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Pima County Community College District Standard Practice Guide

PG Title:  Disclosure of Conflict of Interest – Pecuniary or Proprietary Interest
SPG Number:
 SPG-4201/CA
Effective Date:  6/11/08
Approval Date:  6/11/08
Review Date(s):
Revision Date(s):
Schedule for Review & Update:
  Annually
Unit Responsible for Review & Update:  Chancellor
Sponsoring Unit/Department:  Chancellor
Policy Title(s) & No(s).:  Personnel Policy Statements
Legal Reference:  Title 38 of Arizona Revised Statutes, § 501-511
Cross Reference:


PURPOSE

This Standard Practice Guide (“SPG”) provides notice and information to all College employees concerning Arizona’s Conflict of Interest Law (“the Conflict Law”). This SPG also sets out the requirements employees need to follow to be in compliance with the Arizona Conflict Law and College requirements under this law.

DEFINITIONS

1.       Relative

A “relative” of a College employee is defined in the Conflict Law as the following: (1) an employee’s spouse, child, grandchild, parent, grandparent, brother, sister, half-brother, and half-sister; (2) the spouse of any of the foregoing; and (3) the employee’s spouse’s parent, brother, sister or child.

2.       Substantial Interest/Financial Interest

A “substantial interest” is defined in the Conflict Law as “any pecuniary or proprietary interest, either direct or indirect, other than a remote interest.” Pecuniary means money, and proprietary means ownership. Because the term substantial interest is somewhat confusing, any interest involving money and/or ownerships shall hereafter be referred to as a financial interest.

3.       Remote Interest

A “remote interest” is one of the specific interests set out in A.R.S. § 38-502 (10). Under the Conflict Law and this SPG, employees may, but are not required to, disclose a remote interest.  An employee must disclose all other financial interests, direct or indirect. The following is a list of remote interests defined in the Conflict Law.

  1. A College employee or relative who owns shares of a for-profit corporation has a remote interest in any College transaction with or decision affecting the corporation, if three conditions are satisfied: (a) the person owns less than three percent of the shares of the corporation; (b) the dividends (including the value of stock dividends) from the corporation do not exceed five percent of the person’s total annual income; and (c) any other payments made to the person by the corporation do not exceed five percent of the person’s total annual income.
  2. A College employee or relative being reimbursed for actual and necessary expenses incurred in the performance of his or her duties has a remote interest in any decision affecting the reimbursement.
  3. A College employee or relative who receives public services provided to the general public by the College has a remote interest in any contract with or decision affecting services to the employee or relative. The services must be provided on the same terms and conditions as are provided to non-employees.
  4. A College employee or a relative who is a non-salaried officer of a nonprofit corporation has a remote interest in any College transaction with or decision affecting that corporation.
  5. A College employee or relative who is a landlord or tenant of another party has a remote interest in any College transaction with or decision affecting the other party.
  6. A College employee or relative employee who is an attorney for a client has a remote interest in any College transaction with or decision affecting the client.
  7. A College employee or relative who is a member of a nonprofit cooperative marketing association has a remote interest in any College transaction with or decision affecting that association. 
  8. The interest of a College employee or relative is a remote interest when the transaction with the College or the College decision indirectly affects that person as an employee of another public agency or political subdivision and does not confer a direct economic benefit or detriment upon the College employee or relative.
  9. A College employee or relative who is a member of a trade, business, profession, or other class of persons of at least ten members with an interest no greater than the interest of the other members of the class has a remote interest in a decision by the College affecting the class.

SCOPE

All College employees are required to adhere to the standards set out in the Conflict Law and this SPG.

GENERAL RULE

College employees must comply with the Conflict Law. The Conflict Law provides that if an employee has, or an employee’s relative has, a financial interest in any decision or transaction made or to be made by the College, the employee must: (1) disclose such financial interest on a “Conflict of Interest Disclosure Form” and (2) refrain from participating in any manner in such decision or transaction, including any contract, fee, grant, purchase, sale, service, benefit or any other matter.

Certain narrowly defined remote interests are excluded from the Conflict Law and can be, but are not required to be, disclosed on the College’s “Conflict of Interest Disclosure Form.” If an employee chooses not to disclose a financial interest on the form, he or she is responsible for determining that the financial interest is a remote interest as defined by A.R.S. §38-502(10). (See definition of remote interest above.).

