Ethics for VA-Affiliated Nonprofit Research and Education

Ethics for VA-Affiliated Nonprofit Research and Education Corporations Joan L. Liguoro VA Office of General Counsel Ethics Specialty Team – March 2017

Overview BOD Membership COI Policy NPC Pay Travel for VA Employees ED Conducting VA Research AO/ACOS serving as ED WOC appointments Fundraising VA AUG 2015 Topics 2

Overview VA-affiliated Nonprofit Research and Education Corporations (NPC) VHA Handbook 1200.17 dated April 27, 2016 VA AUG 2015 38 U.S.C. sections 7361-7366 Secretary [of VA] may authorize the establishment at any Department medical center of a nonprofit corporation to provide a flexible funding mechanism for the conduct of approved research and education at the medical center 3

Overview A [VA-affiliated NPC] is not: Owned or controlled by the United States; or VA AUG 2015 Any corporation established under this subchapter shall be established in accordance with the nonprofit corporation laws of the State in which the applicable Department medical center is located An agency or instrumentality of the United States 4

Overview Accept, administer, retain and spend funds derived from gifts, contributions, grants fees, reimbursements, and bequests from individuals and public and private entities Enter into contracts and agreements with individuals and public and private entities Any funds received by the Secretary for the conduct of research or education at a VA medical center, other than funds appropriated to the Department, may be transferred to and administered by the NPC (IPA exception) VA AUG 2015 NPC may, solely to carry out the purposes of this subchapter: 5

Overview Such funds shall be credited to the applicable appropriation account of VA and shall be available, without fiscal year limitation, for the purposes of that account Except for reasonable and usual preliminary costs for project/activity planning before its approval, NPC may not spend funds for research/education unless research/education has been approved by appropriate VA committee(s) VA AUG 2015 VA may retain and use funds provided to it by a [NPC] established under this subchapter. 6

BOD Membership Medical Center Director Chief of Staff ACOS-R ACOS-E Statutory Non-Federal Directors No less than two Not Federal employees/officers Not NPC employees May not be affiliated with/employed by any entity that funds VA research or education unless entity is non-profit VA AUG 2015 Statutory VA Directors 7

BOD Membership Multi-NPC BOD composition Officers of NPC Appointed by BOD per state law where NPC incorporated Statutory BOD members may serve as officers but may not be compensated because serve as part of official VA duties Others – VA employees may now serve on NPC BOD in official VA capacity VA AUG 2015 BOD members of established NPC At a minimum, VAMC Director of each additional VAMC where the multi-NPC will facilitate research/education 8

BOD Membership Official capacity service as NPC officer requires: NPC follows its policies in appointing a director If NPC wants to appoint VA employee, need approval from VA supervisor of VA employee First SES/SES EQV in chain of command of that employee has authority to assign the employee to serve on the NPC board in official VA capacity VA employees may NOT serve on the Board of the NPC in personal capacity VA AUG 2015 OGE regulatory exemption (implemented by VA COS 12/30/14) permits VA employees to serve as officer, director or trustee of outside nonprofit in official VA capacity 9

BOD Membership VA employee may not simultaneously serve NPC in personal capacity as employee, officer, director, trustee in position supervised by the NPC Board and ED NPC researcher whose sole duties are to be assigned to conduct research at VA under VA supervision is not considered an NPC employee for these purposes VA AUG 2015 Limitations on VA employee serving on NPC Board in official capacity (in non-statutory director position) VA employee may not serve as employee of NPC in official duty capacity VA employee may not receive compensation from NPC for board service Travel support by NPC is permitted – gift to VA not to employee because VA employee serves NPC in official VA capacity 10

BOD Membership VA employee may not participate in official capacity fundraising for NPC VA employee may not participate in lobbying on behalf of the NPC VA AUG 2015 Limitations on VA employee serving on NPC Board in official capacity, cont’d. VA employee may not participate in any activity determined by VA OGC to be illegal or improper 11

BOD Membership VA employee serving in official capacity on NPC Board (non-statutory VA): May participate in financial and personnel decisions VA AUG 2015 Owes a duty of loyalty first and foremost to VA May fundraise in personal capacity provided in accordance with Government ethics rules on fundraising 12

