[Federal Register Volume 60, Number 132 (Tuesday, July 11, 1995)]
[Notices]
[Pages 35820-35823]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16800]
Federal Register / Vol. 60, No. 132 / Tuesday, July 11, 1995 /
Notices
[[Page 35820]]
NATIONAL SCIENCE FOUNDATION
Investigator Financial Disclosure Policy
AGENCY: National Science Foundation.
ACTION: Notice of technical changes to investigator financial
disclosure policy.
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SUMMARY: The National Science Foundation (NSF) is making certain
technical changes and clarifications to its Investigator Financial
Disclosure Policy in order to make the Policy more consistent with the
provisions of the final Department of Health and Human Services (HHS)
rule on this subject.
EFFECTIVE DATE: The effective date of the Investigator Financial
Disclosure Policy and these technical changes is October 1, 1995.
Proposals submitted on or after October 1, 1995 must contain the new
certifications set forth in the Policy.
EFFECTIVE DATES: Christopher L. Ashley, Assistant General Counsel,
National Science Foundation, 4201 Wilson Boulevard, Room 1265,
Arlington, VA 22230, (703) 306-1060.
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act Control Number 3145-0149
On June 28, 1994 NSF published in the Federal Register a final
Policy announcing revised award conditions relating to investigator
financial disclosure. Those revised conditions require grantee
institutions to maintain written and enforced policies on investigator
conflict of interest. 59 FR 33308 (June 28, 1994).
NSF has been coordinating its Investigator Financial Disclosure
Policy with the Public Health Service and the Office of the Secretary
of the Department of Health and Human Services (HHS). At the same time
NSF published its final policy, HHS published a notice of proposed
rulemaking also dealing with investigator conflicts. HHS received and
reviewed public comments on that proposed rule, and is issuing in this
Federal Register its final rule regarding investigator conflicts that
will be effective on October 1, 1995. In cooperation with HHS, NSF is
now making certain corresponding technical changes and clarifications
to its Investigator Financial Disclosure Policy in order to maintain
consistency with the final HHS rule. In addition, NSF and HHS will be
working together to develop common guidance, including a set of
questions and answers, to help institutions implement conflict of
interest policies that comply with both HHS and NSF requirements.
The following summarizes the changes and clarifications to NSF's
Investigator Financial Disclosure Policy:
Grant Policy Manual References: All references to GPM 310 will be
changed to GPM 510.
Disclosures by Investigators: Subparagraph b of GPM 510 will be
revised to require disclosure to the institution's representative of
significant financial interests that ``would reasonably appear to be
affected'' by the activities funded or proposed for funding by NSF.
Previously, the provision had required disclosure of interests that
``reasonably appear to be directly and significantly affected'' by such
activities. This change will result in a slightly broader disclosure by
the investigator. As explained below, the institutional
representative(s) will be responsible for reviewing the disclosures to
determine which disclosed interests could directly and significantly
affect the design, conduct or reporting of the research.
Definition of ``Significant Financial Interest''--Exclusions: For
greater clarity, the exclusion set out in subparagraph b.5 of GPM 510
will be split into two separate exclusions--one for equity interests
and one for other types of payments. Also, the dollar threshold
increased from $5,000 to $10,000. To be excluded from the definition of
``significant financial interest,'' an equity interest, when aggregated
for the Investigator and his or her spouse and dependent children, must
be under both the $10,000 and five percent ownership thresholds. For
example, an investigator who owns an equity interest which is worth
$20,000 (with reference to public prices or other reasonable measures
of fair market value), but which represents only one percent ownership
in the entity, would nevertheless be required to disclose that interest
if it would reasonably appear to be affected by the research or
educational activities funded or proposed for funding by NSF.
Conflicts of Interest: In subparagraph d of GPM 510, the definition
of a conflict of interest will be revised. As revised, a conflict of
interest exists if the reviewer(s) of disclosures determines that a
significant financial interest ``could directly and significantly
affect the design, conduct, or reporting of'' NSF-funded activities.
Thus, contrary to the previous definition, the reviewer(s) rather than
the investigator determines whether a significant financial interest
directly and significantly affects the design, conduct or reporting of
NSF-funded activities.
