Conflict of Interest Policy on Significant Financial Interests

Introduction
Technology Transfer and Conflict of Interest
Definitions
Guidelines for Disclosure
Procedures
Seeking Resolution


Introduction

These requirements apply to all new applications to the National Science Foundation and the US Public Health Service (National Institutes of Health). (Federal Register, 6/28/94, p. 33232 and 33308).

These guidelines define the general University policy and procedures regarding the management of financial conflicts of interest that could bias the outcome of sponsored projects involving research, education, and university service. Their primary purpose is to protect the credibility and integrity of the university's faculty and staff so that public trust and confidence in the university's sponsored activities is ensured.

To comply with new federal regulations, the Institution must manage, reduce, or eliminate any actual or potential conflicts of interest that may be presented by a financial interest of an investigator. Thus, the university requires that investigators disclose any significant financial interest that may present an actual or potential conflict of interest in relationship to a sponsored project.



Technology Transfer and Conflict of Interest

Effective interaction between universities conducting research and industry is essential to ensure the rapid application of scientific discoveries to the needs of the nation and to maintain the international competitiveness of domestic industry. Numerous statutes and programs demonstrate federal interest in the promotion of interactions among government, academia, and industry.

However, the value of the results of sponsored research to the economy of the nation must not be compromised by any investigator's financial interest that could bias the design, conduct or reporting of the research. This policy seeks to maintain a reasonable balance between these competing interests, give the university the ability to identify and manage financial interests that may bias the research, and minimize reporting and other burdens on the investigators.
Link to Technology Transfer



Definitions

1. Conflict of Interest occurs when there is a conflict, or appearance of conflict, between an individual's private interests and his or her professional obligations to the university such that an independent observer might reasonably question whether the individual's professional actions or decisions are influenced or determined by considerations of personal gain, financial or otherwise.

2. Investigator means the principal investigator/project director, co-principal investigator, and any other person at the University who is responsible for the design, conduct, or reporting of research, educational, or service activities funded, or proposed for funding, by an external sponsor. An investigator's spouse and dependent children also are restricted from having a Significant Financial Interest in the outcome of an externally sponsored research project.

3. 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); and
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, or, constitute more than a five percent ownership interest in any single entity; or

5. Salary, royalties or other payments that when aggregated for the Investigator and the Investigator's spouse and dependent children over the next twelve months, are not expected to exceed $10,000.

Provided, however, that the exclusions in items 1, 4, and 5 shall not apply if the compensation or transfer of an equity interest is conditioned upon a particular outcome in a sponsored research project.



Guidelines for Disclosure

Each Investigator is required to disclose the following Significant Financial Interests:

Any Significant Financial Interest of the Investigator that is directly and significantly affected by the research or educational activities funded, or proposed for funding, by an external sponsor; or Any Significant Financial Interest of the Investigator in an entity in which financial interest would reasonably appear to be directly and significantly affected by the research or educational activities funded, or proposed for funding, by an external sponsor.

Note that only financial interests relating to the proposal currently being submitted to the sponsor need be disclosed.

Regardless of the above minimum requirements, a faculty or staff member, in his or her own best interest, may choose to disclose any other financial or related interest that could present an actual conflict of interest or be perceived to present a conflict of interest. Disclosure is a key factor in protecting one's reputation and career, and the university from potentially embarrassing or harmful allegations of misconduct.



Procedures

Federal regulations require that all Significant Financial Interests must be disclosed prior to the time a proposal is submitted. This will be done when the proposal is routed for approval. Financial disclosures must be updated by Investigators during the period of the award, as new reportable Significant Financial Interests are acquired.

A disclosure constitutes a completed, Significant Financial Interests Disclosure Form, pertinent documentation, and a copy of the proposal.

A prior disclosure under PM-11 or a prior PM-67 application for approval does not constitute a disclosure for the purposes of this policy. A copy of any PM-11 disclosure, which constitutes a conflict of interest for the proposed research, must be included as part of the documentation. If an investigator has applied for or possesses a PM-67 research or licensing agreement, which is in the same area of research, or which could benefit or disadvantage the sponsor of the proposed research, a disclosure to that effect is required.

