What is a related-party transaction?
A business deal or arrangement between two parties who are joined by a special relationship prior to the deal. For example, a business transaction between a member of the Board of Trustees and the University, such as a contract for the board member’s company to perform renovations to a University building, would be deemed a related-party transaction. Another example would be the University purchasing new vans through a dealership that is owned by a relative of a university executive officer. It’s not illegal, but it introduces the potential for conflicts of interest. While the great majority of related-party transactions are perfectly acceptable, these types of transactions must be disclosed in our audited financial statements and tax returns. Therefore, all related party transactions must be reported to Business & Finance. Please contact Kim Kvaal to disclose these types of transactions or if you have further questions.
