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MICHIGAN STATE UNIVERSITY
Guidelines for Potential Conflicts of Interest
Pertaining to Applications for NSF and PHS Research Support,
Effective 1 October 1995
I. Introduction
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.
II. Definitions
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 nonprofit entities, (3) income from
service on advisory committees or review panels for public or nonprofit
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 Chair 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:
1) Public Disclosure of Significant Financial Interests;
2) Monitoring of research by independent reviewers;
3) Modification of the research plan;
4) Disqualification from participation in all or a portion of the
research funded by PHS or NSF:
5) Divestiture of Significant Financial Interests;
6) 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. Noncompliance: These new rules require major changes in the way
University Investigators operate. There may be minor issues of
noncompliance 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 noncompliance.
- 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 Procedure. 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.
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