Revisions to EM 96-087 Policy on Conflict of Interest in Grants and Contracts; Revised by EM 12-065
Executive Memorandum 08-002
February 14, 2008
From: Paul J. Zingg, President
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 or engaging in externally funded activities.
This policy recognizes that State of California and federal government laws and regulations, which differ, do exist. These regulations and the CSU Chancellor’s Office Memo HR 2005-38 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.
Each investigator, as defined below, is required to file the appropriate disclosure form as specified in this policy. In no case shall the University, Research Foundation or University Foundation accept funds from an external agency or individual on behalf of an employee or project in the absence of the disclosures required in this policy and the satisfactory completion of actions required by the provisions of this policy, the applicable regulations and any findings approved by the President to manage, reduce or eliminate any conflicts of interest.
In keeping with CSU regulations, department chairs will disqualify themselves from approving a research proposal for a project to be funded in whole or in part by a nongovernmental entity in which they have a financial interest.
Also in keeping with CSU regulations, investigators will not make, participate in the making or in any way attempt to use the investigator’s position to influence the making of any governmental decision which foreseeably will have a material financial effect as specified in HR 2005-38 and any subsequent regulations.
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
- $500 or more in income, 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(s) of $500 or more in the last 12 months
- Has investment or equity interest in the nongovernmental funding source of more than $2,000
- Serves as a director, officer, partner, trustee, consultant 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 (NSF) and the National Institutes of Health (NIH)), significant financial interest is involved and must be disclosed where
- The investigator's financial situation (including that of the investigator’s spouse and dependent children) would reasonably appear to be directly and significantly affected by the activities funded or proposed for funding or
- 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 are an applicant under the Small Business Innovation Research Program or Small Business Technology Program.
The threshold reporting requirements above will change automatically with changes in federal and state regulations.
PROCESS: THE INVESTIGATOR DISCLOSURE AND CONFLICT RESOLUTION PLAN
CSU, Chico requires that an investigator disclose any significant financial interest, as defined above that may present an actual or potential conflict of interest with assigned campus responsibilities. As required by the Office of Research and Sponsored Programs, each investigator will file the appropriate disclosure form even if the investigator believes no conflict of interest exists.
Investigators must disclose significant financial interests at the time of proposal submission to NSF or NIH.
Investigators who have principal responsibility for a research project funded or supported, in whole or in part, by a contract, grant or gift from a nongovernmental entity, are required to report financial interests before final acceptance of the award, and file a new form within 30 days if funding is renewed from the same source. A project completion statement must also be filed within 90 days of expiration of the contract, grant or gift from a nongovernmental source.
Investigators must file an updated form if new financial interests are obtained during the life of any award or gift from NSF, NIH or a nongovernmental source.
Awards or gifts cannot be accepted until any conflict of interest issues are resolved.
Each investigator will complete the appropriate Conflict of Interest Disclosure Form, either a California Form 700-U for a nongovernmental funding source, or a Governmental Funding Source Form. The appropriate form must be submitted to the Office of Research and Sponsored Programs. In addition, each investigator must file an updated form 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 Vice Provost for Research 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 receiving a disclosure form that may disclose a potential conflict of interest, the Vice Provost for Research will notify the investigator(s) and convene an Independent Review Committee as described below.
An Independent Review Committee will be established as appointed by the President or the President’s designee. The Independent Review Committee will be composed of at least three members including a faculty or staff person as appropriate from another department or occupation area, an administrator, and a member at large. The Vice Provost for Research will serve as a non-voting committee chair to organize the Review Committee, call meetings, make and maintain a record of meetings and provide staff and other resources to the committee.
The Independent Review Committee will engage in an independent substantive review of the potential conflict(s) of interest to determine if a significant conflict of interest as defined by this policy does exist or potentially could occur. In conducting its business, the committee may confer with other individuals, including the investigator(s) involved, to gain information and discuss possible solutions to the conflict(s) of interest. If a conflict of interest is found to exist or the potential for one could occur, the committee will make recommendations as to how to manage, reduce or eliminate the potential or actual conflict(s) of interest. The committee may also conclude that the conflict(s) of interest cannot be managed, reduced or eliminated so that the award or gift may be accepted. The committee's recommendations will be reduced to writing and submitted first to the Provost for review and comment and then to the President who will make the final determination as to what actions should be taken. The President's decision(s) will be reduced to writing and presented to the Vice Provost for Research for dissemination to the appropriate individuals including the investigator(s). The Vice Provost for Research will see that a written record is recorded throughout the process and maintained for at least three years following the President's decision or the end of the project, whichever occurs last. Records, upon request, will be made available to the public upon conclusion of the review process.
Committee recommendations for managing, reducing or eliminating conflict(s) of interest 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.
The Vice Provost for Research will serve as the University's contact with external entities for reporting, resolving, and otherwise dealing with matters related to this policy. The Vice Provost for Research 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 Vice Provost for Research, and/or Vice Provost for Human Resources. They will jointly investigate the issue(s), following campus and system wide procedures and rules for such matters. Disciplinary measures, if any, will be in keeping with campus and system wide 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 Research and Sponsored Programs award documents.
DOCUMENTATION AND RECORD MAINTENANCE
The Vice Provost for Research will maintain records of all disclosures, Independent Review Committee proceedings and recommendations and actions taken pertaining to conflicts for a period of at least three years after the later of the termination or completion of the project to which such documents relate or the resolution of any action(s) involving these records.
The Vice Provost for Research and the Vice Provost for Human Resources will ensure that the campus meets any state or federal regulations regarding the provision of ethics training to investigators.