Conflict of Interest

CONFLICT OF INTEREST January 2009

CONFLICT OF INTEREST

This online course takes approximately 30 minutes to complete. You must successfully pass the exam with an

80%.

On-line Course


Purpose The purpose of this

training is to:

Protect the integrity, trust and respect of UNM and its academic community is based upon UNM Business Policies and Procedures 3720 – Conflicts of Interest;

Ensure that employees comply with federal, state regulations and institution policies;

Provide a few examples of the many forms of Conflict of Interest.


COI Objectives

After taking this course you should be able to:

Learn about favors or gratuities;

Identify when you’re subject to disclosure requirements under New Mexico law and UNM Policy;

Identify the process to comply with the disclosure requirements;

Define Arm’s Length and Non Arm’s Length transactions.


Suggested Audience

Researchers;

All employees (faculty and staff) of the University, public and student members of University advisory boards and committees, and other volunteers serving in an official capacity;

Any employee who may or may not be in a position of influence.


The University of New Mexico is a steward of public funds and the public trust. It is the responsibility of faculty, staff, and students to be aware of and use all available resources to avoid conflicts of interest. All employees should understand their responsibilities for disclosure in order to avoid conflict of interest (COI).

As one of our UNM Values states: “Integrity that holds us accountable to our students, the community, and all who serve UNM’s mission, to manage our resources wisely and keep our promises.”

The University cares about COI because activities undertaken in service of personal interests could unduly influence professional judgment or call into question a faculty, staff, or student’s primary obligation to the University.

The common feature among potential COI situations is that people placed in positions of judgment or power must take extra steps to insure that their private interests do not compete with their professional duties at UNM.

Policy Reference #: 3720This training is intended to discuss the non-research aspects of

conflict of interest.

Introduction

http://www.unm.edu/~ubppm/ubppmanual/3720.htm


General Definitions Conflict of Interest:

A situation in which someone in a position of trust or power has competing professional or personal interests.

NM legal definition of Conflict of Interest: UNM employees must avoid any conflict of interest that may affect their independent judgment in the impartial performance of their UNM duties and may not use their positions to enhance their direct or indirect financial interest or use confidential information learned as employees for anyone’s private gain.

Arm’s Length:An arm’s length transaction involves the buying and selling of goods, services, properties, or stocks between two parties that are completely separate from one another.


COI Rules for Favors and Gratuities

Employees shall not accept favors or gratuities from any firm, person, or corporation that is engaged in, or attempting to engage in business transactions with the University.

Small items of appreciation e.g., coffee mugs with a company logo may be accepted if they do not have any significant economic value.

If you have a question regarding acceptance of an item, discuss it with your supervisor.


Test Your Knowledge about Favors and Gratuities

YES, because these items are considered as having insignificant value.

Can you keep the following item?

You go to a Banner training session and a notepad and a nice pen, with a Banner logo, are provided for your use.


“Disclosure” Requirements

UNM employees (as well as individuals and firms) proposing business transactions with UNM must disclose in advance and in writing any direct or indirect financial interest UNM employees may have in a transaction with UNM.

To determine if you are subject to this disclosure requirement, you must ask yourself:

• “Do I or any member of my immediate family have a direct or indirect financial interest in an entity proposing business transactions with UNM?”

• Terms need to be defined for you to answer this question:

Immediate family Direct or indirect financial interest Business transactions with UNM


“Disclosure” Requirements Immediate Family

Immediate family includes:

Spouse or domestic partner

Children (including in-laws)

Brothers or sisters (including in-laws)

Parents (including in-laws)


“Disclosure” RequirementsDirect or Indirect Financial Interest

NOTE:

Donors and grantors should not be given any preferential treatment.

The goal is to ensure the existing relationship between UNM and the donor or grantor does not impact the procurement or the likelihood that the donor or grantor will be selected as the vendor.

These procedures are developed by UNM officials and must be reviewed by the President to ensure the integrity of the procurement.

You need to disclose if any of the following applies to you or an immediate family member:

Has an ownership interest in (other than <1% of a publicly traded corporation) or

Is an employee, partner, officer, director, trustee, or paid consultant of or

Has received gift or grant support from or

Has received support for travel expenses, honoraria, etc. from or

Has a right to receive royalties from.


“Disclosure” Requirements Business Transactions with UNM

Disclosure must be made if any of the following transactions in which UNM is either acquiring from or providing to a business entity in which you have a direct or indirect financial interest includes:• Procurement of supplies, equipment, or

other good or • Procurement of professional, technical,

or any other service or• Rental, lease, or contract for use of UNM

employees, equipment, facilities, labs, rooms, or any other UNM resource

Just because you have to disclose the relationship does not necessarily mean the transaction can’t take place.

Additional criteria will be used to determine whether or not the transaction can be approved.

