Ethics, Gifts, and Gratuities - 208

Accepting Gifts and Gratuities

Government Code, Section 19990 establishes the authority for departments to create Incompatible Activity Statements for employees to follow. Buyers are responsible for knowing their department's policies regarding incompatible activities and in terms of best practices, buyers, and employees involved in the procurement process, whether directly or indirectly, are discouraged from participating in the following activities:

• Accepting directly or indirectly any gift, including money or equipment, meals, lodging, transportation, entertainment, service, gratuity, favor, hospitality, loan, or any other thing of value from anyone who is doing or seeking to do business with the department you represent.
• Using their position in state government to bestow any preferential benefit on anyone related to them by family, business, or social relationship.
• Situations that create the appearance of questionable or unethical practices.

Consider the Consequence

Buyers, after reviewing the incompatible activities policy, are encouraged to answer the following questions when dealing with suppliers who may offer gifts or gratuities:

• Will I violate a law or department policy if I accept this gift?
• What is the intent of the gift?
• Do I or my relatives or friends benefit from the gift?
• Would I mind seeing the acceptance of the gift publicized in the news media?
• How will accepting this gift be interpreted by others?

Avoid Making a Gift of Public Funds

The Constitution of the State of California prohibits any gift of public funds. All expenditures of public funds must support the Department's function, purpose, and benefit the state.

This prohibition extends to any advance payments or pre-payments made to a contractor before work has been performed or before all goods or services have been accepted.

Per the Governor's press release dated 2/18/11, all state agencies and departments must stop spending taxpayer dollars on free giveaway and gift items (such as key chains, squeeze toys, pens, hats, trinkets, shirts, cups, and other gift items).

Considerations before Accepting Free or Loaner Equipment from Suppliers

Offers from suppliers of goods or services without cost or obligation to the state should not be accepted If a decision is made contrary to this recommendation, before accepting any supplier's goods and/or services offered at no cost or obligation, the department must:

• Consider the perception of the acceptance to other suppliers (i.e. how does the department remain fair and impartial if a decision is eventually made to solicit the product?)
• Document the agreement by the execution of a purchase document with language indicating the state has no further obligations or hidden costs associated with acceptance.

Evaluation Teams

Government Code, Section 1090 requires that state officers and others shall not be financially interested in any contract made by them in their official capacity, or by anybody or board of which they are members. State employees and others may not participate as purchasers or members of the evaluation team at any sale or vendors at any purchase made by them in their official capacity.