THE UNIVERSITY OF MEMPHIS OPERATING PROCEDURES
SUBJECT: Disclosure of Financial Interests Related to Federally
Sponsored Projects
PROCEDURE NO.: 2A:18:01A DATE: October 2, 1995
SUPERSEDES PROCEDURE NO.: None
POLICY AND PROCEDURE ON DISCLOSURE OF FINANCIAL INTERESTS
RELATED TO FEDERALLY SPONSORED PROJECTS
I. POLICY
It is the policy of The University of Memphis (University) that any University
employee responsible for the design, conduct, or reporting of a sponsored
project at the University must disclose significant personal financial
interests related to the sponsored project. When the University determines
that such an interest might reasonably appear to be directly and significantly
affected by the sponsored project, the University will take steps either to
manage or to eliminate the conflict of interest, pursuant to Section VI. of
this Policy.
II. PURPOSE AND SCOPE OF THE POLICY AND PROCEDURE
The purpose of this Policy is to establish a process of open disclosure and
review, to identify conflicts of interest between an Investigator's sponsored
project obligations and personal financial interests or obligations, and to
establish a process to reduce, manage or eliminate such conflicts so that
financial interests of Investigators do not compromise the objectivity with
which projects are designed, conducted, or reported. This Policy applies to
all research supported through external and internal funds and to all other
activities supported under externally sponsored agreements. Initially,
however, for the first period (October1, 1995-June 1997), the Policy will
apply only to projects submitted for support from the Public Health Service
and National Science Foundation; beginning July 1, 1997, the Policy will
apply to all projects submitted for support from ANY Federal agency. Private
and other governmental sponsors and intramural programs will be phased in
subsequently. PROJECT DIRECTORS AND PRINCIPAL INVESTIGATORS OF ALL EXTERNALLY-
FUNDED PROJECTS ARE, NONETHELESS, REQUIRED TO BE AWARE OF AND COMPLY WITH THEIR
OWN SPONSOR'S POLICIES AS WELL AS THE POLICIES OF THE UNIVERSITY AND/OR THE
TENNESSEE BOARD OF REGENTS REGARDING POSSIBLE CONFLICTS OF INTEREST.
This policy is consistent with the Public Health Service (PHS) regulations,
"Objectivity in Research," 42 CFR Part 50 and 45 CFR Part 94 and the National
Science Foundation (NSF) regulations, "Investigator Financial Disclosure
Policy," effective for all projects beginning on or after October 1, 1995.
This Policy supplements, but does not replace other University or Tennessee
Board of Regents policies on Conflicts of Interests (SEE UNIVERSITY CONFLICT
OF INTEREST POLICY 1:2A:11:05 AND TENNESSEE BOARD OF REGENTS POLICY ON
CONFLICT OF INTEREST 1:02:03:10). This Interim Policy on Disclosure of
Financial Interests Related to Sponsored Projects is directed toward dis-
closure of any financial interest that would reasonably appear to be affected
by the work performed under a sponsored project.
III. DEFINITIONS
A. UNIVERSITY REVIEWING OFFICIAL - An official or officials designated by the
Provost or the Vice Provost for Research and the Graduate School to review
completed Disclosure of Financial Interests forms and to determine whether any
reported financial interest would reasonably appear to be directly and
significantly affected by the sponsored project.
B. DISCLOSURE OF FINANCIAL INTERESTS (DISCLOSURE) - Statement to be completed
by the Investigator.
C. FINANCIAL INTEREST - Anything of monetary value, including, but not limited
to:
1. Income, including salary, consulting payments, honoraria, royalty payments,
dividends, or any other payments or consideration with value FROM A SINGLE
BUSINESS ENTITY during the prior twelve months, exceeding $10,000 when
aggregated for an Investigator and the Investigator's spouse and dependent
children; or
2. Income, including salary, consulting payments, honoraria, royalty payments,
dividends, or any other payments or consideration with value FROM A SINGLE
PUBLIC OR NONPROFIT ENTITY during the prior twelve months, exceeding
$10,000 when aggregated for an Investigator and the Investigator's spouse
and dependent children, excluding income from seminars, lectures, teaching
engagements, or service on advisory committees or review panels; or
3. Equity in the form of stock, stock options, warrants, loans, real estate,
or any other investment or ownership interest exceeding either $10,000
(current market value if publicly traded; value of the option or the
difference between the trading price and the option price, whichever is
higher; otherwise, amount of investment) or a 5% ownership interest, for
any one enterprise when aggregated for an Investigator and the
Investigator's spouse and dependent children; or
4. A management position, such as board member, director, officer, partner,
or trustee, held by the Investigator; or
5. Intellectual property interest held by the Investigator, or Investigator's
spouse or dependent children on a patent, patent application, or a copy-
right of software assigned or to be assigned to a party other than the
University or the Board of Regents.
