Conflict of Interest (COI)

Purpose

The purpose of this policy is to assist the College in identifying, disclosing, and resolving potential conflicts of interest. Members of the Board of Trustees, Faculty and Staff have certain legal and ethical
requirements relating to conflicts of interest and disclosure thereof. This policy is intended to define and communicate the responsibility for compliance with these requirements.

Scope

The following statement of policy applies to:

  • each member of the Board of Trustees (hereinafter referred to as “Board”), and
  • all members of the Faculty and Staff

Definitions

"Affiliate" means an entity controlled by, in control of, or under common control with, the College.

"Compensation" means direct or indirect remuneration, as well as gifts or favors that are valued in excess of $500.

"Conflict of Interest" means any situation, circumstance or state of affairs relating to a Covered Person which: (1) involves personal interests or Financial Interests of the individual that may be inconsistent with, or divergent from, the interests of the College; or (2) could ultimately harm or benefit financially:  (a) the individual; (b) any member of his or her Immediate Family; or (c) any entity in which any individual described in clause (a) or (b) of this definition has a five percent or greater ownership or beneficial interest, with respect to which any such individual serves as a director or officer, or over whose activities or decisions any such individual has the ability to exercise control. Without limiting the foregoing, any interest in a Related Party Transaction shall constitute a Conflict of Interest. 

"Financial Interest" means any instance in which a Covered Person has, directly, or indirectly, through business, investment or Immediate Family:  (1) an actual or potential ownership or beneficial interest in any entity with which the College has, or may reasonably be expected to have, a transaction or arrangement; or (2) an actual or potential Compensation arrangement with any entity or individual with which the College has, or may reasonably be expected to have, a transaction or arrangement.

"Immediate Family" includes any child, stepchild, grandchild, parent, step-parent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include adoptive relationships and any person (other than a tenant or employee) who shares your home.

“Key Employee” as defined by the IRS, is any employee who, during the plan year was a more than 5% owner of the employer; was a 1% owner of the employer having annual compensation of more than $150,000: or was an officer of the employer and received compensation greater than $170,000.00

"Related Party"  includes: (1) any Board or Employee; (2) Immediate Family of any Board or Employee; or (3) any entity in which any individual described in clause (1)  or (2) of this definition has a direct or indirect ownership interest in excess of one percent (1%).

"Related Party Transaction" includes any transaction, agreement or any other arrangement in which a Related Party has a Financial Interest and in which the College or an Affiliate is a participant.

“Excess Benefit Transaction” means a transaction in which one receives an economic benefit from an exempt organization that exceeds the fair market value of what the organization receives in return. Examples of possible excess benefit transactions include collecting compensation from the organization that exceeds the fair market value of the services rendered, buying property from the organization at less than fair market value or selling the organization the property at greater than fair market value, leasing a property from the organization at less than fair market value or leasing a property to the organization at greater than  fair market value, borrowing money from the organization at less than fair market value or lending money to the organization on greater than fair value terms or engaging in one of the above example transactions with an entity controlled by the organization.

Fiduciary Responsibilities

Members of the Board, Faculty, and Staff serve the College and have a clear obligation to conduct all affairs of the College in an upright and honest manner.  Each person should make necessary decisions using sound judgement and ethical considerations.

Responsibility for Disclosure

Members of the Board, Faculty, and Staff should be aware of the requirement under generally accepted accounting principles (“GAAP”) and IRS regulations to disclose in the footnotes to the College’s annual, audited financial statements material “related party” transactions.

Policy

Members of the Board, Faculty and Staff agree to place the welfare of the College above personal interests, interests of family members, or others who may be personally involved in substantial affairs affecting the College’s basic functions.

Members of the Board, Faculty and Staff shall disclose fully the precise nature of their interest or involvement when participating in any transaction for the College in which another party to the transaction includes:

  • himself or herself
  • a member of his/her Immediate Family (as defined in the above definitions ), or
  • an organization with which the member of the Board, Faculty, or the Staff, or his/her Immediate Family, is affiliated.

