Individual Financial Conflicts of Interest (III.B.2)

Volume III: Ethics
Chapter B: Conflicts
Responsible Executive: Vice President for Ethics and Compliance
Responsible Office: Office of the Vice President for Ethics and Compliance
Date Issued: July 1, 2011
Date Last Revised: January 1, 2019 

TABLE OF CONTENTS

Contacts
Statement of Policy
Reason for This Policy
Individuals and Entities Affected by This Policy
Exclusions
Responsibilities
Definitions (defined terms are capitalized throughout the document)
Related Documents, Forms and Tools
Website Address for This Policy
History and Updates
Appendix 

CONTACTS

Policy Clarification

Title/Office

Telephone

Email/Webpage

Vice President for Ethics and Compliance

765-494-5830

vpec@purdue.edu

Non-Research Related Financial Interests

Title/Office

Telephone

Email/Webpage

Fort Wayne:

Director of Human Resources and Office of Institutional Equity

260-481-6840

hr@pfw.edu

 

Northwest:

Vice Chancellor for Finance and Administration

219-989-2232

Vice Chancellor's website

West Lafayette: Director of Compliance

765-496-3158

compliance@purdue.edu

 

Research Related Financial Interests

Title/Office

Telephone

Email/Webpage

Fort Wayne:

Associate Vice Chancellor for Research and External Support

260-481-4101

ores@pfw.edu

Northwest:

Vice Chancellor for Academic Affairs

219-989-2446

Vice Chancellor's website

West Lafayette:

Executive Vice President for Research and Partnerships

765-494-6840

fcoi@purdue.edu

EVPRP's Research Related COI website

STATEMENT OF POLICY

Purdue acknowledges that Employees, and their families and Dependents, have the right to acquire, retain and accumulate personal financial assets (including personal income from the transfer of technology or intellectual property subject to University policy) and to establish financial relationships with outside private entities. Employees also have the responsibility to manage their financial affairs and relationships in a manner that does not interfere with, or improperly influence the performance of, their duties and responsibilities as an Employee.

Purdue will exercise oversight and care in eliminating or managing Financial Conflicts of Interest that do or may arise because of an Employee's or an Investigator's Financial Interest in University activities or research activities. The University will not accept or enter into agreements, contracts, gifts or purchases that give rise to a Financial Conflict of Interest unless the conflict can be eliminated or appropriately managed through administrative oversight to protect the interests of the University. The University will comply with all federal and state laws and regulations requiring reporting of or public access to disclosed individual Financial Interests (including Significant Financial Interests) and Financial Conflicts of Interest; however, the University will maintain the specific fiscal details of disclosed Financial Interests (including Significant Financial Interests) and Financial Conflicts of Interest as confidential information to the extent allowed by applicable laws and regulations.

As part of fulfilling their responsibilities, and to assist the University in avoiding or managing Financial Conflicts of Interest, all Employees and Investigators must disclose any known Financial Interests that they or a Dependent have in any of the following:

  1. Any University purchase or procurement of goods or services (whether or not pursuant to a formal contract) or in any investment or loan made by the University.
  2. Proposals submitted to external sponsors for funding. In the case of proposals to Public Health Services (PHS) agencies, Investigators must also disclose Significant Financial Interests held by them and/or their Dependent(s) that are associated with their Institutional Responsibilities.
  3. Protocols for research that are submitted for review and approval by a Regulatory Committee (or to a subcommittee).
  4. Any agreement relating to University technology or other intellectual property that is or will be subject to negotiations between the Office of Technology Commercialization (OTC) and any third person or entity.
  5. A donor that contributes a monetary gift or gift-in-kind designated to be in support of the Employee’s scholarly activities. This includes a gift to support a faculty member that is given by the faculty member, the faculty member’s Dependent or parent, and/or an entity in which the faculty member (or Dependent or parent) has a financial interest.
  6. Any research protocol submitted to a Regulatory Committee on which the Employee is a member (with the Employees also recusing themselves from the review process regarding such protocol).
  7. For Employees who are Investigators, any Significant Financial Interest that they have not already disclosed as a Financial Interest.