A Financial Interest does not include payments by The University of Memphis or
the Tennessee Board of Regents, such as salary, stipends, royalty payments,
honoraria, reimbursement of expenses, or any other similar remuneration from
the University.
D. INVESTIGATOR - Any University employee RESPONSIBLE for the design, conduct,
or reporting of the results of the work performed or to be performed under the
sponsored project. This includes the Principal Investigator, Project Director,
Investigator, Co-Investigators, and any other individual who has independent
responsibility for accomplishing project objectives.
E. INDEPENDENT SUBSTANTIVE REVIEW COMMITTEE (ISRC) - A Committee appointed by
the Provost, Vice Provost for Research and the Graduate School, or their
designee to review Disclosures and relevant features of the sponsored projects
and, on the basis of the review, to recommend to the Provost, Vice Provost for
Research and the Graduate School, or their designee whether funding for the
project should be accepted, and if so, whether any modifications or conditions
are needed.
F. RELATED FINANCIAL INTEREST - When the work to be performed under the
sponsored project and the results of the undertaking would reasonably appear
to affect the financial interest, the financial interest is "related" to the
sponsored project and must be DISCLOSED. The following are examples of
financial interests that are "related" to a sponsored project:
1. The Investigator is carrying out a project whose results would be relevant
to the development, manufacturing, or improvement of the products or
services of the entity in which there is a financial interest;
2. The Investigator has a financial interest in an entity which might
manufacture or commercialize a drug, device, procedure, or any other
product used in the project or that will predictably result from the
project;
3. The Investigator has consulting income in his/her professional field
(Consulting activities in the professional field of the Investigator are
considered "related" interests and all income must be disclosed if it
meets the threshold for a financial interest);
4. The Investigator has a financial interest in an entity and the sponsored
project proposes to subcontract a portion of the work, or lease property,
or make referral of participants to, or make purchases from the entity;
5. The Investigator has a financial interest in an entity that is part of a
consortium or that will otherwise participate in the sponsored project.
Financial interests which are not "related" to the sponsored project do not
need to be disclosed.
G. UPDATE OF DISCLOSURE OF FINANCIAL INTERESTS (UPDATE) - Statement to be
completed by Investigators either annually or whenever they acquire new
financial interests that were not listed in the original Disclosure of
Financial Interests and that are related to their projects.
IV. DISCLOSURE REQUIREMENT
For each sponsored project application, the Principal Investigator must fully
disclose all related financial interests and must insure that all other
Investigators on the project have also completed such Disclosures prior to the
University's acceptance of the award. All Investigators must also file an
Update of Disclosure of Financial Interest either when they acquire new
financial interests related to active projects, or on an annual basis, as
determined by Vice Provost for Research and the Graduate School. THE
PRINCIPAL INVESTIGATOR IS RESPONSIBLE FOR ENSURING THAT SUBCONTRACTORS TO A
SPONSORED PROGRAM CERTIFY TO THE UNIVERSITY ANY CONFLICTS OF INTEREST RELATED
TO THE SPONSORED PROGRAM.
Alternatively, the Office of Research Support Services may accept a single,
annual Disclosure from an Investigator in lieu of a separate Disclosure with
each award, provided that a Designated University Official and, if necessary,
an Independent Substantive Review Committee (ISRC), can assure that each
specific sponsored project and the related financial interests were examined
in the scope of the annual review.
Under the Tennessee Open Records Act, T.C.A. 10-7-503, Disclosures and Updates
are open to the public inspection upon request.