Each person who has significant financial interests requiring disclosure must complete a Significant Financial Interests Disclosure Form, attach all required supporting documentation, and place the materials in a sealed envelope addressed to the Office of Sponsored Research and clearly marked "CONFIDENTIAL - Significant Interests Financial Disclosure," and identified with the name of the person making the disclosure, and the project name.

It is the responsibility of the principal investigator to ensure that every named investigator signs the Proposal Routing Form to signify each has read and has complied with the disclosure requirement. Additional investigators (postdoctoral research associate, graduate research assistant, undergraduate student, or any other personnel) appointed to the research project, at any time before its termination, must be informed by the principal investigator of his/her obligation to declare any relevant Significant Financial Interest. The additional investigators must file the Significant Financial Interest Disclosure Form in the Office of Research and Sponsored Projects. The principal investigator is also responsible for sending a copy of the Policy on Significant Financial Interests to subcontractors.

Subcontractors from other institutions or other collaborators must comply with the policy by providing a completed Significant Financial Interest Disclosure Form or a certification that their institution is in compliance with federal policies regarding investigator Significant Financial Interest disclosure and that their portion of the project is in compliance with their institutional policies.

In the event that an award is offered without a proposal having been routed through the normal channels, a proposal Routing must be completed (complete with any necessary disclosures), and resolution of any conflicts of interest attained, prior to acceptance of the award.

The Vice Chancellor for Research, or the Vice Chancellor's designee, shall conduct an initial review of all financial disclosures to determine whether a significant conflict of interest exists. A significant conflict of interest exists when the Vice Chancellor for Research, or the Vice Chancellor's designee, reasonably determines that a Significant Financial Interest exists that could directly and significantly affect the design, conduct, or reporting of the proposed sponsored project. The reviewer may make any inquiries he/she considers necessary to make this determination. If the initial determination is made that there may be a potential for conflict of interest covered by this policy, then the Disclosure packet will be referred to the university Research Council, which will serve as the university's Conflict of Interest Review Committee (CIRC). If a disclosure is referred to the CIRC, the individual concerned and the Project Director will be informed.



Seeking Resolution

If a disclosure is forwarded to the CIRC, the CIRC shall:

Review the disclosures and make recommendations for resolution. Appoint a member of the CIRC to work with the individual having a conflict of interest to develop a Resolution Plan, which becomes a Memorandum of Understanding (MOU) between the individual and the university. Such a Plan shall detail measures to manage, reduce, or eliminate any actual or potential conflict of interest presented by a Significant Financial Interest. The CIRC recommends to the Vice Chancellor for Research approval, disapproval, or changes in the Plan to enable approval.

At a minimum the Resolution Plan shall address such issues as:

Public disclosure of significant financial interests, Technical review of the research protocol to be conducted by a faculty panel, independent of the CIRC, Plan for monitoring and reporting research outcomes by a panel of experts in the particular field of research, independent of the CIRC.

The CIRC may recommend incorporation of such measures in the Resolution Plans as:

Modification of the research plan,

Disqualification of the investigator with the conflict of interest from participation in all or a portion of the research,

Divestiture of significant financial interests,

Severance of relationships with the business enterprise or entity that create actual or potential conflicts of interest,

Disclosure of the conflict to the sponsor.

The committee recommends to the Vice Chancellor for Research any conditions or restrictions, that should be required by the institution to manage actual or potential conflicts of interest arising from disclosed Significant Financial Interests. The CIRC shall forward to the Vice Chancellor for Research the Resolution Plan, when acceptable.

If the CIRC determines that imposing specific conditions or restrictions would be inequitable, or 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 the CIRC may, in exceptional circumstances, recommend to the Vice Chancellor for Research that, to the extent permitted by federal regulations, the research go forward without imposing such conditions or restrictions. In these cases, the Vice Chancellor for Research shall make the final decision regarding resolution, and provide documentation of the ruling to the CIRC. The Resolution Plan details the conditions or restrictions to which the Investigator must adhere in the conduct of the project or in the relationship with the business enterprise or entity.

