ORSP - Policies

INSTRUCTIONS FOR HANDLING SIGNIFICANT FINANCIAL INTEREST DISCLOSURES FOR PHS AND NSF SPONSORED PROJECTS

Federal regulations effective October 1, 1995 require universities to review and evaluate certain federally funded research and educational projects to ensure that the design, conduct, or reporting of research will not be biased by any conflicting financial interest of those investigators responsible for the research. The federal regulations apply to projects sponsored by the Public Health Service (including the National Institutes of Health) and the National Science Foundation. As discussed more fully below, the federal regulations specify that investigators are required to disclose certain financial interests (and those of his/her spouse and dependent children) which should reasonably appear to be affected by the proposed research. The institution must determine whether the disclosed financial interests could bias the research by affecting the design, conduct or reporting of the research. If so, the University must manage, reduce, or eliminate any conflicts of interest that may be presented by a financial interest of an investigator. The federal government requires the process of financial disclosure prior to the time of submission and requires institutional evaluation prior to the expenditure of research funds.

A. Background

According to the federal regulations issued by PHS and NSF (42 CFR Part 50, Subpart F and NSF Grants Policy Manual Section 510 respectively), investigators are required to disclose to a responsible institutional representative: 1) all Significant Financial Interests of the investigator (including those of the investigator's spouse and dependent children) that would reasonably appear to be affected by research or educational activities funded or proposed for funding by NSF or PHS; or 2) Significant Financial Interests in entities whose financial interests would reasonably appear to be affected by such activities.

Effective October 1, 1995 both PHS and NSF regulations require that grantee institutions maintain and enforce such a written policy on conflict of interest. The federal regulations contain specific requirements which go beyond those contained in the University's Conflict of Interest Policy (Univ. Reg. 3.83a-f) (see Appendix A) and University regulations regarding professional activities outside the University and outside employment (Univ. Reg. 3.80-3.82h).

Determinations regarding conflict of interest will be made using existing University policies and procedures at the department or unit level. The department chair/ unit head may elect to refer the matter to a Conflict of Interest Review Committee (CIRC) of faculty peers appointed by the chair for advice.

B. Definitions

Investigator means the principal investigator/project director, co-principal investigators, and any other person at the University who is responsible for the design, conduct, or reporting of research or educational activities funded or proposed for funding by PHS or NSF. By federal regulation, the term "Investigator" includes the investigator's spouse and dependent children.

Significant Financial Interest means anything of monetary value, including, but not limited to:

• salary or other payments for services (e.g., consulting fees or honoraria);
• equity interests (e.g., stocks, stock options or other ownership interests);
• intellectual property rights (e.g., patents, copyrights and royalties from such rights)

The term does not include:

1. Salary, royalties, or other remuneration from the University;
2. Income from seminars, lectures, or teaching engagements sponsored by public or nonprofit entities;
3. Income from service on advisory committees or review panels for public or nonprofit entities; or
4. An equity interest that when aggregated for the Investigator and the Investigator's spouse and dependent children, meets both of the following tests: does not exceed $10,000 in value as determined through reference to public prices or other reasonable measures of fair market value, and does not represent more than a five percent ownership interest in any single entity. State law generally prohibits the University from transacting business with an entity in which an employee holds greater than a 1% (one) percent equity interest with limited exceptions.).

Conflict of Interest Review Committee (CIRC). A committee which may be established by the unit director or department chair according to its bylaws in order to review Significant Financial Interest Statements for potential Conflict of Interest situations. In the case of academic department, the CIRC would usually contain, at a minimum, three faculty members representing the department. The CIRC may also be augmented by faculty external to the unit.

A Conflict of Interest exists when the reviewer(s) (the CIRC) reasonably determine that a Significant Financial Interest could directly and significantly affect the design, conduct or reporting of PHS or NSF funded research or educational activities.

Conflict of Interest Resolution Plan. A plan developed by the investigator and modified as appropriate by a unit head or director, or dean in consultation with any review committee to manage or avoid conflicts of interest arising from Significant Financial Interests which may be directly and significantly affected by a grant application to PHS or NSF.

C. Required Steps to Comply with Federal Regulations

1. Each Investigator upon submitting an application for funding to the NSF or PHS is required to disclose the following Significant Financial Interests:
   • Any Significant Financial Interest of the Investigator that could reasonably appear to be affected by the research or educational activities funded, or proposed for funding; or
   • Any Significant Financial Interest of the Investigator in an entity whose financial interest would reasonably appear to be affected by the research or educational activities funded or proposed for funding.

