| See also supplementary Policy issued on 10-06-97 and effective 10-15-97. |
April 26, 1984
CHANCELLORS
LABORATORY DIRECTORS
MEMBERS, PRESIDENT'S CABINET
Dear Colleagues:
The attached policy on Disclosure of Financial Interest in Private Sponsors of Research supersedes the policy issued on April 8, 1982, and is effective immediately. The revised policy has been reviewed by many of you as well as the Academic Council, and it has received your endorsement. It has also been discussed with the Fair Political Practices Commission.
The revisions in this policy are a result both of our increased experience in this area, and of our continuing endeavor to refine and improve procedures. Most of the revisions to the policy are in Section IV, which gives additional guidance regarding the role of the Independent Substantive Review Committees.
Senior Vice President Frazer will issue the Guidelines for Disclosure and Review of Principal Investigator's Financial Interest in Private Sponsors of Research, which have also been revised, to implement this Policy.
Sincerely,
David Pierpont Gardner
University of California
Office of the President
April 26, 1984
UNIVERSITY POLICY ON DISCLOSURE OF
FINANCIAL INTEREST IN PRIVATE SPONSORS OF RESEARCH
I. Policy on Disclosure of Financial Interest in Private Sponsors
of Research
A principal investigator must disclose whether or not he or
she has a direct or indirect financial interest in the sponsor
of research which is funded in whole or in part (a) through a
contract or grant with a non-governmental entity or (b) by a
gift from a non-governmental entity which is earmarked by the
donor for a specific research project or a specific principal
investigator. Disclosure statements must be filed (a) before
final acceptance of such a contract, grant, or gift; (b) when
funding is renewed; and (c) within 90 days after expiration in
the case of a contract or grant, or after funds have been
completely expended in the case of a gift. The Statements
will be open to public inspection. When disclosure indicates
that a financial interest exists, an independent substantive
review of the disclosure statement and the research project
must take place prior to acceptance of the contract, grant, or
gift. Department chairs must disqualify themselves from
approving a research proposal for a project which is funded in
whole or in part by a non-governmental entity in which they
have a financial interest.
This policy is consistent with California Administrative Code,
Title 2, Section 18705.
II. Definitions
A. "Financial Interest." A "financial interest" in the
sponsor of research means:
1. A direct or indirect investment in the sponsor worth
more than $1,000;
2. A position as director, officer, partner, trustee,
employee of or any other position of management in the
sponsor;
3. Income from the sponsor, including consulting income and
gifts aggregating $250 or more in value, received by or
promised to the principal investigator within 12 months
prior to the time the award is made. (For the purposes
of this policy, "income" is further defined as in Gov.
Code, Section 82030.)
B. "Indirect Investment" or "Indirect Financial Interest." A
principal investigator has an "indirect investment" or
"indirect financial interest" in a sponsor if:
1. His or her spouse or dependent child has a financial
interest in the sponsor;
2. The principal investigator, his or her spouse, or
dependent child own directly, indirectly, or
beneficially a 10 percent interest or greater in any
business entity or trust which has a financial interest
in the sponsor of the research.
C. "Equity (Ownership) Interest." For the purposes of this
policy, an "equity (ownership) interest" shall be an
investment of more than $1,000 in the sponsor by the
principal investigator, his or her spouse, or dependent
children.
III. Disclosure Requirement
When a principal investigator has disclosed a financial
interest in a sponsor of research, the required financial
disclosure statement shall contain:
A. Disclosure of Income
1. The name and address of the sponsor and a general
description of the business activity, if any, of the
sponsor;
2. A statement whether the aggregate value of income from
the sponsor, or in the case of a loan, the highest
amount owed to the sponsor, was at least $250 but did
not exceed $1,000, whether it was in excess of $1,000
but was not greater than $10,000, or whether it was
greater than $10,000;
3. In the case of a gift of $50 or more, a description of
and the amount of the gift; and
4. In the case of a loan, the annual interest rate and the
security, if any, given for the loan.
B. Disclosure of Equity or Ownership Interest and Disclosure
of Position in Sponsor
When an investment or equity (ownership) interest is
required to be disclosed, or when the principal
investigator is a director, officer, partner, trustee,
employee, or holds any position of management, the
disclosure statement shall contain:
1. A general description of the business activity in which
the sponsor is engaged;
2. A statement whether the fair market value of the
investment or interest exceeds $1,000 but does not
exceed $10,000, whether it exceeds $10,000, but does not
exceed $100,000, or whether it exceeds $100,000; and
3. The position held in the entity by the principal
investigator.
