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					35820                 Federal Register / Vol. 60, No. 132 / Tuesday, July 11, 1995 / Notices

NATIONAL SCIENCE FOUNDATION                    The following summarizes the                 with the HHS final rule, the
                                            changes and clarifications to NSF’s             Certification for Authorized
Investigator Financial Disclosure           Investigator Financial Disclosure Policy:       Institutional Representative or
Policy                                         Grant Policy Manual References: All          Individual Applicant (in the Section
                                            references to GPM 310 will be changed           WHAT WOULD BE REQUIRED IN
AGENCY:  National Science Foundation.       to GPM 510.                                     PROPOSALS) will be changed to require
ACTION: Notice of technical changes to         Disclosures by Investigators:                the institutional representative to certify
investigator financial disclosure policy.   Subparagraph b of GPM 510 will be               that any identified conflicts of interests
                                            revised to require disclosure to the            will be managed, reduced or eliminated
SUMMARY: The National Science               institution’s representative of significant     ‘‘prior to the institution’s expenditure of
Foundation (NSF) is making certain          financial interests that ‘‘would                any funds under the award.’’ The
technical changes and clarifications to     reasonably appear to be affected’’ by the       certification previously required
its Investigator Financial Disclosure       activities funded or proposed for               resolution of conflicts ‘‘prior to funding
Policy in order to make the Policy more     funding by NSF. Previously, the                 the award.’’ This technical change will
consistent with the provisions of the       provision had required disclosure of            enable institutions to refrain from
final Department of Health and Human        interests that ‘‘reasonably appear to be        reviewing and resolving identified
Services (HHS) rule on this subject.        directly and significantly affected’’ by        conflicts until after the award is funded,
EFFECTIVE DATE: The effective date of the   such activities. This change will result        thereby eliminating the need to review
Investigator Financial Disclosure Policy    in a slightly broader disclosure by the         and resolve conflicts in proposals that
and these technical changes is October      investigator. As explained below, the           do not get funded. Also, the last
1, 1995. Proposals submitted on or after    institutional representative(s) will be         sentence of the certification has been
October 1, 1995 must contain the new        responsible for reviewing the                   separated into two sentences to clarify
certifications set forth in the Policy.     disclosures to determine which                  that conflicts of interest that cannot be
EFFECTIVE DATES: Christopher L. Ashley,     disclosed interests could directly and          satisfactorily managed, reduced or
Assistant General Counsel, National         significantly affect the design, conduct        eliminated must be reported to NSF.
Science Foundation, 4201 Wilson             or reporting of the research.                   Accordingly, the certification will now
Boulevard, Room 1265, Arlington, VA            Definition of ‘‘Significant Financial        read as follows:
22230, (703) 306–1060.                      Interest’’—Exclusions: For greater
                                                                                              In addition, if the applicant institution
                                            clarity, the exclusion set out in               employs more than fifty persons, the
SUPPLEMENTARY INFORMATION:                  subparagraph b.5 of GPM 510 will be             authorized official of the applicant
Paperwork Reduction Act Control             split into two separate exclusions—one          institution is certifying that the institution
Number 3145–0149                            for equity interests and one for other          has implemented a written and enforced
                                            types of payments. Also, the dollar             conflict of interest policy that is consistent
   On June 28, 1994 NSF published in        threshold increased from $5,000 to              with the provisions of Grant Policy Manual
the Federal Register a final Policy         $10,000. To be excluded from the                Section 510; that to the best of his/her
announcing revised award conditions         definition of ‘‘significant financial           knowledge, all financial disclosures required
relating to investigator financial                                                          by that conflict of interest policy have been
                                            interest,’’ an equity interest, when            made; and that all identified conflicts of
disclosure. Those revised conditions        aggregated for the Investigator and his or      interest will have been satisfactorily
require grantee institutions to maintain    her spouse and dependent children,              managed, reduced or eliminated prior to the
written and enforced policies on            must be under both the $10,000 and five         institution’s expenditure of any funds under
investigator conflict of interest. 59 FR    percent ownership thresholds. For               the award, in accordance with the
33308 (June 28, 1994).                      example, an investigator who owns an            institution’s conflict of interest policy.
   NSF has been coordinating its            equity interest which is worth $20,000          Conflicts which cannot be satisfactorily
Investigator Financial Disclosure Policy    (with reference to public prices or other       managed, reduced or eliminated must be
with the Public Health Service and the                                                      disclosed to NSF.
                                            reasonable measures of fair market
Office of the Secretary of the              value), but which represents only one              Deletion of Additional Certification
Department of Health and Human              percent ownership in the entity, would          for Principal Investigators and Co-
Services (HHS). At the same time NSF        nevertheless be required to disclose that       Principal Investigators: In order to
published its final policy, HHS             interest if it would reasonably appear to       conform with the HHS final rule, NSF’s
published a notice of proposed              be affected by the research or                  policy will be revised to delete the
rulemaking also dealing with                educational activities funded or                additional Certification for Principal
investigator conflicts. HHS received and    proposed for funding by NSF.                    Investigators and Co-Principal
reviewed public comments on that               Conflicts of Interest: In subparagraph       Investigators that was previously to be
proposed rule, and is issuing in this       d of GPM 510, the definition of a               included in Section C–1 of Part II of the
Federal Register its final rule regarding   conflict of interest will be revised. As        Grant Proposal Guide and on Page 2 of
investigator conflicts that will be         revised, a conflict of interest exists if the   the NSF Form 1207, Cover Sheet for
effective on October 1, 1995. In            reviewer(s) of disclosures determines           Proposal to NSF. Although submission
cooperation with HHS, NSF is now            that a significant financial interest           of the additional certification to NSF is
making certain corresponding technical      ‘‘could directly and significantly affect       no longer required, NSF believes that
changes and clarifications to its           the design, conduct, or reporting of’’          most institutions’ policies will have
Investigator Financial Disclosure Policy    NSF-funded activities. Thus, contrary to        principal and co-principal investigators
in order to maintain consistency with       the previous definition, the reviewer(s)        certify to the institution that the
the final HHS rule. In addition, NSF and    rather than the investigator determines         investigator has read and understands
HHS will be working together to             whether a significant financial interest        the institution’s policy, that all required
develop common guidance, including a        directly and significantly affects the          disclosures were made and that the
set of questions and answers, to help       design, conduct or reporting of NSF-            investigator will comply with any
institutions implement conflict of          funded activities.                              conditions or restrictions imposed by
interest policies that comply with both        Timing of Conflict of Interest Review        the institution to manage, reduce or
HHS and NSF requirements.                   and Resolution; In order to conform             eliminate conflicts of interest.
                                       Federal Register / Vol. 60, No. 132 / Tuesday, July 11, 1995 / Notices                                                                                         35821

