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, LEGAL Cohm,lANCE MANUAL CONFLICTS OF INTEREST Introduction Minnesota statutes forbid any public officer authorized to take part in the making of a melt, lease or contract, to voluntarily have a persenai financial interest in the transaction or personally benefit financlaily from it. The following persons are apeciileally forbidden from having any interest in any contract made by their respective governing bodies: 1) Elected officers 2) Town supervisors and town board members I) County Off iciala, e(lunty deputies, county clerks and I employees of such officials 4) School Board members. For practical reason' the legislature has created certain limited exceptions to the general prohibition. This questionnaire will assist you in a Gete:minetfon gig to whether a forbidden transaction fits within an,Y of the statutory exceptions,' For the purpose# of this checklist "interested officer" shell mean say public officer or employee, as listed above, who diractly or through his or her apouse (see "Discussion" below) bes one of the following interests in either the entity imaking or the ;object matter of the sale, lease or contract with the governing body; i. a. officer; yy b. director; !K% C. employee (tee "Discussion" below); d, partner; e. owner (complete or partial); f, shareholder{ or g. prior Fong-te:m contractual relationship. Discussion The determination as to r.'htther a particular transaction involves an "interested officer" often calls for a judgment on the part of the auditor, A helpful concept to remember for analysis, is that it is a conflict of interest to be on both sides of a contract or transaction. Most problems in this regard, arise in the examination of the "interest" the public officer has in the person or entity making the contract with the governing body. Two frequent problem areoi Bret Ccntrecte with officer's or employee°a spouse. It is not a conflict of interest . rcr a governing body to contract or otherwise economically transact with b- e:- a member effiear'e spouat. However, if the facts fnaicece an eeonvmia <na..- to the member officer as a result of the contract or transaction, a conflict of interest exists. If a husband and wife, one of whom is a public officer, share s common pool of fund, and likewise share debts, conflicts may exist because there is benefit to t`e public officer or employee flowing from the economic benefit to hia spouse, Likewise, if a governmental officer or employee and his or her spouse, in fact, do not economically benefit from each other, no conflict may exist. 11-87