Revisions to EM 95-020, Policy on Conflict of Interest in Grants and Contracts; Revised by EM 08-002

Executive Memorandum 96-087

September 5, 1996

From: Manuel A. Esteban, President

Subject: Revisions to EM 95-020, Policy on Conflict of Interest in Grants and Contracts; Revised by EM 08-002

On the recommendation of the Academic Senate and Provost Scott McNall, I approve the following policy on Conflict of Interest in Grants and Contracts for immediate implementation. It replaces EM 95-020, The Interim Policy on Conflict of Interest in Grants and Contracts.

INTRODUCTION

California State University, Chico encourages campus personnel to engage in a variety of scholarly and creative activities, including those leading to external funding or income from public agencies, private entities and individuals, and entrepreneurial ventures. At times, such activities may create situations that lead to potential or real instances of conflict of interest. The University recognizes the obligation of individuals and the institution to ensure that instances of conflict of interest do not improperly affect university activities, including those conducted through auxiliary organizations. Therefore, through the policies and procedures set forth herein, CSU, Chico intends to identify and address potential conflicts of interest that may arise among campus personnel proposing to engage in or subsequently engaging in externally funded activities.

This policy recognizes that State of California and federal government laws and regulations, which differ, do exist. These regulations require CSU, Chico to establish and maintain a conflict of interest policy and implementing procedures. The intention of the policy set forth below is to establish a uniform policy which covers state and federal laws and regulations currently in place and those anticipated and to provide the public with accountability in the institution's dealings with external organizations.

GENERAL PRINCIPLES AND POLICY

The policy which follows is based upon the principle that CSU, Chico has a responsibility to manage, reduce, or eliminate any actual or potential conflicts of interest involving activities conducted under the authority of the University or its auxiliary organizations.

DEFINITIONS

A potential conflict of interest occurs when a divergence develops between an individual's private interests and his or her professional obligations to the University and its auxiliary organizations such that an independent observer might reasonably question whether the individual's professional actions or decisions are determined by considerations of personal gain, financial or otherwise. Reviewer(s) of disclosure statements can find an actual or potential conflict of interest when it is determined that a significant financial interest of the investigator could directly or significantly affect the assigned campus activities and professional obligations of campus personnel. Each campus personnel member must disclose all financial interests that would reasonably appear to be affected by the proposed activities.

Investigator means any member of the campus community who is a full- or part-time or temporary employee of California State University, Chico or a university auxiliary organization who is assigned the task of principal investigator(s)/project director(s) and any other member of the campus community who is responsible for the design, conduct, or reporting of activities proposed for funding or funded by an external source. The latter includes funds provided by grants and contracts and other means. In this context, "Investigator" also includes the investigator's spouse and dependent children. For the purposes of this policy, investigators also may include subcontractors where the foregoing definition may apply.

Significant financial interest refers to anything of monetary value, including but not limited to salary or other (e.g. , consulting fees or honorariums) payments for services, equity interests (e.g. , stocks, stock options or other ownership interests) and intellectual property rights (e.g. , patents, copyrights, and royalties from such rights).

As a result of differing state and federal regulations, significant financial interest is defined in two ways, as follows:

In relation to nongovernmental funding source(s) (sources other than federal, state, or local government agencies and their subsidiaries), significant financial interest is involved and must be disclosed where a funding source has allocated to the investigator

  • $250 or more in salary or other payment(s) for services (outside the parameters of a current or previous award conducted through the campus wherein the investigator was paid through the campus) in the last 12 months
  • A gift of $50 or more in the last 12 months
  • A loan of $250 or more in the last 12 months

Or where the investigator

  • Has investment or equity interest in the nongovernmental funding source of more than $1,000
  • Serves as a director, officer, partner, trustee, or employee or holds any management position in the entity providing the funds.

In relation to governmental funding source(s) (specifically the National Science Foundation and the Public Health Service), significant financial interest is involved and must be disclosed where

  • The investigator's financial situation would reasonably appear to be directly and significantly affected by the activities funded or proposed for funding
  • There exists any significant financial interest of the investigator in an entity whose financial interest would reasonably appear to be directly and significantly affected by the activities funded or proposed for funding.