Other Clarifications                                                         changes to resolve minor                                                       funded or proposed for funding by
                                                                             inconsistencies between its policy and                                         NSF’’ will be replaced with the phrase
   1. Application of Policy to Increments
                                                                             the final HHS rule. These changes are                                          ‘‘NSF-funded research or educational
of Major Awards: In addition to new
                                                                             not intended to alter the meaning of any                                       activities.’’
NSF proposals, the Policy will apply to
                                                                             provision of NSF’s final policy. The                                              e. Subparagraph g of GPM 510 will be
certain large ongoing projects such as
                                                                             changes are as follows:                                                        revised to require institutions to
centers and other activities that are                                           a. In subparagraph b.1 of GPM 510,
currently being funded by NSF on an                                                                                                                         maintain records ‘‘for at least three years
                                                                             the word ‘‘applicant’’ will be added                                           beyond the termination or completion of
incremental basis through cooperative                                        before the word ‘‘institution.’’ The
agreements or other agreements for                                                                                                                          the grant to which they relate, or until
                                                                             exclusion from the definition of                                               the resolution of any NSF action
which new proposals may not be                                               ‘‘significant financial interest’’ will now
submitted for several years. NSF will                                                                                                                       involving those records, whichever is
                                                                             read ‘‘salary, royalties or other                                              longer.’’
require that institutions and                                                remuneration from the applicant
investigators involved in such projects,                                                                                                                       f. The words ‘‘actual or potential’’ will
at the time of their first funding                                                                                                                          be deleted in all places where they are
                                                                                b. In subparagraph c of GPM 510, the
increment which occurs after October 1,                                                                                                                     used to modify ‘‘conflict of interest.’’
                                                                             word ‘‘pendency’’ will be replaced with
1995, provide the certifications required                                    the word ‘‘period’’. An institutional                                             3. Paperwork and Recordkeeping
by the Policy for all cooperative                                            policy must require financial                                                  Burden: In cooperation with HHS, NSF
agreements and for all continuing grant                                      disclosures to be updated during the                                           has revised its estimate of the
increments exceeding $1,000,000. Such                                        period the award is in effect.                                                 paperwork burden associated with the
awardees will be advised in advance in                                          c. In subparagraph d of GPM 510,                                            Policy in order to make its estimate
writing by the Grants Officer that they                                      immediately before the list of examples                                        consistent with HHS’ and to conform to
will be required to have a policy in                                         of conditions or restrictions to manage,                                       certain changes in the law since NSF
place and submit the required                                                reduce or limit conflicts of interest, the                                     issued the final Policy. NSF and HHS
certifications as a condition of future                                      words ‘‘but are not limited to’’ will be                                       have used the same methodology in
funding increments.                                                          added after ‘‘include.’’                                                       estimating respective paperwork
   2. In addition to the technical changes                                      d. In the second sentence of                                                burdens for their rules.
and clarifications announced above,                                          subparagraph d of GPM 510, the phrase                                             NSF’s revised estimates are as
NSF has made a small number of word                                          ‘‘research or educational activities                                           follows:

