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IS-2508 Conflict of Interest Under Federal Projects

Human Resources

Release Date: 8/26/97
Revision Date: 7/12/16 

Introduction

Central New Mexico Community College (CNM) is required by  federal law (2 CFR 200.112 & 200.318) to protect federally-funded projects from any bias that can reasonably be expected to arise from financial interests of individuals involved in the design, conduct or reporting of project results.

CNM's federally-funded sponsored programs follow a standardized process designed to promote objectivity in the work completed under federal projects and to manage, reduce or avoid any bias resulting from possible investigator conflicts of interest.

Nothing in this document replaces or changes any obligations detailed under New Mexico law or the (other supplementary CNM policy statements that address conflict of interest) CNM Employee Handbook.

1. Investigation of Conflict of Interest

1.1 The Contracts and Grants Manager or Comptroller provides a copy of this directive to each investigator assigned to a federal project and informs him or her of reporting responsibilities and any conflict of interest regulations adopted by the federal agency funding the federal project.

1.2 Each investigator is required to complete Financial Disclosure Statementwhich must include information involving the financial interests of the investigator and family members.  The Financial Disclosure Statement is forwarded to the CNM Contracts and Grants Manager or the Comptroller before the CNM proposal, offer or application is submitted to the federal agency.

Investigators working for subgrantees, subcontractors or collaborators must be given a copy of this CNM policy and procedure. Each investigator is also required to complete a Financial Disclosure Statementor provide assurances from their employer(s) that enables CNM to comply with the conflict of interest regulations of the federal agency funding the federal project.

2. Management of Conflict of Interest

2.1 A conflict of interest may exist when the Contracts and Grants Manager or the Comptroller determines that a significant financial interest or other interest of an investigator, employee, officer or agent could directly and significantly affect the design, conduct or reporting of the work to be delivered by CNM under a federal project.

2.2 If a conflict of interest appears to exist, the Contracts or Grants Manager or the Comptroller determines what actions should be taken by CNM to manage, reduce or eliminate conflict of interest.

Conditions or restrictions that might be imposed by CNM to manage conflict of interest include, but are not limited to, one or more of the following:

  • Public disclosure of significant financial interests or other interest of an investigator as reported in Financial Disclosure Statements
  • Monitoring of project activities by independent reviewers
  • Modification of the project
  • Disqualification from participation in all or a portion of the funded project activities
  • Divestiture of significant financial interest
  • Severance of relationships that create actual or potential conflict

2.3 If additional review is deemed necessary to determine or resolve a possible conflict of interest, the Contracts and Grants Manager or the Comptroller can submit the Financial Disclosure to CNM legal counsel, or any other appropriate CNM personnel.  This information is not disclosed to any party not involved in this process.

2.4 If a conflict of interest cannot be managed or resolved, the President has the authority to decline the award.

2.5 In the event that CNM determines an investigator employed by CNM has recklessly disregarded or intentionally avoided obligations under this administrative directive, CNM may impose sanctions on the investigator in accordance with the applicable grievance procedure.

3. Federal Agency Request for Information

3.1 The federal agency funding a federal project may, at any time, request information about CNM's procedures and actions regarding conflicting financial interests in work performed under the federal project. To the extent required by law, the federal agency maintains the confidentiality of all records of financial interests.

3.2 The federal agency may also review all records pertinent to compliance with the federal agency's conflict of interest rules or regulations either by requiring submission of these records or reviewing them on site.

3.3 CNM provides all information available upon request, to the federal agency funding a federal project regarding all conflicting interests identified by CNM and how those interests have been managed, reduced or eliminated to protect the work performed under the federal project.

4.  Compliance and Audit

4.1 The Contracts and Grants Manager or the Comptroller reports the existence of a conflict of interest to the federal awarding agency or pass-through entity. See 2 CFR 200.112. The federal awarding agency or pass-through entity will also be advised if the conflict of interest has been managed, reduced or eliminated.  The reporting must be completed prior to the expenditure of awarded funds.

If a conflict of interest is discovered after funding, an updated report is submitted  indicating that the conflicting interest has been managed, reduced or eliminated, at least on an interim basis, within 60 days of identifying the conflict.

The federal agency may determine that the suspension of funding is necessary until the matter is resolved.

