Section 4.0304-00 Inducements, Entertainment, and Gifts
NCBA CLUSA has many clients, and other business partners, all of whom are vital to the organization’s success. All of these relationships must be based entirely on sound business decisions and fair dealings. Business gifts and entertainment can build goodwill, but they can also create a perception of conflict of interest that can undermine the integrity of our relationships. Any courtesy that an NCBA CLUSA employee extends should always comply with the policies of the recipient’s organization, and those we are doing business with should understand our policy as well.
“Inducements, favors, gifts and/or entertainment” means anything of monetary value, including meals, lodging, discounts, loans, cash, favorable terms on any product or service, services, equipment, prizes, products, training, transportation, use of vehicles or vacation facilities, stocks or other securities, home improvements, tickets and gift certificates. The potential list is endless – these are just examples. Because of tax and other legal reporting rules, it is essential that your expense report records accurately record favors, gifts, and entertainment provided to clients and customers. You are required to properly report all expenditures on your expense reports related to normal business, and you must accurately state the purpose of the expenditures and the identities of the individuals receiving the favors, gifts or entertainment.
Subsection 4.0304-01 Favors, Gifts and Entertainment to Public Sector/Government Officials Raise Special Risks
It is very important that, when working with any public sector official – regardless of location, department or agency, and including government–controlled organizations, you know the specific rules related to the giving of favors, gifts and entertainment to that official. It is each NCBA CLUSA employees’ responsibility to know the specific rules related to the giving of favors, gifts or entertainment to public sector employees.
Subsection 4.0304-02 Inducement to Clients or Donor Agencies
In accordance with U.S. federal regulations and accepted good business practices, no NCBA CLUSA employee is authorized to offer, or give the impression of offering, an inducement (monetary or otherwise) to any current or potential client or donor agency official for the purpose of obtaining proprietary information or influencing their judgments on future grant or contract awards. No offer or suggestion to provide employment or consultancies will be made to such an official. In addition, NCBA CLUSA will not, and employees or consultants of NCBA CLUSA shall not, offer or make any payment, or even suggest a bribe be paid, to obtain a contract or “favor” from a potential client. Engaging, or appearing to engage, in such activities will result in disciplinary action and/or termination of the employee. NCBA CLUSA staff should immediately report any evidence of such activities to the appropriate Senior Leadership area representative or Chief Financial Officer.
Similarly, NCBA CLUSA employees are prohibited from paying, or offering to pay, any fees or commissions to consultants or other NCBA CLUSA staff to obtain proprietary information or to otherwise assist in any inappropriate manner in obtaining a contract or grant award. NCBA CLUSA staff should immediately report any evidence of such activities to the Chief Financial Officer. Any such act will result in immediate termination of employment with NCBA CLUSA. Any instances in which an employee is approached or asked to pay a bribe or to provide an inappropriate gift or gratuity must be reported immediately to the Chief Financial Officer or Chief Human Resource Officer.
Subsection 4.0304-03 Receiving or Offering Favors, Gifts or Entertainment
As a not-for-profit organization, the NCBA CLUSA keeps entertainment costs at a very modest level, and encourages all staff to consult with their area Senior Leadership representative for guidance about the appropriateness of a particular activity. Moreover, in line with applicable federal regulations, no favors, gifts or entertainment expenses are allowable under any grant, contract, or overhead/development account. Such costs must be charged to NCBA CLUSA’s unrestricted income, requiring the approval of the Chief Financial Officer before such charges are incurred.
Favors, gifts or entertainment offered by NCBA CLUSA employees to customers or customers’ family members, or offered to NCBA CLUSA employees and their family members fall into three categories: Acceptable, Inappropriate, or Questionable.
