The Conflict of Interest Policy provides guidelines to Board members in order to avoid even the appearance of conflict of interest. It is modeled after the IRS sample document and customized to fit the needs of the Santa Fe Community College.
Scope and Applicability
This policy applies to all Governing Board members.
The conflict of interest policy is intended to protect Santa Fe Community College’s interest when it is contemplating entering into a transaction or arrangement that might benefit the private interest of a Governing Board member of Santa Fe Community College or might result in a possible excess benefit transaction. This policy does not replace or supplant any applicable state and federal laws governing conflict of interest applicable to nonprofit and charitable organizations.
A. No member of the Governing Board shall knowingly:
- Use College assets or equipment for any unlawful or improper purpose or to promote a personal business interest;
- Approve or make any payment of College funds with the intention that any part of said funds be used for any purpose other than that described in the supporting documents;
- Participate in the negotiation or the making of any contract between the College and any business entity in which the board member has a financial interest, either directly or indirectly;
- Represent a private interest in any action or proceeding before the Governing Board;
- Request or receive any money, thing of value or promise thereof, that is conditioned upon or given in exchange for performance or promised performance of an official act, with the exception of the taxable meeting per diem provided for elected Board Members, and reimbursement for travel on behalf of the college;
- Render any commercial service to the College on a commission basis;
- Serve on any College evaluation committee for proposals or bids without disclosing any potential conflict of interest prior to the start of committee business.
- Compensation includes direct or indirect remuneration as well as gifts or favors that are not insubstantial. Compensation does not include the taxable meeting per diem provided for elected Board Members, or reimbursement for travel on behalf of the college authorized under NMSA 1978, Section 10-8-4.
- Conflict of interest- A situation in which an individual might profit personally from a decision made in his or her official capacity.
- Disqualified person– To be deprived of legal capacity, power or right.
- Excess Benefit Transaction– An excess benefit transaction is one in which the organization provides an economic benefit to a disqualified or unqualified person, directly or indirectly, which exceeds the value of the consideration, including the performance of services, received by the organization in return. The regulations specify that a benefit shall not be treated as compensation for performance of services unless the organization clearly indicates its intent to treat the benefit as compensation when the benefit is paid.
- Financial Interest– A person has a financial interest if the person has, directly or indirectly, through business, investment, or family:
a. An ownership or investment interest in any entity with which Santa Fe Community College has a transaction or arrangement,
b. A compensation arrangement with any entity or individual with which the College is negotiating a transaction or arrangement, or a potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which Santa Fe Community College is negotiating a transaction or arrangement.
c. A financial interest is not necessarily a conflict of interest. A person who has a financial interest may have a conflict of interest only if the appropriate Governing Board or Committee decides that a conflict of interest exists.
6. Honoraria – Gifts given by way of honoring or paying respect to someone or something; a (voluntary) fee for professional services which are rendered nominally without charge.
7. Immediate family member (near relative) – For purposes of this policy, spouse, domestic partner, parents, brothers, sisters, children, stepparents, stepbrothers and stepsisters, stepchildren, parents-in-law, brothers- and sisters-in-law, sons- and daughters-in-law, and the immediate family members (parents, brothers and sisters, and children) of spouses and domestic partners, or is a person who receives financial support of more than 25% of his/her annual income, or is a person claimed as a dependent for federal income tax purposes. This policy applies whether the relationship exists at the time of election or is established later.
8. Interested Persons – Any director, principal officer, or member of the Governing Board or committee member with Governing Board delegated powers who has a direct or indirect financial interest, as defined in this policy.
9. Unqualified person – Lacking the qualities, attributes, or accomplishments required to be or do something.
Duty to Disclose
In connection with any actual or possible conflict of interest, an interested person must disclose the existence of the financial interest and be given the opportunity to disclose all material facts to the Governing Board.
Determination Whether a Conflict of Interest Exists
After disclosure of the financial interest and all material facts, and after any discussion with the interested person, he/she shall leave the Governing Board meeting while the determination of a conflict of interest is discussed and voted upon. The remaining Governing Board members shall decide if a conflict of interest exists.