                                                                                   REPORTING AND RECORDKEEPING
                                                                                                                                                                    Number of            Hours per    Total
                                                                                                                                                                   respondents           response

Files * ........................................................................................................................................................             2,300               4       9,200
Reports of conflict to NSF ** ....................................................................................................................                              50              80       4,000
Subsequent reports of conflict of interest ................................................................................................                                      7               2          14
    * Consistent with HHS methodology, NSF is now using the number of files expected to be necessary as a basis for estimating the Policy’s rec-
ordkeeping 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 con-
flicts because NSF makes fewer awards annually than HHS and because, on average, activities funded by NSF are less likely to affect the finan-
cial interests of investigators.

                                                                                    DISCLOSURE BY INVESTIGATORS
                                                                                                                                                                                         Hours per
                                                                        Number of respondents                                                                                                         Total

38,000 ..............................................................................................................................................................................           1.0    38,000

                                                         INSTITUTIONAL DISCLOSURE OF POLICY TO INVESTIGATORS ***
                                                                                                                                                                                         Hours per
                                                                          Number of Institutions                                                                                                      Total

2,000 ................................................................................................................................................................................          20     40,000
  *** 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,                                                 review and approval. Organizations and                                         and Regulatory Affairs, OMB, New
recordkeeping and disclosure: 91,214.                                        individuals desiring to submit                                                 Executive Office Building, Room 10235,
  In accordance with the requirements                                        comments on the information collection                                         725 17th Street NW., Washington, DC
of the Paperwork Reduction Act of 1980,                                      requirements and the estimated burden                                          20503.
the National Science Foundation has                                          should direct such comments to the                                               Accordingly, NSF’s Investigator
submitted the information collection                                         information address cited above and to:                                        Financial Disclosure Policy now reads
requirements cited above to OMB for                                          NSF Desk Officer, Office of Information                                        as follows:
35822                 Federal Register / Vol. 60, No. 132 / Tuesday, July 11, 1995 / Notices

