Financial Management Manual of RHSTEP

Conflict of Interest
A conflict of interest occurs when one gets torn between two loyalties. Conflict of interest can occur at any
level and at any time. Some examples are as follows:
• Purchases piece of land from a trustee or his / her relative.
• Appointing Chief Functionary’s spouse as a consultant.
• Obtaining service from relative of key person responsible for obtaining the service;
• Accepting consulting assignment from one of the grantee NGOs;
• Program Officer making grant to an NGO just before end of his / her tenure and then joins the NGO as
director.
• Grants are made to NGOs where the Agency’s Director or staff or their relatives hold positions2.

Implications
Conflict of interest is not bad in itself. In today’s society when people have multiple responsibilities, this is
natural. Things like networking and working together on issues also increase chances of a person
occupying two positions.

However, if conflict of interest is not handled properly, it can lead to loss of money, image or reputation. In
some cases, it may also result in civil or criminal proceedings. Accordingly the matter is extremely sensitive
and RHSTEP will deal with the matter with utmost seriousness.

Procedures
RHSTEP will adopt the following procedures to minimize a conflict of interest situation

• Disclosure of Interest: All persons in key positions would voluntarily disclose involvement of their close
relatives in organizations which has significant financial transactions with RHSTEP;
• Role in decision-making and monitoring: A person having conflict of interest will not get involved in any
decision making process with the concerned organization;
• Establish a clear tone at the top that conflicts of interest should be avoided, if possible;
• Identify those areas of work which have high risk for conflict of interest;
• Establish an organization-wide policy on how conflicts of interest should be identified and handled.
• Educate directors, officers and employees on the subject;
• Perform periodic reviews to evaluate effectiveness of established policies;
• Annually, each RHSTEP employee with a responsibility of placing, paying or supervising any supplier,
consultant, or subcontractor will be required to sign and understand the following Code of Conduct:

"No employee, officer, or agent shall participate in the selection, award, or administration of a contract
or grant if a real or apparent conflict of interest would be involved. Such a conflict would arise when the
employee, officer, or agent, any member of her or his immediate family, her or his partner, or an
organization which employs or is about to employ any of the parties indicated herein, has a financial or
other interest in the organization selected for an award. The officers, employees, and agents of
RHSTEP shall neither solicit nor accept gratuities, favours, or anything of monetary value from
contractors or vendors.”

This signed Code of Conduct, which shall be completed annually, is to be filed in each employee's
personnel record.

Name :

Designation :

Project :

Signature: