Title III Administrative and Financial Requirements Policy #2: Conflicts of Interest

This content is part of a public comment period. For more information, refer to Minnesota Board on Aging – State Plan on Aging.

Authority Reference	OAA, Sec. 307(a)(7)(B) 45 CFR Part 75.112 45 CFR 1321.47 MN Stat. Sec. 10A.07 OGM -08-01 Conflict of Interest Policy for State Grant-Making
Operating Category	Title III Administrative and Financial Requirements

Policy

1. A conflict of interest occurs when a person has actual or apparent duty or loyalty to more than one organization and the competing duties or loyalties may result in actions which are adverse to one or both parties. A conflict of interest exists even if no unethical, improper, or illegal act results from it.

2. AAAs and service providers must work to deliberately avoid actual, perceived, and potential conflicts of interest related to grant-making, grant administration and with respect to contracts and commercial relationships at both the individual and organizational levels. When a conflict of interest exists, transparency shall be the guiding principle in addressing it.

3. AAAs and service providers must establish mechanisms to identify, avoid, remove, and remedy conflicts of interest in a Title III program at individual and organizational levels. Every reviewer for competitive procurement processes shall be responsible for identifying where an actual or potential conflict of interest exists and for informing appropriate parties. All reviewers involved in the review of competitive applications must complete and sign a conflict-of-interest disclosure form for each competitive procurement process in which they participate.

4. Actual and Potential Conflicts of Interest

A. Actual Conflict of Interest: An actual conflict of interest occurs when a person’s decision or action would compromise a duty to a party without taking immediate appropriate action to eliminate the conflict.

B. Potential Conflict of Interest: A potential conflict of interest may exist if a person has a relationship, affiliation, or other interest that could create an inappropriate influence if the person is called on to make a decision or recommendation that would affect one or more of those relationships, affiliations, or interests.

C. For purposes of this policy, “immediate family member” includes the following:

· A spouse, domestic partner, parent, sibling, child, in-law, or other relative living in the home or with whom there is a close personal or significant financial relationship.

5. Individual Conflict of Interest:

A. A conflict of interest that may benefit an individual AAA or service provider employee, Board member, advisory council member, grant/contract reviewer, or volunteer is any situation in which their judgment, actions or non-action in their official capacity could be interpreted to be influenced by something that would benefit them directly or through indirect gain to an immediate family member, business, or organization with which they are involved.

An individual conflict of interest occurs when any of the following conditions are present:

· i. An AAA employee, Board member, advisory council member, grant reviewer, or volunteer uses their status or position to obtain special advantage, benefit, or access to the AAA or current and/or prospective service provider’s time, services, facilities, equipment, supplies, badge, uniform, prestige, or influence.

· ii. An AAA or service provider employee, Board member, advisory council member, grant reviewer, or volunteer receives or accepts money or anything else of value from a grantee or grant applicant or has equity or a financial interest in or partial or whole ownership of an applicant organization. AAA employees, Board members, advisory council members, grant reviewers and volunteers may not have a financial interest in a Title III program and are prohibited from soliciting or accepting gratuities, favors, or anything of monetary value from grantees, contractors, and/or service providers, except where policies and procedures allow for situations where the financial interest is not substantial, or the gift is an unsolicited item of nominal value.

· iii. An AAA employee, Board member, advisory council member, grant reviewer, or volunteer is an employee or board member of a grant applicant or grantee or is an immediate family member of an owner, employee or board member of the grantee or grant applicant.

· iv. An AAA or service provider employee, Board member, advisory council member, grant reviewer, or volunteer has one or more conflicts between competing duties or any conflict between their private interests and official responsibilities.

· v. Instances in which a reviewer works in a volunteer capacity for a grant applicant or grantee organization, or a AAA employee represents the AAA on a stakeholder board should be evaluated on a case-by-case basis. Volunteer status has the potential to but does not necessarily create a conflict of interest, depending on the nature of the relationship between the two parties.
a. No AAA or provider may employ, in any capacity, any member of its governing board or any family member of a person on the board (i.e., parent, spouse, child, brother, sister, grandparent or in-laws); and
b. No AAA may make a sub-grant or subcontract with any service provider, if a member of the AAA's board is also a member of the provider's staff, board of directors or advisory council.

