Can a Virginia city and its school board share back-office services like health plans, accounting, or a shared chief financial officer?

Plain-English summary

Delegate Garrett asked about a proposal between the City of Lynchburg and the Lynchburg School Board to consolidate certain functions. Two of the proposed changes: merging health care plans or back-office financial accounting services, and having the school board rely on the City's Chief Financial Officer to craft the school board's budget.

The AG concluded that consolidation is permissible for ordinary back-office functions but raises serious concerns when it touches the school board's core independence, especially in budget matters.

The constitutional and statutory baseline:

• Art. VIII, § 7 and § 22.1-28. Supervision of schools vested in a school board.
• § 22.1-79. Powers and duties of school boards.
• The opinion states a school board cannot forfeit its independence to another entity and must retain the ability to fulfill its responsibilities.

The AG's framework: a school board can share certain functions with a city or county as a cost-saving measure, but it cannot forfeit its independence to another entity and must retain the ability to fulfill its responsibilities.

Applied to the Lynchburg proposal:

Health plans: Permissible. The AG saw little danger to the school board's core responsibilities from consolidating health plans. Sharing a health plan does not threaten the school board's core decision-making.

Back-office financial accounting: Permissible. A prior opinion of this Office concluded that a school board and a locality could create a joint legal entity responsible for personnel, finance, operations, maintenance and construction, facilities design and engineering, and management information systems. Back-office accounting falls comfortably within that scope.

Shared Chief Financial Officer: This is where the AG drew a caution flag. Budgetary disputes between localities and school boards "occur with regularity" in Virginia. A CFO who serves both the locality and the school board will find it difficult to act independently for each. Even if the actual conduct were impartial, the appearance of independence would be compromised. The AG stopped short of declaring the arrangement impermissible without more facts, but emphasized that it presents "a greater danger of restricting the independence of the school board in budgetary matters."

Outsourcing to private parties: The AG confirmed that school boards and local governments routinely contract with outside parties for vehicle and equipment maintenance, legal services, and similar functions. Outsourcing is permissible as long as it complies with statutory and constitutional restrictions.

The unifying principle: the school board can use cost-saving consolidation tools as long as it retains independent authority over its core responsibilities (overseeing school policy, spending funds for schools, and managing school personnel). When a shared arrangement would functionally place a school board decision under the control of another body, the arrangement is impermissible.

Currency note

This opinion was issued in 2011. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The legal framework for shared services has continued to evolve. Anyone designing a current consolidation arrangement should consult current statutes, recent AG opinions, and case law on school board independence.

Common questions

Why is the CFO arrangement special?
Because the budget is where the line between locality and school board is most contested. A shared CFO would simultaneously be advising the locality (which fixes the school appropriation) and the school board (which decides how to spend it). The CFO ends up structurally conflicted. Even with good intent, the dual loyalty undermines the school board's claim to independent budget judgment.

Could the school board hire its own CFO who also works for the city under contract?
The opinion stops short of analyzing every possible structure. The key issue is whether the school board retains independent budget judgment. An arrangement that preserves that independence (for example, a CFO who advises both bodies but the school board makes the final calls without effective veto from the city) might survive. An arrangement that effectively transfers budget control to the city would not.

Are joint legal entities common in Virginia?
Yes. Many localities and school boards run joint entities for IT, transportation, maintenance, and similar services. A prior AG opinion explicitly approved this joint-entity structure. The boundary the AG drew is on functions that directly implicate the school board's constitutional independence.

Can a school board outsource teaching itself?
The opinion didn't address that. The AG framed outsourcing as appropriate for "maintenance and repair services for vehicles and equipment, and legal services." Outsourcing classroom instruction would raise separate issues about the school board's authority over personnel and the constitutional commitment to school board supervision.

What if cost savings are huge?
Cost savings don't override the constitutional and statutory framework. The school board may face political pressure to consolidate, but it cannot give up authority that the Constitution and the Code have committed to it.

Background and statutory framework

The constitutional and statutory anchor:

• Va. Const. art. VIII, § 7. Supervision of schools vested in a school board.
• § 22.1-28. Same.
• § 22.1-79. Powers and duties of school boards.