Timing of Conflict of Interest Review and Resolution; In order to
conform with the HHS final rule, the Certification for Authorized
Institutional Representative or Individual Applicant (in the Section
WHAT WOULD BE REQUIRED IN PROPOSALS) will be changed to require the
institutional representative to certify that any identified conflicts
of interests will be managed, reduced or eliminated ``prior to the
institution's expenditure of any funds under the award.'' The
certification previously required resolution of conflicts ``prior to
funding the award.'' This technical change will enable institutions to
refrain from reviewing and resolving identified conflicts until after
the award is funded, thereby eliminating the need to review and resolve
conflicts in proposals that do not get funded. Also, the last sentence
of the certification has been separated into two sentences to clarify
that conflicts of interest that cannot be satisfactorily managed,
reduced or eliminated must be reported to NSF. Accordingly, the
certification will now read as follows:
In addition, if the applicant institution employs more than
fifty persons, the authorized official of the applicant institution
is certifying that the institution has implemented a written and
enforced conflict of interest policy that is consistent with the
provisions of Grant Policy Manual Section 510; that to the best of
his/her knowledge, all financial disclosures required by that
conflict of interest policy have been made; and that all identified
conflicts of interest will have been satisfactorily managed, reduced
or eliminated prior to the institution's expenditure of any funds
under the award, in accordance with the institution's conflict of
interest policy. Conflicts which cannot be satisfactorily managed,
reduced or eliminated must be disclosed to NSF.
Deletion of Additional Certification for Principal Investigators
and Co-Principal Investigators: In order to conform with the HHS final
rule, NSF's policy will be revised to delete the additional
Certification for Principal Investigators and Co-Principal
Investigators that was previously to be included in Section C-1 of Part
II of the Grant Proposal Guide and on Page 2 of the NSF Form 1207,
Cover Sheet for Proposal to NSF. Although submission of the additional
certification to NSF is no longer required, NSF believes that most
institutions' policies will have principal and co-principal
investigators certify to the institution that the investigator has read
and understands the institution's policy, that all required disclosures
were made and that the investigator will comply with any conditions or
restrictions imposed by the institution to manage, reduce or eliminate
conflicts of interest.
[[Page 35821]]
Other Clarifications
1. Application of Policy to Increments of Major Awards: In addition
to new NSF proposals, the Policy will apply to certain large ongoing
projects such as centers and other activities that are currently being
funded by NSF on an incremental basis through cooperative agreements or
other agreements for which new proposals may not be submitted for
several years. NSF will require that institutions and investigators
involved in such projects, at the time of their first funding increment
which occurs after October 1, 1995, provide the certifications required
by the Policy for all cooperative agreements and for all continuing
grant increments exceeding $1,000,000. Such awardees will be advised in
advance in writing by the Grants Officer that they will be required to
have a policy in place and submit the required certifications as a
condition of future funding increments.
2. In addition to the technical changes and clarifications
announced above, NSF has made a small number of word changes to resolve
minor inconsistencies between its policy and the final HHS rule. These
changes are not intended to alter the meaning of any provision of NSF's
final policy. The changes are as follows:
a. In subparagraph b.1 of GPM 510, the word ``applicant'' will be
added before the word ``institution.'' The exclusion from the
definition of ``significant financial interest'' will now read
``salary, royalties or other remuneration from the applicant
institution.''
b. In subparagraph c of GPM 510, the word ``pendency'' will be
replaced with the word ``period''. An institutional policy must require
financial disclosures to be updated during the period the award is in
effect.
c. In subparagraph d of GPM 510, immediately before the list of
examples of conditions or restrictions to manage, reduce or limit
conflicts of interest, the words ``but are not limited to'' will be
added after ``include.''
d. In the second sentence of subparagraph d of GPM 510, the phrase
``research or educational activities funded or proposed for funding by
NSF'' will be replaced with the phrase ``NSF-funded research or
educational activities.''
e. Subparagraph g of GPM 510 will be revised to require
institutions to maintain records ``for at least three years beyond the
termination or completion of the grant to which they relate, or until
the resolution of any NSF action involving those records, whichever is
longer.''
f. The words ``actual or potential'' will be deleted in all places
where they are used to modify ``conflict of interest.''
3. Paperwork and Recordkeeping Burden: In cooperation with HHS, NSF
has revised its estimate of the paperwork burden associated with the
Policy in order to make its estimate consistent with HHS' and to
conform to certain changes in the law since NSF issued the final
Policy. NSF and HHS have used the same methodology in estimating
respective paperwork burdens for their rules.
NSF's revised estimates are as follows:
Reporting and Recordkeeping
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Number of Hours per
respondents response Total
------------------------------------------------------------------------
Files *.......................... 2,300 4 9,200
Reports of conflict to NSF **.... 50 80 4,000
Subsequent reports of conflict of
interest........................ 7 2 14
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* Consistent with HHS methodology, NSF is now using the number of files
expected to be necessary as a basis for estimating the Policy's
recordkeeping burden. NSF estimates that the Policy will apply to
approximately 10,000 awards annually and that 23% of all investigators
will have disclosures which will require the creation of a file. NSF
estimates that 77% of investigators will not have disclosures
requiring the creation of a file. NSF estimates that it will require
four hours for the establishment and maintenance of a file.