Members of the Board, Faculty, and Staff shall disclose family relationships with other trustees or officers of the College.

Disclosure shall be made at the first knowledge of the conflict.

Disclosure

Members of the Board, Faculty, and Staff shall disclose all relationships and business affiliations which may now, or in the future, potentially conflict with the interests of the College or bring personal gain to them or their family, or business.  Disclosure must be made if any member of the Board, Faculty, or Staff or a member of his/her Immediate Family or a business owned by any member of the Board, Faculty, or Staff or his/her Immediate Family:

  • receives compensation or other payment from the College, other than reimbursement of expenses under an accountable plan, and for Faculty/Staff other than for their primary employment with the College
  • receives a grant, scholarship, fellowship, internship, prize, award or other assistance (including provision of goods, services, or use of facilities), regardless of amount (For Faculty and Staff amounts received as part of the individual’s primary employment with the College are excluded.)
  • is an officer, director, trustee, partner, employee, or agent of an organization with which the College has business dealings;
  • is either the actual or beneficial owner of more than one percent (1%) of the voting stock or controlling interest of an organization with which the College has business dealings;
  • employs or is employed by another Member of the Board, Faculty, or Staff in which the other party owns more than 35% of the business
  • acts with another Member of the Board,  Faculty, or Staff, as director, trustee, officer or owner of greater than 10% each, in the same business or investment entity
  • has any other direct or indirect dealings with an individual or organization doing business with the College from which he or she is materially benefited (i.e., through the receipt directly or indirectly of cash, gifts, or other property).

All disclosures required by staff will be handled by the Vice President of Finance and Administration; all disclosures required by faculty will be handled by the Provost; and all disclosures of conflicts and potential conflicts, including disclosures by Members of the Board, shall be referred to the Chair of the Audit and Compliance Committee.  Information disclosed to the Chair of the Audit and Compliance Committee, Provost or the Vice President of Finance and Administration will be held in confidence, except when the College’s best interests would be served by bringing the information to the attention of the Executive Committee of the Board and/or the officers of the College.

Restraint on Participation

Members of the Board, Faculty, and Staff who have a conflict of interest in any matter shall refrain from attempting to influence the consideration of the proposed transaction.  Such person or persons, however, may participate in the consideration of the proposed transaction.  Such person or persons should abstain from voting on the proposed transaction.  Notwithstanding the foregoing, the presence of, or a vote cast by, such person or persons shall not affect the validity of an action taken if (1) the material facts of the transaction and the person’s interest were disclosed or known to the deciding body and (2) the transaction is authorized, approved, or ratified by an affirmative vote of the majority of the members of the deciding body who did not have an interest in the transaction, though less than a quorum.

Determination of Possible Conflict of Interest

Any individual who is uncertain about a conflict of interest in any matter shall disclose such possible conflict to the appropriate individual as noted above.

Each person covered by this policy will complete and update a copy of the College’s Disclosure Letter annually. 

If a potential conflict of interest arises subsequent to the submission of the annual Disclosure Letter, the persons covered by this policy are responsible for advising of such occurrence as soon as possible but not later than thirty (30) days after the occurrence. 

Failure to Disclose

Members of the Board and other Key Employees (as defined by IRS regulations) who are requested to file this Related Party Disclosure Statement should recognize that such filing is a requirement for continued affiliation or employment with the College and, further, that failure to knowingly disclose a potential conflict of interest could result in disaffiliation or termination of employment.

Faculty or Staff who knowingly fail to disclose a potential conflict of interest will be subject to corrective action.  Any sanction will be determined in accordance with personnel policies as defined in the appropriate Handbook.

Effect of Policy

The responsibilities of the Board, Faculty and Staff that are the subject of this policy are mandatory affiliation or employment duties.  Otherwise, however, this policy is not intended to create any liability other than that already found in federal and state law.  Any responsibility under this policy may be enforced only by the College.