In relation to governmental funding source(s), significant financial interest does not include

  • Salary, royalties, or other remuneration from the University or its auxiliary organizations
  • Income from seminars, lectures, or teaching engagements sponsored by public or nonprofit entities
  • Income from service on advisory committees or review panels for public or nonprofit entities
  • An equity interest in a business enterprise(s) that when aggregated for the investigator and the investigator's spouse and dependent children meets the following test
    • Does not exceed $10,000 in value for any single entity as determined by 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
  • Salary, royalties, or other payments that when aggregated for the investigator and the investigator's spouse and dependent children over the last 12 months or anticipated in the next 12 months are not expected to exceed $10,000 from any single business enterprise entity
  • Any ownership interests in the University or its auxiliary organizations, if either is an applicant under the Small Business Innovation Research Program or Small Business Technology Program.

Regardless of the above minimum requirements, a member of the campus community 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. The University recognizes disclosure as a key factor in protecting one's reputation and career from potentially embarrassing or harmful allegations of misconduct.

PROCESS: THE INVESTIGATOR DISCLOSURE AND CONFLICT RESOLUTION PLAN

CSU, Chico requires that personnel disclose any significant financial interest, as defined above, that may present an actual or potential conflict of interest with assigned campus responsibilities. Investigators must disclose significant financial interests at the time of proposal submission and update this information annually or more frequently as new financial interests are obtained during the life of the award. Awards cannot be accepted until any conflict of interest issues are resolved.

Each investigator who has a significant financial interest will complete the appropriate Conflict of Interest Disclosure Form, Nongovernmental Funding Source, or Governmental Funding Source. The appropriate form must be submitted to the Office of Sponsored Projects prior to the submission of the proposal. In addition, each investigator must make a disclosure at any time during the award period when a material change occurs that presents a conflict of interest as defined by this policy. Supporting documentation that provides details as to the investigator's significant financial interest(s), relationship(s) with external entity(ies), and any other pertinent information should be attached to the form (in a sealed envelope labeled with the term "Confidential" and the investigator's name if the investigator prefers confidentiality beyond those who must review the documentation).

The Provost, or designee, will conduct a review of all financial disclosure forms. A conflict of interest exists when the review reasonably determines that a significant financial interest could directly and significantly affect the design, conduct, and reporting of the proposed activity(ies). Upon such a finding, the Provost, or designee, will notify the investigator(s) of the finding and work with the individual(s) to devise a plan to manage, reduce, or eliminate the potential or actual conflict(s) of interest.

Upon developing a mutually agreed upon resolution plan, the Provost, or designee, will submit it to the President for final approval. Should mutual agreement not be reached for a plan, the Provost, or designee, will convene an ad hoc Independent Review Committee (IRC) composed of no fewer than three faculty members who will represent various disciplines but not represent the investigator's home department. The Provost, or designee, will select the IRC members and serve as non-voting Chair of the IRC. The Provost, or designee, and investigator(s) will present their respective resolution proposals to the IRC. The IRC will then settle upon one of these plans or one developed by the IRC as selected by majority vote. The plan and the IRC's vote will be forwarded by the Provost, or designee, to the President for final approval, with the President carrying final authority.

Resolution plans may include but not be limited to the following:

  • Public disclosure of significant financial interests
  • Monitoring of research by independent reviewers
  • Modification of the research plan
  • Disqualification from participation in the portion of the project that is affected by the significant financial interest
  • Divestiture of significant financial interests
  • Severance of relationships that create actual or potential conflicts.

To the extent allowable by state and federal laws and regulations, the Provost, or designee, and/or the IRC may determine that imposing restrictive conditions such as those listed above would be inequitable or ineffective and that the potential negative impacts that may arise from a significant financial interest are outweighed by interests of the advancement of knowledge, discoveries, technology transfer, or the public health and welfare. In such instances, the Provost, designee, or IRC may recommend that the project go forward without imposing restrictive conditions. Such a recommendation will be sent to the President for final resolution.

Final resolution, as approved ultimately by the President, will be sent to the investigator(s), who will abide by the resolution plan, the project/account file, and other parties as deemed appropriate and necessary by the Provost, or designee.

