Conflict of Interest in External Funding Policy

*This policy applies to the following employment groups: MPP, Confidential, CFA, CSEA, Unit 6, and Unit 8.

1.00 Purpose

The purpose of this policy is to outline an institutional approach (applicable to the University and its auxiliaries) to the identification and management of conflicts of interest related to external funding, in a fashion which will foster both the conduct of scholarly activities and ensure compliance with federal and state regulations.

This policy is intended to reflect the University's commitment to the principles, goals, and ideals described in the CSUMB Vision Statement and its core values.

2.00 Introduction

California State University, Monterey Bay encourages campus personnel to engage in a variety of scholarly and creative activities, including those leading to external funding or income from public agencies, private entities and individuals, and entrepreneurial ventures. At times, such activities may create situations that lead to potential or real instances of conflict of interest. The University recognizes the obligation of individuals and the institution to ensure that instances of conflict of interest do not improperly affect university activities, including those conducted through auxiliary organizations. CSUMB intends to identify and address potential conflicts of interest that may arise among campus personnel proposing or engaging in externally funded activities.

This policy conforms to State of California (CA Government Code 87300) and federal government laws and regulations related to Conflicts of Interests. These regulations require CSUMB to establish and maintain a conflict of interest policy and implementing procedures. The intention of the policy set forth below is to establish a uniform policy that covers the state and federal laws and regulations currently in place, those anticipated, and to provide the public with accountability in the institution's dealings with external organizations.

3.00 General principals

The policy that follows is based upon the principle that CSUMB has a responsibility to manage, reduce, or eliminate any actual or potential conflicts of interest involving activities conducted under the authority of the University or its auxiliary organizations. Therefore, CSUMB requires that personnel disclose any financial interest, as defined below, that may present an actual or potential conflict of interest in the conduct of any sponsored activity, meaning all activities conducted through such mechanisms as grants, contracts, and other means. Specifically, the University seeks to ensure that such activities will not be compromised by any financial interest that will or may be reasonably expected to bias the design, conduct, or reporting of any such activities.

4.00 Definitions

Business means any corporation, partnership, sole proprietorship, firm, franchise, association, organization, holding company, joint stock company, receivership, business or real estate trust, or any other legal entity organized for profit or charitable purposes.

Conflict of Interest occurs when a divergence develops between an individual's private interests and his/her professional obligations to the University and its auxiliary organizations such that an independent observer might reasonably question whether the individual's professional actions or decisions are determined by considerations of personal gain, financial or otherwise. Reviewer(s) of disclosure statements can find an actual or potential conflict of interest when it is determined that a financial interest of the investigator could directly or significantly affect the design, conduct, or reporting of activity(ies) funded or proposed for funding. Each investigator shall disclose all financial interests that would reasonably appear to be affected by the proposed activities.

Investigator (also known as Project Director) means the principal investigator/project director, co-principal investigator(s)/project director(s), and any other member of the campus community who is responsible for the design, conduct, or reporting of activities proposed for funding or funded by an external source. The latter includes funds provided by grants and contracts and other means. In this context, "Investigator" includes the investigator's spouse and dependent children. For the purposes of this policy, investigators also may include subcontractors where the foregoing definition may apply.

Participant means to be part of the described activity in any capacity, including but not limited to serving as a principal investigator, co-investigator, and research collaborator. The term is not intended to apply to individuals who provide primarily technical support or who are purely advisory, with no direct access to the data (e.g., control over its collection or analysis), unless they are in a position to influence the study's results or have privileged information as to the outcome.

Financial interest refers to anything of monetary value, including but not limited to salary or other payments for services (e.g., consulting fees, honorariums, etc.), equity interests (e.g., stocks, stock options, or other ownership interests), and intellectual property rights (e.g., patents, copyrights, and royalties from such rights).

Financial interest is defined in different ways, depending on the entity and/or source of funding. The most significant difference in definition exists in relation to nongovernmental vs. governmental funding sources. Criteria for each section are as fellows:

Nongovernmental Funding Sources:

In relation to nongovernmental funding source(s) (sources other than federal, state, or local government agencies and their subsidiaries), financial interest is involved and shall be disclosed where the funding source has allocated or paid to the investigator:

  • Salary or other payment(s) for services (outside the parameters of a current or previous award conducted through the campus wherein the investigator was paid through the campus) in the last 12 months;
  • A gift in the last 12 months;
  • A loan in the last 12 months;

Or, where the investigator

  • Has investment or financial or equity interest in the nongovernmental funding source;
  • Serves as a director, officer, partner, trustee, or employee or holds any management position in the entity providing the funds.