6. Organizational Conflict of Interest:

A. A conflict of interest can also occur with an organization that is a grant applicant in a competitive grant process or grantee an AAA. Organizational conflicts of interest occur when:

· i. A grantee’s objectivity in carrying out the grant is impaired or compromised due to competing duties, programs, services and/or loyalties

· ii. A grantee, potential grantee or grant applicant has an unfair competitive advantage through being furnished unauthorized proprietary information or source selection information that is not available to all competitors.

· iii. Particular attention should be paid to any proposed grant contract agreement requirements that provide for the rendering of planning, consultation, evaluation, or similar activities that may inform decisions on future grant awards.

7. Any agency operating or overseeing the administration of a Title III program must have policies in place to prohibit the employment or appointment of Title III program decision-makers, staff or volunteers with a conflict that cannot be adequately removed or remedied.

8. Any agency operating or overseeing the administration of a Title III program must take reasonable steps to suspend or remove Title III program responsibilities of an individual who has a conflict of interest, or who has an immediate family member with a conflict of interest which cannot be adequately removed or remedied.

9. On an annual basis, AAAs must inform current employees, Board members, advisory council members, and volunteers of this conflict-of-interest policy; ask those individuals to disclose any actual or potential conflicts of interest; and maintain that documentation. Should any conflicts of interest arise through this annual screening process, the AAA must take steps to remove or reduce the impact of the conflict of interest.

A. Because conflicts of interest may emerge at any time as personal circumstances change, employees should also disclose any new conflicts of interest that may arise between annual processes.

10. AAAs must also be mindful of the potential for organizational conflicts of interest with regard to their advocacy role. While advocacy is an integral and required responsibility for AAAs, federal funds may not be used for lobbying purposes. As ACL explains, “While advocacy may inform an official on an issue, lobbying is meant to influence an official’s opinion in a specific way and for a specific purpose. Lobbying is not an allowable use of federal funding, and ACL grantees should be able to provide documentation to show that non-federal funds were used for any lobbying activities.”

A. According to ACL, "advocacy is the act of engaging with government officials to educate and provide technical, factual, and non-partisan information about relevant issues. For example, a grantee could meet with an elected official to provide information about grant activities and educate them about the beneficiaries of those activities. They may also respond to written requests from government officials for testimony. Advocacy is a permissible use of federal funding, and certain ACL grantees…are required to engage in advocacy. (See 45 C.F.R § 1329.4 for the regulatory definition of “systems advocacy.”)

B. “Lobbying is the act of engaging with local, state, or federal government officials (including elected officials, their staff, and other government employees) with the intent to influence funding, support for, or opposition to a particular issue or piece of legislation or potential appointment. The Anti-Lobbying Act prohibits the direct or indirect use of appropriated funds to pay for "any personal service, advertisement, telegram, telephone, letter, printed or written matter or other device, intended or designed to influence in any manner a Member of Congress, a jurisdiction, or an official of any government to favor, adopt, or oppose, by vote or otherwise, any legislation, law, ratification, policy, or appropriation, whether before or after the introduction of any bill, measure, or resolution proposing such legislation, law ratification, policy or appropriation." 18 U.S.C. § 1913.”

11. AAAs must also comply with the Senior Linkage Line conflict of interest policy, which has additional specific protections related to providing information to older adults about options for meeting their service needs.

12. No AAA or service provider will give preference for services to older individuals as a result of a contract or commercial relationship that is carried out to implement Title III, unless stipulated by OAA or MBA contracts or policies.

Procedures

1. Procedures to Avoid, Address, and Resolve Individual Conflicts of Interest with respect to review of applications from potential service providers.

A. All reviewers must complete and sign a conflict-of-interest disclosure form for each competitive review process in which they participate. On the conflict-of-interest disclosure form, each reviewer must identify any respondent with which they have an actual or potential conflict of interest. The reviewer may choose to provide the context for the actual or potential conflict of interest; however, this is not required.

