Conflict of Interest (COI): What Issues has Your SILC Encountered?

1. Conflict of Interest (COI):What Issues has Your SILC Encountered? SILC Congress 2019 Ann McDaniel, West Virginia SILC Brad Williams, New York SILC

2. I. Overview • Our goals for today’s session are: • To provide a brief background of why we have our current Conflict of Interest (COI) practices • To review basic COI policy components and a code of ethics • To discuss how to incorporate COI into existing annual procedures • To facilitate a peer discussion to find out what issues SILCs have encountered related to COI

3. II. Background: How’d we get here? • In the US, some sources will note the evolution of Conflict of Interest (COI) policies and practices in the medical education, research and practice fields over the past four decades. • However, our current practices are largely due to the Sarbanes–Oxley Act of 2002  (known as the Corporate and Auditing Accountability, Responsibility, and Transparency Act in the House) the law was enacted to address a number of major corporate and accounting scandals like Enron and WorldCom. • Sections of the law require auditor independence, corporate responsibility, fraud and COI accountability - among other items, for publicly-traded companies.

4. II. Background: How’d we get here? • Since Sarbanes-Oxley governs the responsibilities of auditors, it provides general guidelines that also apply toward non-profits. Some responsibilities include: • the need for an audit committee • review and approval of financial statements • engage auditing services/review and approve annual audit • compete the auditing services every five years • the CEO/CFO attest that the fiscal documents accurately represent the organization • Conflict of Interest (COI), fraud disclosure, whistleblower protection, document destruction policy, public transparency

5. II. Background: How’d we get here? • Why is this important for a non-profit? • Unaccountability rife among 9/11 charities (10 years later) • AP investigation found that out of the over $1.5 billion that came in to the charities to serve the victims and their families, many of the 325 charities failed miserably • According to tax records, one-third of the money raised went to the charity’s founder and or relatives • The $1.5 billion donated to these charities was in addition to the billions spent by Congress and states and established nonprofits like the Red Cross. • Questions? NBCNews.com: http://www.nbcnews.com/id/44271766/ns/us_news-9_11_ten_years_later/t/whered-money-go-shady-dealings-unaccountability-rife-among-charities/#.XFiS8_ZFzIV

6. III. Basic COI Components/Code of Ethics • What should be in a Conflict of Interest (COI) policy? • Define what a conflict is, something like: • When a public servant accepts a gift or money, or takes official action, making decisions that directly affects themselves, their family members, or business associates. • Members of the board of directors, officers, the Executive Director (i.e., “Management Persons” of the council) must not act in their personal interests, or in the interests of others, but must act exclusively in the interest of the organization.  Management Persons must have undivided loyalty to the organization and may not use their positions, or use the organization’s property, in a manner that allows them to obtain a financial benefit for themselves or others to the detriment of the organization.

7. III. Basic COI Components/Code of Ethics • Define the duties of council members (i.e., management): • Duty of care: member familiar with the organization’s finances, operations, and governance carried out with diligence, care and skill. • Duty of loyalty: keep the interests of the organization paramount to all other interests in decision making. All COI must be disclosed fully and completely. • Duty of obedience: ensure that the organization remains compliant regarding its exempt status and purpose. • Define members duty to disclose a potential conflict. • Define a process for the determination of a conflict to address when potential conflicts are identified. • Define a process for violation of the COI policy.

8. III. Basic COI Components/Code of Ethics • Additional sections may include: • Definitions, including gifts • Records/documentation • Affirmation/disclosure statement (form) • Code of Ethics: • Standards of ethical and professional behavior • Applicable to board members and staff • Should be customized to your organization and mission

9. III. Basic COI Components/Code of Ethics • A Code of Ethics lays out expectations that may include: • Uphold and enforce all laws, rules, and regulations • Assure the equal access and independent living of people with disabilities • Uphold the independent living philosophy, including consumer control • Refrain from interfering with the day to day operations of the SILC • Treat all people with dignity, respect, and compassion to foster a trusting environment free of harassment, intimidation, and discrimination • Act in a manner that assures the rights and dignity of others are upheld • Refrain from using SILC position for personal (or friends or family), material, or financial gain or the appearance of such • Safeguard restricted or confidential information • Recognize that authority rests with the SILC as a whole and make no individual promises or actions that may compromise the SILC

10. III. Basic COI Components/Code of Ethics • Anytime there is a question or concern about a potential conflict of interest or violation of the Code of Ethics – refer to and review your policies together so everyone is clear and COIs or violations can be handled immediately • Questions?

11. IV. How Does this Fit into Annual Practices • Orientation: New appointees/staff can review the Conflict of Interest (COI) policy and code of ethics and attest and sign the disclosure form at orientation. Save disclosure forms on file. • Once a year, an email must go out to all council members asking them if anything has changed during the past year, which may impact their COI disclosure form. They can simply email back indicating that nothing has changed. However, if they are unsure or something has changed, then invite a discussion. It can possibly lead to a few members updating their forms. https://nysilc.org/resources/key-documents/other/303-nysilc-annual-coi-verificaiton-email/file • Review by CPA during fiscal audit, typically during first year with new firm to verify existence of process. • Questions?

12. V. Peer Discussion • What issues has your SILC encountered related to Conflict of Interest (COI)? • Final questions?

13. Contact Information • Ann McDaniel, West Virginia SILC, PO Box 625, 5010 D Fairlawn Ave, Institute, WV 25112-0625, (304) 766-4624, ann.meadows@wvsilc.org • Brad Williams, New York SILC, 111 Washington Avenue, Suite 101, Albany, NY 12210, (518) 427-1060, bradw@nysilc.org