A conflict of interest exists when a person or organization in a position of trust has a competing professional or personal interest thereby creating a circumstance where the person’s or organization’s judgment is improperly influenced. Conflicts of interest may arise in the relations of directors, officers, and management employees, family members, friends, and other employees, firms supplying goods and services or leased property and equipment.

A Less-Than-Arm’s Length Transactions (LTAL) transaction occurs when one party to the transaction can exercise control or significantly influences the other. Such transactions include, but are not limited to, those between divisions of an organization; organizations under common control through common officers, directors, or members; and an organization and a director, trustee, officer, key employee of the institution or immediate family members, either directly or through corporations, trusts, or similar arrangements in which a controlling interest is held.

All conflicts of interest or LTAL transactions must be disclosed to SED. It is expected that the directors, officers, and management employees of an organization will recognize such areas in relation to all SFSP funds to ensure such transactions do not occur. Costs incurred from a conflict of interest or LTAL transactions for the purpose of the Summer Food Service Program are limited to the organization’s actual documented costs and will be reviewed for reasonableness and necessity to the program.

For additional information please refer to the Office of Management and Budget (OMB) requirements for conflicts of interest in the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Rewards (also known as the Super Circular). In the Super Circular, subsection 200.318 mandates that non-federal entities must now disclose in writing any potential conflict of interest to SED.