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Policy: XV.A.1

Issued: August 1, 1993

Owner: University Comptroller

Latest Revision: July 2, 2010

CONFLICT OF INTERESTS

1.0 Purpose

This policy describes the University's position on conflict of interest.

2.0 Policy [Top]

NOTE: See also the Conflict of Interest policy within the Faculty Handbook.

NOTE: This policy applies to employment contracts, employment renewals, or other contracts entered into July 1, 1983 or later, and reflects changes brought about by the State and Local Government Conflict of Interests Act of 1987 (as amended through 2005).


2.1 Employee Responsibilities

This policy has been established to ensure that each employee (faculty, staff and officer) is aware of his/her responsibilities when performing duties for the University. It is intended to incorporate and also supplement the requirements of the State and Local Government Conflict of Interests Act of the Code of Virginia 2.2-3100 through 2.2-3131, and the Virginia Public Procurement Act, Article 6, Ethics in Public Contracting, Code of Virginia Section 2.2-4367. However, this policy does not restate those Acts verbatim; and employees who have questions about conflict of interests may wish to consult the Acts themselves. Copies of the applicable Code sections are available in the Department of Procurement & Supplier Diversity Services and the Office of the General Counsel.

Employees should disclose actual or potential conflict of interests and should not initiate any contract or transaction to which the University is a party until approval is received from the Assistant Vice President and University Comptroller.

See also:

Procedure 15-1, "Providing Notice of Possible Conflict of Interests."

EMPLOYEES SHOULD BE AWARE THAT FAILURE TO ABIDE BY THE TERMS OF THESE LAWS MAY MAKE THEM SUBJECT TO LEGAL PENALTIES, INCLUDING CRIMINAL PROSECUTION AND/OR FORFEITURE OF EMPLOYMENT. THE LANGUAGE OF THESE ACTS IS COMPLEX, AND THE EMPLOYEE MAY NEED THE ASSISTANCE OF HIS/HER PERSONAL ATTORNEY. EMPLOYEES MAY SEEK ADVISORY OPINIONS FROM THE ATTORNEY GENERAL ON THE CONFLICT OF INTEREST ACT. ONLY RELIANCE ON AN OPINION OF THE ATTORNEY GENERAL SERVES AS A BAR TO PROSECUTION.


2.2 Departmental Responsibilities

It is the responsibility of the dean/department head to investigate and report to the Assistant Vice President for Finance and University Comptroller any potential conflict of interests affecting contracts or transactions to which the University is a party.

It is also the responsibility of the dean/department head to certify that a conflict of interests does not exist in employment situations having the appearance of conflict.

See also:

Procedure 15-2, "Certification that No Conflict of Interest Exists."


2.3 Employment Restrictions

In addition to the Conflict of Interest Act, University policy provides that no faculty or staff member shall serve as the immediate supervisor or exercise any control over the employment or employment activities of a person related by family or marriage or an individual sharing the same household.

See also:

Procedure 15-2, "Certification That No Conflict of Interest Exists."


2.4 Restrictions on Procurement Activities

No employee having official responsibility for a procurement transaction (purchase or lease of goods or services) shall participate in the procurement when the employee knows that:

No employee or former employee having official responsibility for procurement transactions shall accept employment with any bidder, offeror or contractor with whom he/she has dealt in an official capacity concerning procurement transactions for a period of one year after termination of the employee's University employment.

Exception: An exception is allowed if the employee/former employee notifies his/her Vice President/former Vice President, the Assistant Vice President for Human Resources, and the Chief Contracting Officer in writing before starting the new position.


2.5 Prohibited Conduct Regarding Contracts

No employee shall have a "personal interest in a contract" with:

Exceptions:

* NOTE: All employees with "personal interests in contracts" should disclose this fact as required and not initiate the contract to which the University is a party until approval is received from the Assistant Vice President for Finance and University Comptroller.

See also:

Procedure 15-1, "Providing Notice of Possible Conflict of Interests."


2.6 Prohibited Conduct Regarding "Transactions"

Each employee shall disqualify him/herself from representing the University in a "transaction" when:

He/she has a "personal interest in the transaction", and the "transaction" has "specific application" to the employee.

In this situation, the employee will not vote or represent the University in the "transaction," and the University will record the disqualification in writing. Even after disqualifying oneself, the employee may still represent him/herself, one's spouse, or any relative in the "transaction." The employee must not be compensated for his/her representation and must comply with the disqualification and recording requirements above.

NOTE: All employees with "personal interests in transactions" should disclose this fact as required.

See also:

Procedure 15-1.

If an employee's disqualification leaves less than the required number of persons needed to act on the "transaction," the remaining members will have authority to act by majority vote or unanimous vote of the remaining members, as required. If action is taken when these above conditions are not met, the University may rescind the action, as required.

NOTE: The above disqualifications and disclosures are in addition to the disclosure of economic interest required for certain positions designated by the Governor. The Department of Human Resources sends out the disclosure form annually to select employees.