Disclosures must be made annually and within 30 days of discovering or acquiring a new Financial Interest or Significant Financial Interest.

An Employee or Investigator who fails to make disclosures required by this policy, or who otherwise violates any of the provisions in this policy or in a management plan, may be subject to appropriate sanctions, including but not limited to, discipline for misconduct and/or insubordination under University policies, practices and procedures, up to and including dismissal.

An Employee or Investigator who disagrees with a decision regarding the existence of a Significant Financial Interest, Financial Conflict of Interest or the necessary elements of a conflict management plan may submit a written appeal in accordance with the Operating Procedures for Individual Financial Conflicts of Interest.

Purdue encourages faculty authorship of instructional materials and does not discourage the use of such materials in courses in a faculty member's department. In order to prevent Financial Conflicts of Interest or the appearance of such in selecting instructional materials, every academic department or school must have a policy appropriate to its circumstances that ensures instructional materials are selected for their academic merit.

Situations involving Financial Interests also may involve issues addressed in the University’s policy on Conflicts of Commitment and Reportable Outside Activities (III.B.1), in the Regulations Governing the Use and Assignment of University Facilities (IV.B.1) and in the policy on Nepotism (III.B.3), among others.

REASON FOR THIS POLICY

This policy confirms Purdue's commitment to the basic values of openness, academic and scholarly integrity, integrity of business policy and procedure, independence, and safe and ethical research, as well as to its tradition and expectation that Employees will conduct their relationships with the University with candor and integrity. To ensure the integrity of all institutional activities, including review and conduct of research involving human and vertebrate animal subjects, and the associated fiscal, contractual and procurement transactions, regardless of the source of support, Purdue has elected to apply the same Individual Financial Conflicts of Interest policy to all University activities.

In addition to supporting these basic values, this policy is also designed to:

  • Comply with Indiana law (IC 35-44.1-1-4), which provides that an Employee who knowingly or intentionally has a monetary interest in or profits from a University contract or purchase may be charged with conflict of interest, a felony punishable by fine and imprisonment, unless the Employee has made the required disclosure in advance of the contract or purchase and the disclosure has been approved in advance by the Board of Trustees and submitted to the Indiana State Board of Accounts.

  • Satisfy federal regulations requiring the University to establish and implement policies concerning Significant Financial Interests held by:

    1. Employees or Investigators engaged in research funded by certain federal agencies (e.g., Public Health Services (42 CFR Part 50, Subpart F and 45 CFR Part 94) and the National Science Foundation (Award and Administration Guide)),
    2. Institutional Review Board members (45 CFR 46.107(e)), and
    3. Certain personnel involved in research involving human subjects funded by the Department of Health and Human Services.

    Such policies allow the University to maintain eligibility for federal funding from the Public Health Service and the National Science Foundation and, in the case of research involving human subjects, funding from any federal agency that is a signatory to the Common Rule (45 CFR 46) when researchers have Significant Financial Interests in research involving human subjects.

  • Protect researchers and other Employees from misplaced charges of Financial Conflicts of Interest by providing a mechanism for prior objective review and approval of Financial Interests.

INDIVIDUALS AND ENTITIES AFFECTED BY THIS POLICY

This policy affects all Purdue University Employees and any individual who meets the definition of an Investigator.

EXCLUSIONS

There are no exclusions from this policy.

RESPONSIBILITIES

Academic Schools or Departments

  • Establish a policy appropriate to their circumstances to ensure that instructional materials are selected for their academic merit and that there is no Financial Conflict of Interest or appearance of such in selecting instructional materials.

Board of Trustees

  • In accordance with IC 35-44.1-1-4, review and approve disclosures and direct those that are approved be transmitted to the Indiana State Board of Accounts.

