Policy 7114 - Conflict of Significant Financial Interest Policy
WWW Posting Date: 1/15/2002
Responsible Office: Provost
These guidelines define general university policy and procedures regarding conflicts of interest in relationship to sponsored projects involving research, education, and university service. Their purpose is to protect the credibility and integrity of the university’s faculty and staff so that the public trust and confidence in the university’s sponsored activities is ensured.
In accordance with federal regulations, the university has a responsibility to manage, reduce, or eliminate any actual or potential conflicts of interest that may be presented by the financial interest of an investigator. Thus, the university requires that investigators disclose any significant financial interest in a research-sponsoring entity that may present an actual or potential conflict of interest in the event that the investigator becomes engaged in research in a project sponsored by that entity.
Background: 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. Nonetheless, prudent stewardship of public funds includes protecting sponsored research from being compromised by the conflicting financial interests of any investigator responsible for the design, conduct, or reporting of sponsored research.
The value of the results of sponsored research to the health and the economy of the nation must not be compromised by any financial interest that will, or may be reasonably expected to, 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.
Conflict of Interest
A potential conflict of interest occurs when there is a divergence 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 determined by considerations or personal gain, financial or otherwise. An actual conflict of interest depends on the situation and on the character or actions of the individual.
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, educational, or service activities funded, or proposed for funding, by an external sponsor. In this context, the term investigator includes the investigator’s spouse and dependent children.
Significant Financial Interest
Significant financial interest means anything of monetary value received from the research sponsoring entity, including, but not limited to, the following categories:
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).
Significant financial interest does not include the following categories:
salary, royalties, or other remuneration from the university;
income from seminars, lectures, or teaching engagements sponsored by public or nonprofit entities; or
income from service on advisory committees or review panels for public or nonprofit entities.
Significant financial interest is defined as an equity interest that, when aggregated for the investigator and the investigator’s spouse and dependent children, meets the following criteria:
exceeds $10,000 in value as determined through reference to public prices or other reasonable measures of fair market value or
constitutes more than a five percent ownership interest in any single entity.
Significant financial interest is also defined as salary, royalties, or other payments that, when aggregated for the investigator and the investigator’s spouse and dependent children over the next twelve months, exceed $10,000. However, if the compensation or transfer of an equity interest is conditioned upon a particular outcome in a sponsored research project, no investigator with any financial interest in the entity sponsoring a research project may serve in a responsible position on the project as a university employee. A responsible position is one that may involve making decisions on research direction or making interpretations of research results that are reported to the sponsoring entity.
Guidelines or Procedures for Disclosure of Conflicts of Interest
Requirements for Disclosure of Significant Financial Interests
Each investigator is required to disclose the following significant financial interests:
any significant financial interest of the investigator that would reasonably appear to be 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 whose 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.
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 the reputation and career of an investigator from potentially embarrassing or harmful allegations of misconduct.
Documentation for Disclosure
Each investigator who has significant financial interest requiring disclosure shall complete a Significant Financial Interests Disclosure form and attach all require supporting documentation. The completed disclosure form must be submitted with the proposal and routing form to the Office of Sponsored Projects using normal university procedures. Supporting documentation that identifies the business or entity involved and the nature and amount of the interest should be submitted in a sealed envelope marked confidential and accompany the disclosure form and the routing form.
Time Table for Disclosure
As required by federal regulation, all significant financial interests must be disclosed at the time a proposal is submitted. All financial disclosures must be updated by investigators during the period of the award, either on an annual basis or as new reportable significant financial interests are obtained.
Conflict of Interest Review Committee
The Provost, or official designee, shall conduct an initial review of all financial disclosures to determine whether a conflict of interest exists. A conflict of interest exists when the review reasonably determines that a significant financial interest could directly and significantly affect the design, conduct, or reporting of the proposed sponsored project. 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 appropriate university Conflict of Interest Review Committee (CIRC). Committee members are appointed by the Provost. The CIRC shall contain one faculty member from each college, representing a cross section of academic disciplines, and a research administrator. The committee shall determine what conditions or restrictions, if any, should be imposed by the institution to manage actual or potential conflicts of interest arising from disclosed significant financial interests.
Conflict of Interest Resolution Plan
Prior to consideration by the CIRC, the investigator, in cooperation with the academic unit or college, shall develop and present to the CIRC a Conflict of Interest Resolution Plan that details proposed steps that will be taken to manage, reduce, or eliminate any actual or potential conflict of interest presented by a significant financial interest. At a minimum the resolution plan shall address such issues as the following:
public disclosure of significant financial interests,
review of research protocol by independent reviewers, and
monitoring of research by independent reviewers.
Where the CIRC deems it appropriate, the CIRC shall review the resolution plan and approve it or add conditions or restrictions including the following:
modification of the research plan,
disqualification from participation in all or a portion of the research funded,
divestiture of significant financial interests, or
severance of relationships that create actual or potential conflicts of interest.
If the CIRC determines that imposing the above referenced conditions or restrictions would be equitable, 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 recommend that, to the extent permitted by federal regulations, the research go forward without imposing such conditions or restrictions. In these cases, the Provost shall make the final decision regarding resolution.
Memorandum of Understanding
The approved resolution plan shall be incorporated into a Memorandum of Understanding between Louisiana Tech University and the faculty member 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, the department head, and, on behalf of the university, the investigator’s cognizant university administrator (usually a Dean/Director). Actual or potential conflicts of interest will be satisfactorily managed, reduced, or eliminated in accordance with these guidelines prior to accepting any award, or they will be disclosed to the sponsoring agency for action.
Retention of Records
Records of investigator financial disclosures and of actions taken to manage actual or potential conflicts of interest shall be retained by the Office of Sponsored Projects until three years after 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 this policy or the terms of the Memorandum of Understanding, the CIRC shall recommend sanctions which may include disciplinary action ranging from a public letter or reprimand to dismissal and termination of employment. If the violation results in a collateral proceeding under university policies regarding misconduct in science, then the CIRC shall defer a decision on sanctions until the misconduct in science process is completed. The CIRC’s recommendations on sanctions shall be presented to the investigator’s cognizant university official, who, in consultation with the Provost, shall enforce any disciplinary action.
Collaborators from other institutions must either comply with this policy or provide a certification that their institutions are 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.