B. Reviewers who are AAA employees must act immediately upon disclosing or being notified that a conflict of interest exists in the competitive review process. Upon identification, such matters are referred to appropriate agency or program personnel (the employee’s immediate supervisor, RFP contact person, or grant program manager) for additional discussion to identify and reduce any potential conflicts. If the conflict involves the AAA employee’s immediate supervisor, grant/contract program manager, or RFP contact person, the employee reviewer should instead contact a different manager or director.

C. Reviewers who are a Board member, advisory council member, or volunteer that identify a conflict of interest must follow the steps the AAA or service provider has in place to address and resolve the conflict of interest.

D. Reviewers who are not AAA employees and involved in the competitive review process should choose one of these options for disclosing, reviewing, and discussing the nature of the conflict:

· i. Refer and discuss with AAA personnel.

· ii. Follow the AAA’s by-laws and policy guidance for how and to whom to disclose actual, perceived, or potential conflicts. Public officials must use this policy’s definitions for decision-making on disclosure for competitive grant review.

E. If it is determined that an actual or potential conflict of interest exists, as defined by this policy or other relevant law, appropriate steps must be taken to avoid, address or resolve the conflict. These steps may include:

· i. Reassigning the duties associated with the particular applicant, grant or grantee to another employee or reviewer

· ii. Requiring the reviewer to remove themselves from the discussion or decision about an applicant(s) that is affected by the conflict and avoid discussing the applicant and/or applications from organizations with which the reviewer has disclosed a conflict of interest with other reviewers

· iii. At a minimum, all AAA employees who are involved in the competitive review process must be made aware that an actual or potential conflict has been disclosed and evaluated, even if it is not serious enough to remove or reassign the employee or reviewer.

F. Any disclosed conflicts and their resolution should be noted in meeting minutes, documents, or records that the AAA maintains as a regular part of its grants process.

2. Procedures to Avoid Organizational Conflicts of Interest

A. Conflicts of interest should be prevented as early in the competitive procurement process as possible. This includes writing requests for proposals in a manner that avoids conflicts and creates a level playing field for all respondents. Agencies may also consider including questions as part of the Request for Proposal (RFP) process to identify how potential respondents manage conflicts of interest, which may include information such as the applicant’s conflict of interest policies or procedures.

B. If an organizational conflict of interest is in question, disclosed or discovered agency staff must immediately notify the agency’s ethics officer or a supervisor, manager, or director.

C. In cases where an organizational conflict of interest is in question, disclosed or discovered, the service provider or applicant should be notified by the AAA regarding the actual or potential conflict and allowed a reasonable opportunity to respond. Based on a review of the response and other relevant facts, one of the following actions may be pursued:

· i. The potential service provider is disqualified from eligibility for the grant or contract
ii. A current service provider’s contract or grant agreement or notice of grant award is amended or terminated

· iii. The service provider is disqualified from subsequent AAA contract or grant awards if it is determined that it improperly failed to disclose a known organizational conflict of interest or misrepresented information regarding such a conflict

· iv. The responsibility for the contract or grant is reassigned to a different AAA employee

· v. Actions should be taken to reduce or neutralize actual or potential organizational conflicts of interest. This may include: revising the service provider’s duties so that the conflict is reduced; allowing the service provider to propose the exclusion of task areas that create a conflict, if appropriate; asking the service provider to submit an organizational conflict of interest avoidance or mitigation plan; or making all information available to all service providers and/or potential service providers in order to eliminate favoritism toward any one service provider.

D. AAAs must also sign an assurance they will not use federal funds for lobbying purposes as part of the Area Plan submission process.

3. Other Procedures to Identify and Mitigate Against Potential Conflicts of Interest

A. AAAs must, in the course of hiring new employees or recruiting new Board members, advisory council members, and/or volunteers, screen for potential or actual conflicts of interest. AAAs may not hire employees or nominate individuals to their Board with known conflicts of interests that cannot be adequately removed or remedied.

B. AAAs must develop policies and procedures aligned with this policy.