COI Officer

  • Receive disclosures of Employee Financial Interests in (1) University procurement or contractual transactions, (2) gifts received by the University and dedicated to the Employee’s research or scholarship, or (3) any University investment or loan; oversee the review of these disclosures; and manage any real or potential Financial Conflicts of Interest arising from these Financial Interests.
  • Coordinate the development and oversight of appropriate conflict management and mitigation plans for Financial Conflicts of Interest when appropriate.
  • Notify the applicable purchasing/procurement department and contracting officers upon receipt of a Conflict of Interest Disclosure Statement disclosing a Financial Interest that involves their respective activities and for which it is determined that a Financial Conflict of Interest that cannot or should not be managed exists.
  • If a Financial Interest disclosed by an Employee is governed by IC 35-44.1-1-4, submit the disclosure to the VPEC for approval by the Board of Trustees.
  • If a disclosed Financial Interest may be related to a sponsored project, notify the Responsible Official (or designee).
  • Provide a report annually to each vice president, vice chancellor, vice provost, dean and director that identifies employees in their respective units who have active management or mitigation plans.

College/School/Departmental Business Offices

  • Obtain positive verification from the COI Officer that Financial Conflicts of Interest have been managed or eliminated prior to purchasing or procuring goods or services for which a Financial Interest was disclosed.
  • Obtain positive verification from the COI Officer that Financial Conflicts of Interest have been managed or eliminated prior to accepting a gift for which a Financial Interest was disclosed.

Ad Hoc Appeals Committee

  • Evaluate appeals from Employees and Investigators regarding management of real or potential Financial Conflicts of Interest arising from disclosed Financial Interests and Significant Financial Interests.

Employees

  • Disclose, as required by this policy, any and all Financial Interests that they or a Dependent have in University activities or transactions. Such disclosures must be made as far in advance of the contract, purchase, procurement, investment or loan as possible and may be made on an annual basis with respect to particular types of contracts or purchases of goods or services that the University makes on a repetitive basis from a particular vendor.
  • Upon request by the COI Officer, confirm the accuracy of and sign each Conflict of Interest Disclosure Statement prepared by the COI Officer for transmittal to the Board of Trustees and the Indiana State Board of Accounts.
  • Comply with the requirements of any management plan.

Executive Vice President for Research and Partnerships (EVPRP)

  • Designate an individual to serve as Responsible Official.

Investigators

  • Disclose any and all Financial Interests and Significant Financial Interests that they or a Dependent have, as required by this policy.
  • Update disclosures of Significant Financial Interests within 30 days of discovering or acquiring a new Significant Financial Interest (e.g., through purchase, marriage, inheritance, creation of a new start-up) and, in the case of a sponsored research project, at least annually thereafter for the duration of the project.
  • For Investigators participating in sponsored projects awarded by PHS agencies, complete training as required by this policy.
  • Comply with the requirements of any management or mitigation plan.

Principal Investigators (PIs)

  • Identify all Investigators on a project and notify SPS, including additional Investigators and/or Senior/Key Personnel who may be added during the life of the funded project or identified in a report to a PHS sponsoring agency.

Purchasing/Procurement Departments

  • Obtain positive verification from the COI Officer that Financial Conflicts of Interest have been managed or eliminated prior to procuring goods or services for which a Financial Interest has been disclosed.

Regulatory Committees

  • Obtain positive verification from the COI Officer or Responsible Official, as applicable, that Financial Conflicts of Interest have been managed or eliminated prior to approving a protocol for which a Financial Interest has been disclosed.
  • Obtain positive verification that committee members with Financial Interests in the sponsor or outcome of research projects conducted with the use of a proposed protocol have recused themselves from participation in the review of the protocol.