Governmental Funding Sources:

In relation to governmental funding source(s) (specifically the National Science Foundation and the Public Health Service), financial interest is involved and shall be disclosed where:

  • The investigator's financial situation would reasonably appear to be directly and significantly affected by the activities funded or proposed for funding; or
  • There exists any financial interest of the investigator in an entity whose financial interest would reasonably appear to be directly and significantly affected by the activities funded or proposed for funding.

In relation to governmental funding source(s), financial interest does not include:

  • Salary, royalties, or other remuneration from the University or its auxiliary organization;
  • Income from honorariums, 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 (as defined by the governmental funding source) in a business enterprise(s) that when aggregated for the investigator and the investigator's spouse and dependent children meets both of the following tests:
  • o Does not exceed allowed value for any single entity as determined by reference to public prices or other reasonable measures of fair market value, and
  • o Does not present more than a the allowed percent ownership interest in any single entity; or
  • Salary, royalties or other payments that when aggregated for the investigator and the investigator's spouse and dependent children over the last 12 months or anticipated in the next 12 months are not expected to exceed the allowed amount from any single business enterprise entity;
  • Any ownership interests in the University or its auxiliary organizations, if either are an applicant under the Small Business Innovation Research Program or Small Business Technology Program.

Regardless of the above minimum requirements, a member of the campus community may disclose any other financial or related interest that could present an actual conflict of interest or be perceived to present a conflict of interest. The University recognizes disclosure as a key factor in protecting one's reputation and career from potentially embarrassing or harmful allegations of misconduct.

5.00 Investigator disclosure & resolution plan

Investigators shall disclose financial interests at the time of proposal submission and update this information annually or more frequently as new financial interests are obtained during the life of the award. Awards cannot be accepted until any conflict of interest issues are resolved.

Each investigator who has a financial interest must complete the appropriate Conflict of Interest Disclosure Form: Statement of Economic Interest CA Form 700-U for private funding or Conflict of Interest Disclosure Form for Governmental Funding Source. The appropriate form shall be submitted to the Grants & Contracts concurrently with the submission of the proposal. In addition, each investigator shall make a disclosure at any time during the award period when a material change occurs that presents a conflict of interest as defined by this policy.

The University Human Resources ("UHR") designee shall conduct a review of all financial disclosure forms. The UHR designee will serve as the University and its auxiliaries' contact with external entities for reporting, resolving, and otherwise dealing with matters related to this policy. The UHR designee will report disclosure and resolution activities to agencies and funding sources as required and appropriate.

The UHR designee shall determine whether a conflict of interest exists. Upon such a finding, the UHR designee will notify the investigator(s) of the finding and work with the individual(s) to devise a Resolution Plan to manage, reduce, or eliminate the potential or actual conflict(s) of interest.

Resolution plans may include but not be limited to the following:

  • Public disclosure of financial interests
  • Monitoring of research by independent reviewers
  • Modification of the research plan
  • Disqualification from participation in the portion of the project that is affected by the financial interest
  • Divestiture of financial interests
  • Severance of relationships that create actual or potential conflicts.

Upon developing a mutually agreed upon resolution plan, the UHR designee, will submit it to the President and Provost for final approval. Should mutual agreement not be reached for a plan, the UHR designee, will convene an ad hoc Independent Review Committee (IRC) composed of no fewer than three faculty members, who will represent various disciplines but not represent the investigator's home department. The UHR designee will select the IRC members and serve as nonvoting Chair of the IRC. The UHR designee, and investigator(s) will present their respective resolution proposals to the IRC. The IRC will then settle upon one of these plans or one developed by the IRC as selected by majority vote. The UHR designee will forward the plan and the IRC's vote, to the President and Provost for final approval, with the President carrying final authority.

Final resolution, as approved ultimately by the President, will be sent to the investigator(s), who will abide by the resolution plan, the project/account file, and other parties as deemed appropriate and necessary by the UHR designee.

6.00 Enforcement & sanctions

Instances of failure to disclose conflict(s) of interest and potential violation(s) of the resolution plan will be reported/referred to the UHR designee. Disciplinary measures, if any, will be in keeping with campus and system wide policies, procedures, and union contracts current at the time. Funding sources and other appropriate parties will be notified and kept informed as required by state and federal laws and regulations and sponsored projects award documents.

7.00 Documentation & record maintenance

The UHR will maintain records of all disclosures and actions taken resulting wherefrom for a period of at least three years after the later of the termination or completion of the award to which such documents relate or the resolution of any action(s) involving these records.

8.00 Continuous renewal

This policy shall be assessed in five years from its effective date to determine its effectiveness and appropriateness. This policy may be assessed before that time as necessary to reflect substantial organizational, physical, or academic change(s) at CSUMB or any change required by law.

s/ Peter Smith


Effective Date: March 8, 2005

Certification of Process

Reviewed by: Policy Facilitation Team, Academic Affairs Council, Academic Senate Executive Committee, Grants and Contracts, Student Affairs, Administration & Finance, and University Advancement