Conflict of Interest Policy VA employees serving as NPC Directors as part of official VA duty are also subject to the Federal conflict of interest laws and regulations VA AUG 2015 Each director, officer and employee of an NPC shall be subject to a conflict of interest policy adopted by that corporation Federal conflict of interest laws and regulations take precedence over the NPC COI policy if they conflict with each other VA employees other than statutory NPC directors may also, with SES supervisor permission, serve as NPC Directors, officers or employees in official capacity unless otherwise prohibited 13

Conflict of Interest Policy Paragraph 9 – Conflicts of Interest VA AUG 2015 VHA Handbook 1200.17 dated 4/27/2016 on NPCs Fleshes out the statute 14

Conflict of Interest Policy NPC must have a written COI policy Each NPC Director, officer and employee shall, upon hire or affiliation, sign a statement acknowledging: VA AUG 2015 NPC Board of Directors (Board) must retain responsibility for oversight of the conflict of interest policies of NPC understanding of the COI policy, and agreement to comply with COI policy COI acknowledgement statements will be maintained by the NPC 15

Conflict of Interest Policy been trained about the COI policy, acknowledged understanding of, and agrees to comply with, the COI policy, and VA AUG 2015 NPC Executive Director annually reports to Secretary and must include certification that each NPC Director, officer and employee has: submitted a COI disclosure form 16

Conflict of Interest Policy Minimum required contents of NPC COI Policy Require training about the policy Require disclosure by key employees of potential COI VA AUG 2015 Describe when COI may exist Require statement of acknowledgement of understanding and agreement to comply with the policy NPPO has sample COI Policy reviewed and approved by VA OGC 17

Conflict of Interest Policy COI Policy - Describe When a COI may exist Unless authorized by the Board NPC Director, officer, or employee May not participate in official NPC duties In which he has a COI or appearance of a COI VA AUG 2015 Sample COI Policy language: To “participate” means: to engage in an aspect of the decision-making process through recommendation, approval, disapproval, investigation, advicegiving, and the like; or Active supervision of a subordinate who is so engaged 18

Conflict of Interest Policy Director, officer or employee has COI: When he or someone with whom he has Close Relationship has existing financial or other material interest that affects or appears to affect the independence, impartiality, or integrity of the Director, officer or employee; or Personal or business relationships cause divided loyalties that are unrelated to personal financial gain Close Relationship – Relatives, members of household, and Business Associates VA AUG 2015 “Conflict of Interest” exists when the interests of Director, officer or employee is, or appears to be, competing with the interest of NPC 19

Conflict of Interest Policy “Relatives” Parent Child VA AUG 2015 Spouse Any other relative by blood or marriage with whom NPC officer, director or employee has similarly close personal ties Member of household of officer, director or employee 20

Conflict of Interest Policy Engages in the exchange of goods or services for remuneration (other than routine consumer transactions); Served within the past year as officer, director, trustee, general partner, agent, attorney, consultant, contractor or employee; or Any of their Relatives serves, seeks to serve, or has an arrangement to serve as officer, director, trustee, general partner, agent, attorney, consultant, contractor, or employee VA AUG 2015 Business Associates – any person/entity (not the NPC) with whom an NPC officer, director, or employee: 21

The new Executive Director of the Jupiter NPC used to work for a staffing company with particular emphasis on finding jobs for researchers. The staffing company has recently contacted the new ED with the hope of entering an exclusive contract to provide researchers to the NPC. The new ED knows the staffing company has researchers of the highest caliber and is eager to enter into this contract for the mutual benefit of the NPC and the ED’s former employer. Does the new ED have a conflict of interest with regard to this contract? VA AUG 2015 Conflict of Interest Policy 22

The new Ed served in the past year as an employee of the staffing company, and therefore, the staffing company is a “Business Associate” of the ED’s. Under the sample policy, the ED has a conflict of interest whenever someone with whom he has a “Close Relationship” has an interest that affects the independence, impartiality or integrity of the ED in discharging his NPC duties. The ED has a “Close Relationship” with a “Business Associate.” The ED should not participate in the NPC’s decision of whether to enter into the exclusive contract with the staffing company unless the BOD finds need for contract outweighs the COI. VA AUG 2015 Conflict of Interest Policy 23