Responsible Official

  • Design and implement disclosure, review and Financial Conflict of Interest management procedures to satisfy federal and other sponsor requirements and regulations to ensure objectivity in research and research regulatory compliance. For disclosures from Investigators for proposals to a PHS agency, develop and implement guidelines to determine whether an Investigator’s Significant Financial Interest is related to the PHS-funded project and, if so, whether the Significant Financial Interest is a Financial Conflict of Interest.
  • Solicit and oversee the review of disclosures of Significant Financial Interest to identify real or potential Financial Conflicts of Interest arising from these Significant Financial Interests.
  • Design and implement training on Financial Conflicts of Interest for Investigators associated with sponsored projects awarded by PHS agencies, including measures to ensure training is completed before any PHS agency funds are expended and every four years thereafter, as well as whenever this policy is changed or an Investigator is new to a project or found not to be in compliance with this policy or with a management plan, and monitor the completion of such training.
  • If a Significant Financial Interest disclosed by an Employee is governed by IC 35-44.1-1-4, inform the COI Officer.
  • Satisfy all federal regulatory requirements relevant to the subject matter of this policy and applicable to Purdue including, but not limited to, requirements related to (1) reporting, (2) record keeping, (3) causing written agreements with subgrantees, subrecipients, contractors, subcontractors and collaborators in federally sponsored research projects to be executed, and to include applicable mandatory clauses, including but not limited to the requirement that the subrecipient or subcontractor comply with this policy or its own Financial Conflicts of Interest policy, and that any identified Financial Conflicts of Interest of its Investigators are reported to the University in a timely manner for inclusion in any required reports to PHS by the University, (4) making any required public disclosures of Significant Financial Interests and (5) training Investigators.
  • Develop, implement and monitor management plans for real or potential Financial Conflicts of Interest arising from disclosed Significant Financial Interests of Employees, Investigators, Dependents, subgrantees or subcontractors.
  • Document, implement and monitor any retrospective reviews and coordinate any required notifications and mitigation reports to PHS with the appropriate University personnel, as required by PHS regulations.
  • Report annually to the COI Officer on real or potential Financial Conflicts of Interest that may impact objectivity in research, the status of formal plans implemented to manage or reduce these Financial Conflicts of Interest and compliance with applicable state and federal requirements and University policies.
  • Provide a report annually to each dean and to the executive director of Discovery Park identifying Investigators with appointments in their respective units with active Financial Conflict of Interest management plans.

Sponsored Program Services (SPS)

  • Work with PIs to identify all Investigators on proposals submitted to external sponsors.
  • Alert PIs and Investigators listed on proposals to external sponsors of the need to disclose Significant Financial Interests and, for proposals to a PHS agency, of their responsibility to complete training.
  • Obtain positive verification from the COI Officer and/or Responsible Official, as applicable, that Financial Conflicts of Interest have been managed or eliminated, and that any required training has been completed, prior to awarding or expending any funds for a sponsored project for which a Financial Interest or a Significant Financial Interest has been disclosed.
  • Collaborate with the Responsible Official to ensure compliance with this policy in relation to subgrants and subcontracts.

University Development/Advancement Offices and Purdue Research Foundation

  • Obtain positive verification from the COI Officer and the Responsible Official that Financial Conflicts of Interest have been managed or eliminated prior to accepting a gift for which a Financial Interest has been disclosed.

Vice President for Ethics and Compliance (VPEC)

  • Administer this policy.
  • Serve as the COI Officer, or designate another Employee to do so.
  • Respond to requests for interpretation or clarification of this policy.
  • Appoint and chair an ad hoc appeals committee upon receipt of an appeal from an Employee or Investigator.
  • Forward disclosures received from the COI Officer to the Board of Trustees for review and approval.
  • Transmit all disclosures approved by the Board of Trustees to the Indiana State Board of Accounts.

DEFINITIONS

All defined terms are capitalized throughout the document. Refer to the central Policy Glossary for additional defined terms. Some of the terms listed below may be found in the supporting procedures only.

COI Officer
The Conflict of Interest Officer, who will be the VPEC or the VPEC’s designee.

Dependent
An Employee's or Investigator’s spouse or unemancipated child(ren), including stepchildren and adoptees, under the age of 18, or anyone who receives more than one-half of their financial support during a year from an Employee.

Employee
Each employee of Purdue University, wherever located and whether full-time or part-time, including, but not limited to, all executive officers, faculty and staff; including those on leave of absence with or without pay. 

Equity Interest
Any ownership interest in a company or business, including, but not limited to, stocks, stock options or warrants, membership or partnership interests or rights, or other ownership interests, as determined through reference to public prices or other reasonable measure of fair market value.

Financial Conflicts of Interest
Situations where an Employee's Financial Interest (including an Investigator's Significant Financial Interest, where applicable) compromises, or could appear to compromise, their judgment or ability to carry out the Institutional Responsibilities associated with their appointment or employment. A Financial Conflict of Interest may take many forms, but in general arises when an Employee in a relationship with an outside person or organization is in a position to influence the University’s business, research or decisions in ways that could lead directly or indirectly to financial gain for the Employee or the Employee’s Dependents or could give an improper advantage to others to the detriment of the University.

