USAPA Conflict of Interest Policy

 

Article I  Purpose

 

            The purpose of this conflict of interest policy is to protect the USAPA’s interest when it contemplates entering into a transaction or arrangement that might benefit the private interest of a director or officer, or might result in a possible excess benefit transaction.  This policy is intended to supplement but not replace any applicable state or federal laws governing conflict of interest applicable to nonprofit or charitable organizations.

 

Article II  Definitions

 

            Interested Person. Any director, principal officer, or member of a committee with governing board delegation posers, who has direct or indirect financial interest, as defined below, is an interested person.

            Financial Interest.  A person has a financial interest if the person has, directly or indirectly, through business, investment or family: (1) an ownership or investment interest in any entity with which the USAPA has a transaction or arrangement; (2) a compensation arrangement with the USAPA or with any entity or individual with which the USAPA is negotiating a transaction or arrangement, or (3) a potential ownership or investment in, or compensation arrangement with, any entity or individual with which the USAPA is negotiating a transaction or arrangement.  Compensation includes direct and indirect remuneration as well as gifts or favors that are not insubstantial.  A financial interest is not necessarily a conflict of interest. Under Article III, Section 2, below a person who has a financial interest may have a conflict of interest only if the board of directors or executive committee decides that a conflict of interest exists.

 

Article III  Procedures

 

            1.  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 directors and members of committees with Board-delegated powers considering the proposed transaction or arrangement.

 

            2.  Determining Whether a Conflict of Interest Exists.  After disclosure of the financial interest and after any discussion with the interested person, he or she shall leave the Board or committee meeting while a determination of a conflict of interest is discussed and voted upon. The remaining Board or committee members shall decide if a conflict of interest exists.

 

3.      Procedures for Addressing the Conflict of Interest. 

 

a.      An interested person may make a presentation as the Board or committee meeting, but after the presentation, he or she shall leave the meeting during the discussion of, and the vote on, the transaction or arrangement involving the possible conflict of interest.

b.      The chairperson of the Board or committee shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement.

c.       After exercising due diligence, the Board or committee shall determine whether the USAPA 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.

d.      If a more advantageous transaction or arrangement is not reasonably possible under circumstances not producing a conflict of interest, the Board or committee shall determine by a majority vote of the disinterested directors whether the transaction or arrangement is in the USAPA’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.

 

4.      Violations of the Conflict of Interest Policy.

 

a.      If the Board or committee has reasonable cause to believe that a member has failed to disclose actual or possible conflicts of interest, it shall inform the member of the basis for that belief and afford the member an opportunity to explain the alleged failure to disclose.

b.      If, after hearing the member’s response and after making further investigation as warranted by the circumstances, the Board or committee determines that the member has failed to disclose an actual or possible conflict of interest, it shall take appropriate disciplinary and corrective action.

 

Article IV  Records of Proceedings

 

            The minutes of the Board and all committees with Board-delegated powers shall contain:

 

  1. The names of the people who disclosed or otherwise were found to have a financial interest in connection with an actual or possible conflict of interest, the nature of the financial interest, any action taken to determine whether a conflict of interest was present, and the Board’s or committee’s decision as to whether a conflict of interest in fact existed.
  2. The names of the people who were present for discussions and votes relating to the transaction or arrangement, the content of the discussion, including the alternatives to the proposed transaction or arrangement, and a record of any votes taken in connection with the proceedings.

 

Article V  Compensation

 

  1. A voting member of the Board who receives compensation, directly or indirectly, from the USAPA for services is precluded from voting on matters pertaining to that member’s compensation.
  2. A voting member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the USAPA for services is precluded from voting on matters pertaining to that member’s compensation.
  3. No voting member of the Board or any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the USAPA, either individually or collectively, is prohibited from providing information to any committee regarding compensation.

 

Article VI  Annual Statements

 

            Each director, principal officer and member of a committee with Board-delegated powers shall annually sign a statement affirming that he or she: (a) has received a copy of the conflict of interest policy, (b) has read and understands the policy, (c) has agreed to comply with the policy, and (d) understands the USAPA is charitable and in order to maintain its federal tax exemption it must engage primarily in activities that accomplish one or more of its tax-exempt purposes.

 

Article VII  Periodic Reviews

 

            To ensure that the USAPA operates in a manner consistent with charitable purposes and does not engage in activities that could jeopardize its tax-exempt status, periodic reviews shall be conducted. The periodic reviews shall, at a minimum, include the following subjects:

 

  1. Whether compensation arrangements and benefits are reasonable, based on competent survey information, and the result of arm’s length bargaining.
  2. Whether partnerships, joint ventures, and arrangements with management organizations conform to the USAPA’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.

 

Article VIII  Use of Outside Experts

 

            When conducting the periodic reviews as provided for in Article VII, the USAPA may, but need not, use outside advisors. If outside experts are used, their use shall not relieve the Board of its responsibility for ensuring that periodic reviews are conducted.