Conflict of Interest Policy Any COI? VA AUG 2015 The spouse of the new ED of the Mercury NPC owns a small bookkeeping business. The new ED quickly realizes that the NPC could use her expertise and wants to hire her company. 24

Conflict of Interest Policy VA AUG 2015 Of course there is a conflict of interest. 25

Conflict of Interest Policy Training occur upon hire or affiliation for directors, officers and employees – within 90 days Annual training thereafter for directors, officers and employees with decision-making authority (i.e. key personnel) VA AUG 2015 The COI Policy must require training about the policy. Per VHA Handbook 1200.17, at a minimum, the COI policy must require that: Federal training on Government ethics does NOT fulfill this NPC COI training requirement NPC training on the COI policy does not fulfill requirement for Federal employees to take annual Government ethics training 26

Conflict of Interest Policy Ensure all new hires are trained within 90 days Ensure key employees are trained on the COI policy annually VA AUG 2015 The COI Policy must require the NPC to have a mechanism for tracking fulfillment of the training requirement 27

Conflict of Interest May choose to use Public Financial Disclosure (OGE Form 278) May choose to use Confidential Financial Disclosure (OGE Form 450) or other Process for filing, reviewing (including identifying and managing COI), and tracking must be included in the COI policy Filing must occur at least annually Filing disclosure with NPC does not fulfill any VA requirement of annual disclosure filing VA AUG 2015 The COI Policy must require disclosure by directors, officers, and key employees of potential COI Disclosure form must be approved by the NPC BOD 28

Conflict of Interest Statement signed upon hire or affiliation VA AUG 2015 COI policy must require that each officer, Director, and employee of NPC sign statement of acknowledgement of understanding and agreement to comply with the COI policy Statement maintained on file by NPC 29

Conflict of Interest Certification in annual report to Secretary of VA Been trained about the COI policy A signed “Understanding of the NPC COI policy and Agreement to Comply” statement on file VA AUG 2015 ED shall certify that each Director, officer, and employee has: Submitted a financial COI disclosure as required by the policy Handbook requires at a minimum that directors, officers, and key employees file annually Your policy might require others to file, but may not require less 30

NPC Pay Travel NPC authority to provide travel support - 38 U.S.C. § 7362(a) – purpose of NPCs for the conduct of approved VA research & education to facilitate functions related to conduct of such research and education VA AUG 2015 NPC is a “flexible funding mechanism” If the travel fulfills the NPC purpose, NPC may fund it Travel must facilitate conduct of approved VA research or education or functions related to the conduct of such research and education 31

NPC Pay Travel VA’s authority to accept is more complicated Traveler must be on official duty VA AUG 2015 Multiple authorities Personal capacity travel Authority to accept travel reimbursement as yet undetermined Not covered in today’s presentation 32

NPC Pay Travel 5 U.S.C. § 4111 Authority The meeting or training must be the primary reason for the trip Training must be for employee; not given by employee VA AUG 2015 Travel support only for travel to training or a meeting May pay travel if employee is doing both Donor must be a 501(c)(3) organization NPC may provide all or some benefits in kind NPC pays entity directly to provide service to traveler For example, lodging or meals at training conference 33

NPC Pay Travel May be in cash or check made payable to traveler Not employee’s money – spend for travel/refund excess No claim against VA for expenses provided in cash or in kind Traveler must be on official duty If leaving the local area must have travel authorization Travel authorization obtained through VA travel system Travel authorization splits out who pays for what part of travel May be “no cost” if NPC will provide all travel expenses VA AUG 2015 5 U.S.C. § 4111 Authority, cont’d. Provides authority to pay traveler directly 34

NPC Pay Travel 5 U.S.C. § 4111 Authority, cont’d. For expenses not provided in kind or cash - to be paid by VA Original receipts to NPC - copies faxed to VA VA AUG 2015 Traveler submits travel voucher (travel claim) VA Form 0893 required Implementation regulations of OMB require review Includes ethics element 35

