The Department of Human Resources has requested that an exception be applied to permit an income maintenance worker (the Employee) in a County Department of Social Services to serve as a CARE home provider in the County. Based on the nature of the individual's duties and their relationship to this program, we advise that exception would not be appropriate to allow this relationship.

Income Maintenance (IM) is one of several divisions in this basically small social services department. Other divisions include what are referred to as the "services" programs, such as Adult Services and Child Welfare Services. The Income Maintenance program is the central coordinating program for public assistance programs in the State. These are substantially supported by federal funding and subject to federal requirements, though some also rely on State funding. Local Income Maintenance divisions follow policy and procedural requirements established by the headquarters Income Maintenance Administration for determining eligibility for these programs.

In the Employee's County Project Home, or the Certified Adult Residential Environment Program (CARE), is within the Special Programs Unit of the IM Division. The CARE program is administered by the Community Services Administration in DHR. Its purpose is "to develop, certify and monitor protective CARE housing for disabled individuals, ... and to provide case management services to persons living in CARE housing." The program has grown substantially in recent years as a result of the Health Department's implementation of a policy for releasing patients from residential mental and disability health facilities for living in the community. According to the Unit's Director, this and other programs handled by the Unit involve application of substantive program requirements by units in the service divisions. This entails initial intake and substantive program eligibility determinations by social worker caseworkers who are assigned to a particular client who has applied for assistance.

After the program determination is made, the case is sent to IM for processing for payment. This involves taking the level of care and other information from the services unit as a given and applying the client's resources to calculate a specific amount to be paid by the State. The process involves use of documents provided evidencing other entitlements, as well as interviews with the client. Based on this calculation the payment is authorized and the check is issued, usually directly to the client rather than the provider. Apparently this is a determination that must be made by an IM worker, as social workers may not authorize payments; under federal and State rules, since this is a public assistance entitlement program, the actual funding authorization must be made by an IM worker. The Employee is an IM worker in the Special Programs Unit and does this processing for Public Assistance to Adults (PAA) clients who receive payments of State funds based on their certification as eligible for domiciliary care support, Department of Health and Mental Hygiene rehabilitative residence care, or for the CARE Program. Her workload does currently include handling processing for clients served or to be served under the DSS CARE program.

The Employee is a worker who has been with the local DSS for many years. She has apparently had personal experience as a caregiver, and she indicates that she decided on her own to apply to be a CARE provider. The County's Adult Services supervisor indicates that the Department currently has 12 CARE providers. One person in this Division serves as the case manager for CARE clients, and is responsible for recruiting and certifying providers. The supervisor advises that as a general matter the DSS would like to have a few extra providers available to provide services, which is not currently the case. He also advises that the clients served by this program tend to be difficult clients and that they have a hard time finding caregivers. Apparently there is a particular situation currently pending involving a provider who is an African American and has two African American clients. The provider wants to retire, and the agency would like to be able to proceed with the Employee's application as a provider as a way to resolve this situation.

The agency points out in supporting this exception request that the program decisions regarding CARE clients and providers are made in the Adult Services Division, and the Employee works in the Income Maintenance Division. She is one of 7 workers in Special Programs, out of a total of 21 in IM. This is not, however, a large County or agency, and there are likely people in the agency and in the population being served who would know the Employee as a person who implements a key part of this program. The Special Programs Unit supervisor indicates that though the Employee has in the past included CARE cases in her workload, this is not necessary. There are other workers to whom these cases can be assigned, and the supervisor indicates that given the small number she would very likely simply do these authorizations herself. She believes that the rule requiring handling of cases where a worker has a personal relationship with a client by other workers functions well and would also work if the Employee were to become a CARE provider. The supervisor also indicates that she personally reviews all of the authorizations and case work-ups done by the Employee and other staff.

Given the Employee's current duties, we believe that several sections of the Public Ethics Law (Article 40A, Annotated Code of Maryland, the Ethics Law) would be at issue here, including the strict employment and impairment provisions of §3-103(a), and the absolute provisions involving duties relating to contracts in §3-105. Also, the §3-104 prestige provision could have application to dealings with her own agency. In particular, however, §3-103(a)(1)(i) of the Law prohibits an employee from being employed by or having an interest in an entity that is subject to her authority or that of her agency, or that has or is negotiating a contract with her agency. The Commission in interpreting this provision in situations involving provider relationships has generally said that being a provider, even as an individual, results in the existence of an entity in which the individual has both an employment and interest relationship as contemplated in §3-103(a). This entity has both a regulatory and contractual relationship with the State agency for which it serves as a provider, and the relationship is therefore prohibited by the strict language of this section unless an exception is allowed as set forth in the Law and implemented in Commission regulations.

Exception is permitted by the introductory language of §3-103(a), which provides that the prohibition applies "except as permitted by regulation of the Commission where such interest is disclosed or where such employment does not create a conflict of interest or appearance of conflict." This exception was added to the Law by the General Assembly at the request of the Commission in order to allow the holding of employment or interests in situations where it was reasonably clear that there was no conflict of interest or even the appearance of conflict. Prior to this change in the Law, having regulatory or funding relationships with an employee's own department was totally prohibited. The approach of Commission regulations implementing this exception (COMAR 19A.02) is to establish guidelines for determining whether the relationships between an employee's agency's functions and the private affiliations are so remote that a conflict or appearance of conflict is unlikely. The regulations address the situation both from the standpoint of the individual's agency relationships and functions, and from the aspect of the person's private affiliations and activities. They deal, for example, in this request, with whether the employee's duties significantly impact on the private entity, whether she is in the unit of her agency or has supervisory relationships with individuals that impact on the private entity, whether she has private management responsibilities relating to the private entity's compliance with agency regulations, and whether the private compensation is directly funded under the contract.