The Resolution Plan shall be structured in the form of a Memorandum of Understanding (MOU) between the investigator and the university, and will become final upon completion of the following steps:

1. The MOU will be signed by the Investigator and the chairperson of the CIRC.

2. The MOU will then be signed by the department chair/head and the dean/director to signify each, respectively, is aware of the potential conflict and the recommended resolution procedure.

3. The chair/head and dean/director may promptly register in writing any concerns to the CIRC which appear not to have been addressed, and return the MOU to the CIRC.

4. Any further action by the CIRC, will be returned to the chair/head and dean/director for signatures. (The signatures of the chair/head and dean/director do not signify approval or disapproval, only notification of action).

5. Once all signatures are obtained, the Vice Chancellor for Research signs to consummate the MOU for the University.

6. The Significant Financial Interest Disclosure Form will be placed in the Office of Research and Sponsored Programs with the proposal file.

Actual or potential conflicts of interest must be resolved in accordance with these guidelines prior to accepting the award. Otherwise, the conflict of interest will be disclosed to the sponsoring agency for action; or, at the option of the university, the award may be declined.

The CIRC shall maintain minutes of its deliberations. Records of investigator financial disclosures and of actions taken to manage actual or potential conflicts of interest, shall be retained by the Office of Research and Sponsored Projects for a period of three (3) years after the termination or completion of the award to which they relate, or the resolution of any government action involving those records, whichever is the later.

Whenever an Investigator is discovered to have violated this policy or the terms of the Memorandum of Understanding by failing to disclose a significant conflict of interest, or failing to adhere to the resolution plan, the CIRC shall report to the Vice Chancellor for Research who may explore disciplinary action, ranging from a public letter of reprimand to dismissal and termination of employment, according to the approved university procedures employed for violation of the university's policy on misconduct PM-11 and/or PM-67. If the violation results in a collateral proceeding under University policies regarding misconduct, then the CIRC shall notify the Vice Chancellor for Research. As possible disciplinary action may be delayed until the misconduct allegations have been investigated, it may be necessary to withdraw a pending grant application.

1. Regulatory basis for the disclosure requirement:

National Science Foundation: Federal Register June 28, 1994, p 33308.
Public Health Service: Federal Register June 28, 1994, p 33232.

2. Legislative basis for University participation in technology transfer and industry collaborations:

The Stevenson-Wydler Technology Innovation Act of 1980 (Public Law (P.L.) 96-480) encourages technology transfer, particularly through industrial-academic collaborations.

The Patent and Trademark Act Amendments of 1980 (P.L. 96-517) allow universities and other funding recipients to apply for patents developed with federal funding, and expressly promote collaboration between commercial concerns and nonprofit organizations.

The Economic Recovery Tax Act of 1981 (P.L. 97-34) is aimed at fostering research and development by small companies and associated university partners.

The Federal Technology Transfer Act of 1986 (P.L. 99-502), which amended P.L. 96-480, and Executive Order 12592, provide similar patent and licensing authority to federal laboratories, and encourage them to participate in cooperative research and development agreements with the private sector and nonprofit organizations, including universities.

These legal authorities facilitate the movement of intellectual capital among the federal government, academic institutions, and the private sector because such cross-fertilization is critical to the development of U.S. industry. However, these and other inducements for collaboration have created a climate in which the stewardship of public funding for research is increasingly complex and challenging.

The following Procedures forms are available only in hard copy and may be obtained by contacting Dennis Herringshaw:

PM-3 on Compensation Limitations, Academic and Nonclassified Employees

PM-11 on Outside Employment of University Employees

AP 20.3 to Establish Policies and Procedures for Approval of Outside Employment of University Employees

AP 20.4 on Additional Compensation Charged to Grants and Contracts for Academic Year Employees PM 16 Technology Transfer

PM 27 Policy on Placement of Sponsored Agreements-

PM 66 on Consulting not covered by PM 67 on Contracts between University and Selected Employees And Selected Staff Execution of University Contracts