Arkansas Department of Education New Requirement: Written Code of Conduct for Employees Involved in Procurement in Child Nutrition Program

Memo Information

Memo Number
FIN-15-074
Memo Date
1/26/2015
Memo Type
Regulatory
Section
Fiscal & Administrative Services
Regulatory Authority
§USDA Memo SP 09-2015; 7 CFR 3016.36 and 3019.42
Response Required
NO
Attention
Co-op Directors; Elementary Principals; Middle School Principals; High School Principals; Superintendents; Child Nutrition Directors, Purchasing Personnel, Bookkeepers

Contact Information

Memo Text

Child Nutrition Program operators are reminded that 7 CFR 3016.36(b)(3) and 3019.42, as applicable, currently requires entities receiving Federal funds to develop and implement a written code of conduct designed to govern the performance of employees engaged in procurement (purchasing). This written code of conduct must: prohibit employees from soliciting gifts,prohibit employees from travel packages andprohibit employees from other incentives from prospective contractors. prohibit an employee from participating in the selection, award and administration of any contract to which an entity or certain persons connected to them, have financial interest.  provide for Child Nutrition Program (CNP) operators to set standards when financial interest is not substantial or the gift is an unsolicited item of nominal value and may be acceptable (for example:  coffee mug or calendar).  must provide for disciplinary actions to be applied in the event the standards are violated. State agency oversight and monitoring of sub-grantee procurement activities includes a review of the written code of conduct as well as an investigation of reported real or apparent conflicts of interest by employees involved in procurement.  Remedies for failure to comply with these regulations are outlined in 7 CFR 3016.43 and 3019.62.  Based on 7 CFR 3016.43(a) Arkansas Department of Education/Child Nutrition Unit (ADE/CNU) is required to take appropriate action for enforcement as follows:  “…the awarding agency may take one or more of the following actions, as appropriate in the circumstances: Temporarily withhold cash payments pending correction of the deficiency by the grantee or sub grantee  or more severe enforcement action by the awarding agency,Disallow (that is, deny both use of funds and matching credit for) all or part of the cost of the activity or action not in compliance, Wholly or partly suspend or terminate the current award for the grantee’s and sub grantee’s program, Withhold further awards for the program, or  Take other remedies that may be legally available.” School Food Authorities (SFAs) will be required to submit a Written Code of Conduct for Employees Involved in Procurement in the Child Nutrition Program as part of the Procurement section of the Agreement between ADE and the SFA for the 2015-16 School Year.  The SFA should consult legal counsel for guidance on necessary board action for implementing this required “Code of Conduct”.  Employees should be given guidance about how to respond when a gratuity, favor or item with monetary value is offered.  Where there is doubt concerning the appropriateness of accepting gifts, favors, etc. the employee should consider the following questions:How would the public perceive this action of receiving the gift, favor, etc.?Will acceptance of the gift, favor, etc. possibly influence a future purchasing decision? The following is an EXAMPLE of School Food Authority Code of Conduct for Child Nutrition Program Procurement (please consult district legal counsel):No employee, administrator, official or agent of the __________________ School District shall participate in the selection or in the award or administration of a contract supported by program funds if a conflict of interest, real or apparent, would be involved.  Conflicts of interest arise when one of the following has a financial or other interest in the firm selected for the award: a. The employee, administrator, official or agent; b. Any member of the immediate family; c. His or her partner; d. An organization which employs or is about to employ one of the above.The _________________________________ School District employees, administrators, officials or agents shall neither solicit nor accept gratuities, favors or anything of monetary value from contractors, potential contractors or parties to sub-agreements, including but not limited to: a. Entertainment b. Hotel rooms c. Transportation d. Gifts e. MealsPenalties for violation of the code of conduct of the __________________ School District Child Nutrition Program should be: a. Reprimand by the Board of Education; b. Dismissal by the Board of Education; c. Any legal action necessary School Food Authorities (SFAs) may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nominal value (for example: calendar or coffee cup).  If the SFA does set standards for these situations it must be part of the written code of conduct.  The SFA should require training regarding the new “Code of Conduct” for all child nutrition personnel as well as any other district personnel involved in purchasing for the child nutrition program.  Documentation of this training activity will be reviewed as part of the Monitoring Reviews performed by the Arkansas Department of Education/Child Nutrition Unit (ADE/CNU). Reminder:   In addition to this federal requirement please refer to Commissioner’s Memos FIN-09-036 Clarifying Documentation for Act 1599 and FIN-10-048 Act 1599 of 2001 as applied to Administrators.

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