2.7 Solicitation and Acceptance of Gifts, Travel, etc.

An employee of the University shall not:

An employee having authority to conduct or influence the buying of goods or services for the University must not solicit or accept any gift, payment, loan or anything else, other than miscellaneous items bearing advertising, such as matches, calendars, rulers, note pads, or other items of nominal or minimal value from a bidder, offeror, contractor, or subcontractor. This rule does not prohibit employees from buying goods or services, or obtaining loans, for their personal use where they pay equal consideration for the goods, services or loans; nor does it prohibit employees from accepting meals or beverages from vendors when offered to a large group of people at a trade show, exhibit or other professional meeting.


2.8 Other Restrictions:

An employee of the University shall not:

Use confidential information not available to the public and acquired through one's University position for one's own or another's economic benefit.

The University shall not:

Purchase building materials, supplies or equipment for a University building or structure from any independent contractor who is providing architectural or engineering (non-construction) services to the University, or from any partnership, association or corporation in which the architect or engineer has a personal interest, except in cases of emergency.


2.9 Penalties and Remedies

Any employee who violates the provisions of the mentioned Acts is guilty of a misdemeanor, and may be fined up to $1,000 and sentenced up to a year in jail. Any employee may NOT be prosecuted if PRECEDING the potential conflict action:

If convicted for this violation, the employee shall, in addition to any other fine or penalty provided by law, forfeit his/her employment. In addition, any employee who violates the requirements of this policy may otherwise be disciplined by the University.

Any money or other thing of value derived from a violation of the above policies will be forfeited to the appropriate source of funds, i.e., State Treasurer, University Bursar, etc. If the money, etc., increased in value between the time of violation and the discovery of the violation, the greater value will be forfeited.

Any purchase made in violation of the above policies may be rescinded by the University within five years of the date of such purchase.

If convicted for this violation, the employee shall, in addition to any other fine or penalty provided by law, forfeit his/her employment. In addition, any employee who violates the requirements of this policy may otherwise be disciplined by the University.

Any money or other thing of value derived from a violation of the above policies will be forfeited to the appropriate source of funds, i.e., State Treasurer, University Bursar, etc. If the money, etc., increased in value between the time of violation and the discovery of the violation, the greater value will be forfeited.

Any purchase made in violation of the above policies may be rescinded by the University within five years of the date of such purchase.

Any contract made in violation of the above policies may be declared void by the University within five years of the date of such contract. The contractor or subcontractor will retain or receive only the reasonable value, with no increment of profit or commission, of the property or services rendered prior to receiving notice the contract had been voided. In voiding contracts of sale, any refund will be made to the appropriate source of funds, i.e., State Treasurer, University Bursar, etc.

Approved by SCHEV 3 February 1992.

3.0 Definitions [Top]

"Official Responsibility" - Administrative or operating authority, whether intermediate or final, to initiate, approve, disapprove, or affect a procurement transaction or any resulting claim.

"Exercising control over the employment or employment activities" - This concept includes, but is not limited to, making decisions regarding initial appointment, retention, promotion, tenure, salary, leave of absence, and evaluation. This concept does not include academic or scientific conduct of instruction or research. The instructor or principal investigator of a research project is responsible for the academic or scientific work and for technical leadership.

"Contract" - Any agreement to which the University is a party, or any agreement between or on behalf of the University or any subdivision and a third party for payment from any University fund. Sub-contracts are included only if the University was a party to the original contract.

"Personal Interest in a Contract" - Being a party to a contract or having a "personal interest" in the firm, corporation, partnership, or other business entity which is a party to the contract.

"Transaction" - Any matter considered by the University or one of its subdivisions on which official action is taken or contemplated.

"Personal Interest in a Transaction" - Where an employee or his/her spouse, or immediate family member, has a "personal interest" in property, or in either a firm, corporation, partnership or business entity, or in one representing an entity, which is the subject of the transaction in question, or will benefit or may reasonably be expected to benefit, directly or indirectly, or suffer from the transaction.

"Personal Interest" - A financial benefit or liability of an employee, or immediate family member, if such benefit or liability is included in one of the categories outlined below:

"Specific Application Transaction" - A transaction affecting the personal interest of an employee. Specific application transactions do not affect the public in general, but general public transactions may include the personal interest of the employee.

"Immediate Family" - An employee's spouse, and any other person living in the same household as the employee, who depends on the officer or employee for more than 50% of his or her support, or provides more than 50% of the support for the officer or employee.

"Related by Family or Marriage" - An employee's spouse, parent, child, sibling, grandparent, grandchild, aunt, uncle, niece, nephew, in-law, or individual for whom an employee has been assigned legal responsibility or guardian.

4.0 References [Top]

5.0 Approvals and Revisions [Top]

Previous version in effect from 8/1/93 to 7/5/06 available in policy archive.

Maintained by University Comptroller
© 2000 by the Rector and Visitors of the University of Virginia