4.2 Each federal project being performed by CNM is reviewed by the Contract and Grants Manager and/or the Comptroller to ensure receipt of a Financial Disclosure for each investigator working on each federal project for CNM.

If it is determined that any investigators have not submitted Financial Disclosure Statements, the Contracts and Grants Manager or the Comptroller will promptly obtain statements from these investigators.

4.3 If CNM finds that an investigator has failed to comply with this conflict of interest administrative directive and has biased the design, conduct or reporting of work to be delivered by CNM, the federal funding agency is promptly notified of the corrective action to be taken.

The federal agency will consider the situation and, as necessary, take appropriate actions or refer the matter to CNM for further action, which may include directions to CNM on how to maintain appropriate objectivity in the federal project.

4.4 The Contracts and Grants Manager and/or Comptroller shall enforce the appropriate actions involving an investigator employed by CNM who has recklessly disregarded or intentionally avoided obligations under this administrative directive and procedure.

If the investigator is employed by a subcontractor, subgrantee or collaborator of CNM under a federal project, CNM places the investigator and the employer on notice of CNM's determination.

CNM can also include one or more of the following:

  • Request that the employer review its conflict of interest policies and procedures and determine how future violations will be avoided
  • Remove the investigator from the federal project
  • Remove the employer from the federal project
  • Prohibit the employer and investigator from participating in future federal projects with CNM

5.  Records Maintenance

5.1 The Contract and Grants Manager and/or Comptroller make every attempt to maintain the confidentiality of the information contained in the Financial Disclosure Statement to the extent permitted by law, and except as otherwise provided in this CNM administrative directive and procedure.

5.2 Records of all financial disclosures and actions taken by CNM involving conflicting interest are retained for at least three years:

  • After submissions of a final expenditure report by CNM for the federal project involved;
  • After resolution of any government action involving these records;
  • From other dates specified (by the federal regulations appearing at 45 CFR 74.53 or 48 CFR 4.703), whichever period is longer.

5.3 The Contracts and Grants Office destroys records after expiration of the retention time period. In making a determination of whether to destroy these records, the Contracts and Grants Manager or the Comptroller may consult with and disclose these records to CNM legal counsel.

5.4 The Contracts and Grants Office sends a reminder notice to each active investigator on an annual basis stating their obligations under this administrative directive to submit an updated Financial Disclosure Statement, if they become aware of any new information that should be reported.

6. Definitions

Conflict of Interest

A conflict of interest may exist when the Contracts and Grants Manager or Comptroller determines that a significant financial interest or other interest of an investigator could directly and significantly affect the design, conduct or reporting of the work to be delivered by CNM under a federal project.

Family Members

An individual's spouse and dependent children.

Federal Agency

Any federal agency that is subject to the Uniform Guidance.

Federal Project

Any contract, grant, cooperative agreement, intergovernmental personal agreement between CNM and a federal agency that provides monies to CNM in exchange for CNM providing property or services.

Investigator

The investigator, program director, and any other person who is responsible, in whole or part, for the design, conduct or reporting of a federal project. The term "investigator" includes the investigator's family members.

Financial Interest

Anything of monetary value, including but not limited to, salary or other payments for services (e.g., commissions, consulting fees, or honoraria); equity interests (e.g., stocks, stock options, or other ownership interests); allowance, forbearance, forgiveness of debt; interest in real or personal property; dividends; rent; capital gain; and intellectual property rights (e.g., patents copyrights, and royalties from such rights).

Significant Financial Interest

A financial interest is deemed significant depending upon the facts of the situation, but monetary value is considered significant if it meets one of the following tests:

  1. an equity interest is significant if it exceeds $10,000 in value as determined through reference to public prices or other reasonable measures of fair market value, or represents more than 5 percent ownership interest in any single entity, when aggregated for the investigator and family members;
  2. salary, royalties or other payments are significant if they are expected to exceed $10,000, when aggregated for the investigator and family members over the twelve months following the date of disclosure.

A significant financial interest does not include:

(a) Salary, royalties or other remuneration from CNM; 
(b) Income from seminars, lectures or teaching engagements sponsored by public or nonprofit entities; or
(c) Income from service on advisory committees or review panels for public or nonprofit entities.

 

Forms

Support Materials

IS-2004, Employment Separation
IS-2010, Job Vacancies

Reference Materials

Employee Handbook 4.02, Conflict of Interest
Governing Board Handbook 2.12, Conflict of Interest