IV. Independent Substantive Review Committees
When disclosure indicates that a financial interest exists, an
independent substantive review of the disclosure statement and
research project shall take place before a contract, grant, or
gift is accepted. Chancellors, Laboratory Directors, and the
Vice President--Agriculture and Natural Resources, after
consultation with appropriate academic and administrative
groups, shall develop a procedure for independent substantive
review including the designation or establishment of a
committee to conduct the review.
The committees shall review disclosure statements and relevant
features of the research project and on the basis of the
review recommend to the Chancellor, Laboratory Director, or
the Vice President--Agriculture and Natural Resources whether
funding for the research project should be accepted and, if
so, whether any modifications or conditions are needed. The
committees shall be sufficiently qualified through the
experience of their members to promote respect for their
advice.
The committees should possess the academic, professional, and
administrative competence and expertise necessary to review
the subject matter of the proposed research and to assess the
University and other public interests involved. The committee
may include graduate students and one or more qualified
members not affiliated with the University. The committee may
consult with administrators, faculty, and others involved in
the research and review process and the academic discipline in
question. It may also consult with or request principal
investigators and department chairs to provide information in
order to make a fully informed recommendation. It may also
invite individuals with competence in special areas to assist
in the review process which require expertise beyond, or in
addition to, that available to the committee. The committee
review should occur as early as possible in the overall review
process to assure that commitments are not inadvertently made
to the sponsors. The committee shall, in its written
documentation of the review, address each of the principles
set forth in the Guidelines. The basis for the recommendation
should be clearly established in the documentation of the
review.
V. Implementation
Chancellors, Laboratory Directors, and the Vice President--
Agriculture and Natural Resources shall implement this policy.
They must provide the committees with appropriate
administrative support, assure that technical advice on
conflict of interest matters is provided, and assure that
appropriate documents related to this policy are available to
the public, as required by law.
The Senior Vice President--Academic Affairs has responsibility
for assuring compliance with applicable State law, this
policy, and related University policies. He is responsible
for developing and issuing implementing guidelines for this
policy. He serves as the liaison on these matters with the
Fair Political Practices Commission and with the campuses,
Laboratories, and the Vice President--Agriculture and Natural
Resources. He consults with the Senior Vice President--
Administration when financial reporting by principal
investigators affects the Senior Vice President--
Administration's Filing Officer responsibilities under the
Political Reform Act.
April 27, 1984
CHANCELLORS
LABORATORY DIRECTORS
MEMBERS, PRESIDENT'S CABINET
Dear Colleagues:
I am pleased to issue the revised Guidelines for Disclosure and Review of Principal Investigators Financial Interest in Private Sponsors of Research. They supersede the Guidelines issued April 9, 1982, and are effective immediately. This document, along with the revised Policy (issued by President Gardner April 26, 1984), has been reviewed by many of you, as well as by the Academic Council. It has also been discussed with the Fair Political Practices Commission. This extensive review process has taught us a great deal about our accomplishments and the ways in which our efforts respond to the interests of the University and the public. The revised Policy and Guidelines build on our experience and should enable us to carry out our responsibilities even more effectively.
The most significant change in the Guidelines concerns the review process for statements which indicate the existence of a financial interest on the part of the principal investigator. This revision is in Section III which gives additional guidance on the role of the review committees. During our round of consultations, one observation we have made about this process concerns the importance of including sufficient information in the written summaries you provide to substantiate the review committee recommendations.
We will be continuing our consultations within the University on these matters and are planning to hold a meeting this spring with campus officials to discuss procedures and other related issues. We intend to hold such meetings on a regular basis to enable campuses to learn from each other's experiences and to assist in refining and improving our procedures.
I appreciate your continuing assistance in this matter.
