Conflict of Interest

Identifying conflicts of interest

A conflict of interest occurs when a school staff member’s private interests intersect with their public duties. This is a very common occurrence, and most school staff will experience a conflict of interest at some point in their career.

All school staff are responsible for actively considering their private interests and how these could intersect with their public duties.

To identify whether a school staff member might have a conflict of interest in a certain situation, it is useful to consider the 2 elements of the conflict of interest definition:

• private interest – the private interest that a staff member has in their personal life, which can be:
  • financial or non-financial
  • direct (relating to the staff member) or indirect (relating to the interests of another person or group that the staff member is or was recently closely associated with, or has an enduring interest in)
  • positive (influence the staff member to act in their favour) or negative (influence the staff member to act against their favour)
• public duties – the individual tasks that form part of staff members’ role as a public sector employee, which can relate to the following (and many more):
  • children staff teach or provide support to
  • other employees that staff manage, including direct reports
  • initiatives, events or other physical work outcomes that staff contribute to delivering
  • recommendations, advice or options that staff provide for consideration
  • financial decisions, including allocation of funds, granting of contracts or payment of invoices
  • access to confidential, sensitive or personal information.

A conflict of interest will occur where an employee’s public duties could conceivably be performed in a way that would benefit their private interest. This is an objective assessment – the way that the staff member believes they perform those public duties is not relevant in identifying whether a conflict exists. The conflict is between the private interest the school staff member has and the public duties that form the basis of their position as a public sector employee.

School staff are encouraged to consult with their principal or manager for assistance in identifying whether a private interest could be an actual, potential or perceived conflict of interest.

School staff with higher risk factors for conflict of interest include those who have:

• responsibility, or involvement in, key decision-making processes – such as those that involve the allocation of public funds (procurement, grants, contract management, finance) or human resources management (recruitment, employee benefits, people management)
• unique operating environments – such as working in roles supporting international student enrolment, roles working with stakeholders in local industries to support student vocational pathways, or employee’s working in small or regional communities where likelihood for close personal relationships within the community is increased
• primary employment with another organisation who may benefit from access to the department’s systems, data and information
• personal relationships within the department or school – such as a consensual personal relationship with another employee or a family relationship with an employee or student at a Victorian government school or early childhood learning service.

Managers are recommended to consider the risk profile of the employee’s role and expected duties and assist them to identify situations which may give rise to conflicts with their private interests.

Categorising a conflict of interest

Conflicts of interest can be categorised as either actual, potential or perceived.

Actual

An actual conflict occurs where there is an intersection between a staff member’s private interest and their public duties. For example:

You are a principal and your family member is an employee at the school.

This is an actual conflict of interest because your public duties as a principal involve managing all employees employed at the school. As your family member works at the school, you could conceivably perform your role in a way that brings a benefit to your family member, such as with favourable performance assessments, professional development opportunities, or promotions.

It is not relevant whether you would actually perform your role in this way – it is your public duties that are in direct conflict with your private interest. To address this conflict in accordance with the policy, you are required to submit a conflict of interest declaration and develop a management plan that demonstrates how the relevant risks will be mitigated.

Potential

A potential conflict of interest occurs where a private interest could foreseeably come into conflict with a staff member’s public duties. For example:

You are a business manager, and your partner operates a local business selling goods or services that your school may one day require.

This is a potential conflict of interest because your private interest (the business interests of your partner) could foreseeably become relevant if your school required the particular good or service your partner provides. As a business manager, you would have authority as part of your role to identify a suitable vendor.

The conflict of interest is not an actual conflict yet, because it is not known whether that good or service will be required. But as the opportunity may one day arise, it may be necessary for you to declare a potential conflict of interest and put in place a management plan to ensure you have a process to follow should the day come around that the relevant good or service is required by the school.

Perceived

A perceived conflict of interest occurs where it would be reasonable for another person to believe that an employee’s private interests could influence the performance of their public duties.

To be a perceived conflict of interest, rather than an actual or potential conflict, one of the following must be true:

• the staff member does not actually have to have a private interest in the matter, but a reasonable person may assume that they do
• the staff member does not have public duties that could be used to influence or benefit their private interest, but a reasonable person would assume that they do.

For example:

You are a principal chairing a recruitment panel, and you recognise that a candidate for the position is a former colleague from a previous school that you worked with 15 years ago.

This could be a perceived conflict of interest, as a reasonable person may believe that the pre-existing relationship you have with the candidate would prevent you from being impartial in the recruitment process, and lead to the former colleague being successful in getting the job.

Even though you may be confident that your relationship with your former colleague would not constitute a close personal relationship that would create a private interest, and you believe you can act impartially and without any bias, there still may be a perception that you will favour them and lead to doubt in the integrity of the recruitment process.

Accordingly, the perceived conflict needs to be declared and appropriately managed to help mitigate that perception risk and give confidence that merit-based principles are being applied in the recruitment process.

Avoiding conflicts of interest

If a conflict of interest is identified, the first step for school staff and their manager to consider is whether the conflict can be avoided.

Avoiding a conflict of interest, as opposed to managing a conflict of interest, means taking active steps to ensure that a private interest does not come into conflict with a public duty.

For example:

• a principal may exclude their family member’s local business from consideration as a supplier
• a business manager may suggest to their adult child that they consider applying for casual ES roles at other local schools
• a VCE teacher performing tutoring work in their specialised subject may elect to only offer their service to students from other Australian states or territories, delivering the service online and outside school hours,.

In many cases however, conflicts of interest are unavoidable and a natural part of working in a large education system that has many opportunities for contact with the private lives of employees. Where conflicts cannot be avoided, they must be declared and managed to ensure transparency and impartiality of decision-making is maintained and that the public interest is protected.