3-9 Conflict of Interest Guidelines

• Attachments are included in the PDF file.
• Effective date of this revision: September 15, 2020
• Contact for more information:  Contracting and Purchasing Services

The purpose of the Conflict of Interest Policy is to foster high ethical standards of performance by ensuring that actual or apparent conflict of interest situations are avoided. The guidelines address specific areas of potential conflict of interest.

A conflict of interest may occur when a University faculty/staff member meets any one of the following criteria:

A. The faculty/staff member is:

1. an officer, director, trustee, sole proprietor, partner, employee, sales representative or agent of, OR

2. a consultant, independent contractor or advisory board member to an external organization or corporation either seeking to do or doing business with the University, funding a sponsored project, or providing goods or services under a sponsored project in which the faculty/staff member is participating in any capacity; OR

B. The faculty/staff member is the actual or beneficial owner of more than five percent (5%) of the voting stock or controlling interest of such organization or corporation, or the market value of her/his stock exceeds $10,000; OR

C. The faculty/staff member has dealings with such organization or corporation from which he/she derives income (e.g., royalties, stipends, salary) of more than $10,000 per year, exclusive of dividends and interest; OR

D. The assets of the faculty/staff member's Family/Household, alone or in combination with the assets of the faculty/staff member, meet any of the criteria stated in paragraphs A, B and C above. Family/Household is defined to include a) immediate family (spouse, parents and children) and b) persons living at the same residence as the faculty/staff member, except their tenants or employees.

The Guidelines are organized as follows:

Section

I. Contracting with University Employees (Faculty/Staff)

II. Contracting with Others 

III. Soliciting Faculty/Staff to Provide 403(b) Options Available in the University's Benefit Packages

IV. Soliciting Clients for A Faculty/Staff's Private Business

V. Use of University Materials and Equipment in a Faculty/Staff's Private Business

VI. Use of University Name to Suggest Private Business is Operated/Endorsed by the University

 VII. Personal Gifts

VIII. Development Activities

X. Conflict of Commitment

IX. Royalties

XI. Sponsored Projects

XII. Board of Trustees

Attachment A: Financial Disclosure Statement for Contracting with University Employees or Employee's Family/Household

Attachment B: Financial Disclosure Statement Regarding Sponsored Projects (Parts I and II)

I. CONTRACTING WITH UNIVERSITY EMPLOYEES (FACULTY/ STAFF)

A. Definition

A contract is any agreement between the University and another party, which is enforceable at law, whether or not it is titled "Contract". A contract includes any agreement made on behalf of the University in which legally enforceable commitments are made by or to the University. Other terms that are sometimes used include agreement, letter of agreement, letter of understanding, memo of understanding, consortium, operating agreement, etc.

B. Guidelines

The University may enter into contracts with University faculty/staff and businesses in which they have a financial interest so long as there is compliance with the reporting requirements and limitations outlined in Section C below. Contracting & Purchasing Services, along with other departments who have been granted authorization, are delegated the responsibility of monitoring and approving all bidding and purchasing of equipment, goods and supplies, leases and rentals, and contracts for professional services from University faculty/staff or businesses in which University faculty/staff have a financial interest.

1. The reporting requirements and limitations set forth apply to all contracts except those which create or supplement employment relationship agreements between the University and the faculty/staff. This regulation covers, but is not limited to, the purchase of equipment, goods and supplies, contracts for construction, renovation and repair, leases and rentals, and contracts for professional services.

2. University offices may adopt more restrictive regulations (with the permission of the appropriate vice president) than those outlined in this Policy in order to serve the special needs of their area.

3. The University does expect account directors to use reasonable care to follow the established criteria, particularly in the use of University credit cards, Quick Purchase Orders and petty cash, and to see that the University makes quality purchases for the lowest prices and to avoid patterns of preferential purchasing from businesses owned or operated by University faculty/staff or businesses in which University faculty/staff have a financial interest.

C. Reporting Requirements when Contracting with Faculty/Staff or Their Family/household's Business

1. It must be demonstrated that the business is an ongoing pre-existing one, based on the following criteria:

a. The business must have been in existence for at least one year prior to doing business with the University.

b. The business cannot generate 50 percent or more of its gross annual sales from sales to the University.