The independence principle:

• The opinion states the school board cannot forfeit its independence to another entity and must retain the ability to fulfill its responsibilities.

Prior AG approvals of shared functions described in the opinion (without citation numbers in the reproduced text):

• Localities could require all purchases of supplies and equipment for a school board to be performed by a central purchasing agent, subject to the school board retaining the authority to decide what it needs and the costs.
• A school board can create a joint legal entity with the locality for personnel, finance, operations, maintenance and construction, facilities design and engineering, and management information systems.

The line: shared services that preserve school board independence are fine. Shared services that effectively transfer school board authority are not. The CFO question is on the borderline and depends on specifics not in the record.

Citations

• Va. Code § 2.2-505
• Va. Code Ann. § 22.1-28
• Va. Code Ann. § 22.1-79
• Va. Const. art. VIII, § 7

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2011/10-122-Garrett.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Kenneth T. Cuccinelli, II
Attorney General

January 21, 2011

The Honorable T. Scott Garrett, M.D.
Member, House of Delegates
Post Office Box 10889
Burke, Virginia 22009

Dear Delegate Garrett:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issue Presented

You ask whether a plan to consolidate certain functions between the school system and a city would result in the school board abrogating its duty and authority with respect to the schools. You further inquire whether certain functions can be "outsourced."

Response

It is my opinion that a school board can consolidate certain functions with a city or a county, but in doing so the school board may not abrogate its duties or compromise its independence with respect to its core responsibilities. I lack sufficient information, however, to determine whether the plan at issue would impermissibly result in the abrogation of the school board's duties and authority. Finally, outsourcing certain functions is permissible so long as school boards and localities comply with statutory and constitutional restrictions.

Background

You relate that the City of Lynchburg and the City of Lynchburg School Board are considering a plan to consolidate certain functions. The information you provide indicates that the City and the School Board have contemplated merging health care plans or back office financial accounting services. One of the contemplated changes would result in the school board relying on the City's Chief Financial Officer to craft the school board's budget.

Applicable Law and Discussion

Article VIII, § 7 of the Constitution of Virginia and § 22.1-28 of the Code of Virginia provide that "[t]he supervision of schools in each school division shall be vested in a school board." In general, the powers and duties of the school board are set forth in § 22.1-79 of the Code. A school board cannot forfeit its independence to another entity and must retain the ability to fulfill its responsibilities.

School boards and cities or counties can agree to exercise certain functions jointly as a cost-saving measure. Prior opinions of this Office have concluded that localities could require all purchases of supplies and equipment for a school board to be performed by a central purchasing agent. School boards, however, must retain the authority to decide what supplies, materials and commodities it may need and the costs for these items. This Office also has concluded that a school board can create with the locality a joint legal entity responsible for certain aspects of personnel, finance, operations, maintenance and construction, facilities' design and engineering, and management information systems. I see little danger to the school board's core responsibilities of overseeing school policy, spending funds for schools, and managing school personnel should it decide to consolidate health plans or back office financial services.

With respect to sharing a chief financial officer, such an arrangement presents a greater danger of restricting the independence of the school board in budgetary matters. Budgetary disputes between localities and school boards occur with regularity throughout the Commonwealth. A shared chief financial officer will find it difficult to act independently with each body. Certainly, the appearance of independence would not be present. In the absence of specific details concerning the arrangement, however, I am unable to conclude absolutely that such an arrangement would be impermissible under Virginia law.

Finally, you inquire whether certain functions can be "outsourced." School boards and local governments can, and often do, contract with outside parties to provide certain services, including maintenance and repair services for vehicles and equipment, and legal services. Such contracts are permissible so long as they abide by statutory and constitutional restrictions.

Conclusion

Accordingly, it is my opinion that a school board can consolidate certain functions with a city or a county, but in so doing may not abrogate its duties or compromise its independence with respect to its core responsibilities. I lack sufficient information, however, to determine whether the plan at issue would impermissibly result in the abrogation of the school board's duty and authority. Finally, outsourcing certain functions is permissible so long school boards and localities comply with statutory and constitutional restrictions.

With kindest regards, I am

Very truly yours,

Kenneth R. Cuccinelli, II
Attorney General