Guidelines for Potential Conflicts of Interest Pertaining to Applications for NSF and PHS Research Support - Faculty Handbook
The following policy was issued by the Office of the Provost and the Office of the Vice President for Research and Graduate Studies on October 2, 1995.
On July 11, 1995 the Department of Health and Human Services, Office of the Secretary and the Public Health Service printed in the Federal Register the final rule for 42 CFR 50 and 45 CFR 94, "Objectivity in Research." In the same issue of the Federal Register the National Science Foundation published a "Notice of technical changes to [its] Investigator Final Disclosure Policy," to bring it into close conformity with the PHS policy.
The intent of both NSF and PHS rules is to set standards to ensure that the design, conduct, and reporting of research funded under PHS or NSF grants, cooperative agreements or contracts will not be biased by any conflicting financial interest of those Investigators responsible for the research. These rules require that faculty Investigators applying to NSF or PHS disclose to the University potential conflict of interests and that the University manage, reduce, or eliminate disclosed financial conflicts of interest.
The applicable definitions, from the NSF and PHS rules, are as follows:
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 non-profit entities, (3) income from service on advisory committees or review panels for public or non-profit entities, (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 and does not represent 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.
Conflicts of Interest exist if independent reviewers of disclosures determine that a significant financial interest "could directly and significantly affect the design, conduct, or report of" NSF- or PHS-funded activities.
Disclosures by Investigators means disclosure to University representatives prior to submission of a request to NSF or PHS, of significant financial interests that "would reasonably appear to be affected" by the activities funded or proposed for funding, or contractual relationship.
Research means a systematic investigation designed to develop or contribute to generalizable knowledge. The term encompasses basic and applied research and product development.
Investigator means the principal Investigator and any other person who is responsible for the design, conduct, or reporting of research in question. For the purposes of these procedures relating to financial interests, "Investigator" includes the Investigator's spouse and dependent children.
III. Policies and Procedures
A. General: The applicable laws of the federal government and the State of Michigan and policies of the Board of Trustees of Michigan State University shall control University policies and procedures for addressing potential conflicts of interest.
B. Disclosure: When faculty Investigators prepare an application for research grants, cooperative agreements or contracts from either NSF or PHS, each Investigator who is planning to participate in the research must submit to his or her departmental chairperson and dean, two days prior to submission, a listing of his/her known Significant Financial Interests (and those of his/her spouse and dependent children): (i) that would reasonably appear to be affected by the research for which PHS or NSF funding is sought; and (ii) in entities whose financial interests would reasonably appear to be affected by the research.
Alternately, an Investigator may submit a financial Disclosure statement of all Significant Financial Interests to the departmental chairperson annually, and update it as new reportable Financial Interests are obtained.
Whichever method of initial disclosure they use, Investigators must renew their Disclosures during the period of an award or contract or cooperative agreement as new reportable Significant Financial Interests are obtained, or at least annually.
It is the Principal Investigator's responsibility to name the other persons on the research project who meet the regulatory definition of Investigator, and to be sure that they have disclosed any significant financial interests.
C. Primary Review: When, upon receipt and review of a Disclosure, the Departmental Chairperson or School Director and the Dean determine that there is no apparent or potential conflict of interest, the Investigator may submit the application for an NSF or PHS grant, cooperative agreement or contract, or may continue an existing NSF- or PHS-funded project. The Dean and Departmental Chairperson or School Director indicate by their signatures on Significant Financial Interest Disclosure Form that they have completed their review of the disclosure. When the Investigator is also an administrator, the Primary Review will be completed by the Provost and Vice President for Research and Graduate Studies (VPRGS). A copy of the disclosure form shall accompany the "Transmittal Sheet for Request for Contract, Grant or Gift Support" (transmittal sheet) and shall be kept in the applicant's file in the Office of the Vice President for Research and Graduate Studies.
