2011 Conflict of Interest2011 Conflict of Interest & Procurement Ethics & Procurement Ethics Update for Research Update for Research

AdministratorsAdministrators

UA Business Affairs & Office of UA Business Affairs & Office of the General Counselthe General Counsel

Current Environment Current Environment

Public concern re: ethics in government, Public concern re: ethics in government, including higher edincluding higher ed

Focus on practices favoring specific vendors / Focus on practices favoring specific vendors / partners without benefit to customer / partners without benefit to customer / taxpayertaxpayer

Calls for transparency Calls for transparency Attitudes towards public spendingAttitudes towards public spending Poor economic conditionsPoor economic conditions

Tight competition Tight competition Greater scrutiny on transactions; FOIA requestsGreater scrutiny on transactions; FOIA requests Incentives to challengeIncentives to challenge

Recent News Events Recent News Events

Cautionary talesCautionary tales

Bottom line: extra efforts & attention Bottom line: extra efforts & attention neededneeded

Employee Conflict of Interest Employee Conflict of Interest — State Procurement Law— State Procurement Law

Statement of Policy – Ark. Code Statement of Policy – Ark. Code § 19-11-§ 19-11-703(b)703(b)

“Public employees must discharge their duties impartially so as to assure fair competitive access to governmental procurement by responsible contractors. Moreover, they should conduct themselves in such a manner as to foster public confidence in the integrity of the state procurement organization.”

See Arkansas Procurement Code at:http://www.dfa.arkansas.gov/offices/procurement/Documents/lawsRegs.pdf

General Ethical Standards for General Ethical Standards for Employees — Employees — § 19-11-704§ 19-11-704

(1) “Any attempt to realize personal gain through public employment by conduct inconsistent with the proper discharge of the employee's duties is a breach of a public trust.”

(2) Employees must meet specific standards re: conflict of interest, employee disclosure requirements, gratuities & kickbacks, prohibition against contingent fees, restrictions on employment of present & former employees, & use of confidential info.

Employee Conflict of Interest Employee Conflict of Interest — Ark. Code— Ark. Code § 19-11-705§ 19-11-705

(a)(1) It shall be a breach of ethical standards . . . to participate directly or indirectly [in any matter] pertaining to any contract or subcontract, & any solicitation or proposal . . . in which . . . .

(A) employee / immediate family has a financial interest;

(B) A business or org. has financial interest, in which employee / immediate family member has financial interest;

(C) Any other person, business, or org. with whom employee

/ immediate family member is negotiating or has arrangement concerning prospective employment is a party.

Employee Conflict of Interest Employee Conflict of Interest — Ark. Code — Ark. Code § 19-11-705§ 19-11-705

(a)(2) “Direct or indirect participation” shall include, but not be limited to, involvement through decision, approval, disapproval, recommendation, preparation of any part of a procurement request, influencing the content of any specification or procurement standard, rendering of advice, investigation, auditing, or in any other advisory capacity.

Use of Confidential Information Use of Confidential Information — Ark. Code — Ark. Code § 19-11-710§ 19-11-710

Breach of ethical standards for any employee or former employee knowingly to use confidential info. for actual or anticipated personal gain for self or any other person.

Employee Conflict of Interest Employee Conflict of Interest — UA Board of Trustee Policy — UA Board of Trustee Policy

330.1330.1

Prohibits Contracts with Legislators, Constitutional Officers, Board Members, or State/UA Employees (or Family) Without Chancellor Approval

Approval Process

BASIS cross-checks

Board Policy 330.1 — MoreBoard Policy 330.1 — More

Requires each campus to create conflict of interest policies

Must include adequate disclosure of conflicts of interest and method for resolving

Policies shall assure that employees in purchasing, billing, collections, financial offices, and offices otherwise engaged in contracting for expenditure or receipt of funds shall not accept gifts/gratuities from UA contractors.

