CONFLICTS OF INTEREST:
RECOGNITION AND
MANAGEMENT
Judith L. Curry
Associate General Counsel
NC State University
January 20, 2011
Introduction

What are Conflicts of Interest and
Conflicts of Commitment?

Why should you be concerned?

Consequences if not handled properly?
Overview

Conflicts of Interest in the academic
community may arise in:
– Conduct of Research
– Economic Development
– Consulting and Other External Activities for
Pay
http://www.ncsu.edu/general_counsel/legal_to
pics/consulting-faqs.php
– Student Supervision
– Contract Management
Conflict of Commitment Defined

When pursuit of outside activities involves
an inordinate investment of time that
interferes with one’s obligations to
University responsibilities
Managing Conflicts of
Commitment

External Activity for Pay (Consulting)
Review http://www.ncsu.edu/sparcs/coi/

“Time” related

Generally more easily dealt with
Conflict of Interest Defined

Financial or other considerations that may
compromise (or have the appearance of
compromising) one’s objectivity or
independent professional judgment in meeting
university duties or responsibilities
Federal Requirements

Public Health Service

National Science Foundation

Both require recipients of federal research
funding to have policies and require
reporting of financial conflicts of interest
Public Health Service

All research funded by PHS must comply
with 42 C.F.R. 50.600 et seq., ensuring
that the design, conduct or reporting of
research will not be biased by conflicting
financial interests of an investigator, or the
investigator’s spouse or dependent child
Compliance
Compliance Requires:
– Disclosure by Investigators of Significant
Financial Interests (SFI);
– Determination by Responsible Official as to
whether SFI results in Conflict of Interest and,
if so, how to manage, reduce or eliminate such
Conflict of Interest;
– Institution’s compliance with disclosure
obligations to PHS
Significant Financial Interest
SFI: Anything of monetary value,
including consulting fees, stock, stock
options, and IP rights
 SFI excludes:

– Phase I SBIR’s
– Income from certain non-profit activities
– Equity interests valued at less than $10K and
less than 5% ownership interest and
– Salary or other payments not exceeding $10K
per year
Disclosable Financial Interest



If SFI would reasonably appear to be
affected by the research for which funding
is sought
it is a
Disclosable Financial Interest
http://www.ncsu.edu/sparcs/coi/index.php
Managing Conflicts of Interest

Institutional responsibility to identify
– Proposal based
– Routine reports of external financial interests

Prior to expenditure of funds, notify funding
agency of COI and assure that managed,
reduced or eliminated

Updates annually and/or as circumstances
change
Managing Conflict (cont.)

Public Disclosure

Monitoring by Independent Reviewers

Modification of Research Plan

Publication Oversight

Strict Adherence to Data Retention

Alternate Supervision of Students

Full Disclosure to Students
NC Gen. Stat. §14-234

“No …employee who is involved in
making or administering a contract on
behalf of a public agency may derive a
direct benefit from the contract”

“Administers” = oversees performance, or
make decisions about the contract

“Direct Benefit” = >10% ownership in
other party, or derives income directly
NC Gen. Stat. §14-234 (cont.)

Even if not involved in “making or
administering” the contract, it’s illegal for
one getting direct benefit to “attempt to
influence” any other person who is
involved in making or administering the
contract
OTHER CONSEQUENCES

False Claims Act (31 U.S.C. 3729 et seq.)
– Researchers who make false certifications
because of failure to disclose COI’s are
subject to liability
– University subject to liability for failure to
disclose known conflicts (See, e.g.Gelsinger v
U Penn)
– Loss of funding
More Information

Observations on Targeted Site Reviews (NIH)
http://grants.nih.gov/grants/policy/coi/index.htm

American Association of Medical Colleges
http://www.aamc.org/research/dbr/coi.htm#questions

NIH Review of Institutional Conflict of Interest Policies
http://grants.nih.gov/grants/policy/coi/nih_review.htm