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Policy 1106
Conflict of Interests

Date of Current Revision: April 2016
Primary Responsible Officer: Director of Human Resources
Secondary Responsible Officer: Assistant Vice President for Finance

1. PURPOSE

The purpose of this policy is to maintain the public’s highest trust in public officers and employees of the university and to provide procedures for employees to abide by state law.

2. AUTHORITY

The Board of Visitors has been authorized by the Commonwealth of Virginia to govern James Madison University. See Code of Virginia section 23-164.6; 23-9.2:3. The Board has delegated the authority to manage the university to the president.

STATE OR FEDERAL STATUTE AND/OR REGULATION
Employees of the university are bound by the terms of the State and Local Government Conflict of Interests Act (Code of Virginia, § 2.2-3100 et seq., hereafter “the Act”) and Virginia Executive Order 33 (2014).

3. DEFINITIONS

Definitions are taken from the Act. For more definitions see Code of Virginia, § 2.2-3101.

Business
Corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, trust or foundation, or any other individual or entity carrying on a business or profession, whether or not for profit.

Conflict of Interests (COI)
A conflict of interests occurs when a university employee or officer, or a member of his/her immediate family has a personal interest, or benefits or suffers from his/her participation in a contract or transaction considered by JMU.

Conflict of Interests Online Disclosure System
A restricted online system implemented by the Virginia Conflict of Interest and Ethics Advisory Council for employees working in disclosure-designated positions to electronically submit a Statement of Economic Interests.

COI Agency Coordinator
The person in JMU’s Human Resources office designated to manage employee access to the Virginia Conflict of Interest and Ethics Advisory Council’s online Conflict of Interests Disclosure System.

COI Designated Positions
University vice presidents are tasked with determining which positions are designated to file a Statement of Economic Interests based on guidance from the Governor’s office, to include the president, vice presidents, provosts, deans, and those persons in positions with decision-making authority regarding 1) policy, 2) contracts and procurement, 3) audits, 4) licensure, 5) inspections and investigations, and 6) investments or other financial matters.

Contract
Any agreement to which JMU is a party, or any agreement on behalf of JMU that involves the payment of money appropriated by the General Assembly, whether or not such agreement is executed in the name of the Commonwealth of Virginia or JMU.

Council
The Virginia Conflict of Interest and Ethics Advisory Council created by the General Assembly to encourage and facilitate compliance with the State and Local Government Conflict of Interests Act.

Employee
Any person employed by JMU in any capacity.

Immediate Family
A spouse and any other person who resides in the same household as the employee or officer and who is a dependent of the employee or officer.

Officer
Any person appointed or elected to any governmental or advisory agency including local school boards, whether or not s/he receives compensation or other reward of office.

Personal Interest
Financial benefit or liability accruing to a university employee or officer, or to a member of his or her immediate family. Such interests shall exist by reason of the following:

  1. Ownership in a business if the ownership interest exceeds three percent of the total equity of the business.
  2. Annual income that exceeds or may reasonably be anticipated to exceed $5,000 from ownership in real or personal property or a business.
  3. Salary, other compensation, fringe benefits or benefits from the use of property, or any combination thereof, paid or provided by a business or governmental agency that exceeds, or may reasonably be anticipated to exceed, $5,000 annually.
  4. Ownership of real or personal property if the interests exceeds $5,000 in value and excluding ownership in a business, income, or salary, other compensation, fringe benefits, or benefits from the use of property
  5. Personal liability incurred or assumed on behalf of a business if the liability exceeds three percent of the asset value of the business; or
  6. An option for ownership of a business or real or personal property if the ownership interest will consist of the above items 1. or 4.

Personal Interest in a Contract
A personal interest that an employee or officer has in a contract with a governmental agency, whether due to being a party to the contract or due to personal interests in a business that is a party to the contract.

Statement of Economic Interests
The electronic form used by employees in positions designated to disclose their financial interests by providing information pertaining to real estate, business interests, gifts, travel, liabilities, directorships and other matters.

Transaction
Any matter considered by JMU on which official action is taken or contemplated.

4. APPLICABILITY

This policy applies to all university employees.