How to Comply with “Disclosure” Requirements

“Do I or any member of my immediate family have a direct or indirect financial interest in an entity proposing business transactions with UNM?”If your answer is YES, then you must:

Complete Exhibit A of Policy 3720 which can be found at http://www.unm.edu/~ubppm/ubppmanual/3720ex_a.htm

Submit Exhibit A to your dean or director, and

Submit Exhibit A to UNM’s Purchasing Department if UNM is acquiring the good or service or if UNM is providing the good or service submit Exhibit A to the UNM department providing the good, service, or space.


http://www.unm.edu/~ubppm/ubppmanual/3720ex_a.htm

http://www.unm.edu/~ubppm/ubppmanual/3720ex_a.htm

Test Your Knowledge #1 Disclosure Requirements

I am an accountant at the Physical Plant.

I have a week-end catering business and the Law School wants me to cater a reception Saturday night for the Dean of Yale Law school.

Do I need to complete the disclosure form?

YES, because I am a UNM employee and have direct or indirect financial interest in an entity proposing business transactions with UNM.


Test Your Knowledge #2Disclosure Requirements

I am a lab technician at the Center for High Tech Materials.

When the clean room is not being used by UNM, we rent space to other high tech companies in Albuquerque.

My son works for ABC tech company and they want to rent the space.

Do I need to complete the disclosure form?

YES, because I have direct or indirect financial interest (with my son) in an entity proposing business transactions with UNM.


Arm’s Length and Non Arm’s Length

Once you enter into a transaction, and you disclose, you will need to determine if the transaction is:• Arm’s Length or Non Arm’s Length.

Definition:• The main purpose of the arm’s length

transaction is to ensure there are no hints of a conflict of interest that would give one or both companies an undue advantage in a business arrangement.

• Arm’s Length means there is NO conflict.

• Non Arm’s Length means there IS a conflictCONFLICT OF INTEREST January

2009

“Arm’s Length Transaction” Criteria

UNM may enter into a contract in which an employee has a financial interest if the transaction is one at “arm's length” and full disclosure has been made.

To qualify as an “arm's length” transaction, it must meet both of the following criterion.

1. The employee with a financial interest must not be in a position to exert influence over the transaction because of his or her employment at UNM. (As a matter of policy, transactions will not be considered "arm's length" where a University employee has a financial interest in the proposed transaction and that employee reports to the same dean or director as the University unit proposing the transaction.)

2. AND The employee must not have participated directly nor indirectly in UNM’s decision with respect to the transaction such as:

• Helping prepare the specifications; or

• Having input or influence in deciding to whom the contract is awarded.


What more do I need to know about “Arm's Length Transaction” If it is arm's-length and financial disclosure has been made, it must go through the normal approval procedures listed in section 3.1 of the policy. It is non-arm's length and financial disclosure has been made in order to be approved, it:

• Must be related to a sponsored project;• Must meet all the requirements listed in Section 5.1 of the policy, and• Requires approval of the Vice President for Research (see section 5.2). If the

transaction is approved it must then follow the procedures listed in section 3.1 of the policy.

For a non “arm's length transaction to be approved by the VP for Research the UNM employee 1) must have made full financial disclosure and 2) guaranteed the employee has not and will not engage in any official act directly affecting the employee’s financial interest. In addition the transaction must:

Be related to sponsored projects;

• Comply with federal conflict of interest regulations;• Be in UNM’s best interest and potentially benefit the state; and• Demonstrate that the employee’s benefit from the transaction will not

adversely affect NM state interest and that any procurement functions can be carried out without favoritism or bias.


Test Your KnowledgeArm’s Length and Non Arm’s Length #1Earlier in this lesson it was determined that you

needto disclose because:

You are an accountant at the Physical Plant; Own a week-end catering business, and; The Law School wants you to cater a reception

Saturday night for the Dean of Yale Law school;

Now, is this an arm's length transaction?


YES, because I am not in a position to exert influence over the transaction; I work for the Physical Plant; and, do not participate directly nor indirectly in the Law Schools decision to hire my catering business. There is NO conflict.

Test Your KnowledgeArm’s Length and Non Arm’s Length #2Earlier in this lesson it was determined that you

needto disclose because: You are a lab technician at the Center for High

Tech Materials, and; When the clean room is not being used by UNM,

we rent space to other high tech companies in Albuquerque, and;

My son works for ABC Tech Company and they want to rent the space.

Now, is this an arm's length transaction?


NO, because I work in the same department and I could be in a position to unduly influence the decision to hire my son’s company to do business with UNM. There IS a conflict.

Conflicts of Interest (COI)

You should now be able to determine:

If you should accept favors or gratuities;

Disclosure requirements under New Mexico law and UNM Policy;

The process to comply with the disclosure requirements;

What are Arm’s Length and Non Arm’s Length transactions.


Conflicts of Interest (COI)

When in doubt …

disclose.


ResourcesReporting violations:

Contact your Supervisor Whistleblower Policy:


Anonymous UNM Hotline: 1-888-899-6092

Internal Audit: 277-5016 http://www.unm.edu/~iaudit/




http://www.unm.edu/~iaudit/

Documents

Conflict of Interest