When applied to an Investigator, Financial Conflicts of Interest occur in situations where the Investigator's Financial Interest (including Significant Financial Interest) compromises, or could appear to compromise, their professional judgment regarding the design, conduct or reporting of research or when the Financial Interest (including Significant Financial Interest) could directly and significantly affect the design, conduct or reporting of research. The bias these conflicts conceivably imparts may not only affect collection, analysis and interpretation of data, but also the hiring of staff, procurement of materials, sharing of results, choice of protocol, involvement of human participants and the use of statistical methods.

Financial Conflicts of Interest also may include the use of University facilities, personnel, student assignments or research projects, equipment, materials, IT Resources (as defined in the policy on IT Resource Acceptable Use (VII.A.2)), Intellectual Property (as defined in the policy on Intellectual Property (I.A.1)), data, confidential information, or other resources for purposes that could lead directly or indirectly to financial gain for the Employee and/or the Employee’s Dependents.

Financial Interest
Any interest that will, could or is intended to lead to a profit or an ascertainable increase in the income or net worth of an Employee, Investigator and/or a Dependent. Such a profit or increase in income or net worth could be realized through the receipt of anything of monetary or potential monetary value, including, but not limited to, payments of any kind (e.g., salary, consulting fees, honoraria, gifts, dividends, distributions, rent, paid authorship, etc.), Equity Interests, an increase in the value of real estate or Equity Interests, or Intellectual Property Rights.  

IC 35-44.1-1-4
Indiana Code 35-44.1-1-4 relating to conflicts of interest. 

Institutional Responsibilities
An Employee or Investigator's professional responsibilities on behalf of Purdue, including, but not limited to, activities such as research, research consultation, teaching, professional practice, institutional committee memberships and service on panels such as institutional review boards or data and safety monitoring boards. Institutional Responsibilities are those activities that fall within the scope of Total University Effort as defined in the policy on Effort Reporting (II.C.1) and which are not Reportable Outside Activities as defined in the policy on Conflicts of Commitment and Reportable Outside Activities (III.B.1).

Intellectual Property Rights
Any interest in intellectual property, including, but not limited to, patents, copyrights, licenses, royalties from such rights, agreements to share royalties and similar interests. 

Investigator
A project director, a principal investigator of a research project and any other person, regardless of title or position, who is responsible for the design, conduct or reporting of research or project results at or involving Purdue, including Employees, subgrantees, contractors, subcontractors, collaborators and consultants. In general, any individual specifically named in a proposal and any individual identified in a report to the project sponsor or scholarly publication who is responsible for the design, conduct or reporting of research or project results is an Investigator for the purposes of this policy.

OTC
The Office of Technology Commercialization in Purdue Research Foundation or any successor office performing similar functions.

PHS
The Public Health Service of the U.S. Department of Health and Human Services, and any components of the PHS to which the authority involved may be delegated, including the National Institutes of Health (NIH).

PI
A Principal Investigator.

Regulatory Committee
Any University committee or board with regulatory oversight responsibilities, such as Institutional Review Boards, the Purdue Animal Care and Use Committee, the Institutional Biosafety Committee and similar boards or committees.

Responsible Official
The Responsible Official for Research-Related Financial Conflicts of Interest, who is appointed by the Executive Vice President for Research and Partnerships to oversee the receipt and review of disclosures of Significant Financial Interests related to (1) proposing, conducting or reporting of Purdue research or scholarship, (2) research regulatory compliance and (3) commercialization of Purdue’s intellectual property and the management of real or potential Financial Conflicts of Interest arising from these disclosed Significant Financial Interests.

Senior/Key Personnel
When applied to sponsored project applications (proposals) submitted to or awards received from NIH, Senior/Key Personnel means the project director/PI and any other person identified as Senior/Key Personnel by the University in the grant application, progress report or any other report submitted to the NIH by Purdue. When applied to a protocol submitted to a regulatory committee, Senior/Key Personnel means the PI on the protocol and any other person identified as Senior/Key Personnel in the protocol application.