V. REVIEW OF DISCLOSURES
The Disclosure shall be reviewed by a University Reviewing Official to
determine whether any related financial interest is one which would reasonably
appear to be DIRECTLY AND SIGNIFICANTLY affected by the proposed sponsored
project.
* A DIRECT IMPACT occurs when the project results would be directly relevant
to the development, manufacturing, or improvement of the products or
services of the organization in which the employee has a financial interest,
or when the organization is a proposed subcontractor or participant in the
project.
* A SIGNIFICANT IMPACT on the financial interest is one which will materially
affect the value of the organization, its earnings, or the sales of its
products, or the organization is a proposed subcontractor or participant
in the project.
Based on information provided in the Disclosure, the University Reviewing
Official may determine that there is no reasonable basis on which to conclude
that a project could directly and significantly affect the financial interest
and that the financial interest is not likely to affect the design, conduct
or reporting of the project. In this case, a record should be made of the
Reviewing Official's action and the project can proceed without further
review. In the event that either the Investigator or the University Reviewing
Official concludes that the project might have a direct and significant impact
on the financial interest could affect the design, conduct, and reporting of
the project, the Disclosure and appropriate documentation shall be forwarded
to the ISRC for consideration. The ISRC makes a final recommendation to the
Provost, Vice Provost for Research and the Graduate School, or their designee
about whether the project should proceed and whether any conditions or
restrictions should be placed on the project to manage the conflict of
interest. The same review process takes place when an Investigator files an
Update form reporting a new, related financial interest.
VI. MANAGEMENT, REDUCTION OR ELIMINATION OF CONFLICTS OF INTEREST
When an Investigator has financial interests that would reasonably appear to
be directly and significantly affected by the sponsored project, the ISRC
may recommend to the Provost, Vice Provost for Research and the Graduate
School, or their designee that the project may not proceed. Alternatively,
under certain circumstances, the ISRC may recommend that the Office of
Research Support Services impose special conditions or restrictions to manage
the conflict of interest so the effect of the Related Financial Interest(s)
on the design, conduct, or reporting to the sponsored project(s) can be
minimized. Investigators may also be asked to make recommendations about how
to manage the conflict of interest. Examples of conditions or restrictions
that may be imposed to manage, reduce or eliminate conflicts of interest
include:
* Public disclosure of the Related Financial Interest(s);
* Monitoring of the project by independent reviewers;
* Modification of the research or project plan;
* Disqualification from participation in all or a portion of the project;
* Divestiture of the Related Financial Interest(s), or
* Severance of relationships that create actual or potential conflicts.
The review of the Disclosure(s) and adoption of conditions or restrictions to
manage, reduce, or eliminate the conflict of interest must be complete within
ninety (90) days of receipt of the award, unless the sponsor requires action
by an earlier date. Some sponsors may also require a report of the existence
of a conflict of interest and assurances that is has been managed, reduced or
eliminated.
VII. SANCTIONS
Failure to file a complete Disclosure of Financial Interests or Update or to
comply with any conditions or restrictions imposed on the conduct of the
project under this Policy will be grounds for discipline of the faculty member,
up to and including termination for adequate cause. In addition, Federal
regulations may require reports to the Federal sponsor regarding any violations
of this policy. Sponsors may suspend or terminate the award and/or debar an
Investigator from receiving future awards in the event of failure to comply
with applicable Federal regulations on disclosure, review, and management of
significant financial interests related to Federally sponsored projects.
VIII. RESPONSIBILITIES AND ADMINISTRATION:
Records regarding Disclosures, Reviewing Official's determinations, ISRC
recommendations, and University actions regarding management, reduction and
elimination of a conflict of interest must be retained for five (5) years
beyond the termination or completion of an award, or until resolution of any
action by the sponsor involving the records, whichever is longer.
Implementation of this Policy shall include compliance with applicable
sponsor regulations governing institutional responsibilities, certification
of compliance, reporting requirements, and other duties required under the
sponsor's regulations. The Office of Research Support Services will examine
local conditions and obligations to determine what additional actions and
procedures need to be implemented to bring local practices into comformance
with this Policy. Copies of guidelines, procedures, and forms developed by
individual laboratories should be sent to the Office of Sponsored Research.