2. The faculty/staff must have an approved Financial Disclosure Statement, on file with Contracting & Purchasing Services before the business is eligible to contract with the University. A disclosure statement must be resubmitted annually to remain eligible.

3. The faculty/staff or their Family/Household may not sell or lease products or services to the faculty/staff's own department/unit or to departments he/she supervises.

4. If the purchase exceeds the minimum bid limit, competitive pricing is required.

5. No contracts will be made with a University faculty/staff's, or their Family/Household's business if that faculty/staff has been involved with developing the design or specifications for that contract or is involved in negotiating that contract on behalf of the University.

D. Exceptions

The President or designee may approve exceptions to this Policy, which involve University faculty/staff. Faculty/staff must process their request for an exception through their appropriate vice president. Exceptions involving the President must be approved by the Finance Committee of the Board of Trustees. Approval of all exceptions must be in writing and include a disclosure of the parties to the transaction, the subject matter of the transaction, and reasons for the exception. If approved, the signed exception must be forwarded to the Purchasing Department.

II. CONTRACTING WITH OTHERS

Individuals other than faculty/staff may have special relationships with the University (e.g., retirees or persons supplying independent contractor services). University faculty/staff should use care to be sure that decisions to purchase or enter into other contractual situations with these individuals are made in the best interest of the University. Faculty/staff should use care to protect the University from the appearance of impropriety, as well as actual impropriety. In addition, proper University contracting policy must be followed.

III. SOLICITING FACULTY/ STAFF TO PROVIDE 403(b) OPTIONS AVAILABLE IN THE UNIVERSITY'S BENEFIT PACKAGES

 A. Guidelines

Faculty/staff who want to sell University-authorized 403(b) retirement options to other University employees may do so as long as there is compliance with the reporting requirements and limitations outlined in Section B below. Contracts may be made only with insurance companies and mutual funds on the approved list maintained by Human Resources, Benefits Section.

B. Reporting Requirements and Limitations

1. The faculty/staff must demonstrate that he/she operates an ongoing pre-existing business according to the following criteria:

a. The business must have been a licensed security dealer for at least one year prior to doing 403(b) business with University employees.

b. The faculty/staff's investment business cannot generate 50 percent or more of its gross annual sales from 403(b) sales to University employees.

2. The faculty/staff must complete a Financial Disclosure Statement (see Attachment A) and submit it to the Purchasing Department before he/she is eligible to do 403(b) business with University employees. A disclosure statement must be resubmitted annually to remain eligible.

3. The faculty/staff may not sell 403(b) securities or services to members of her/his own department/unit or to the persons he/she supervises.

4. No 403(b) contracts may be made through a faculty/staff's business for four years after that faculty/staff member has been involved in the selection of and/or monitoring of the investment options.

C. Exceptions

The President or designee may approve exceptions to this Policy, which involve University faculty/staff. Faculty/staff must process their request for an exception through their appropriate vice president. Exceptions involving the President must be approved by the Finance Committee of the Board of Trustees. Approval of all exceptions must be in writing and include a disclosure of the parties to the transaction, the subject matter of the transaction, and reasons for the exception. If approved, the signed exception must be forwarded to the Purchasing Department.

IV. SOLICITING CLIENTS FOR A FACULTY/ STAFF'S PRIVATE BUSINESS

A. Some offices of the University provide services to other University offices or to outside agencies, businesses or people (e.g., a public-school district). If the University office cannot accommodate a request, the offices or agencies needing assistance then look elsewhere. Sometimes they end up directly paying a University faculty/staff to complete the work as a supplemental assignment. Some University faculty/staff perform services or provide consulting, both as University employees and as private independent consultants. A person should not decide whether the University office can provide services to another University office or to an outside business, agency or person, if that same person also might undertake the work as a private consultant. In such situations, the request must be referred to either the Assistant Vice President for Research or the Director of Purchasing, who will make the decision.

B. University faculty/staff must disclose in writing to her/his vice president what services and consultations he/she has provided privately to persons or agencies that made their first inquiry through the University.