** HHS has estimated that it will receive 200 reports of conflicts of
interest. NSF believes that it will receive significantly fewer
reports of conflicts because NSF makes fewer awards annually than HHS
and because, on average, activities funded by NSF are less likely to
affect the financial interests of investigators.
Disclosure by Investigators
------------------------------------------------------------------------
Hours per
Number of respondents response Total
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38,000........................................ 1.0 38,000
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Institutional Disclosure of Policy to Investigators ***
------------------------------------------------------------------------
Hours per
Number of Institutions response Total
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2,000......................................... 20 40,000
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*** NSF did not initially include an estimate for this aspect of the
paperwork burden. However, in light of revisions to the Paperwork
Reduction Act, effective October 1, 1995, which will require this
element to be estimated, NSF is including such an estimate. NSF's
estimate is consistent with that of HHS.
Total hours for reporting, recordkeeping and disclosure: 91,214.
In accordance with the requirements of the Paperwork Reduction Act
of 1980, the National Science Foundation has submitted the information
collection requirements cited above to OMB for review and approval.
Organizations and individuals desiring to submit comments on the
information collection requirements and the estimated burden should
direct such comments to the information address cited above and to: NSF
Desk Officer, Office of Information and Regulatory Affairs, OMB, New
Executive Office Building, Room 10235, 725 17th Street NW., Washington,
DC 20503.
Accordingly, NSF's Investigator Financial Disclosure Policy now
reads as follows:
[[Page 35822]]
The Investigator Financial Disclosure Policy
NSF's Investigator Financial Disclosure Policy has the following
primary features:
A. A requirement that any NSF grantee employing more than fifty
persons maintain ``an appropriate written and enforced policy on
conflict of interest.''
B. Minimum requirements for what must be in an institution's
policy. These include (a) limited and targeted financial disclosure,
(b) designation of a person(s) to review the disclosures and resolve
actual or potential problems revealed, (c) enforcement mechanisms, and
(d) arrangements for informing NSF of conflicts issues that are not
resolved to the satisfaction of the institution.
Changes made to NSF issuances to establish and communicate the
Policy are described below. Copies of the NSF Grant General Conditions
and the NSF Grant Proposal Guide referenced in the Policy may be
obtained from the National Science Foundation, Forms and Publications
Unit, 4201 Wilson Blvd., Rm. P-15, Arlington, Virginia 22230, (703)
306-1130, Internet: pubs@nsf.gov. Copies of the NSF Grant Policy Manual
may be obtained from the Government Printing Office.
What Would be Required in Institutional Policies
Grant General Conditions
Insert a new subparagraph b. to Article 23:
Records of investigator financial disclosures and of actions taken
to manage conflicts of interest (see Grant Policy Manual Section 510),
shall be retained until 3 years after the later of the termination or
completion of the award to which they relate, or the resolution of any
government action involving those records.
Renumber subsequent subparagraphs accordingly.
Insert a new Article 33:
For proposals submitted on or after October 1, 1995, if the grantee
employs more than fifty persons, the grantee shall maintain an
appropriate written and enforced policy on conflict of interest
consistent with the provisions of Grant Policy Manual Section 510.
Renumber subsequent articles accordingly.
Grant Policy Manual
Add a new GPM 510 ``Conflict of Interest Policies'':
a. NSF requires each grantee institution employing more than fifty
persons to maintain an appropriate written and enforced policy on
conflict of interest. Guidance for such policies has been issued by
university associations and scientific societies.\1\
\1\ See On Preventing Conflicts of Interests in Government-
Sponsored Research at Universities, a Joint Statement of the Council
of the American Association of University Professors and the
American Council on Education (1964); Managing Externally Funded
Programs at Colleges and Universities, especially ``Principle X.
Research Ethics and Conflicts'', issued by the Council on Government
Relations (1989); Guidelines for Dealing with Faculty Conflicts of
commitment and Conflicts of Interest in Research, issued by the
Association of American Medical Colleges (1990); and Framework
Document for Managing Financial Conflicts of Interest, issued by the
Association of American Universities (1993).
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b. An institutional conflict of interest policy should require that
each investigator disclose to a responsible representative of the
institution all significant financial interests of the investigator
(including those of the investigator's spouse and dependent children)
(i) that would reasonably appear to be affected by the research or
educational activities funded or proposed for funding by NSF; or (ii)
in entities whose financial interests would reasonably appear to be
affected by such activities.
The term investigator means the principal investigator, co-
principal investigators, and any other person at the institution who is
responsible for the design, conduct, or reporting of research or
educational activities funded or proposed for funding by NSF.
