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Substantial Interests

University Employees are required to disclose Substantial Interests.

A Substantial Interest is any nonspeculative pecuniary or proprietary interest, either direct or indirect, other than a remote interest. Remote interest is defined in A.R.S. § 38-502(10).

In order to remove or limit the possibility of personal influence that might bear upon a public employee’s decision in his or her capacity as a public employee, Arizona state law (A.R.S. 38-503 et seq.) requires an employee who has, or whose relative has, a "Substantial Interest" in (1) any contract, sale, purchase, or service by or to the Arizona Board of Regents (“ABOR”) or an Arizona state university or (2) any decision of  ABOR or an Arizona state university to disclose said interest in the official records of ABOR. If such an interest exists, the employee shall refrain from participating in the decision, contract, sale, or purchase in any manner.

I. What are the affirmative responsibilities of employees?

Any employee who has or whose relative has a substantial interest shall make known that interest in a special file open to the public and kept by the University and the Board. He or she shall thereafter refrain from voting or participating in any manner in the contract, sale, purchase, or decision. The University and the Board will keep the required file. It will be the responsibility of each employee to keep the disclosure current. Disclosure forms may be obtained from and shall be filed with the Office of the Director of Procurement and Contracting Services.

II. May an employee who has or whose relative has a substantial interest, supply equipment, material, supplies, or services to the board and universities?

Yes. An employee who has or whose relative has a substantial interest may supply equipment, material, supplies, or services to the Board and the universities, in accordance with the following: (a) the interest is disclosed in the special file or in the minutes of the Board; (b) if the contract is with the employee, the contract is awarded as a result of a public sealed competitive solicitation irrespective of the dollar amount; (c) if the contract is with a relative, a public competitive solicitation is not required; and (d) in both instances (b and c) the employee must refrain from voting or participating in any manner in the contract, sale, purchase, or decision.

III. What are the remedies in event of violation?

Any contract entered into in violation of the statute is voidable or subject to cancellation at the option of the Board and the University. Any persons affected by Board or University action may commence a civil suit to enforce the provisions of the statute. The court may order appropriate relief, including reasonable costs and attorney’s fees to the prevailing party.

IV. What are the penalties in event of violation?

Criminal penalties are provided for two classes of violations: (a) Persons who intentionally or knowingly violate the statute may be guilty of a class 6 felony. (b) Persons who recklessly or negligently violate the statute may be guilty of a class 1 misdemeanor. A person found guilty of either must forfeit their employment.

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