NPC Pay Travel 38 U.S.C. § 7364 – New authority in 2010 amendment to NPC authorizing statute NPC may spend funds that fulfill NPC statutory purpose VA may retain and use funds from NPC VA AUG 2015 Allows VA to accept funds from NPC Funds are credited by VA medical center to applicable appropriation account - not General Post Fund Available without fiscal year limitation - “no year” funds 36

NPC Pay Travel 38 U.S.C. § 7364, cont’d. Travel must fulfill NPC purpose – facilitate conduct of approved research/education VA AUG 2015 No authority to pay traveler directly Traveler on official duty must have travel authorization if leaves local area NPC may provide in kind benefits Travel authorization breaks out VA and NPC costs 37

NPC Pay Travel 38 U.S.C. § 7364, cont’d. Traveler files travel voucher with VA and NPC Original receipts to NPC – copies faxed to VA VA Form 0893 not required (not a gift) VA AUG 2015 VA reimburses traveler - NPC reimburses VA Authority for NPC to pay for non-official travel Not authority for VA traveler to accept funds in personal capacity 38

NPC Pay Travel 31 U.S.C. § 1353 authority – in light of two other authorities, no longer reason to use this authority Traveler must be on official duty – travel authorization Travel to meeting or similar function NPC may provide reimbursement to VA or in kind travel support No authority to pay traveler directly (except check payable to VA) Travel orders break out costs payable by VA and NPC Advance review of travel and VA Form 0893 required Traveler files travel voucher with VA VA reimburses traveler – NPC reimburses VA VA AUG 2015 VA may accept reimbursement from NPC 39

VA-NPC - allowed to support official duty travel based on 38 U.S.C. 7362(a) Travel must be to facilitate the conduct of approved VA research or approved education activities or to facilitate functions related to those missions, including travel for activity planning Must travel on official duty status (not AA or AL) Must enter travel into VA travel system (Fed Traveler or Concur) (may be no-cost trip or normal listing of expenses – see below) Is travel conducted under a contract? YES NO Not training or a meeting; e.g., planning or conducting research. May use B, or Option C A. 5 U.S.C. §4111 authority for travel support for travel to training or other meeting Only statute that provides authority to pay traveler directly NPC provides payment in kind &/or directly to traveler Travel entered into VA travel system as no-cost trip or costs broken out between NPC and VA. Traveler submits voucher to VA for any VA costs and to NPC for its costs. VA Form 0893 required (is a gift) B. Conducting activity explicitly or clearly implicitly as part of a contract, CRADA, grant or other agreement including conduct of research &/or attendance at meeting listed in such agreement. Must use Option C 31 U.S.C. § 1353 authority NPC may reimburse VA &/or provide in-kind travel costs No authority to pay traveler directly Travel authorization breaks out VA costs & NPC costs Traveler files travel claim with VA VA reimburses traveler & seeks reimbursement from NPC NPC reimburses VA – gift VA Form 0893 required C. 3 38 U.S.C. § 7364 authority allows VA to accept funds from NPC that fulfill NPC statutory purpose NPC may reimburse VA &/or provide inkind* travel costs . No authority to pay traveler directly. Travel authorization breaks out VA costs & NPC costs Traveler files travel voucher (travel claim) in FedTraveler & with NPC (original receipts to NPC, copies to VA travel system) VA reimburses traveler and seeks reimbursement from NPC NPC reimburses VA VA Form 0893 not required (not a gift) VA AUG 2015 Attending training or a meeting. May use Option A , B, or C 40