Sincerely,
William R. Frazer
cc:
University of California
Office of the President
April 27, 1984
GUIDELINES FOR DISCLOSURE AND REVIEW
OF PRINCIPAL INVESTIGATOR'S FINANCIAL INTEREST
IN PRIVATE SPONSORS OF RESEARCH
These Guidelines implement the University Policy on Disclosure of
Financial Interest in Private Sponsors of Research
I. Rationale
University research is currently reviewed according to the
principles specified below and to other well-established
policies guiding the conduct of sponsored research,
including the principle that researchers must be free to
pursue knowledge and that this freedom, which is essential
to the research process, must not lightly be abridged. The
proposed review is supplemental to this process and takes
advantage of the expertise and structure of the existing
system. While it is normally the case that a principal
investigator takes responsibility for the central issues
raised in these guidelines, when a principal investigator
has a financial interest of the sort defined in the
University Conflict of Interest Code regarding disclosure,
it is possible that his or her judgment may appear to be
affected by potential financial gain rather than by the
pursuit of knowledge. Therefore, it is proper that the
principal investigator, the University community, and the
public be assured that the principles central to the
research process be followed.
II. Principles
A. Traditional conflict of interest situations should
continue to be avoided
In the conventional sense, conflict of interest refers
to situations in which employees may have the
opportunity to influence the University's business
decisions in ways that could lead to personal gain or
give advantage to associates or firms in which employees
have an interest. Principal investigators, like all UC
employees, are expected to continue to separate their
University and private interests in accordance with
existing University policies and State law.
B. Research is appropriate to the University
The research must be appropriate to the mission of the
University, i.e., promising significant contributions to
scholarship and knowledge and, when possible, providing
appropriate opportunities for students. The suitability
of the research would be judged according to the
standards of the discipline and should be guided by the
principles and policies of Regulation 4, Special
Services to Individuals and Organizations.
C. The teaching and research environment is open
The teaching and research environment should continue to
promote the free exchange of ideas, information, and
materials among students and faculty in all of their
forums--classrooms, laboratories, meetings, and anywhere
in the University. Selection of students for
participation in the research project should not be
inappropriately influenced by the interest of the
sponsoring firm.
D. Freedom to publish and to disseminate research results
is preserved
Consistent with current University policies, there
should be no limits placed on the freedom to publish,
except for short periods of delay that permit a sponsor
to comment or to permit filing of patent applications.
E. Licensing agreements require thorough review
If the principal investigator has a financial interest
in the sponsoring firm, justification for granting of an
exclusive license to the sponsoring firm will require
careful review to ensure that the best interests of the
public and the University are served. This review
should be coordinated with the Patent Administrator for
consideration in negotiations concerning patent rights.
F. University facilities and resources are used
appropriately
As is currently the policy, University resources--
supplies, equipment, and facilities, as well as staff
time--must not be used for the benefit of the firm
without proper compensation.
III. Procedures for conduct of committee review
Review committees should be guided by the following
practices and apply them as appropriate.
A. Assure adherence to relevant University policies,
guidelines, and regulations
These policies are identified; summarized, and
paraphrased in the Compendium of Specialized University
Policies, Guidelines, and Regulations Related to
Conflict of Interest issued on June 23, 1982 and revised
on August 11, 1982.
B. Consider, to the extent possible, the nature and extent
of the financial interest in the relationship of the
principal investigator to the sponsoring entity
In addition, to the extent possible, the potential
financial effects of the research both on the sponsor
and on the principal investigator should be considered.
C. Give special consideration to:
1. Conditions of research agreements which involve:
a. The testing of a sponsor's products or inventions
b. Research conducted in the sponsor's facilities
c. Research performed jointly with someone from the
sponsor
d. Research involving the provision of proprietary
information from the sponsor.
2. The relationship between the principal investigator
and the sponsor when the principal investigator has:
a. A significant ownership interest in the sponsor
b. The opportunity to receive substantial financial
benefits from the sponsor (e.g. bonuses, stock
options)
c. A long term or ongoing consulting relationship
with the sponsor.
D. Obtain additional information from the Principal
Investigator when necessary
Since committees may find it useful to get more
information from the principal investigator than is
covered in the financial disclosure statement, a sample
form is provided (entitled the Principal Investigator's
Addendum to Statement of Economic Interest) which
includes possible questions and also advice to the
principal investigator about the purpose of the request
and its legal status.
In the event that such a sample form, or the like, is
utilized, it must contain a privacy statement.
E. Apply the principles set forth in II above:
Some questions which might be considered when
appropriate are:
1. Do the facts and circumstances suggest that the
principal investigator's financial involvement with
the sponsoring organization will in any way affect or
impair the conduct of the research in accordance with
the applicable University policies and the highest
professional standards?