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 interests (e.g.,
stocks, stock options or other ownership interests); and intellectual
property rights (e.g., patents, copyrights and royalties from such
rights). The term does not include:
1. Salary, royalties or other remuneration from the applicant
institution;
2. Any ownership interests in the institution, if the institution
is an applicant under the Small Business Innovation Research Program or
Small Business Technology Transfer Program;
3. Income from seminars, lectures, or teaching engagements
sponsored by public or nonprofit entities;
4. Income from service on advisory committees or review panels for
public or nonprofit entities;
5. An equity interest that, when aggregated for the investigator
and the investigator's spouse and dependent children, meets both of the
following tests: does not exceed $10,000 in value as determined through
reference to public prices or other reasonable measures of fair market
value, and does not represent more than a 5% ownership interest in any
single entity; or
6. Salary, royalties or other payments that, when aggregated for
the investigator and the investigator's spouse and dependent children,
are not expected to exceed $10,000 during the next twelve month period.
c. An institutional policy must ensure that investigators have
provided all required financial disclosures at the time the proposal is
submitted to NSF. It must also require that those financial disclosures
are updated during the period of the award, either on an annual basis,
or as new reportable significant financial interests are obtained.
d. An institutional policy must designate one or more persons to
review financial disclosures, determine whether a conflict of interest
exists, and determine what conditions or restrictions, if any, should
be imposed by the institution to manage, reduce or eliminate such
conflict of interest. A conflict of interest exists when the
reviewer(s) reasonably determine that a significant financial interest
could directly and significantly affect the design, conduct, or
reporting of NSF-funded research or educational activities.
Examples of conditions or restrictions that might be imposed to
manage, reduce or eliminate conflicts of interest include, but are not
limited to:
1. Public disclosure of significant financial interests;
2. Monitoring of research by independent reviewers;
3. Modification of the research plan;
4. Disqualification from participation in the portion of the NSF-
funded research that would be affected by the significant financial
interests;
5. Divestiture of significant financial interests; or
6. Severance of relationships that create conflicts.
If the reviewer(s) determines that imposing conditions or
restrictions would be either ineffective or inequitable, and that the
potential negative impacts that may arise from a significant financial
interest are outweighed by interests of scientific progress, technology
transfer, or the public health and welfare, then the reviewer(s) may
allow the research to go forward without imposing such conditions or
restrictions.
e. The institutional policy must include adequate enforcement
mechanisms, and provide for sanctions where appropriate.
f. The institutional policy must include arrangements for keeping
NSF's Office of General Counsel appropriately
[[Page 35823]]
informed if the institution finds that it is unable to satisfactorily
manage a conflict of interest.
g. Institutions must maintain records of all financial disclosures
and of all actions taken to resolve conflicts of interest for at least
three years beyond the termination or completion of the grant to which
they relate, or until the resolution of any NSF action involving those
records, whichever is longer.
What Would Be Required in Proposals
Grant Proposal Guide
Section II.C.1, INSTRUCTIONS FOR PROPOSAL PREPARATION, at the end
of the Certification for Authorized Institutional Representative or
Individual Applicant, will be revised to add:
A new certification will be added that requires an institutional
representative to certify that the institution has implemented a
written and enforced policy on conflicts of interest consistent with
the provisions of Grant Policy Manual Section 510; that to the best of
his/her knowledge, all financial disclosures required by that conflict
of interest policy have been made; and that all identified conflicts of
interests will have been satisfactorily managed, reduced or eliminated
prior to the institution's expenditure of any funds under the award, in
accordance with the institution's conflict of interest policy.
Conflicts which cannot be satisfactorily managed, reduced or eliminated
must be disclosed to NSF.
Page 2 of the NSF Form 1207, Cover Sheet for Proposal to the NSF,
will be revised to add the following to the end of the section on
Certification for Authorized Institutional Representative or Individual
Applicant:
In addition, if the applicant institution employs more than fifty
persons, the authorized official of the applicant institution is
certifying that the institution has implemented a written and enforced
conflict of interest policy that is consistent with the provisions of
Grant Policy Manual Section 510; that to the best of his/her knowledge,
all financial disclosures required by that conflict of interest policy
have been made; and that all identified conflicts of interest will have
been satisfactorily managed, reduced or eliminated prior to the
institution's expenditure of any funds under the award, in accordance
with the institution's conflict of interest policy. Conflicts which
cannot be satisfactorily managed, reduced or eliminated must be
disclosed to NSF.
Dated: May 17, 1995.
Lawrence Rudolph,
General Counsel.
[FR Doc. 95-16800 Filed 7-10-95; 8:45 am]
BILLING CODE 7555-01-M
