1.4 Conflict of Interest

Last Revised Date
Friday, September 1, 2006 - 12:00 am

Policy Information

Policy Number: 1.4 Effective Date: October 2001
Responsible Unit: Financial Services - Purchasing Last Revised Date: September 2006
Phone: 520-621-1747 Email: contactpacs@fso.arizona.edu

Purpose and Summary

The purpose of conflict of interest statute is to remove or limit the possibility of personal influence that might bear upon a public employee’s decision in his or her capacity as a public employee.

Source

ABOR Policy 3-901 Conflict of Interest
ARS 38-501 et seq.

Scope

This policy applies to all University locations and units, including all University extensions, satellite locations, and off-site campus units, both domestic and international.

Definitions

  1. Employees: All persons who are employed by the University on a full-time, part-time, or contract basis (including student employees).
  2. Relatives: Relatives are defined to include spouse, children, grandchildren, parents, grandparents, brothers, sisters (including half-brothers and half-sisters), brothers and sisters-in-law, parents-in-law, and children-in-law of the employees. If any substantial interest is present in a relative, that interest will be considered to be that of the employee.
  3. Remote Interest: A remote interest means:
    1. That of a non-salaried officer of a nonprofit corporation.
    2. That of a landlord or tenant of the contracting party.
    3. That of an attorney of a contracting party.
    4. That of a member of a nonprofit cooperative marketing association.
    5. Ownership of less than three percent (3%) of the shares of a corporation for profit, provided the total annual income from dividends, including dividends payable in stock, received from that corporation does not exceed five percent (5%) of the total annual income of the employee and further providing that any other payments from that corporation do not exceed five (5%) percent of the total annual income of the employee.
    6. That of an employee in being reimbursed for expenses incurred in performance of official duty.
    7. That of a recipient of services generally provided by the Board or universities on the same basis as if to any member of the public. (Examples: An employee whose spouse, son, or daughter attends a state university would have a remote interest in the setting of fees and tuition. Non-remote interest—an employee whose relative has a contract with the University, has a substantial interest in the contract and thus cannot participate in any University decision related to that contract).
    8. That of a public school board member provided the relative involved is not a spouse or a dependent as defined by state income tax laws. (A.R.S. 43-1001).
    9. That of a public officer or employee of any other public agency unless the action of that agency would confer a direct economic benefit or detriment upon a Board member or employee.
    10. That of a member of a trade, business, occupation, profession, or class of persons consisting of at least ten members which is no greater than the interest of the other members of that trade, business, occupation, profession or class of person.
  4. Substantial Interest: Any interest, which cannot be defined as a remote interest and which confers a pecuniary or proprietary interest, either direct or indirect.

Policy

  1. All University employees must comply with all Arizona conflict of interest laws and with Arizona Board of Regents (ABOR) policy.
  2. Arizona statute (A.R.S. 38-503 et seq.) requires an employee who has, or whose relative has a substantial interest in any contract, sale, purchase, or service by or to ABOR or the universities, as well as in any decision, to disclose said interest in the official records of ABOR and the University.
  3. Any employee who has or whose relative has a substantial interest must make that interest known in a special file open to the public and kept by the University.
  4. Employees must keep their disclosures current by updating them whenever the disclosed interest or relationship changes.
  5. If a substantial interest exists, the employee must refrain from participating in the decision, contract, sale, or purchase in any manner.
  6. An employee may supply equipment, material, supplies, or services to ABOR or university only if the contract is awarded after a public sealed competitive solicitation, regardless of the dollar amount.

Procedures

  1. When a substantial interest exists, the employee discloses the interest to the University by completing the Conflict of Interest Form.    
  2. Whenever the disclosed interest changes, the employee updates the University by completing the Conflict of Interest Form with the revised information.
  3. A list of current conflict of interest vendors is maintained on the Purchasing Conflict of Interest website.

Frequently Asked Questions

  1. What are the affirmative responsibilities of employees?
    Any employee who has or whose relative has a substantial interest shall make known that interest in a special file open to the public and kept by the University. He or she shall thereafter refrain from voting or participating in any manner in the contract, sale, purchase or decision on behalf of the University. The University will keep the required file. It will be the responsibility of each employee to keep the disclosure current. Disclosure forms may be obtained on the Purchasing Conflict of Interest website and shall be filed with the office of the Chief Procurement Officer.
  2. May an employee who has or whose relative has a substantial interest, supply equipment, material, supplies, or services to ABOR and the University?
    Yes. An employee who has or whose relative has a substantial interest may supply equipment, material, supplies, or services to ABOR and the University, in accordance with the following:
    1. The interest is disclosed in the special file or in the minutes of the University or ABOR;
    2. the contract is with the employee and the contract is awarded as a result of a public sealed competitive solicitation regardless of the dollar amount; 
    3. if the contract is with a relative, a public competitive solicitation is not required; and
    4. in both instances (a & b) the employee must refrain from voting or participating in any manner in the contract, sale, purchase, or decision.
  3. What are the remedies under the Arizona Revised Statutes in event of a violation?
    Any contract entered into in violation of the statute is voidable or subject to cancellation at the option of ABOR and the University. Any persons affected by ABOR or University action may commence a civil suit to enforce the provisions of the statute. The court may order appropriate relief, including reasonable costs and attorney’s fees to the prevailing party.
  4. What are the penalties under the Arizona Revised Statutes in the event of a violation?
    Criminal penalties are provided for two classes of violations:
    1. Persons who intentionally or knowingly violate the statute may be guilty of a class 6 felony.
    2.  Persons who recklessly or negligently violate the statute may be guilty of a class 1 misdemeanor. A person found guilty of either shall forfeit his or her employment.

ABOR Policy 3-901 Conflict of Interest
A.R.S. 38-503
A.R.S. 43-1001
Conflict of Interest Vendor List 
Conflict of Interest Form

* Please note that sections titled Frequently Asked Questions and Related Information are provided solely for the convenience of users and are not part of the official University policy.