Disclosing Financial Interests: Federal (Non-PHS) Sponsored Research

Beginning in 1995, federal regulations, as well as the University of California policy's on disclosure of financial interests and the management of conflicts of interests related to sponsored projects, began requiring researchers at UCSD, who receive funding from a particular federal sponsor, to disclose certain significant financial interests. Significant refers to specific financial thresholds, as well as the researcher's financial interests or the financial interests of the entity, that could reasonably appear to be affected by the federal sponsored research.

Keep in mind that having an outside financial interest is not automatically a conflict of interest. It is also important to remember that some financial interests are of such low value and/or limited duration that they do not meet the definition or threshold of disclosable financial interests, or are so small or inconsequential that the research support from the sponsor can be accepted with no further action. And, almost all disclosed financial interests and resulting conflicts of interest can either be reduced, eliminated, or managed so that the research project can be accepted and funded by the proposed sponsor.

Please note: PHS and DOE do not follow Non-PHS.

Disclosure is required at the time of submission for any proposal being submitted to:

• National Science Foundation (NSF)
• National Aeronautics and Space Administration (NASA)
• California Institute for Regenerative Medicine (CIRM)
• UC Discovery Grant Programs:
  • bio - Biotechnology
  • com - Communications and Networking
  • dig - Digital Media
  • ele - Electronics Manufacturing and New Materials
  • itls - Information Technology for Life Sciences
  • MICRO - Microelectronics
• UC Programs:
  • Breast Cancer Research Program (BCRP)
  • California HIV/AIDS Research Program (CHRP)
  • Tobacco-Related Disease Research Program (TRDRP)
• Subawards:
  • When a project is awarded through a subaward and the funds originating from NSF, CIRM, UC Discovery Grant Program, and UC Programs BCRP, TRDRP, and UARP.

For projects funded by the NSF and other sponsors who have adopted the NSF policy, disclosure is required with:

• Initial proposal
• Renewal proposals
• Annually or with any change in the investigator's financial interest(s)

For Federal projects that are not NSF (or have sponsors who have not adopted the NSF policy), disclosure is required with:

• Initial proposal
• Continuation proposals (if required)
• Renewal proposals
• Supplemental proposals
• When new personnel are added
• Any change with the investigator's financial interest(s)

• Training Grants
• Other Federal Agencies:
  
  • Air Force
  • Army
  • Department of Defense (DOD)
  • Department of Education
  • Department of the Interior (DOI)
  • Environmental Protection Agency (EPA)
  • National Endowment of Humanities (NEH)
  • National Oceanic and Atmospheric Administration (NOAA)
  • Office of Naval Research (ONR)
  • United States Geological Survey (USGS)
  • United States Institute of Peace (USIP)
• UC Discovery Opportunity Awards
• UC Programs other than BCRP, TRDRP, and UARP

Be sure to check with your proposal analyst for other specific agencies not listed above.

• Co-Principal Investigators
• Other Investigators
• Other individuals participating in the project

Please Note: Financial interests must be reported for the disclosing individual(s) and their spouse and dependent children. 

• Equity holdings in the entity
• Management position with the entity
• Consulting income received from the entity
• Honoraria received from the entity

The term “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 interest (e.g., stocks, stock options, private equity, or other ownership interests); venture or other capital financing, and intellectual property rights (e.g., patents, copyrights, and royalties from such rights).

In general terms, significant financial interests that must be disclosed can be separated into 4 main categories. These categories include, but are certainly not limited to:

Income from the entity:

Income of $10,000 or more from a single for-profit company or non-profit foundation, for services that can include: salaries, consulting income, honoraria from speeches or other services that were performed, royalty payments, and stock dividends and/or interest earned, or the proceeds from any stock sales. In addition, income also includes compensation received by the University of California Health Sciences Compensation Plans.

Investments in the entity:

Investments in the entity can include stocks, bonds, stock options, including margin or brokerage accounts or loans.

• For publicly traded entities: these investments are defined as having a market value of $10,000 or more, or exceeding a 5% ownership interest.
• For privately held entities: these investments are based on the amount of the investment, not market value, of either $10,000 or more or exceeding a 5% ownership interest.

Positions with the entity:

Positions with the entity, which can include positions as founder, partner, director, manager, officer, trustee, employee, or any other position of management with the entity.

Intellectual Property:

Intellectual property interest, meaning any invention, discovery, or work of authorship, in a patent, patent application, or a copyright assigned or licensed to a party other than The Regents of the University of California.

Please Note: These 4 financial interest categories above each use a 12 month threshold for financial disclosure, but it is applied in different ways. For example:

• Income uses the 12 month threshold in 2-ways: for activities that took place 12 months prior to the time of financial disclosure, as well as for 12 months of future or anticipated financial interest.
• Investments, Positions, and Intellectual Property applies only to current, as well as for 12 months of future or anticipated financial interest.

• Payments made by The Regents of the University of California, including salary, stipends, royalty payments, honoraria, reimbursement of expenses, or any other remuneration from the University.
• Income from seminars, lectures, teaching engagements, or service on advisory committees or review panels of public and non-profit entities.
• Financial interests not related to the sponsored project. For example, a computer scientist conducting research on computer-aided drug design does not need to disclose financial interests (stock in companies such as IBM or Xerox) if these companies are not conducting research or manufacturing in the field of computer-aided drug design.
• Financial interests unrelated to their field of research, such as Wal-Mart stock or real estate investments.

• Investigators must complete and submit disclosure in Kuali COI system.

• If no financial interest exists, then disclosure is approved. This is referred to as a Negative Disclosure. When necessary, the COI Office informs the sponsor project office to release funds upon receipt of the award.
• If a financial interest exists, this is referred to as a Positive Disclosure:
  • Positive disclosure is referred to the Independent Review Committee (IRC) for further review
  • The IRC recommends a conflict of interest management strategy to the chancellor
  • Chancellor either endorses or disagrees with the recommended strategy
  • Memo is issued by the Conflict of Interest Office advising the researcher of the Chancellor's decision

Please Note: Once the disclosure of financial interests forms have been submitted, they can be made available, upon request, to the public, under the California Public Records Act.

To assist you with a better understanding of what a conflict of interest may look like for a researcher here at UCSD, and how they may occur, let's take a look at a couple of basic, straight-forward federal examples and/or scenarios.

Scenario #1:

Dr. Serena Drysdale's research focus is inorganic nanotechnology. Dr. Drysdale is a member of the Scientific Advisory Board for Nanosys, a company the manufactures high performance inorganic nanostructures for the use in fuel cells and flat-panel displays. The department of Nanoengineering received a $3 million National Science Foundation (NSF) grant to research nanostructures for use in MP3 players and digital cameras. Dr. Drysdale will be the co-principal investigator on this project.

• Does Dr. Drysdale have a financial interest that may result in a potential conflict of interest?

• Yes, Dr. Drysdale is a member of the Scientific Advisory Board and thus is able to influence the research focus of Nanosys. Nanosys could also benefit from the research results of this NSF project. In addition, Dr. Drysdale's research field, the nature of her research project, and Nanosys products are all related.