2. How will the interests of the University be
maintained in consideration of the principal
investigator's interest in the sponsor?
3. Will the research project lead to the advancement of
knowledge rather than to routine testing of primary
benefit to the sponsor?
4. How will this research project contribute to the
University's mission of teaching, research, and
public service?
5. Do the potential public benefits to be gained from
undertaking this research outweigh any potential
erosion of academic freedom, collegiality, or public
trust?
6. Are the best interests of the University and the
public served by granting an exclusive license to the
sponsor?
F. Make a Recommendation Providing the Necessary
Documentation and Indicating:
o Acceptance of the gift or grant.
o Non-acceptance of the gift or grant.
o Modification, specifying what modifications need to
be made, or what conditions need to be imposed.
Attachment to Guidelines
Sample Form
PRINCIPAL INVESTIGATOR'S
ADDENDUM TO STATEMENT OF ECONOMIC INTEREST
Campus
Principal Investigator _________________________________________
NAME DATE
Research Project ____________________________________________
Proposed Sponsor ___________________________________________
Introduction
(Include here information about the research process on the
campus for review of disclosures of financial interest; reasons
additional information is needed; and any other relevant
information.)
Request for Information (recommended questions)
1. Describe the nature of your financial interest in the
sponsor, such as your responsibilities as a director,
officer, partner, trustee, employee, consultant, ownership
interest including actual or promised options or
convertible securities or loans, and the relationship
between that interest or position and this research
project. Please indicate if there are any written
agreements between you and the sponsor.
2. Describe to the extent possible the potential financial
effect of this project on the sponsor.
3. Explain if you separately, or along with your spouse and
dependent children, own 10% or more of the entity
sponsoring this research project.
4. Describe your role in the research program of the
sponsoring entity.
5. Describe in some detail if the research project involves:
a. testing
b. licensing or other approval of any product or device by
a governmental agency; or
c. development of any product or other device of potential
economic value to the sponsor;
6. Explain how the research will lead to the extension of
knowledge, to an increased effectiveness in teaching, or
will provide a public service.
7. Provide funding information about the project:
a. Is the sponsor funding the full cost of the project?
b. If other funding sources are involved in this research
project, please indicate who they are and the dollar
value of their support.
c. Will the University be contributing to this project,
either by supporting faculty or other salaries, or by
directly providing supplies, equipment, or facilities?
8. Describe any participation of the sponsor in deciding the
direction of the research, once begun.
9. Describe the role of students in the research project.
10. Indicate whether selection of topics for students will be
restricted by commercial considerations.
11. Describe how the terms of your relationship with the
sponsor could affect the free exchange of ideas,
information, and materials among students and faculty.
12. Describe how the terms of your relationship with the
sponsor could affect publication or other dissemination of
research results by faculty or students involved in the
project.
13. Indicate whether the contract, grant, or gift funding this
research will require the granting of an exclusive license
to the sponsor.
14. Indicate whether the sponsor will be providing any
proprietary data for use on the project.
15. Indicate whether possession of proprietary data will
require controls on access to the research data. Please
describe any such requirements.
(Please include any additional information that may be of use to
the committee in reviewing the proposal, including any background
documentation about the development of the project, related
research interests, negotiations or other correspondence with the
sponsor, and a proposed budget if one has not already been
submitted.)
________________________________________
SIGNATURE
________________________________________
DATE
Privacy Statement*
The State of California Information Practices Act of 1977
(effective July 1, 1978) requires the University to provide the
following information to individuals who are asked to supply
information about themselves: The principal purpose for
requesting the above information is to accomplish the independent
and substantive review of positive financial disclosures as
required by the Policy on Disclosure of Financial Interest in
Private Sponsors of Research (Revised March 1984). University
policy and State law authorize maintenance of this information.
Submission of this information is mandatory. The consequences of
not providing all or any part of the requested information could
be nonacceptance of your award from the proposed sponsor. The
information is a public record under University policy and State
law. Individuals have the right to review their own records in
accordance with Academic Personnel Manual, Section 160.
Information about this records policy may be obtained from the
campus or Office of the President--Office of Academic Affairs.
The officials responsible for maintaining the information collected
on this form are the (appropriate campus officer) and the Senior
Vice President--Academic Affairs.
* This statement must be included in the form.