OTHER CONSIDERATIONS AND RESTRICTIONS

The Conflict Law does not prevent an employee from doing business with the College. A College employee may supply equipment, material, supplies, or services to the College but only if the contract is awarded after public competitive bidding. The employee should contact the Finance Department for a description of the competitive bidding requirements. (A.R.S. § 38–503 (C))  Note that when a College employee does business with the College, the employee has a financial interest in the transaction and the disclosure and non-participation requirements set out above apply.  

A College employee may not receive or agree to receive directly any valuable thing or valuable benefit that would not ordinarily accrue to the employee in the performance of the employee’s official duties. The employee may accept food, refreshments or unsolicited advertising or promotional materials (such as pens or calendars) provided that the food, refreshments or other items are of insignificant value.  The employee also may accept items of minor value (such as an inexpensive box of candy) that are merely tokens of appreciation and not designed to influence a decision in a particular transaction.

During employment with the College and for twelve months after leaving employment, a College employee may not represent another person for compensation before the College on any matter that involved a substantial and material exercise of administrative discretion by the employee if: (1) the employee was directly concerned with the matter while a College employee; and (2) the employee personally participated in the matter during his or her College employment. (A.R.S. § 38–504 (A))

During employment with the College and for two years after leaving the College, a College employee may not disclose or use in order to obtain a financial interest any information disclosed to him or her in the course of his or her official College duties that has been clearly designated to him or her as confidential or that is declared confidential by law. (A.R.S. § 38–504 (B)) Exception: A current or former College employee may disclose or use otherwise confidential information in situations where the employee obtains appropriate College authorization for the disclosure of the information.

PROCESS AND PROCEDURES

1.       Responsibility for Distribution of Conflict of Interest Disclosure Forms
The Executive Vice Chancellor for Administration is responsible for the annual distribution of the Conflict of Interest Disclosure Form to all College employees.

2.       Disclosure of Conflict of Interest 
Employees of the College shall annually complete a Conflict of Interest Disclosure Form.  The process for each employee group is different and defined below:

a.  Administrative Personnel and Regular Faculty Members
Each regular contract personnel will receive a Conflict of Interest Disclosure Form with the issuance of a new contract for the ensuing academic or fiscal year.  The completed disclosure form will be submitted in conjunction with signature acceptance of a new contract.

b.  Regular Staff Employees
Each continuing staff employee will complete a Conflict of Interest Disclosure Form at the time of receipt of their annual salary notification.

c.  New Hire Regular and Temporary Employees
Each new hire employee will complete a Conflict of Interest Disclosure Form as a part of the new hire process.

Each returning temporary employee will complete a Conflict of Interest Disclosure Form at the time of rehire. The completed disclosure form will be submitted with the new fiscal personnel action form.

Each returning adjunct faculty will complete a Conflict of Interest Disclosure Form at the time of rehire. The completed disclosure form will be submitted in conjunction with signature acceptance of the new teaching contract. Adjunct faculty teaching at multiple sites for the semester will need to sign only one disclosure form per year.

d.  Student employees
Each student employee will complete a new Conflict of Interest Disclosure Form at the time of the offer of student employment.

Each returning student employee will complete a Conflict of Interest Disclosure Form at the time of rehire.

3.       Maintenance of Forms
All completed Conflict of Interest Disclosure Forms shall be maintained as a public record in the Office of the Chancellor.

4.       Ongoing Requirement to Disclose Conflicts of Interest
Employees of the College must identify on an ongoing basis any new or changed circumstances where the College’s actions might directly or indirectly affect their financial interests or the financial interests of their relatives.  If an employee develops an actual or anticipated conflict of interest in a matter that has not been disclosed during the annual completion of the Conflict of Interest Form, the employee must immediately withdraw from participation in all activities and decisions related to the matter. In addition, the employee must complete a new Conflict of Interest Form, describing the new potential or existing conflict of interest and affirming that the employee has withdrawn from participation in the matter.  This new Conflict of Interest Form shall be submitted directly to the Office of the Chancellor.

5.       Failure to Disclose
Failure to appropriately disclose any conflict of interest may result in disciplinary action up to and including termination. Failure to appropriately disclose any conflict of interest may also subject the employee to criminal penalties. (A.R.S. § 38-510.)

6.       Availability of Assistance
An employee who (1) has any questions concerning this specific practice guide; (2) desires assistance in determining whether a particular circumstance does or does not present a conflict of interest situation; or (3) desires assistance with the conflict of interest process set out in this SPG, should contact the College’s Employee Relations Office for assistance (206-4807).

OUTCOMES

College employees are advised of their responsibility to actively eliminate conflict of interest situations in their employment with the College.  They are also provided with the necessary steps to meet compliance obligations.