VA-NPC - allowed to support official duty travel based on 38 U.S.C. 7362(a) Travel must be to facilitate the conduct of approved VA research or approved education activities or to facilitate functions related to those missions including travel for activity planning Must travel on official duty status (Not AA or AL) Must enter travel into VA travel system (Fed Traveler or Concur) (may be no cost trip or normal listing of expenses – see below) Is travel conducted under a contract? YES Attending training or a meeting. May use Option A or C A. Not training or a meeting; e.g., planning or conducting research. Must use Option C 5 U.S.C. §4111 authority for travel support for travel to training or other meeting Only statute that provides authority to pay traveler directly NPC provides payment in kind &/or directly to traveler Travel entered into VA travel system as no-cost trip or costs broken out between NPC and VA. Traveler submits voucher to VA for any VA costs and to NPC for its costs. VA Form 0893 required (is a gift) Conducting activity explicitly or clearly implicitly as part of a contract, CRADA, grant or other agreement including conduct of research &/or attendance at meeting listed in such agreement. Must use Option C C. 38 U.S.C. § 736 4 authority allows VA to accept funds from NPC that fulfill NPC statutory purpose NPC may reimburse VA &/or provide in kind* travel costs . No authority to pay traveler directly. Travel authorization breaks out VA costs & NPC costs Traveler files travel voucher (travel claim) in FedTraveler & with NPC (original receipts to NPC, copies to VA travel system) VA reimburses traveler and seeks reimbursement from NPC NPC reimburses VA VA Form 0893 not required (not a gift) VA AUG 2015 NO 41

ED Conduct VA Research All VA Investigators are subject to Government Ethics laws and rules VA AUG 2015 Per VHA policy VA Investigator must have VA appointment (salaried or WOC), or be appointed or detailed under Intergovernmental Personnel Act Federal employees are prohibited from participating in official VA matters that affect financial interest of employee’s outside employer (18 U.S.C. § 208) ED may not conduct VA research. 42

No Federal employee may serve as ED Federal employees are prohibited from participating in official VA matters that affect financial interest of employee’s outside employer (18 U.S.C. § 208) Federal employees are prohibited from representing another before Federal agency/Federal court with intent to influence official action on a matter in which U.S. is a party or has substantial interest (18 U.S.C. §§ 203/205) VA employee serving as ED in personal capacity would violate these criminal statutes ED would be representing NPC before VA employees serving as directors in official VA capacity ED at NPC Board meeting would be attempting to influence the other board members to act in a certain way Does not matter if ED is salaried or not VA AUG 2015 AO/ACOS as ED 43

WOC Appointments Must have VA WOC appointment Must sign VA Intellectual Property Agreement (although VA can and will take ownership when appropriate even if not signed) VA AUG 2015 NPC employees directly or indirectly involved in approved VA research or education, under VA supervision VA employees working for NPC during non-VA duty hours who are then assigned to VA to work on research or education during NPC hours Must have WOC appointment Duties must be different from official VA duties 44

Fundraising In accordance with its own governing documents, NPC Directors, officers and employees may engage in fundraising activities under the following conditions: Statutory VA Directors may engage in fundraising in official VA capacity as board members Other VA employees may participate in NPC fundraising activities in their personal capacities to extent permitted by ethics rules May not knowingly solicit subordinates or prohibited sources May not use official title Fundraising event may not take place on VA property May not represent NPC before any Federal agency VA AUG 2015 Per VHA Handbook 1200.17 on NPCs: 45

Fundraising No solicitation of VA employees is permitted outside of approved CFC campaign NPC may not put up fundraising signs in the VAMC even if physically located in the VAMC VA AUG 2015 NPC is treated by VAMC like all other CFC entities NPC may hire professional fundraiser to assist with fundraising activities Fundraising activity from NPC office on VA grounds must be directed toward people located off VA/GSA grounds 46

Contact Info If you have questions on any of the issues discussed in this training session: Telephone – (202) 461-7694 VA AUG 2015 Send an email to [email protected] 47

[email protected] - CT, DC, DE, MA, MD, ME, NC, NH, NJ, NY, PA, RI, VA, VT, WV [email protected] - AL, FL, GA, KY, Puerto Rico, SC, TN [email protected] - IA, IL, IN, KS, MI, MN, MO, NE, ND, OH, SD, WI [email protected] - AR, CO, LA, MS, MT, OK, TX, UT, WY [email protected] - AK, AZ, CA, Guam, HI, ID, NM, NV, OR, Philippines, WA VA AUG 2015 Other VA Ethics Officials on OGC Ethics Specialty Team: 48