The Provost, or designee, will serve as the University's contact with external entities for reporting, resolving, and otherwise dealing with matters related to this policy. The Provost, or designee, will report disclosure and resolution activities to agencies and funding sources as required and appropriate.

ENFORCEMENT AND SANCTIONS

Instances of failure to disclose conflict(s) of interest and potential violation(s) of the resolution plan will be reported/referred to the Provost, or designee, and/or Vice Provost for Human Resources. They will jointly investigate the issue(s), following campus and systemwide procedures and rules for such matters. Disciplinary measures, if any, will be in keeping with campus and systemwide policies and procedures and union contracts current at the time. Funding sources and other appropriate parties will be notified and kept informed as required by state and federal laws and regulations and Sponsored Projects award documents.

DOCUMENTATION AND RECORD MAINTENANCE

The Provost or designee will maintain records of all disclosures and actions taken pertaining to conflicts for a period of at least three years after the later of the termination or completion of the award to which such documents relate or the resolution of any action(s) involving these records.

CONFLICT OF INTEREST DISCLOSURE FORM

Nongovernmental Funding Source

Investigator Name:

Department/College:

Project Title:

Proposed Sponsor:

I am disclosing the following significant financial interests related to the entity funding the project. (Responses should include the investigator, his/her spouse, and any dependent children. )

Name of Entity:

Address of Entity:

Principal Type of Business:

If Entity is the Sponsor, Amount of Funding Request: $

Are you a director, officer, partner, trustee, or employee of the entity? Yes _ No _

Do you have an investment of $1,000 or more in the entity? Yes _ No _

Do you hold an equity position of 5% in the entity? Yes _ No _

Have you received income of $250 or more or gifts valued at $50 or more from the entity? (Exclude income received from the entity for a current or previously funded project. ) Yes _ No _

Have you received a loan from the entity for which the outstanding balance exceeded $250 in the past 12 months? Yes _ No _ Do you have an interest in any intellectual property rights belonging to the entity? Yes _ No _

INVESTIGATOR CERTIFICATION

I agree to update this disclosure either on an annual basis or as new reportable significant financial interests are obtained.

I agree to cooperate in the development of a Resolution Plan to address any actual or potential conflict of interest identified via this Disclosure.

I agree to comply with any conditions or restrictions imposed by California State University, Chico to manage, reduce, or eliminate actual or potential conflicts of interest or forfeit the award.

Signature of Investigator:

Date:

Endorsements:

I have reviewed the significant financial interest disclosure and believe that no significant financial interest exists or if one does exists that it is possible to develop and execute, prior to award, a Resolution Plan to manage, reduce, or eliminate any actual or potential conflict of interest; and, therefore, I recommend that the proposal be submitted to the agency at this time.

Signature of Provost/Designee:

CONFLICT OF INTEREST DISCLOSURE FORM

Governmental Funding Source

Investigator Name:

Department/College:

Project Title:

Proposed Sponsor:

I am disclosing the following significant financial interests related to the government funding for this project. (Responses should include the investigator, his/her spouse, and any dependent children.)

Name of Entity:

Address of Entity:

Principal Type of Business:

If Entity is the Sponsor, Amount of Funding Request: $

Have you received in the last 12 months or expect to receive in the next 12 months salary, consulting fees, and/or other payments in excess of $10,000 from this entity? Yes _ No_

Do you have an investment of $10,000 or more in the entity? Yes _ No _

Do you have an equity position of 5% or more in the entity? Yes _ No _

Do you have an interest in any intellectual property rights belonging to the entity? Yes _ No _

Investigator Certification:

I agree to update this disclosure either on an annual basis or as new reportable significant financial interests are obtained.

I agree to cooperate in the development of a Resolution Plan to address any actual or potential conflict of interest identified via this Disclosure.

I agree to comply with any conditions or restrictions imposed by California State University, Chico to manage, reduce, or eliminate actual or potential conflicts of interest or forfeit the award.

Signature of Investigator:

Date:

Endorsements:

I have reviewed the significant financial interest disclosure and believe that no significant financial interest exists or if one does exists that it is possible to develop and execute, prior to award, a Resolution Plan to manage, reduce, or eliminate any actual or potential conflict of interest; and, therefore, I recommend that the proposal be submitted to the agency at this time.

Signature of Provost/Designee:

Date: