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Disclosing Financial Interests: Service Agreements

See financial interest reporting requirements for service agreements.

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Overview

A service agreement is a legally binding agreement between the University and an external entity, such as a private corporation or federal agency. A service agreement sets forth the terms and conditions pertaining to specific goods or services to be provided by the University. 

The primary purpose of most service agreements and incoming purchase orders is for a one-time or non-continuous business or commercial activity, for which it is shown conclusively that satisfactory facilities, goods, and/or services do not exist elsewhere.

For purposes of this type of agreement, services are defined as small, specifically-designed projects and are confined to those projects that provide services involving classification, diagnostics, or testing of a sponsors data, samples, mechanisms, procedures, or products. These services are performed using University resources, including personnel, equipment, or facilities.

The University of California has issued a policy on Disclosure of Financial Interests and Management of Conflicts of Interest in Private Sponsors of Research as mandated by Fair Political Practices Commission.

Disclosure forms

700-U Form:

The State of California's Fair Political Practices Commission requires disclosure of financial interests by using the State of California's Statement of Economic Interest for Principal Investigators, or the 700-U form. Keep in mind that all financial disclosures must also be updated during the entire period of the award, as new reportable significant financial interests occur.

The 700-U form must be filled out in its entirety by the principal investigator who must disclose their financial interests, as well as the financial interests of their spouse or registered domestic partner, and/or their dependent children.

Addendum:

If a positive financial interest is disclosed, meaning a conflict of interest may exist due to the information that was disclosed on the 700-U form, a conflict of interest Addendum form must also be completed by the principal investigator. The Addendum provides the opportunity for the principal investigator to more fully describe their financial interest and indicate whether that financial interest could directly and significantly affect the sponsored project.

Financial interests

Financial interests are the most important component or components of a conflict of interest for researchers. In broad terms, financial interests can be defined as anything of economic value,  including a fiduciary relationship with an outside entity. Some examples include, but are certainly not limited to:
  • Salaried or unsalaried positions with the sponsor
  • Scientific advisory board memberships
  • Vested or non-vested stock or stock options
  • Gifts
  • Loans
  • Travel reimbursements
  • Income received through honoraria or consulting

A financial interest refers to the direct financial relationship between the principal investigator and the sponsor, or indirectly through their spouse, their registered domestic partner, or their dependent children. Some examples of this include:

  • Equity holdings in the sponsor
  • Management positions with the sponsor
  • Consulting income received from the sponsor
  • Honoraria received from the sponsor
  • Principal Investigator's spouse or registered domestic partner being an employee of or having a financial interest in the sponsor

Types of financial interests

The Principal Investigator at UCSD must disclose their financial interests, as well as the financial interests of their spouse or registered domestic partner, and/or their dependent children. In general terms, financial interests that must be disclosed for the service can be separated into 6 main categories, and are only for activities that took place 12 months prior to the time of financial disclosure. These categories include, but are certainly not limited to:

Positions with the sponsor:

These can include positions as founder, partner, director, manager, officer, trustee, employee, or any other position of management with the sponsor within the past 12 months.

Investments in the sponsor:

Investments in the sponsor, within the past 12 months, can include stocks, bonds, warrants, and stock options, including margin or brokerage accounts that have a value totaling $2000 or more.

Income from the sponsor:

Income received from the sponsor within the past 12 months, which 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.

Gifts from the sponsor:

Gifts from the sponsor, which includes the gift or the promise of a gift received from the sponsor of $50 or more, or multiple gifts from a single sponsor totaling $50 or more, within the past 12 months. Keep in mind that it is the acceptance of the gift, not the ultimate use of the gift, that imposes the obligation to disclose. Therefore, a personal gift must be disclosed even if never used it or if given away to another person. If the exact amount of the gift is not known, a good faith estimate of the item's fair market value must be made. Some common examples of disclosable gifts include: tickets or passes to sporting or entertainment events, or amusement parks, parking passes, transportation and lodging, and forgiveness of a loan (received by from the sponsor).

Loans from the sponsor:

Loans from the sponsor require disclosure if the outstanding balance has exceeded $500 within the past 12 months. This also includes community property interest in loans received by the spouse or registered domestic partner.

Travel Reimbursements from the sponsor:

Travel reimbursement from the donor for travel expenses within the past 12 months, which includes per diem, payments for transportation, travel advances, lodging, and meals that were received from the donor.

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