Significant Financial Interest
A Financial Interest held by an Investigator and/or an Investigator's Dependent that reasonably appears to be related to the Investigator's Institutional Responsibilities and that consists of one or more of the following: 

  • Remuneration (including salary, consulting fees, honoraria, paid authorship and travel reimbursement) received from a publicly traded company during the twelve-month period preceding the date on which an Investigator is making a disclosure, and/or an Equity Interest held in such publicly traded company, if the aggregate value of such remuneration, plus the value of the Equity Interest as of the date of disclosure, exceeds $5,000.
  • Remuneration (including, but not limited to, salary, consulting fees, honoraria, paid authorship and travel reimbursement) received from a non-publicly traded company during the twelve-month period preceding the date on which an Investigator is making a disclosure, if the remuneration exceeds $5,000.
  • More than five percent Equity Interest or ownership in a publicly traded company or business.
  • Any Equity Interest in a non-publicly traded company or business, regardless of value.
  • Any Intellectual Property Rights, regardless of value, upon receipt of income related to such rights and interests.
  • Income from a foreign institution of higher education or the government of another country (including local, provincial or equivalent governments of another country).
  • When applied to sponsored project applications (proposals) submitted to and/or awards received from PHS agencies, any reimbursed or sponsored travel (i.e., travel that is paid on behalf of the Investigator and not reimbursed to the Investigator so that the exact monetary value may not be readily available), provided that the travel is not reimbursed or sponsored  by a federal, state or local government agency within the U.S.; a U.S. institution of higher education as defined at 20 U.S.C. 1001(a); or an academic teaching hospital, medical center or research institute that is affiliated with an institution of higher education in the U.S.

Significant Financial Interest does not include:

  • An Employee's salary, royalties or other remuneration received from the University and/or the Purdue Research Foundation.
  • Income from seminars, lectures or teaching engagements sponsored by a federal, state or local government agency within the U.S.; a U.S. institution of higher education as defined at 20 U.S.C. 1001(a); or an academic teaching hospital, medical center or research institute that is affiliated with an institution of higher education in the U.S.
  • Income from service on advisory committees or review panels for a federal, state or local government agency within the U.S.;  a U.S. institution of higher education as defined at 20 U.S.C. 1001(a); or an academic teaching hospital, medical center or research institute that is affiliated with an institution of higher education within the U.S.
  • Income from investment vehicles, such as mutual funds and retirement accounts, as long as the Investigator does not directly control the investment decisions made in these vehicles.
  • For Investigators who are not Purdue University Employees, any salary, royalties, or other remuneration from and any ownership interest in their primary employer.

SPS
Sponsored Program Services. 

RELATED DOCUMENTS, FORMS AND TOOLS

Frequently Asked Questions

Operating Procedures for Individual Financial Conflicts of Interest

Policies

Forms

Regulations

WEBSITE ADDRESS FOR THIS POLICY

www.purdue.edu/policies/ethics/iiib2.html

HISTORY AND UPDATES

January 1, 2019: Removed definition of and references to Conflicts Committee and changed to an ad hoc committee. Updated the definition of Significant Financial Interest. Moved responsibilities for the EVPT to the VPEC. Removed the procedures to a separate document. Other administrative and clarifying updates throughout.

January 1, 2017: Definition and references to Domestic Partner removed in accordance with the Board of Trustees resolution of December 19, 2015. Contacts section updated.

August 24, 2012: The policy was updated throughout in order to comply with new regulations for PHS agency awards.

November 18, 2011: Policy number changed to III.B.2 (formerly X.2.3) and website address updated. Related Documents section also updated.

July 1, 2011: This policy supersedes:

  • Executive Memorandum No. C-39, University Policy on Conflicts of Interest and Commitment, dated October 25, 1995.
  • Interim Faculty Policy on Conflicts of Interest and Commitment, dated December 30, 1991.
  • Executive Memorandum C-1, Compliance with New “Conflicts of Interest” Disclosure Requirements, dated August 22, 1983.

This policy accompanies the policy on Conflicts of Commitment and Reportable Outside Activities (II.B.1).

APPENDIX

There are no appendices to this policy.

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