Acceptable
Accepting or offering social amenities or business courtesies such as modest favors, gifts or entertainment is common in the commercial work environment and is meant to create goodwill and enhance business relationships. Using good judgment and moderation, occasionally exchanging favors, gifts or entertainment of nominal value with employees of a non-Governmental entity is appropriate, unless the recipient’s employer forbids the practice. Examples of what is generally acceptable and does not require approval include these items:
- Items of nominal value (less than $20 USD market value from a single customer, partner or supplier individually, and no more than $50 USD market value from a single customer, partner or supplier on an annual basis);
- In addition, occasional meals with a business associate who is not an NCBA CLUSA employee are acceptable;
- Offers of favors, gifts or entertainment over $20 USD to or from any single customer, partner or supplier individually, not to exceed a market value of $50 USD on an annual basis for any single partner or supplier, may be made or accepted;
- The following examples would not require approval as long as they meet the criteria stated above:
o Tickets for ordinary sports, theater and other cultural events
o Gifts that do not exceed $20 USD market value
o Other reasonable and customary favors, gifts and entertainment
o Giving or accepting promotional items of nominal value, such as pens, calendars, logo ware, caps, t-shirts, and coffee mugs
o Flowers, fruit baskets and other modest presents that commemorate a special occasion
Unacceptable
Other types of favors, gifts and entertainment are simply wrong, either in fact or in appearance, so that they are never permissible, and no one can approve these. Employees and their immediate family may never do the following:
- Any items that otherwise may be allowed but are more than $20 in value. For example, an expensive promotional clock would not be allowed;
- Offer or accept cash or cash equivalent such as loans, stock, or other monetary instruments such as bank checks, traveler’s checks, money orders, or negotiable instruments;
- Offer, accept or participate in any favors, gifts or entertainment or other situations that are inappropriate, or otherwise violate our commitment to diversity and mutual respect, or which would reasonably cause any customer or NCBA CLUSA employee to feel uncomfortable or embarrass NCBA CLUSA by its public disclosure, such as “adult entertainment”;
- Incur any expense on behalf of a customer, including favors, gifts or entertainment, that is not recorded properly on organization books;
- Use their own money or resources to pay for favors, gifts, or entertainment valued at $20 USD or more for a customer, partner, or supplier; and
- Offer, accept or request anything as part of an agreement to do anything in return for favors.
If you believe that a member, client, supplier, vendor or subcontractor seeks to provide a gift in order to obtain favorable treatment from NCBA CLUSA, you should report this conduct to your supervisor or a member of the Senior Leadership Team, who will seek guidance from the Human Resources Department.
Not included as entertainment are the costs of meetings and conferences when the primary purpose is either to disseminate technical information or to conduct the general administration of the organization or a project. Such expenses are allowable according to standard accounting practices and government regulations, either directly to the project or indirectly to NCBA CLUSA, depending on the nature and purpose of the meeting. Food, refreshments, speaker’s fees, travel expenses and room rental costs are also allowable for an approved official function, meeting or conference that involves a number of people and has a pre-established agenda. Such meeting and conference costs will be reimbursable when accompanied by a receipt and a written explanation of the following:
- purpose of meeting,
- why meeting was held during a meal time,
- who was in attendance– names, titles (if applicable), and
- outcome of meeting
Business lunches – defined here as a business meeting without a pre-established agenda – are not allowable charges to contracts. If such expense is claimed while the staff member is traveling using project or overhead funds, the portion of that person’s meal must be deducted from the traveler’s fixed Meals and Incidentals (M&I) allowance.
Staff should consult the Chief Financial Officer for guidance on the allowability and propriety of any potential “entertainment expense” before that expense is incurred or it may not be reimbursed.
Travel and Transportation
In general, the travel and transportation costs of donor agency and U.S./foreign government officials, including taxi fares, may not be paid unless they are part of NCBA CLUSA’s contractual responsibilities under a current project. Common sense dictates, however, that occasions may arise when transportation or transportation expenses are provided to such officials. For example, giving an official a “ride” in a private or rented vehicle, or paying for a taxi fare when a group is traveling together (and there are no additional charges for the extra passengers). In such cases, however, NCBA CLUSA staff should ensure that their actions are not misconstrued as an inducement to that official.
Other Considerations
In rare circumstances, local customs in some countries may require the exchange of gifts having more than nominal value as part of the business relationship. In these situations, gifts may be accepted only on behalf of NCBA CLUSA (not an individual) with the approval of the NCBA CLUSA CEO. Any gifts should be turned over to Human Resources for appropriate disposition. The foreign organization’s gift-policy regulations must be observed. In all cases, the exchange of gifts must be conducted so there is no appearance of impropriety. Gifts may only be given in accordance with applicable laws, including the U.S. Foreign Corrupt Practices Act (“FCPA”). For more information regarding the FCPA, see policy below.
Ultimately it is the responsibility of each individual to avoid any situation that could reasonably appear to be a conflict of interest. Employees should feel free to discuss any potential conflict of interest situations with their manager or the Human Resources Department.
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Report a concern by either of the following methods:
Completing the communications form on the site:
URL: https://thecompliancepartners.com/ncba/
Calling a special toll-free telephone line designated for NCBA CLUSA 1-800-441-7149
(Posters, reference cards, and training are provided)
Or contact: compliance@ncbaclusa.coop