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Conflict of Interest & Disclosure

What is a Conflict of Interest?

A conflict of interest can be assumed to exist when an employee or someone in his/her immediate family is involved in a business relationship or arrangement, the terms of which may be inconsistent with, or appear to be inconsistent with performance of the employee's duties or exercise of judgment on the University's behalf.

A real or apparent divergence between an employee's private interests and his or her professional obligations to the University, such that an independent observer might reasonably question whether the individual's professional actions or decisions are, or could be determined by considerations of private gain rather than by potential benefit to the University mission.

To avoid such real or apparent conflicts and to avoid exploitation of an office or employee, the University maintains mechanisms by which employees are required to provide the University with information which may bear upon the employee's capacity to perform duties and exercise independent judgment on the University's behalf. Avoidance of conflicts requires constant sensitivity to the issue by all employees and a willingness to disclose potential conflicts for review and appropriate resolution in a timely manner.

Credibility and public confidence are vital throughout the university system. Any erosion of honesty, integrity or openness is injurious to the institution. The shadow of doubt can be as harmful as the conduct itself. It is with this in mind that the following policies and procedures are in place.

Employee Standards of Conduct:

The term "employee" is defined as any person working for, representing or acting on behalf of the University in any capacity where such representation or presumed representation has the potential to influence the direction or outcome of expenditure or exploit an employee's position for the purpose of contemporaneous financial or personal gain.

1. No employee should have any interest, financial or otherwise, direct or indirect, or engage in any business or transaction or professional activity or incur any obligation of any nature, which is in substantial conflict with the proper discharge of employee’s duties in the best interests of the University. An employee shall not engage in acts that are in violation of his/her trust.
2. No employee should accept other employment, which will impair his/her independence of judgment in the exercise of duties and responsibilities when it pertains to the purchase of goods or services for the University.
3. No employee should accept employment or engage in any business or professional activity, which will require or result in disclosure of confidential information, which the employee has gained by reason of his/her position or authority.
4. No employee should disclose confidential information acquired in the course of his/her duties except as required by law nor use such information to further the employee’s personal interests, unless such information has previously been made public.
5. No employee should use or attempt to use his/her position to secure privileges or exemptions for the employee or others that may be obtained in the suggestion, influence, control or direction of an expenditure for the University.
6. By conduct or action, no employee should give reasonable basis for the impression that any person can improperly influence the employee or unduly enjoy his or her favor in the performance of the employee’s duties, or that the employee is affected by the kinship rank, position or influence of any party or person.
7. An employee should abstain from making personal investments in any enterprise which the employee has reason to believe may be directly involved in decisions made by that employee, or which will otherwise create conflict between the employee’s duties in the best interests of the university and the employee’s private interest.
8. An employee shall recuse himself or herself from working on any contract or transaction whereby taking action as a representative or agent of the university, through decision, approval, disapproval, recommendation, giving advice, investigation or similar action, knowing that he/she or a member of the employee’s family has an actual or potential financial interest in the transaction(s).
9. An employee shall have no personal interest in suggesting or specifying suppliers, and there shall be no direct incentives or rewards, financial or otherwise, gained from the conduct of business with a supplier or contractor on behalf of the University.
10. No employee shall solicit or accept anything of value from a current or potential supplier of the University.

What is Disclosure?

IU employees serve a public-interest role and have a clear obligation to conduct the business of the University in a manner consistent with that concept. All decisions by an employee on behalf of the University shall be made solely on the basis of a desire to promote the best interests of the University.

In case of conflicts or the appearance thereof, University personnel are expected to disclose the existence of a conflict prior to making any related decisions governing finances or expenditures of the University. Upon disclosure, it will be determined whether or not there is a potential conflict of interest.

The purpose of financial disclosure is to alert University officials to the employee’s personal interests that might be affected while they are performing their official duties. Disclosure also helps inform the public about potential conflicts of interest. It can establish the fiduciary responsibility of an employee.

It is the policy of the University that, in the event an employee of the University is considering a transaction on behalf of the University which will also involve the employee or a member of their family (spouse, parents, brothers, sisters, or lineal descendants), or an organization with which any such person is affiliated, then such employee, at first knowledge of any such transaction, shall disclose fully the precise nature of his or her interest or involvement.

Disclosure is required concerning all relationships and business affiliations which reasonably could give rise to a conflict of interest involving the University. Disclosure shall be continuously reported and kept current. Situations that involve the employee or a member of their family, while not limited to, may include the following:

• Assets and income which may be materially affected by their actions should be disclosed.
• Investments in business entities (e.g., stock holdings, owning a business, a partnership).
• Interests in real estate (real property).
• Sources of personal income, including gifts and loans.
• Positions of management or employment with business entities.
• Serving as board members of organizations that supply the University.
• Employment by or are doing business with organizations supplying the University.
• Paid or unpaid members of boards and commissions and consultants that are employees of the university also may be required to disclose their personal financial interests if they make or participate in making university decisions that could affect their private financial interests.

Disclosure is made on a form called Conflicts of Interest Disclosure Form (PDF). A Disclosure form must be filed each year or in the event of an apparent conflict of interest. Filed forms are public documents that must be made available to anyone who requests them.

References:

Purchasing Department, Institutional Policies:

• P-3.0 Ethics
• P-3.1 Code of Ethics
• P-3.2 Reciprocity
• P-3.3 Conflict of Interest
• P-3.4 Gratuities
• P-3.5 Purchases for Employees

Appendix F State Statute - 35-44-1-3, Conflicts of Interest; Public Servants

University Human Resources, Personnel Policies:

• Conflict of Interest
• Conflict of Commitment
• Conflicts of Interest Disclosure Form (PDF)

University Financial Institutional Policies

• Policy I-30, Fiscal Misconduct
• Policy I-35, Fraud