CONFLICT OF INTEREST What You Should Know What You Should Do
What You Should Know • Source • A.R.S. § 38-503 (ABOR/University Policy) • Federal Regulations • Policy • Substantial Interest • Employee owned business • Responsibility • As a Business Manager • As an Employee
Source:A.R.S. §38-503 • A. Any public officer or employee of a public agency who has, or whose relative has, a substantial interest in any contract, sale, purchase or service to such public agency shall make known that interest in the official records of such public agency and shall refrain from voting upon or otherwise participating in any manner as an officer or employee in such contract, sale or purchase. • B. Any public officer or employee who has, or whose relative has, a substantial interest in any decision of a public agency shall make known such interest in the official records of such public agency and shall refrain from participating in any manner as an officer or employee in such decision. • C. Notwithstanding the provisions of subsections A and B of this section, no public officer or employee of a public agency shall supply to such public agency any equipment, material, supplies or services, unless pursuant to an award or contract let after public competitive bidding, except that: • 1. A school district governing board may purchase, as provided in sections 15-213 and 15-323, supplies, materials and equipment from a school board member. • 2. Political subdivisions other than school districts may purchase through their governing bodies, without using public competitive bidding procedures, supplies, materials and equipment not exceeding three hundred dollars in cost in any single transaction, not to exceed a total of one thousand dollars annually, from a member of the governing body if the policy for such purchases is approved annually. • D. Notwithstanding subsections A and B of this section and as provided in sections 15-421 and 15-1441, the governing board of a school district or a community college district may not employ a person who is a member of the governing board or who is the spouse of a member of the governing board.
Policy • Substantial Interest • An employee who has or their relative has a substantial interest in any contract, sale, purchase or service to the University. • An employee who has or their relative has a substantial interest in any decision of the University. • Definitions: • Substantial Interest: any pecuniary or proprietary interest, either direct or indirect. • Relative: the spouse, child, child's child, parent, grandparent, brother or sister of the whole or half blood and their spouses and the parent, brother, sister or child of a spouse.
Policy • Employee Owned Business • An employee may not supply materials/services to the University without a competitive bid through Purchasing Services. • A firm owned by an employee has the same requirements for competitive bid.
Responsibility • Business Manager • Know and understand the policy • Do not process an RQS to an employee or a firm owned by an employee without a competitive bid • Never process a PD to an employee or a firm owned by an employee
Responsibility • Employee • Disclose any conflict of interest(form is located on the Purchasing Website under forms-Disclosure of Substantial Interest Form)http://www.nau.edu/purch/Documents/OF%20Disclosure%20of%20Substantial%20Interest-65.doc • Do not provide materials/services to the University (i.e. Consulting, Computer Repair, Photography)
What You Should Do • As a Business Manager • Ensure policy compliance by: • Communicate Policy • Remind those in your department to disclose • Be aware of those with conflicts • Bid any procurement to an employee
What You Should Do • As an Employee • Disclose Conflicts • Update Forms • Only provide materials/services after a bid
Questions? Conflict of Interest
PD Does Not Mean “Payment Document”
PD-Not a “Payment Document” A PD is a departmental Purchase Order. Purchase Orders (PO’s and PD’s) are used by the University to order materials and services from vendors.Only the NAU Purchasing Department has the authority to procure materials or services on behalf of the University.Departments have been delegated purchasing authority for purchases using a PD.
Departmental Purchase Order (PD) • Purpose • Departmental Purchases • Transactions that do not require Purchasing’s approval • Related Policyhttp://www.nau.edu/purch/Procedures/304.05_Departmental_PO.htm • Restrictions
Departmental Purchases • Procurements of materials/services that cost less than $5000 • Cannot split to avoid the maximum dollar amount • Must be generated before the order is placed with the vendor • Services may need insurance • Are not on the restricted list
Alcoholic beverages Animals of any type; dead/alive Bars/Cocktail-Lounges/Nightclubs Capital equipment (items costing more than $5000) Financial institution/Travelers checks/Securities/Insurance Fines/Penalties Firearms/Ammunition/Explosives Flowers Gifts/Contributions Legal fees Loans Material prohibited by State or Federal law (i.e. fireworks or controlled substances) Narcotics/All drugs Package stores/Beer/Wine/Liquor Personal purchases Purchases from University employees or firms owned by University employees. Purchases in which a University employee has a conflict of interest, and that employee participates in the purchase process Radioactive materials Rare and precious metals Renovation/Construction/Removal and/or installation services that may impact/disturb Asbestos Containing Material (ACM) or Presumed Asbestos Containing Material (PACM) Restricted PD Procurements
Construction (Capital Assets Only) Entertainer Fees (Contracted only) Game Guarantees (Athletics only) Game Officials (Athletics only) Gate Receipts - (Athletic Events) Grants - bestowed by NAU on outside agencies or individual students Guest Lecturer Guest Speaker Honorariums Intergovernmental Agreements Interviewee Expenses Participant Fees Payments legally required from NAU by the Arizona Board of Regents, State and Federal Performer Government or other governing agency Program Review Fees Recruiting: incl. Candidate Expenses/Hotel Accommodations. Registration Fees Stipends Student Program Fees Subcontract under Sponsored Project Subscriptions and Dues Taxes Temporary Employment Services Traffic School Tuition Vehicle Registration Uses that Do Not Require Purchasing
The Need for Purchase Orders • Relay University Terms and Conditions • Facilitate Delivery • Facilitate Payment • It is the Contract • Encumber Funds • Protect the Employee
Questions? Departmental Purchase Order (PD)