V. USE OF UNIVERSITY NAME OR MATERIALS AND EQUIPMENT IN A FACULTY/STAFF'S PRIVATE BUSINESS

A. Guidelines

1. Any University faculty/staff who undertakes outside employment or consultation for a fee should use care not to fulfill their outside business commitments on University time or with the use of University equipment, supplies or support staff.

2. University faculty/staff who operate a private business may not state or imply that their business is operated, endorsed or approved by Central Michigan University, unless they have a written agreement with the University to do so. Faculty/staff must process their request for approval through their appropriate vice president. Such approval must be obtained from the Office of the President. Faculty/staff must not use CMU communication systems (e.g., telephones, telefax, electronic mail, copy machines) to regularly conduct a private business.

3. Faculty/staff may not list a University address, phone number, fax number or electronic mail address on stationery, business cards, advertisements, etc. as a contact for their private business nor may they use Central Michigan University stationery in conducting their private business.

4. The University does not consent to the regular use of work site materials or to the use of more costly supplies and services (e.g., computer time, long distance telephone calls, regular use of telephones for local business calls, clerical services, darkroom supplies, special supplies, photocopying, large amounts of paper) by faculty/staff working on private projects, and it does not consent to removal of tools and equipment from the University premises. Some departments or units may adopt restrictions or prohibitions even on minimal uses on the basis of potential liability; skill needed to operate equipment, past problems, wear and tear, or other reasons.

B. Exceptions

1. The President or designee may approve exceptions to this Policy, which involve University faculty/staff. Faculty/staff must process their request for an exception through their appropriate vice president. Exceptions involving the President must be approved by the Finance Committee of the Board of Trustees. Approval of all exceptions must be in writing and include a disclosure of the situation, the subject matter of the transaction, and reasons for the exception. If approved, the signed exception must be forwarded to the Purchasing Department.

2. No statement above shall be interpreted in a way, which is inconsistent with the Intellectual Property Rights Policy.

VII. PERSONAL GIFTS (REVISED 9/29/2005)

A. Guidelines

1. A gift or bequest is defined as anything of value except as excluded in VII B.1. For example, a gift or bequest may be in the form of money, goods (e.g., golf balls, candy), gift certificates, entertainment (theatre, concert tickets), lodging, services, and/or price concessions (discounted rates).

2. University faculty/staff shall not accept a gift or bequest from an individual or organization that has or may have a business interest with the University (i.e., is either currently engaged in business with CMU or may benefit in future business transactions or from a decision the faculty/staff member may make or influence).

a. When circumstances require a gift or bequest to be accepted by a faculty/staff member, a disclosure statement must be filed with the President or her/his designee OR if the gift or bequest is accepted by the President or a Board member, a disclosure statement must be filed with the Board of Trustees Finance and Audit Committee. Disclosure statements shall describe the gift or bequest, its source, and its disposition (e.g. donated to CMU; donated to a charitable organization; kept by the recipient). If the recipient wants to keep the gift or bequest for her/himself, the aforementioned disclosure statement must also then include a justification for doing so. The disclosure statement then must be approved before the recipient will be allowed to keep the gift or bequest.

b. The University recognizes that some faculty/staff members will receive gifts or bequests from personal friends who also do business with the University. The faculty/staff member shall file a disclosure statement with the President or designee if the value of all gift(s) or bequest(s) from a personal friend exceeds $150 during a University’s fiscal year (7/1/ - 6/30).

3. University faculty/staff shall not accept a gift or bequest from a student or prospective student when the faculty/staff member is, or is likely to be, in a position to make or affect decisions about that student. This Guideline is intended to avoid the appearance of influence in the awarding of grades or other decisions affecting the student. The exception B.1.a. below does not apply to this specific guideline. Faculty/staff members may accept gifts from students after their relationship as faculty/staff – student is ended, so long as the gifts were not reasonably anticipated (flowers or a book or product of an international student’s home country, given as the student is graduating and after final grades have been posted and the degree or credential conferred).

