CONFLICTS OF INTEREST: COMPLIANCE DISCLOSURE REQUIREMENTS
Revised November 16, 2015
SCOPE OF REQUIREMENTS
Indiana law (IC-35-44.1-1-4) states that a public servant commits conflict of interest, a Level 6 felony, if the public servant knowingly or intentionally has a pecuniary [financial] interest in, or derives a profit from, a contract or purchase connected with an action by the governmental entity served by the public servant.
“Governmental entity” and “public servant” are defined (IC 35-31.5-2-144, IC 35-31.5-2-145, and IC35-31.5-2-261) to include public universities and their employees and trustees.
Note that if the public servant’s spouse or dependent has the pecuniary interest or derives the profit, then the public servant may be considered to have committed the conflict of interest.
However, the law provides a mechanism by which public servants can avoid the criminal aspects of the conflict of interest law by filing a disclosure statement with the Board of Trustees.
The Board reviews each potential conflict of interest and files all approved disclosures with the State Board of Accounts. (IC 35-44.1-1-4(d)).
WHO IS COVERED?
This disclosure requirement applies to all employees and trustees, but especially to those who have the authority to make purchases or sign contracts for the
INTERESTS TO BE DISCLOSED
The statute does not specifically define the term “pecuniary interest”. If there is any doubt, a disclosure statement should be filed. Examples of possible conflict include but are not limited to:
(a) Any ownership interest in a business or corporation, where a contract or sale to the
(b) The term “pecuniary interest” could also mean “creditor’s interest”. If the public servant has made a loan
(c) A person who is a paid officer, director, employee, or consultant of a corporation, whether it be large or small, and knows of business being done by the corporation with the
(d) The mere ownership of stock in corporations with which the
TIMING OF DISCLOSURES
Two types of disclosures may be submitted:
(a) A single disclosure is used when a specific single transaction (contract or purchase) is proposed. In this case, final action on the contract or purchase must be delayed until the Board of Trustees has approved the disclosure. If approved, the University must submit the disclosure to the State Board of Accounts within 15 days of the final action on the contract or purchase.
Because of the challenges associated with timely approval by the Board of Trustees of single disclosures, employees are advised, when possible, to seek advance approval through the annual disclosure process described below.
(b) An annual disclosure is used when transactions occur on a regular recurring basis throughout the year. In this case, the disclosure is made on an annual basis, typically in time for action at the Board of Trustees’ January meeting.
PROCEDURES TO BE FOLLOWED
Responsibility for the filing of disclosure statements rests on the person or persons described in the “conflicts of interest” law, although the University will attempt to remind employees through annual announcements.
The trustees, president, vice presidents, associate and assistant vice presidents, deans, and director of athletics are expected to file annual disclosure statements, stating “none” if there are no relationships to disclose.
Other employees should file disclosure statements only if there is something to disclose. Vice presidents, deans, directors, and department heads/chairs are responsible for compliance with these disclosure requirements by staff members within their areas of administrative jurisdiction.
Administration of the “conflicts of interest” filing is handled by the vice president for Finance and Administration. Copies of the conflicts of interest disclosure statements may be obtained from that office or downloaded from the Finance and Administration website at http://www.usi.edu/finance-and-administration/.
IC 35-44.1-1-4 provides for the review of all potential conflicts of interest by the University of Southern Indiana Board of Trustees, which accordingly will evaluate specific situations disclosed. If the Board of Trustees finds that the situation involves a conflict of interest which, in its opinion, would be inappropriate, the public servant involved will be required to discontinue or divest himself or herself of the outside interest creating the conflict.
Completed disclosure forms are to be returned to the Office of Vice President for Finance and Administration through the organizational structure for the approval required at each level. Completed and approved forms will be submitted to the Board of Trustees for final approval and transmission to the State Board of Accounts as required by statute. Typically, the Board will act at its January meeting.
Additionally, note that a person with a potential conflict of interest on a matter should not exercise influence or participate in the decision making and related deliberations on that matter, even if the disclosure has been filed and approved.
Questions concerning conflicts of interest and the statutory requirement should be referred to the vice president for Finance and Administration.
*** To obtain a copy of the form, click here. A file will appear in the