2004-02-25 WS & CC Meeting - Laserfiche WebLink

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I - Office of the State Auditor City Expenditures and the Public Purpose Doctrine Page 6 necessary. See Op. Att'y Gen. 285a (Aug. 7, 1969)(Attomey General deferred to library board's determination that meal was necessary so invited guests could attend). 4. The OSA maintains that the purchase of alcohol at public expense does not serve a public purpose. In addition, the expenditure of public funds for the expenses of a spouse of a public employee or officer does not serve a public purpose. E. Employee Social Events Unless specific authority provides otherwise, employee social functions should not be paid for with public funds. See Ops. Att'y Gen. 59A-22 (Jan. 8, 1957) (municipal corporation may not imply authority to appropriate public revenue for celebrations, entertainments, etc., quoting 15 McQuillin, Municipal Corporations, 3" ed., Sec. 39.22), and 59a-22 (Nov. 23, 1966) (city Christmas party). Comment: Many public entities fund employee social events through employee clubs. Such clubs collect money from the employees, and have no involvement with the public entity regarding the funds collected from the employees. Sometimes vending machine proceeds are used by the employee clubs. A public entity appears to have at least three options for the operation of vending machines in public spaces: 1. The public entity could be responsible for the vending machine. All disbursements of vending machine proceeds would then need to comply with the public purpose doctrine. 2. The public entity could contract with a private entity, which results in the public entity receiving a commission from the vending machine sales. All commissions collected by the public entity would need to comply with the public purpose doctrine. 3. An employee club could operate the vending machines. In such cases, the OSA would expectto see a written arm's-length contract between the public entity and the employee club that would compensate the public entity for the licensed space used by the vending machines, and set forth the liabilities of the parties with regard to the machines and insurance. Proceeds of the vending machines would not be considered public funds in such cases. Note: Vending machines operated by employees in non-public places, such as in employee lunch rooms, would not necessarily be public funds in the OSA's opinion.