- An interested person may make a presentation at the Governing Board meeting, but after the presentation, he/she shall leave the meeting during the discussion of, and the vote on, the transaction or arrangement involving the possible conflict of interest.
- The Chairperson of the Governing Board shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement.
- After exercising due diligence, the Governing Board shall determine whether Santa Fe Community College can obtain with reasonable efforts a more advantageous transaction or arrangement from a person or entity that would not give rise to a conflict of interest.
- If a more advantageous transaction or arrangement is not reasonably possible under circumstances not producing a conflict of interest, the Governing Board shall determine by a majority vote of the disinterested directors whether the transaction or arrangement is in Santa Fe Community College’s best interest, for its own benefit, and whether it is fair and reasonable. In conformity with the above determination it shall make its decision as to whether to enter into the transaction or arrangement.
Violations of the Conflict of Interest Policy
- If the Governing Board has reasonable cause to believe a member has failed to disclose actual or possible conflicts of interest, it shall inform the member of the basis for such belief and afford the member an opportunity to explain the alleged failure to disclose.
- If, after hearing the member’s response and after making further investigations as warranted by the circumstances, the Governing Board determines the member has failed to disclose an actual or possible conflict of interest, the Board will re-vote without the offending Governing Board member and that decision will be recorded and put into effect.
Records of Proceedings
The minutes of the Governing Board and all committees with Governing Board delegated powers shall contain:
- The names of the persons who disclosed or otherwise were found to have a financial interest in connection with an actual or possible conflict of interest, and the action taken by the Governing Board regarding the conflict of interest and any final action taken by the Governing Board.
- The names of the persons who were present for discussions and votes related to the transaction or arrangement, the content of the discussion, including any alternatives to the proposed transaction or arrangement, and a record of any votes taken in connection with the proceedings.
- A voting member of the Governing Board may not receive compensation directly or indirectly for any services except for the taxable per diem for service as an elected Board member and reimbursement for travel on behalf of the college allowed for under NMSA 1978, Section 10-8-4.
- A voting member of the Governing Board may not be otherwise employed by the college during the term for which they are elected.
Each Governing Board member shall annually sign, between July 1 and July 31, a statement which affirms such person:
- Has received a copy of the conflicts of interest policy,
- Has read and understands the policy,
- Has agreed to comply with the policy, and
- Understands Santa Fe Community College is non-profit, publicly funded entity created by statute and in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes.
To ensure Santa Fe Community College operates in a manner consistent with its purpose and does not engage in activities that could jeopardize its tax-exempt status, periodic reviews shall be conducted. The periodic review shall, at a minimum, include the following subjects:
- Whether compensation arrangements and benefits are reasonable, based on competent survey information (if reasonably available), and the result of arm’s length bargaining.
- Whether partnerships, joint ventures, and arrangements with management organizations conform to Santa Fe Community College’s written policies, are properly recorded, reflect reasonable investment or payments for goods and services, further charitable purposes and do not result in inurement, impermissible private benefit or in an excess benefit transaction.
Use of Outside Experts
When conducting the periodic reviews as provided above, Santa Fe Community College may, but need not, use outside advisors. If outside experts are used, their use shall not relieve the Governing Board of its responsibility for ensuring periodic reviews are conducted.
Campaign Contribution Disclosure
A Governing Board member shall disclose any campaign contributions received from any contractor or vendor whose contract or purchase is being voted upon by the Governing Board.
Compensation and Gifts
- A Board member shall not accept directly or indirectly any gift, gratuity, favor, and/or entertainment with a monetary value exceeding $100.
- The aggregate of gifts, gratuities, favors and/or entertainment received during any calendar year shall not exceed $500
Board members will hold confidential information learned as a Board member and avoid using such information for financial gain.
Statement of Accountability and Responsibility
The Conflict of Interest Disclosures will be kept in the Office of the President. Each Board member will annually complete a disclosure statement of possible conflicts of interest. When an issue is presented that might involve a conflict of interest for any board member it will be the responsibility of the Board member to disclose the possible conflict and refrain from voting or engaging in active discussion of the issue.
NMSA 1978 Section 10-8-4
SFCC Governing Board approved: 10/28/15