B. Exceptions

1. A gift or bequest for purposes of this Conflict of Interest Policy does not include:

a. Items received from one specific individual or organization with an aggregate value less than $100 during the University’s fiscal year.

b. Food, flowers, or other consumables or perishables which the recipient makes available to guests, visitors or the entire office.

c. Items won at a conference, meeting, etc., where all attendees were given equal opportunity to win.

d. Items made available to all faculty/staff or to the general public.

e. Food or beverages consumed at a business function or entertainment which is included as part of a business function.

f. Attendance at professional meetings and/or customer events, at which a faculty/staff member’s expenses are underwritten in whole or in part by a business or commercial enterprise, so long as attendance is not prior to a potential CMU purchase and the meeting/event is not being offered solely for CMU.

g. Attendance/participation at a sponsored fundraiser (e.g. Lem Tucker, Development scholarship outings) which is underwritten in whole or in part by businesses or commercial enterprises.

h. Staying or dining with a personal friend at his/her residence.

2. The President or designee may approve additional exceptions to this Policy, which involve University faculty/staff. Faculty/staff must process their request for an exception through their appropriate vice president. Exceptions involving the President or Board member(s) must be approved by the Finance and Audit Committee of the Board. Approval of all exceptions must be in writing and include a disclosure of the parties to the gift, the nature of the gift, and reasons for the exception. If approved, the signed exception must be forwarded to the Contracting & Purchasing Services Department.

VIII. DEVELOPMENT ACTIVITIES

A. Federal tax laws prohibit the University from providing charitable gift receipts for monies given to the University to benefit any specific individual. Hence, individual faculty/staff or members of their Family/Household will not receive charitable gift receipts if they give funds to the University to benefit themselves or Family/Household directly.

B. Similarly, account directors should not provide faculty/ staff with monies for personal use that are proportional to the gifts that such individuals have donated to the University. If account directors are approached by potential donors who suggest that their gift is contingent on explicit or implicit agreements about services to be provided them by the University, the account directors should contact their vice presidents before entering into any such agreement. Only the vice presidents are authorized to accept gifts to the University "with strings attached."

IX. CONFLICT OF COMMITMENT

A. Neither work outside the University nor work for different units within the University is prohibited, but it must not constitute a conflict of commitment. Conflicts of commitment are situations in which a University faculty/staff's supplemental or additional activities, often valuable in themselves, and even when they result in no personal gain or improper advantage to others, nevertheless interfere improperly with the faculty/staff's obligations to the University. Conflict of commitment may also arise when faculty/staff accept more than the equivalent of one full-time appointment. In these situations, the faculty/staff is required to disclose this to their respective supervisor. This language shall not be interpreted in a way, which is inconsistent with any collective bargaining agreement or employee policy on the subject.

X. SHARING OF ROYALTIES AND OTHER INCOME

A. The university's Intellectual Property Rights Policy provides specific information regarding the distribution of royalties for intellectual property owned by the University. The policy is available by contacting the Office of Research and Sponsored Programs at 774-6777 or at the web site address, www.orsp.cmich.edu.

B. Ownership retained by creator

1. Neither the University nor any of its employees should benefit financially from the sale of materials that are developed solely for sale to Central Michigan University students (e.g., course packs);

2. It is understood that royalties will accrue from materials that are developed for sale to an audience broader than just Central Michigan University students. However, university employees may not retain the royalties from the sale of these materials to Central Michigan University students if either of the following conditions are met:

i. students purchased the materials in conjunction with a course taught by the employee who will earn the royalties, or

3. the employee who will earn the royalties was involved in selecting the materials that students are expected to purchase

4. Royalties accruing from the sale of materials to Central Michigan University students, as described in Section X.B.2, will be given to the employee's dean's office.

i. The Office of Research and Sponsored Programs will assist in estimating the dollar value of royalties that are covered by this provision. ORSP will use information from the local bookstores and the creator to develop the estimate.

ii. These funds should be used directly or indirectly to encourage and support more research and creative endeavors within the college.

XI. SPONSORED PROJECTS

A. Overview

1. The guidelines in this section are intended to assure that the design, conduct and reporting of research and other sponsored projects conducted by Central Michigan University are not biased by any conflicting financial interest of persons involved in carrying out the sponsored projects. To achieve this goal, the University is committed to:

a. identifying significant financial interests that would reasonably appear to affect the sponsored research and

b. addressing actual, perceived, and potential conflicts.