5. POLICY

No JMU employee or officer shall have personal interests in a contract with JMU, other than his or her own contract of employment. In addition, employees in COI designated positions will disclose financial interests by filing a Statement of Economic Interests upon beginning employment. Thereafter, they will file semi-annually. 

5.1  Prohibited Conduct

No JMU employee or officer shall:

  • Solicit or accept money or other thing of value for services performed within the scope of his or her official duties, except the compensation, expenses or other remuneration paid by the university;
  • Offer or accept any money or any other thing of value for or in consideration of obtaining an appointment, employment or promotion of any person within any governmental or advisory agency;
  • Offer or accept any money or any other thing of value for or in consideration of the use of his or her public position to obtain a contract for any person or business with any governmental or advisory agency;
  • Use for his or her own economic benefit or that of another party, confidential information that he or she acquired by reason of his or her public position and which is not available to the public;
  • Accept any money, loan, gift, favor, service, or business or professional opportunity that reasonably tends to influence him in the performance of his official duties;
  • Accept any business or professional opportunity when he or she knows that there is a reasonable likelihood that the opportunity that is being afforded will influence him or her in the performance of his or her official duties;
  • Accept a gift from a person who has interests that may be substantially affected by the performance of that employee’s or officer’s official duties under circumstances where the timing and nature of the gift would cause a reasonable person to question that employee’s or officer’s impartiality in the matter affecting the donor. Violations of this subdivision shall not be subject to criminal law penalties;
  • Accept gifts from sources on a basis so frequent as to raise an appearance of the use of his or her public office for private gain. Violations of this subdivision shall not be subject to criminal law penalties; or
  • Use the employment to retaliate or threaten to retaliate against any person for expressing views on matters of public concern or for exercising any right that is otherwise protected by law. NOTE: the university is expressly authorized to govern the conduct of its employees and to take disciplinary action for misconduct or performance issues. 

6. PROCEDURES

Before any agreement or contract, other than an employment contract, is contemplated or exists, an advisory opinion from the Attorney General of the Commonwealth of Virginia or the Council may be required by JMU to determine whether the Act will be violated by its formation.

6.1  Process of Disclosing

JMU’s Office of the President and Human Resources provides the VP approved list of employees in COI designated positions to the Council.

Employees in COI designated positions must disclose their financial interests as a condition to taking employment, a disclosure statement of their personal interests and other information as is specified on the form set forth in § 2.2-3117. Thereafter, they shall file such a statement semi-annually by December 15 for the preceding six-month period complete through the last day of October, and by June 15 for the preceding six-month period complete through the last day of April. The Council manages the online Conflict of Interests Disclosure System and provides guidance on who is required to file. See more at http://ethics.dls.virginia.gov/filing-resources.asp#employees.

Upon beginning employment in a COI designated position and prior to the June and December filing dates, JMU’s COI agency coordinator and the Council will send email notifications to COI designated employees to access the Conflict of Interests Disclosure System and complete the Statement of Economic Interests. Any questions regarding the online filing process or general questions about the requirements of the form may be directed to Council staff at ethics@dls.virginia.gov, 804/786-3591. Also see User Guide for Conflict of Interests Individual Filers at http://ethics.dls.virginia.gov/pdf/COI_Individual_Filer_Guide.pdf.

All forms shall be maintained as public records for five years in the office of the Council.

6.2  Virginia State and Local Conflict of Interests Act Online Course

The Commonwealth requires COI designated employees and officers to complete an online Conflict of Interests course within sixty days of assuming employment and once every two years thereafter. Notifications to complete the course are sent by the COI agency coordinator. The course is accessed from JMU’s Human Resources website at https://attendee.gotowebinar.com/register/7819482976195843074 or http://www.jmu.edu/hrcompliance/index.shtml. The course takes approximately an hour to complete.

7. RESPONSIBILITIES

It is the responsibility of each JMU employee and officer to comply with the Act.

Any employee or officer who believes he/she may be in violation of the State and Local Government Conflict of Interests Act has the right and obligation to seek a written advisory opinion of the Attorney General of the Commonwealth of Virginia or the Council and thereby avoid prosecution and loss of office or employment.

If any employee or officer has reason to believe conflict of interests may exist, it is her/his duty to report it to JMU Audit and Management Services.

