Conflict of Interest / Ethics and Financial Disclosure
Op3.12-4 Conflict of Interest / Ethics and Financial Disclosure
What is my role as Department Head?
The university’s fifth mission goal is that of modeling ethical and effective behavior as a public institution. It is important that members of the department understand the areas of potential conflict of interest and ethical behavior. As Department Head, one of the more important roles is that of “setting the tone at the top” and communicating everyone’s responsibility regarding fiscal and academic integrity and potential conflicts of interest.
The topic of ethics is important enough to have been addressed by (a) board resolution; (b) the Faculty Handbook; and (c) the State of Missouri Ethics Commission that requires anyone with the university who has budget authority / decision making authority (including Department Heads) to file an annual Financial Disclosure Statement, reporting any outside financial interests or benefits (such as paid trips) that may exist.
What are examples of conflicts of interest and how do I prevent or detect these?
In the area of Research, a conflict of interest could be where a person or family member has a financial or non-financial interest that may potentially compromise the conduct of the person’s duties and prevents him or her from exercising independent judgment. In other settings, a typical conflict of interest may be an employee who is part owner of a vendor company and has the ability to influence the university’s business with that company. In the personnel arena, an example is a Department Head supervising directly his brother or spouse. Other examples:
- Trip to Las Vegas from a major supplier to attend Procurement Card training
- Tickets to the Super Bowl from the university’s food vendor.
- Gift certificates to local restaurants totaling $250 from a local architect
- Paid trip from a potential future builder / bidder to view new instructional classroom modeling and configuration
Generally, the Department Head is close enough to the situation to be able to ask questions and determine with the faculty and staff as to whether a conflict of interest situation exists, and whether it should be assessed or resolved. Once a determination is made that a conflict exists, the Dean should be consulted.
A good rule of thumb: If you ever have any doubt whether there is a conflict of interest, it is best to err on the side of caution and bring it forward! Ultimately, your Dean or General Counsel can assist if you are unsure if the situation is a conflict of interest.
Any gift to a university employee from an outside party should be scrutinized as a possible conflict of interest when the outside party is or may be doing business with the university. The Employee Handbook, section 2.11 RECEIPT OF GIFTS POLICY, states that per statute:
“No employee should accept any personal gifts or favors exceeding the amount provided in Section 105.485.2(8) R.S.Mo, as amended, (currently $200) in monetary value in any calendar year from any single person, company or firm which transacts, or wishes to transact business with the university. This is not intended to be applicable to meals/functions conducted at the initiative of the university involving university purposes or business, or to compensation or fringe benefits provided by the university. Any exceptions to this policy require a written approval of the employee’s supervisor and vice president (if applicable) based on a written explanation of the requested exception.”
What does the Governing Policy G1.02 “Conflict of Interest and Financial Disclosure” require?
The Board of Governors approved policy regarding conflict of interest and financial disclosure addresses all Governors, officers, faculty and employees of the university. It defines specific roles and definitions in the area of conflicts of interest.
Sections included in the policy address areas such as:
- An employee’s substantial interest in any business entity and other provisions
- Outside interests that affect objective performance of her/his duties
- Confidential information
- Actions that result in financial or political gain
- Selling, renting or leasing property to the university
- Outside Compensation received by an employee and reporting to the Department Head
- Faculty consulting
- Performance of prohibited services after departure
- Receipt of Gifts Policy (no employee shall accept any personal gifts or favors exceeding the amount of $200 from any single person, company, or firm which transacts or wishes to transact business with the university
- Board of Governors’ disclosure requirements
What are reportable outside interests?
Policy G3.03 – Faculty Handbook: Specific directives per the Faculty Handbook describe permitted outside interests for Faculty (section 11.1.2). Section 11.1.3 requires specific reporting of remunerated outside interests, including an annual report. In addition, the Department Head should follow the procedures for annual reporting of outside activities by the faculty to the Dean, for institutional reporting. It is the responsibility of the Department Head to ensure that faculty timely and completely report these activities to you.
Why am I required to report certain personal information to the Ethics Commission?
State law requires that any employee who has responsibility for a budget, such as a Department Head, must complete the Personal Financial Disclosure form by the date due. Any new employee who has fiscal budget decision authority must also report her financial interests for the full year prior to MSU employment (as of December 31.)
Once completed, the Personal Financial Disclosure Form must be mailed directly to the Missouri Ethics Commission, and must be received by May 1st of the new year.
Please note – this form also asks for the employee to report any travel that was provided to the employee outside the state of Missouri from another entity.
Learn more at the Missouri Ethics Commission.
View the online form.
The University Ethics Hotline Policy:
In September 2006, the Board of Governors approved the University’s Whistleblower (Ethics Hotline) policy. The policy encourages good faith reports of allegations of misconduct concerning compliance with the university’s policies and procedures. The employee is encouraged to voice his/her concern regarding a violation of policies or procedures to his/her immediate supervisor; however, if for any reason, the employee is not comfortable utilizing the existing avenues, and wishes to remain anonymous, he/she may utilize the University’s Ethics Hotline.
The Ethics Hotline is operated by an independent, third-party vendor, EthicsPoint. The vendor is an established hotline provider, and assures the employee of his/her anonymity. Either by phone or by web access, a report may be made through the hotline.
On a practical basis – what should I do?
- As Department Head, it’s important that we set the “tone at the top.” As a steward of a public institution’s resources, we should support and encourage transparency in our operations. Encourage faculty to become familiar with fiscal policies.
- Be aware of any unusual circumstances regarding policy compliance or conflict of interest within your organization that may require your attention, and don’t hesitate to ask questions. Discuss any concerns or actual violations with your Dean, and determine what actions must be taken.
- Submit your Personal Financial Disclosure Form timely with the Missouri Ethics Commission. There are imposed penalties if your form is submitted late! If you have questions, contact Internal Audit and Risk Management.
- If a Hotline complaint comes to your attention, support the administration’s prompt review of facts and circumstances to resolve the matter.
What if I have questions?
Contact your Dean, General Counsel or Internal Audit and Risk Management.