In some circumstances where a relationship exists, exception may still be allowed, if the employing agency advises that the credibility of the agency mission will not be impaired, and where the Commission finds there is no conflict or appearance of conflict. The regulations also include a provision implementing §3-103(a)(2)(ii), which allows exception for ministerial employees. Ministerial employee is defined as an "employee who has limited duties that are defined with such precision as to time, mode and occasion as to leave no substantive exercise of discretion or judgment by the employee." An exception is permitted as to ministerial employees despite issues under some of the guidelines, when the agency head specifies that the service or product to be supplied by the employee would otherwise be unavailable to the agency. The regulations also provide for the Commission to determine that the general circumstances of the situation do not raise a potential conflict of interest or appearance of conflict.

We have issued several opinions involving provider situations and implementing the statutory and regulatory provisions. For example, in Opinion No. 84-9 a physician employed in the Medical Assistance Compliance Administration was advised that his private Medical Assistance practice was inconsistent with §3-103(a)(1)(i) and that this bar could not be overcome by the exception regulations. In No. 84-12 In-Home Aides with DHR were advised that they could not have individual provider contracts with their local department to provide in-home services to clients. Opinion No. 86-1 was the first opinion issued after adoption of the ministerial employee portion of the regulations, and involved a Home Care Aide in a local department of social services who wanted to be an adult foster care provider with her agency. This activity was permitted, based on the employee's agency duties and representations by the agency regarding the difficulty in recruiting adult foster care providers. This was the same approach taken in Opinion No. 87-10, in which an Office Clerk in a local DSS was permitted to be a respite care provider with the agency. Both of these opinions reflect the statutory approach of only allowing exception where an appearance of conflict or actual conflict can be avoided.

In the situation here, the Employee would be a CARE home provider to her local department, and would be viewed as having an employment and interest relationship with an entity that is subject to significant monitoring and regulatory review by her agency. She would receive funding pursuant to statutory and regulatory programs in circumstances that we have in the past said result in a tacit contractual type of relationship. This is thus a relationship that would be prohibited by the strict prohibition of §3-103(a)(1)(i) unless an exception is allowed. The local agency and the Department in this situation have described the Employee as a ministerial employee. They point out that program and substantive determinations are made in the service program. Her role is to collect information in accordance with a standard formula and apply that in conjunction with a regulatory payment schedule to calculate a payment. Also, the Special Programs Unit supervisor indicates that all of the calculations and determinations of the IM workers are reviewed by her.

We recognize the agency's view here, and its need to recruit caregivers in these types of programs. We are concerned, however, that allowing an exception here would significantly expand the exceptions previously allowed. The Employee here seems to have duties that are more program oriented than employees in previous requests. Her duties could also be viewed as more substantive, in that she must inquire as to financial matters and help in program control. Apparently, the federal government is sufficiently concerned about objectivity in these programs to require separation between the program and financial functions. Allowing exception here would result in the same person performing official duties in the financial area, while carrying out program functions in a private capacity. Opinion No. 86-1 was also based in part on the fact that the employee's private activity would not involve dealing with people she worked with in the State job. This is not the case here. Finally, No. 86-1 was based on the fact that there was a substantial waiting list for services, and there was therefore no concern that she would be competing with other private providers for referrals.

More importantly, the Employee currently has duties relating to the CARE program. We note that the supervisor has indicated that these duties would be reassigned or handled by her. We have not, however, generally allowed disqualification to be a cure for problems under the employment and interest prohibitions of §3-103(a). Even if the Employee were not handling CARE cases, she would still be in the unit that does handle these cases and would be supervised by the individual responsible for these cases, including hers. She would also be handling cases initiated by caseworkers in the unit that would be substantively responsible to regulate and monitor her performance as a private provider. Necessarily, particularly in a small agency, she would be interacting with these individuals, including her own caseworkers, on a more or less regular basis.

Under these circumstances we are unable to conclude that exception would be appropriate here, even if the Employee were viewed as a ministerial employee. The Public Ethics Law was designed to protect the integrity of government programs by avoiding situations that would give rise to a conflict of interest or the appearance of conflict on the part of agency employees. It therefore prohibits employees from engaging in private activities that involve direct financial dealings with or regulation by their own agency. This establishes the general rule that this agency (and others that contract with private providers) may not recruit providers from among their own employees and enter into financial and regulatory relationships with them. Neither the statutory nor the regulatory exception language has the general effect of overcoming this prohibition and substituting a general rule that such provider relationships are appropriate as any standard practice.

The regulatory criteria implementing the statutory exception are drafted as guidelines that generally describe the potential issues to be taken into account along with other facts in making the finding of whether there is a conflict or appearance of conflict. In applying the criteria, we look for genuine remoteness in relationships, and have been reluctant to grant an exception where there are several potential issues raised under the criteria. We recognize the agency's provider recruitment needs. We do not impugn the Employee's integrity or motivation. In our view, however, in the situation here, the relationships are simply not remote, and the standards for granting an exception are not met.

Mark C. Medairy, Jr., Chairman
   Shirley P. Hill
   Michael L. May
   Mary M. Thompson

Date: August 18, 1993