The Investigator Financial Disclosure        of interest. Guidance for such policies               not represent more than a 5%
Policy                                       has been issued by university                         ownership interest in any single entity;
   NSF’s Investigator Financial              associations and scientific societies.1               or
Disclosure Policy has the following             b. An institutional conflict of interest              6. Salary, royalties or other payments
                                             policy should require that each                       that, when aggregated for the
primary features:
   A. A requirement that any NSF             investigator disclose to a responsible                investigator and the investigator’s
grantee employing more than fifty            representative of the institution all                 spouse and dependent children, are not
persons maintain ‘‘an appropriate            significant financial interests of the                expected to exceed $10,000 during the
written and enforced policy on conflict      investigator (including those of the                  next twelve month period.
                                             investigator’s spouse and dependent                      c. An institutional policy must ensure
of interest.’’
   B. Minimum requirements for what          children) (i) that would reasonably                   that investigators have provided all
must be in an institution’s policy. These    appear to be affected by the research or              required financial disclosures at the
include (a) limited and targeted             educational activities funded or                      time the proposal is submitted to NSF.
                                             proposed for funding by NSF; or (ii) in               It must also require that those financial
financial disclosure, (b) designation of a
                                             entities whose financial interests would              disclosures are updated during the
person(s) to review the disclosures and
                                             reasonably appear to be affected by such              period of the award, either on an annual
resolve actual or potential problems
                                             activities.                                           basis, or as new reportable significant
revealed, (c) enforcement mechanisms,           The term investigator means the
and (d) arrangements for informing NSF                                                             financial interests are obtained.
                                             principal investigator, co-principal                     d. An institutional policy must
of conflicts issues that are not resolved    investigators, and any other person at                designate one or more persons to review
to the satisfaction of the institution.      the institution who is responsible for
   Changes made to NSF issuances to                                                                financial disclosures, determine
                                             the design, conduct, or reporting of                  whether a conflict of interest exists, and
establish and communicate the Policy         research or educational activities
are described below. Copies of the NSF                                                             determine what conditions or
                                             funded or proposed for funding by NSF.                restrictions, if any, should be imposed
Grant General Conditions and the NSF            The term significant financial interest
Grant Proposal Guide referenced in the                                                             by the institution to manage, reduce or
                                             means anything of monetary value,                     eliminate such conflict of interest. A
Policy may be obtained from the              including, but not limited to, salary or
National Science Foundation, Forms                                                                 conflict of interest exists when the
                                             other payments for services (e.g.,                    reviewer(s) reasonably determine that a
and Publications Unit, 4201 Wilson           consulting fees or honoraria); equity
Blvd., Rm. P–15, Arlington, Virginia                                                               significant financial interest could
                                             interests (e.g., stocks, stock options or             directly and significantly affect the
22230, (703) 306–1130, Internet:             other ownership interests); and
pubs@nsf.gov. Copies of the NSF Grant                                                              design, conduct, or reporting of NSF-
                                             intellectual property rights (e.g., patents,          funded research or educational
Policy Manual may be obtained from the       copyrights and royalties from such
Government Printing Office.                                                                        activities.
                                             rights). The term does not include:                      Examples of conditions or restrictions
What Would be Required in                       1. Salary, royalties or other                      that might be imposed to manage,
Institutional Policies                       remuneration from the applicant                       reduce or eliminate conflicts of interest
                                             institution;                                          include, but are not limited to:
Grant General Conditions                        2. Any ownership interests in the                     1. Public disclosure of significant
  Insert a new subparagraph b. to            institution, if the institution is an                 financial interests;
Article 23:                                  applicant under the Small Business                       2. Monitoring of research by
  Records of investigator financial          Innovation Research Program or Small                  independent reviewers;
disclosures and of actions taken to          Business Technology Transfer Program;                    3. Modification of the research plan;
manage conflicts of interest (see Grant         3. Income from seminars, lectures, or                 4. Disqualification from participation
Policy Manual Section 510), shall be         teaching engagements sponsored by                     in the portion of the NSF-funded
retained until 3 years after the later of    public or nonprofit entities;                         research that would be affected by the
the termination or completion of the            4. Income from service on advisory                 significant financial interests;
award to which they relate, or the           committees or review panels for public                   5. Divestiture of significant financial
resolution of any government action          or nonprofit entities;                                interests; or
                                                5. An equity interest that, when                      6. Severance of relationships that
involving those records.
                                             aggregated for the investigator and the               create conflicts.
  Renumber subsequent subparagraphs
                                             investigator’s spouse and dependent                      If the reviewer(s) determines that
  Insert a new Article 33:                   children, meets both of the following                 imposing conditions or restrictions
  For proposals submitted on or after        tests: does not exceed $10,000 in value               would be either ineffective or
October 1, 1995, if the grantee employs      as determined through reference to                    inequitable, and that the potential
more than fifty persons, the grantee         public prices or other reasonable                     negative impacts that may arise from a
shall maintain an appropriate written        measures of fair market value, and does               significant financial interest are
and enforced policy on conflict of                                                                 outweighed by interests of scientific
                                               1 See On Preventing Conflicts of Interests in
interest consistent with the provisions                                                            progress, technology transfer, or the
                                             Government-Sponsored Research at Universities, a
of Grant Policy Manual Section 510.          Joint Statement of the Council of the American        public health and welfare, then the
  Renumber subsequent articles               Association of University Professors and the          reviewer(s) may allow the research to go
accordingly.                                 American Council on Education (1964); Managing        forward without imposing such
                                             Externally Funded Programs at Colleges and            conditions or restrictions.
Grant Policy Manual                          Universities, especially ‘‘Principle X. Research
                                                                                                      e. The institutional policy must
                                             Ethics and Conflicts’’, issued by the Council on
  Add a new GPM 510 ‘‘Conflict of            Government Relations (1989); Guidelines for           include adequate enforcement
Interest Policies’’:                         Dealing with Faculty Conflicts of commitment and      mechanisms, and provide for sanctions
  a. NSF requires each grantee               Conflicts of Interest in Research, issued by the      where appropriate.
                                             Association of American Medical Colleges (1990);
institution employing more than fifty        and Framework Document for Managing Financial
                                                                                                      f. The institutional policy must
persons to maintain an appropriate           Conflicts of Interest, issued by the Association of   include arrangements for keeping NSF’s
written and enforced policy on conflict      American Universities (1993).                         Office of General Counsel appropriately
                      Federal Register / Vol. 60, No. 132 / Tuesday, July 11, 1995 / Notices                                35823