If any JMU employee or officer has reason to believe that personal conflict of interests may exist, it is her/his responsibility to exclude her or himself from all business matters relating to the process of negotiating or administering a contract.

It is the responsibility of JMU vice presidents to review the list of employees in designated positions and to make recommendations for adding or removing employees from the list.

It is the responsibility of employees in COI designated positions to disclose their financial interests by filing statements and meeting training requirements according to policy.

It is the responsibility of the COI agency coordinator to provide names, email addresses, and roles of employees in COI designated positions to the Council and to manage employee access to the Council’s system. The COI agency coordinator, in collaboration with the Council, notifies such employees to complete the Statement of Economic Interests.  

It is also the responsibility of the COI agency coordinator to notify employees in COI designated positions of their obligation to complete the online Conflict of Interests course within 60 days of assuming employment and to notify designated employees biennially when training requirements are to be met.

It is the responsibility of JMU Audit and Management Services to investigate any allegations of violation of this policy and to refer possible criminal violations to the JMU Office of Public Safety.

8. SANCTIONS

Any person who knowingly files the Statement of Economic Interests form inaccurately will be charged with a Class 1 Misdemeanor. A local official who knowingly files the form inaccurately will be charged with a Class 3 misdemeanor. Any person who knowingly files the form inaccurately may also be dismissed from office or employment. An employee or officer required to file the disclosure form who fails to file such form within the time period prescribed shall be assessed a civil penalty in an amount equal to $250.

Agreements and contracts made in violation of the Act may be declared void and may be rescinded by the JMU Board of Visitors within five years of the date of such contract.

Any money or other thing of value derived by an employee or officer from a violation of the Act shall be forfeited. In addition, in the event of a knowing violation, a civil penalty may also be imposed in an amount equal to the amount of money or thing of value forfeited to the Commonwealth.

9. EXCLUSIONS

The Act does not apply to the following situations at JMU:

  • An employee's personal interests in additional contracts of employment with JMU that accrue to him or her because of a member of his or her immediate family, provided the employee does not exercise any control over the employment or the employment activities of the member of his or her immediate family and the employee is not in a position to influence those activities (see JMU Policy 1301-Nepotism and Employment of Family Members).
  • The personal interests of an employee or officer in additional contracts of employment with JMU that accrue to him or her because of a member of his or her immediate family, provided:
    • the employee or officer and the immediate family member are engaged in teaching, research or administrative support positions at JMU,
    • the JMU Board of Visitors finds that it is in the best interests of the institution and the commonwealth for such dual employment to exist, and
    • after such finding, the board ensures that the employee or officer, or the immediate family member, does not have sole authority to supervise, evaluate or make personnel decisions regarding the other.
  • An employee or officer’s personal interests in a contract of employment with any other governmental agency of state government.
  • Contracts for the sale, by a governmental agency, of services or goods at uniform prices available to the general public.
  • An employee's personal interests in a contract between JMU and a publisher or wholesaler of textbooks or other educational materials for students that would accrue to him or her solely because he or she has authored or otherwise created such textbooks or materials.
  • Subject to approval by the JMU Board of Visitors, an employee's personal interests in a contract for research and development or commercialization of intellectual property between JMU and a business in which the employee has personal interests, if:
    • the employee's personal interests have been disclosed to and approved by JMU prior to the time at which the contract is entered into;
    • the employee promptly files a disclosure statement pursuant to § 2.2-3117 and thereafter files such statement semi-annually on or before June 15 and December 15;
    • JMU has established a formal policy regarding such contract that has been approved by the State Council of Higher Education; and
    • no later than December 31 of each year, JMU will file an annual report with the Secretary of the Commonwealth disclosing each open contract entered subject to this provision, the names of the parties to each contract, the date each contract was executed and its term, the subject of each contractual arrangement, the nature of the conflict of interest, the JMU employee responsible for administering each contract, the details of JMU’s commitment or investment of resources or finances for each contract, and any other information requested by the Council.

Also See JMU Policy 2203 - Conflict of Interests Disclosure for Sponsored Programs.

10. INTERPRETATION

The authority to interpret this policy rests with the President, and is generally delegated to the Director of Human Resources.

Previous version: November 2015
Approved by the President: January 2002