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

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
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.

Disciplinary Action

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.