Superior Court of New Jersey. Andrew is a member of the New Jersey Bar Association and a past participant in the Sidney Reitman Labor and Employment Law Inn of Court. He is also a member of the Society of Human Resource Managers.

Andrew was formerly employed by Peckar & Abramson and Appruzese, McDermott, Mastro & Murphy where he exclusively represented management in all types of labor and employment matters. He is admitted to practice law in the state courts of New Jersey, New York and Pennsylvania, the U.S. District Courts for the District of New Jersey and the Southern and Eastern Districts in New York, and the U.S. District Court in Pennsylvania.

akinsey@florioperrucci.com

Jessica L. Cardone

Ms. Cardone is an associate with Florio Perrucci Steinhardt & Fader working in the areas of labor and employment, education and litigation defense.

Jessica received a bachelor of arts degree from Hofstra University and a Juris Doctorate from Hofstra University School of Law. Jessica was secretary to the Corporate Law Society, a finalist in the Hofstra Law Intraschool Trial Competition and a semifinalist on the Hofstra Criminal Trial Team in the Quinnipiac School of Law Annual Trial Competition.

While in law school, Jessica was a legal intern with the Hofstra University Housing Rights Clinic where she participated in settlement negotiations and accompanied the clinic's clients to court.

Jessica is admitted to practice law in the states of New Jersey and New York as well as the U.S. District Court for the District of New Jersey.

jcardone@florioperrucci.com