We know that good grants management requires grantees to use their federal funds in the best interests of their Federal grant. But when the people put their personal best interests before the best interests of the Federal program the result can shatter trust-both with the funding agency and within the organization.
What is a conflict of interest?
When decisions are made based on personal or organizational interests instead of the best interest of the federal program, conflicts of interest are the result. Conflicts of interest can cause harm to a program both in appearance and fact.
Here are two examples:
Conflict of Interest-in fact:
Goods or services are purchased from a family member, paying a higher price than the market value
Conflict of Interest-in appearance:
The spouse of a program director is hired as a consultant-and it has not yet been determined if the hiring followed a fair selection process, with market pay rates and a specific verifiable work product.
6 Questions to tell if your Federal grant is free from conflicts of interest?
Ask yourself these six questions:
#1) Were the goods and services purchased from a related party such as a family member or business associate of an employee?
#2) Was a person hired by the organization in a business or personal relationship with someone else in the organization?
#3) Was there undue influence by anyone within or outside the organization concerning the choice of a vendor or a sub-grant award decision?
#4) Was the procurement made without full and open completion?
#5) Was a consultant hired without using a fair selection process including determining a reasonable pay rate for the specific verifiable type of work to be done?
#6) Are managers able to override or circumvent established procurement controls?
If you answered “yes” to any of these questions, you may be at greater risk of a conflict of interest existing at your organization. You may also be putting yourself at greater risk of grant fraud.
Lucy Morgan CPA, MBA
CEO, Compliance Warrior
P.S. If you’d like some more help about what we talked about today, we offer online grant management training that helps that helps people work through these issues.
Click the link below for your type of organization to get more information about our courses and to get signed up.