The guidelines are to be used for identifying and resolving actual, perceived or potential faculty/staff conflicts of interest pertaining to sponsored projects.

2.  These guidelines apply to:

a. all faculty and staff involved in sponsored projects funded by federal, state or local government agencies, private foundations, or commercial/corporate sponsors, and

b. sub-grantees, contractors or collaborators working under the auspices of Central Michigan University on sponsored projects funded by federal, state or local government agencies, private foundations, or commercial/corporate sponsors, and

c. purchase orders and subcontracts issued by Central Michigan University under its sponsored projects regardless of the source of funds.

B. Disclosure Requirements

1. Participating faculty/staff members in a sponsored project include:

a.  the project director/principal investigator,

b. co-project director/co-principal investigator, and

c. any other person at the University who is responsible for the design, conduct, or reporting of research or educational activities funded or proposed for funding through a sponsored project.

2. Each faculty/staff member participating in a sponsored project covered by these guidelines must disclose whether he/she has external affiliations that may constitute an actual, perceived or potential conflict as described in any of the criteria outlined in paragraph A-D on the first page of the guidelines.

3. No later than the time when a grant proposal  is submitted to the Office of Research and Sponsored Programs for transmittal to a specified funding agency, each participating faculty/staff member must have on file with the Office of Research and Sponsored Programs a completed Financial Disclosure Statement Regarding Sponsored Projects (see Attachment B)covering the fiscal year in which the proposal is submitted.

4. Prior to the finalization of any contracts or subcontracts issued to the University, each participating faculty/staff must have on file with the Office of Research and Sponsored Programs, a completed Financial Disclosure Statement Regarding Sponsored Projects (see Attachment B) covering the fiscal year in which the proposal is submitted.

5. In order to insure that an external subcontractor does not have a conflict of interest related to the particular project, the Principal Investigator on a project is responsible for obtaining a completed Financial Disclosure Statement Regarding Sponsored Projects (see Attachment B) from every subcontractor who will be working on the project. These statements must be submitted to and reviewed by the Director of the Office of Research and Sponsored Programs prior to the University signing any agreements with the subcontractor(s).

6. A negative disclosure (one that reveals no conflict of interest) will be signed by the Director of the Office of Research and Sponsored Programs and retained in the Office of Research and Sponsored Programs.

7. A positive disclosure (one that requires additional review) will be reviewed initially by the Director of the Office of Research and Sponsored Programs in an attempt to resolve any actual or potential conflicts of interest. In those instances where the conflict cannot be resolved at the initial review stage, positive disclosures will be referred to a Conflict Review Committee for additional review. This committee consists of the Assistant Vice President for Research, Assistant Vice President for Academic Administration and the Director of Purchasing, advised by the University Counsel. In the event that the committee determines that additional expertise is necessary, it reserves the right to invite persons with such expertise to participate in its discussions. When resolved, the positive disclosure form and any materials relating to the resolution of the actual or potential conflict of interest will be retained in the Office of Research and Sponsored Programs.

Note: It is not the intent of the Office of Research and Sponsored Programs to delay the submission of a sponsored project because of problems relating to the disclosure form. However, all disclosures must be completed and all actual, perceived, or potential conflicts must be resolved prior to the University's expenditure of any funds under the sponsored project or issuance of a purchase order or subcontract for the acquisition of goods and services under a sponsored project.

8. The Director of the Office of Research and Sponsored Programs will also arrange to have all financial disclosures updated during the period of the faculty/staff member's sponsored projects, either on an annual basis or as new reportable significant financial interests are obtained. It is the faculty/staff member's responsibility to notify the Office of Research and Sponsored Programs of any conflict of interest that arises during the implementation of the sponsored project when none was present at the time the project award was first accepted.

C. Responsibilities of the Conflict Review Committee

In reviewing positive disclosures forwarded by the Director of the Office of Research and Sponsored Programs, the Conflict Review Committee will be guided by the following practices and may apply them whenever appropriate:

1. Determine, from the disclosure form, whether a significant financial interest could directly and significantly affect the design, conduct or reporting of funded research.

