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Conflict of Interest in Sponsored Activities (A-11.5)

Original Implementation: January 30, 1996
Last Revision: July 21, 2009

  1. Policy Statement Relating to Conflict of Interest
    1. These guidelines define general university policy and procedures regarding conflicts of interest in relationship to sponsored activities involving research, education, and university service. Their purpose is to protect the credibility and integrity of Stephen F. Austin State University's (SFA) faculty and staff by ensuring public trust and confidence in the university's sponsored activities.
    2. In accordance with federal regulations, the university has a responsibility to manage, reduce, or eliminate any actual or potential conflicts of interest related to a sponsored activity. Thus, the university requires that investigators disclose any significant financial or related interest that would reasonably appear affected by sponsored activities.
    3. A potential conflict of interest occurs when divergence exists between the private interests of individuals and their professional obligations to the university, such that an independent observer might reasonably question whether an individual's professional actions or decisions are determined by considerations of personal gain, financial or otherwise. An actual conflict of interest depends on the situation and not on the character or actions of the individual.
    4. For purposes of this policy, a conflict of interest exists when the university reasonably determines that a significant financial interest could directly and significantly affect the design, conduct, or reporting of sponsored activities.
    5. The university shall take all necessary steps to assure that any identified conflicts of interests shall be managed, reduced, or eliminated prior to the university's expenditure of any funds under an award and certify to the funding agency that this has been done. Conflicts which cannot be satisfactorily managed, reduced, or eliminated must be disclosed to the funding agency. In some cases, it also might be appropriate to report voluntarily apparent conflicts of interest and the steps taken by SFA to mitigate them (such as relationships between grant and university personnel).
  2. Definitions
    1. Conflict of interest exists if the reviewer(s) of disclosures determines that a significant financial or related interest could directly and significantly affect the design, conduct, or reporting of sponsored activities.
    2. The term investigator, as used in this policy, means the principal investigator, project director, co-principal investigator(s), and any other person 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 also includes the investigator's spouse and dependent children.
    3. Sponsored activities include research, education, service, or training activities funded by an external sponsor.
    4. Significant financial interest means anything of monetary value, including but not limited to:
      1. Salary or other payments for services (e.g., consulting fees or honoraria);
      2. Equity interests (e.g., stocks, stock options, or other ownership interests); and
      3. Intellectual property rights (e.g., patents, copyrights, and royalties from such rights).