    

2. Each Investigator under this section shall complete a Significant Financial Interests Disclosure Form and attach all required supporting documentation. The completed Disclosure Form must be submitted with the proposal and a University Endorsement form to the Chair or Director of the unit which will be responsible for the conduct of the project should the grant be made. Supporting documentation that identifies the business enterprise or entity involved and/or the nature and amount of the interest should be submitted to the chair/unit head in a sealed envelope marked confidential. The Disclosure form must be signed by the Chair and Dean or Director and accompany (without supporting documentation) the Endorsement form and the application to the Office of Research and Sponsored Programs (ORSP).

3. As required by federal regulation, all Significant Financial Interests must be disclosed prior to the time a proposal is submitted. All financial disclosures must be updated by Investigators during the period of the award, and on an annual basis or as changes are made to previously reported Significant Financial Interests. If a new reportable Significant Financial Interest arises at any time during the period after the submission of the proposal through the entire period of any resulting award, the filing of a Disclosure Form and supporting documentation is also required.

4. The chair or unit head shall conduct an initial review of all financial disclosures to determine if any disclosed Significant Financial Interest could reasonably affect the design, conduct, or reporting of the proposed sponsored project. If the chair or unit head determines that there is a potential for conflict of interest covered under this process, then the Disclosure packet may be referred to a unit Conflict of Interest Review Committee (CIRC) appointed by the chair or unit head for advice. In any case, the chair or unit head must determine whether the Significant Financial Interests could reasonably appear to directly and significantly affect the design, conduct, or reporting of the proposed project and what conditions or restrictions, if any, should be imposed by the University to manage conflicts of interest arising from the disclosed Significant Financial Interests. Consideration of the factors enumerated in Univ. Reg 3.83f (B.3.a-g) as well as any other factors deemed relevant may be helpful in making this determination.

5. Upon determination of the presence of a Conflict of Interest, the Investigator, in cooperation with the unit, shall develop and present to the chair or unit head a Conflict of Interest Resolution Plan that details proposed steps that will be taken to manage, reduce, or eliminate any conflict of interest presented by a Significant Financial Interest. The chair or unit head, with the advice of any review committee shall review the Resolution Plan and approve it, or may add conditions or restrictions, including but not limited to the following:

    

   1. Public disclosure of Significant Financial Interests;
   2. Monitoring of research by independent reviewers;
   3. Modification of the research plan;
   4. Disqualification of the investigator(s) from participation in all or a portion of the research funded;
   5. Divestiture of Significant Financial Interests; or
   6. Severance of relationships that create conflicts of interest.

   If the chair or unit head determines that imposing the above referenced conditions or restrictions would be inequitable, and that the potential negative impacts that may arise from a Significant Financial Interest are outweighed by interests of scientific progress, technology transfer, or the public health and welfare, then only in the case of NSF sponsorship, the chair or unit head may recommend that the research go forward without imposing such conditions or restrictions. In these cases, the Vice President for Research, in consultation with the Dean or Provost, shall make the final decision regarding resolution.

6. The approved Resolution Plan shall be incorporated into a Memorandum of Understanding that details the conditions or restrictions imposed upon the Investigator in the conduct of the project or in the relationship with the business enterprise or entity. The Memorandum of Understanding shall be signed by the Investigator and the Investigator's Dean or Director. Conflicts of interests will be satisfactorily managed, reduced, or eliminated prior to the expenditure of any award funds.

7. Where conflicts of interest exist under PHS awards, the University will report to the PHS the existence of a conflicting interest (but not the nature of the interest or other details) and will assure the PHS that the interests have been managed, reduced or eliminated in accordance with PHS requirements prior to the expenditure of any funds received.

8. Records of investigator financial disclosures and of actions taken to manage conflicts of interest, shall be marked confidential and forwarded to the Associate Vice President for Research Policy and Administration for inclusion in the official University grant file until 3 years after the later of the termination or completion of the award to which they relate, or the resolution of any government action involving those records.

Whenever an Investigator has violated these provisions, applicable University regulations or the terms of the Memorandum of Understanding, the chair or unit head shall recommend sanctions to the Dean or Provost. These may include withdrawal of the grant application or return of grant funds. Serious infractions may also warrant, in appropriate cases, disciplinary actions ranging from a letter of reprimand to dismissal and termination of employment.

In any case, where a conflict of interest can not be managed, reduced, or eliminated, or where failure of the Investigator to comply with the University's Conflict of Interest policies and procedures has biased the design, conduct or reporting of PHS or NSF funded research, the University will so inform the funding agency and also will notify the agency of any corrective action taken or to be taken.

(September 19, 1995)  

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