Outside Employment — UA Outside Employment — UA Board of Trustees Policy 450.1Board of Trustees Policy 450.1

Full-Time Faculty & Non-Classified Admin. StaffFull-Time Faculty & Non-Classified Admin. Staff Limited Outside Work OK Must Not Interfere/Conflict with UA Duties Written Advance Approval Required Make Clear Not Acting as Agent/Rep of UA UA Facilities/Property Only with Permission – Fees

May be Required

Disclosure of Potential Conflict Disclosure of Potential Conflict of Interest & Outside of Interest & Outside

Employment — Fayetteville Employment — Fayetteville Policy 404.0Policy 404.0

Implements Board Policy 450.1 (Outside Employment) and Campus Policy on Conflict of Interest and Outside Employment (Faculty Handbook and Staff Handbook 3.16 and 3.17)

Fayetteville Policy 404.0Fayetteville Policy 404.0

Includes Two Forms:

#1 Prior Approval of Outside Employment Full-time faculty & non-classified admin. staff Full-time faculty & non-classified admin. staff Nature & source of outside employment Annually or more often as needed Obtain approval from Department Head prior

to undertaking employment

Prior Approval of Outside Prior Approval of Outside Employment – Form BEmployment – Form B

Fayetteville Policy 404.0Fayetteville Policy 404.0

#2 Disclosure of Potential Conflict of Interest All faculty, classified & non-classified staffAll faculty, classified & non-classified staff Must read campus policy on conflict of interest

(staff handbook 3.17) Disclose relationships or activities . . .

that may give rise to conflicts or appearance of conflicts with duties, responsibilities, or obligations to UA

Complete annually or more often as needed Review by supervisor and head of unit

Disclosure of Potential Conflict of Disclosure of Potential Conflict of Interest – Form AInterest – Form A

Fayetteville Policy 404.0 —Fayetteville Policy 404.0 —Completion & Review of FormsCompletion & Review of Forms

Requests to approve employment & disclosures reviewed by supervisor & head of unit

If approved, may outline steps to manage potential conflict

Copy of form returned to employee indicating whether approved or disapproved

Conflict of Interest Forms Conflict of Interest Forms Enhanced – Public Enhanced – Public

AvailabilityAvailability UA considering procedures to allow outside

employment & associated conflict of interest forms to be available on a UA web site

Employees would have an opportunity to object if they believe disclosure would be unwarranted invasion of personal privacy

University would review objections consistent with requirements of Ark. FOIA prior to release

Faculty and staff reps involved in discussions to help address privacy considerations

Rules on Gifts — Arkansas Rules on Gifts — Arkansas Ethics CommissionEthics Commission

Rules of Gifts Available at http://www.arkansasethics.com/

§ 303 Receipt of Gifts by Public Servants

(a) No public servant shall receive a gift for the performance of the duties and responsibilities of his or her office or position.

(b) For purposes of this rule, a gift shall be prohibited if it is intended to reward a public servant for doing his or her job or it is intended as a reward for past or future action.

Rules on Gifts — Arkansas Rules on Gifts — Arkansas Ethics CommissionEthics Commission

§ 303(a) – Definition of “gift” As used in these rules, the term “gift” means any

payment, entertainment, advance, services, or anything of value, unless consideration of equal or greater value has been given therefor.

Various exclusions. Examples: Informational material re: official duties Food or beverages as part of conference program Valued at $100 or less Gifts from family; wedding gifts Food, lodging or travel bearing a relationship to official

duties when appearing in an official capacity

Ethics & Conflict of Interest – Ethics & Conflict of Interest – Big PictureBig Picture

Heightened focus Transparency Awareness of / abiding by laws and

rules Appearance of impartiality Resources to assist in compliance A final note on Federal compliance

Federal Conflict of Interest Federal Conflict of Interest ComplianceCompliance

NIH, NSF, PHS, etc., require disclosure of significant financial interests by investigators

Significant financial interest is any financial interest (payment or equity interest) of the individual, spouse, or dependent children exceeding $10,000 or 5% ownership in entities that might be affected by the research.

Proposed changes would decrease the limit to $5,000.

Income from seminars, lectures, or teaching, & service on advisory committees or review panels for public nonprofit entities are excluded from disclosure.

Proposed Changes in Federal Proposed Changes in Federal ComplianceCompliance

Public disclosure via web site of certain financial conflicts of interest

Development of management and mitigation plans for when conflicts arise

Institutional reporting of conflicts of interest to Federal entity

Conflict of interest training for investigators before research begins & every two years thereafter

Please call if we can Please call if we can help . . . help . . .

UA Business Affairs 575-2551

Office of the General Counsel575-5401