        4. The term does not include:

        • Salary, royalties, or other remuneration from the university;
        • 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 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; and
        • 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.
  3. Guidelines
    1. Each investigator is required to disclose the following significant financial interests:
      1. Any significant financial interest of the investigator that might reasonably appear to be affected by the research or educational activities funded, or proposed for funding, by an external sponsor; or
      2. Any significant financial interest of the investigator in an entity whose financial interest might reasonably appear to be affected by the research or educational activities funded, or proposed for funding, by an external sponsor.
    2. Regardless of the above minimum requirements, faculty or staff members in their 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.
    3. Each investigator who has significant financial interest requiring disclosure shall complete a Significant Financial Interests Disclosure Form and attach all required supporting documentation. The completed disclosure form must be submitted with the proposal and Proposal Clearance Form (PCF) to the Office of Research and Sponsored Programs (ORSP). Supporting documentation that identifies the business enterprise 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 PCF.
    4. As required by federal regulation, all significant financial interests must be disclosed prior to the time a proposal is submitted. All financial disclosures must be updated by investigators during the period of the award as new reportable significant financial interests are obtained. New reportable significant financial interests includes financial interests that become reportable due to an increase in value that meets the reporting threshold, as well as the acquisition of new interests that are reportable.
    5. The director of research and sponsored programs, or official designee, shall conduct an initial review of all financial disclosures. If the initial determination is made that there may be a potential for conflict of interest covered by this policy, the disclosure packet shall be referred to an investigating committee. Committee members are appointed by the provost and vice president for academic affairs after consultation with the director of ORSP, who serves as chair. If a conflict of interest exists, 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.
    6. Collaborators/subrecipients/subcontractors from other academic or not-for-profit institutions must either comply with this policy or provide a certification from their institutions that they 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. Subcontractors from commercial firms need not make a certification, except when the prime award requires a certification.
  4. Finding of Presence of Conflict of Interest
    1. Resolution
      1. Resolution of any potential or actual conflicts of interest shall not be required until after funding has been approved and prior to any expenditure of funds under the award.
      2. The investigating committee, along with the investigator, shall proceed to resolve any actual or potential problems revealed by the initial review of financial disclosures. In order for the conflict to be managed, reduced, or eliminated, the committee may recommend:
        • Public disclosure of significant financial or related interests; Monitoring of sponsored activities by independent reviewers; Modification of the sponsored activity plan;
        • Disqualification from participation in all or a portion of the activity funded that would be affected by the significant financial interests;
        • Divestiture of significant financial interests; and/or
        • Severance of relationships that create actual or potential conflicts of interest.
      3. If the investigating committee determines that imposing conditions or restrictions would either be ineffective or inequitable, and 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, the committee may recommend that, to the extent permitted by federal regulations, the sponsored activity go forward without imposing such conditions or restrictions. In these cases, the provost in consultation with the director of ORSP shall make the final decision regarding resolution.
      4. The approved resolution plan shall be documented in writing detailing the conditions or restrictions imposed upon the investigator in the conduct of the sponsored activity or in the relationship with the enterprise or entity.
      5. Actual or potential conflicts of interest shall be satisfactorily managed, reduced, or eliminated in accordance with these guidelines and all required reports regarding conflicts of interest submitted to the sponsor prior to the expenditure of any funds under an award.
    2. Records of investigator financial disclosures and of actions taken to manage actual or potential conflicts of interest shall be retained by the ORSP until three (3) years after the termination or completion of the award to which they relate, or the resolution of any government action involving those records.
  5. Enforcement
    1. The provost shall be responsible for determining and implementing sanctions on investigators who have violated this policy in terms of a conflict of interest resolution. The investigator shall be notified in writing of the recommended sanctions within twenty-one (21) calendar days. If the sanctions involve a recommendation for termination of employment, the university’s academic termination procedures shall be invoked. The university must take action as warranted by the seriousness of the violation including, but not limited to, one or more of the following:
      1. Removal from the activity;
      2. Special monitoring of future work;
      3. Letter of reprimand;
      4. Probation with conditions specified; and/or
      5. Termination.
    2. The university shall follow federal regulations regarding the notification of the sponsoring agency in the event an investigator has failed to comply with this policy.
    3. Individuals may appeal the judgment and/or the sanction. A written statement of the grounds for the appeal must be submitted to the president of the university within thirty (30) working days of written notification of the sanctions. Grounds for appeal include, but are not limited to, previously unconsidered material evidence, sanctions not commensurate with the finding, and failure to follow the prescribed process. Upon receipt of a written appeal, the president shall evaluate the evidence and make a determination. The president shall open an investigation if the previously unconsidered material evidence so warrants and may open an investigation if circumstances so dictate. The president's decision shall be conveyed to all parties within thirty (30) working days. In the case of termination, the appropriate university policies on termination for cause shall be followed.
  6. Other Policies

This policy has been developed in accordance with federal guidelines for sponsored activities. State laws regarding employee conduct may also apply to situations involving potential conflicts of interest.

Cross Reference: 42 CFR Part 50, Subpart F, 45 CFR Part 94, Faculty Handbook; Employee Conduct, E-15; Ethics Policy Statements, E-56.

Responsible for Implementation: Provost and Vice President for Academic Affairs

Contact for Revision: Director of Research and Sponsored Programs

Forms: Significant Financial Interest Disclosure Form