2. Assure adherence to all relevant and existing University policies as outlined in such publications as the Faculty Handbook, the PA Handbook, the SO Handbook, the ORSP Handbook, and the Standard Practice Guide. The committee should also refer to and comply with provisions in the Agreement between the University and the CMU Faculty Association, as well as any other University documents that it may consider relevant and appropriate.

3. Consider the nature and extent of the financial interest in the relationship between the faculty/staff member and the external organization.

4. Give special consideration to the terms and conditions of sponsored project agreements that may mitigate or complicate the specific situation under review.

5. Consult with and obtain additional information from the faculty/staff member that either the Conflict Review Committee or the faculty/staff member feel may be helpful in resolving an actual or potential conflict.

6. Act in a timely manner so as not to delay unduly the conduct of the sponsored project.

7. Conclude that the University may take one of the following actions:

a. Accept the sponsored project award.

b. Do not accept the sponsored project award.

c. Accept the sponsored project award subject to:

i. public disclosure of significant financial interests; or

ii. making suitable modifications in the research plan; or

iii. arranging to have the faculty/staff member's research monitored by independent reviewers; or

iv. divestiture by the faculty/staff member of significant financial interests; or

v. the assignment of a different faculty/staff member without a financial interest to take responsibility for the sponsored project; or

vi. severance of any relationship that creates an actual, perceived or potential conflict of interest on the part of the faculty/staff member or the faculty/staff member's Family/Household.

D. Compliance

1. The University requires all faculty/staff involved in sponsored projects to comply fully with all requirements of these guidelines. Violations of the guidelines include, but are not limited to:

a. failure to file a disclosure form;

b. filing of an incomplete, erroneous or misleading disclosure form that the person knew or should have known was incomplete, erroneous or misleading;

c. willful concealment of financial interests; or

d. failure to provide additional information as required by the Conflict Review Committee.

2. The Conflict Review Committee will review all allegations of violations and will make recommendations regarding the imposition of sanctions to the Provost or appropriate vice president. Sanctions imposed will be commensurate with or appropriate to the violation.

3. Any faculty/staff member against whom an allegation of violation is made shall be accorded due process as provided in any applicable collective bargaining agreement or other appropriate procedures at Central Michigan University.

E. Confidentiality and Records Retention

1. The Office of Research and Sponsored Programs shall maintain the maximum confidentiality allowed by law concerning the records pertaining to each disclosure. Access to such records will be limited to the staff of the Office of Research and Sponsored Programs in carrying out their duties, the faculty/staff member, the Conflict Review Committee, the Provost, and others on a "need to know" basis.

2. The Office of Research and Sponsored Programs will comply with all federal reporting regulations regarding conflict of interest. This includes, but is not limited to, the Public Health Services' (PHS) requirement that the University report to PHS, prior to the expenditures of PHS funds, the existence of a conflicting interest and assure that the interest has been managed, reduced, or eliminated. In addition, when required by the federal agency, the Office of Research and Sponsored Programs will inform a specific funding agency whenever the University is unable to satisfactorily manage/resolve an actual, perceived, or potential conflict of interest.

3. The Office of Research and Sponsored Programs will also maintain records of all financial disclosures and of all actions taken to resolve actual, perceived or potential conflicts of interest until at least three (3) years after the termination or completion of the sponsored project to which they relate, or the resolution of any action involving those records, whichever is longer.

Note: Certain sponsors, particularly federal agencies, may have requirements that are more rigorous than those outlined in these guidelines with regard to the timing and frequency of faculty disclosures and other provisions as well. In the case of such discrepancies, the sponsors' requirements will generally prevail.

XII. BOARD OF TRUSTEES

A. Sections I through XI of these Guidelines For Applying Conflict of Interest Policy are intended to apply to the Board of Trustees of Central Michigan University, except where it is clear they only apply to University faculty/staff.

B. Exceptions involving individual Board of Trustee members must be approved by the Finance Committee of the Board of Trustees.

Central Michigan University reserves the right to make exceptions to, modify or eliminate this policy and or its content. This document supersedes all previous policies, procedures or guidelines relative to this subject.