D. Secondary Review and Management: When the Departmental Chairperson, School Director or Dean determines from the Disclosure that one or more of the Investigators has a Significant Financial Interest that may present a conflict, that potential conflict shall be reported to a Conflict Review Committee (CRC). The CRC shall be comprised of three faculty members appointed by the Vice President for Research, from a list of names submitted by the deans and the Director of the NSCL after consultation with the College Advisory Council or other equivalent faculty advisory group. An Assistant Vice President for Research shall serve as the non-voting chairperson of the CRC. In consultation with University Counsel and the Director of the Office of Contract and Grant Administration, the CRC must ensure that conflicting interests can be appropriately managed, reduced, or eliminated prior to the University's expenditure of any funds from a PHS or NSF award. The CRC shall report its review activities and decisions to the VPRGS.
Examples of conditions or restrictions that might be imposed by the CRC to manage conflicts of interest include, but are not limited to:
- Public Disclosure of Significant Financial Interests;
- Monitoring of research by independent reviewers;
- Modification of the research plan;
- Disqualification from participation in all or a portion of the research funded by PHS or NSF;
- Divestiture of Significant Financial Interests;
- Severance of relationships that create actual or potential conflicts.
The CRC shall report to the PHS Awarding Component the existence of conflicting interests (but not the nature of those interests) when PHS funds are involved. The CRC shall inform NSF's Office of the General Counsel if it is unable to manage satisfactorily a conflict involving that agency's funds. The University shall defend complying Investigators in connection with conflicts being managed by the CRC.
E. Non-compliance: These new rules require major changes in the way University Investigators operate. There may be minor issues of non-compliance during the period of time when the procedures first take effect. Primary reviewers, the CRC and the VPRGS will work cooperatively with the principal Investigators and others to resolve any minor non-compliance.
Apparent significant non-compliance with these rules should be reported immediately to the CRC for evaluation and possible investigation. The CRC shall report non-compliance to the appropriate dean and the VPRGS. The CRC is responsible for bringing the University back into compliance with these regulations. The dean shall determine and impose sanctions, if any, against an Investigator. The Investigator has recourse to the Faculty Grievance Policy. If the CRC finds a dean in non-compliance, the matter shall be referred to the Provost to determine and impose sanctions, if any. If disciplinary sanctions are to be imposed, the Policy and Procedure for Implementing Disciplinary Action Where Dismissal Is Not Sought, or the Policy on the Dismissal of Tenured Faculty For Cause, apply.
F. Record Keeping: Chairpersons shall keep for three years disclosures by Investigators which do not reveal potential conflicts of interest. The CRC shall keep for seven years records of disclosure of potential conflicts and its management of those conflicts. Similarly, the CRC shall keep for seven years records of investigations into allegations of violations of these regulations. The CRC shall make this information available on request to NSF or PHS.
G. Confidentiality: All Disclosures by Investigators to Chairpersons, Deans, or the CRC shall be kept private and confidential, to the extent allowed by law. Sanctions will be imposed for inappropriate use of information secured during disclosure.
Significant Financial Interest Disclosure Form Pertaining to Applications for NSF and PHS Research Support
The NSF and PHS financial disclosure regulations are designed to ensure that the design, conduct, and reporting of research funded under PHS or NSF grants, cooperative agreements or contracts will not be biased by any conflicting financial interest of those investigators responsible for the research. Under these regulations, faculty applicants to NSF or PHS must disclose to the University potential conflicts of interest, and the University must manage, reduce, or eliminate disclosed financial conflicts of interest.
Disclosure forms are available in departmental offices or from the Office of Intellectual Integrity (5-2180).
1 In this policy, "Provost" means "Office of the Provost" and that the Associate Provost and Associate Vice President for Academic Human Resources (or other administrator in the Provost's Office) has been delegated responsibility for this role in order to clearly separate any future decision making required by the Provost pursuant to the Faculty Grievance Policy with respect to implementation/enforcement of this policy.