informed if the institution finds that it   policy on conflicts of interest consistent   applicant institution is certifying that
is unable to satisfactorily manage a        with the provisions of Grant Policy          the institution has implemented a
conflict of interest.                       Manual Section 510; that to the best of      written and enforced conflict of interest
   g. Institutions must maintain records    his/her knowledge, all financial             policy that is consistent with the
of all financial disclosures and of all     disclosures required by that conflict of     provisions of Grant Policy Manual
actions taken to resolve conflicts of       interest policy have been made; and that     Section 510; that to the best of his/her
interest for at least three years beyond    all identified conflicts of interests will   knowledge, all financial disclosures
the termination or completion of the        have been satisfactorily managed,            required by that conflict of interest
grant to which they relate, or until the    reduced or eliminated prior to the           policy have been made; and that all
resolution of any NSF action involving      institution’s expenditure of any funds       identified conflicts of interest will have
those records, whichever is longer.         under the award, in accordance with the      been satisfactorily managed, reduced or
What Would Be Required in Proposals         institution’s conflict of interest policy.   eliminated prior to the institution’s
                                            Conflicts which cannot be satisfactorily     expenditure of any funds under the
Grant Proposal Guide                        managed, reduced or eliminated must          award, in accordance with the
  Section II.C.1, INSTRUCTIONS FOR          be disclosed to NSF.                         institution’s conflict of interest policy.
PROPOSAL PREPARATION, at the end               Page 2 of the NSF Form 1207, Cover        Conflicts which cannot be satisfactorily
of the Certification for Authorized         Sheet for Proposal to the NSF, will be       managed, reduced or eliminated must
Institutional Representative or             revised to add the following to the end      be disclosed to NSF.
Individual Applicant, will be revised to    of the section on Certification for            Dated: May 17, 1995.
add:                                        Authorized Institutional Representative
                                                                                         Lawrence Rudolph,
  A new certification will be added that    or Individual Applicant:
requires an institutional representative       In addition, if the applicant             General Counsel.
to certify that the institution has         institution employs more than fifty          [FR Doc. 95–16800 Filed 7–10–95; 8:45 am]
implemented a written and enforced          persons, the authorized official of the      BILLING CODE 7555–01–M

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