2011 Conflict of Interest & Procurement Ethics Update for Research Administrators UA Business Affairs & Office of the General Counsel

Current Environment Public concern re: ethics in government, including higher ed Public concern re: ethics in government, including higher ed Focus on practices favoring specific vendors / partners without benefit to customer / taxpayer Focus on practices favoring specific vendors / partners without benefit to customer / taxpayer Calls for transparency Calls for transparency Attitudes towards public spending Attitudes towards public spending Poor economic conditions Poor economic conditions Tight competition Tight competition Greater scrutiny on transactions; FOIA requests Greater scrutiny on transactions; FOIA requests Incentives to challenge Incentives to challenge

Recent News Events Cautionary tales Cautionary tales Bottom line: extra efforts & attention needed Bottom line: extra efforts & attention needed

Employee Conflict of Interest — State Procurement Law Statement of Policy – Ark. Code § (b) Statement of Policy – Ark. Code § (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:

General Ethical Standards for Employees — § (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 — Ark. Code § (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 — Ark. Code § (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 — Ark. Code § 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 — UA Board of Trustee Policy Prohibits Contracts with Legislators, Constitutional Officers, Board Members, or State/UA Employees (or Family) Without Chancellor Approval Approval Process BASIS cross-checks

Board Policy — 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 Board of Trustees Policy Full-Time Faculty & Non-Classified Admin. Staff Full-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 of Interest & Outside Employment — Fayetteville Policy Implements Board Policy (Outside Employment) and Campus Policy on Conflict of Interest and Outside Employment (Faculty Handbook and Staff Handbook 3.16 and 3.17)

Fayetteville Policy 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 Employment – Form B

Fayetteville Policy #2 Disclosure of Potential Conflict of Interest All faculty, classified & non-classified staff All 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 Interest – Form A

Fayetteville Policy — Completion & 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 Enhanced – Public Availability 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 Ethics Commission Rules of Gifts Available at § 303Receipt 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 Ethics 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 – Big 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 Compliance 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 Compliance 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

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