Feature Article: COI

Imagine this scenario: Dr. Blue, a Penn State researcher and expert in the field of autism, has a large federal grant to study whether recreational dance has positive impacts on the socialization and social anxieties of elementary and high school students diagnosed with autism. Dr. Blue's spouse, Mrs. Blue, who is not employed at the University, owns a local dance school and has over 15 years of experience teaching dance to children in this age group and to children with an autism diagnosis. Dr. Blue would like to hire his spouse's dance school to teach and lead the dance sessions with the children enrolled in his study as Mrs. Blue is the only dance instructor in the state that Dr. Blue knows of with so much experience teaching this special population of children. Dr. Blue has budgeted approximately $5,000 per year of the three year award for costs associated with dance instruction.

Can Dr. Blue hire his non-University employed spouse or spouse-owned company on a sponsored research project? Are there conflict of interest issues in this type of interaction? If yes, what are they and how should Dr. Blue proceed?

The COI Program and the Individual COI Committee has seen an increase in the number of Significant Financial or Business Interest Disclosures, like the Dr. Blue scenario above, involving the hiring of and payments to a non-university employed spouse or a spouse-owned company in order to perform certain services or tasks on sponsored research. This type of relationship with a non-university employed spouse or spouse-owned company and sponsored research is not prohibited by the Penn State Policy RA20 "Disclosure and Management of Significant Financial Interests" ; however, it is something that needs to be disclosed by the researcher so that any potential or perceived conflict between the researcher's financial interest in his/her spouse or spouse-owned company receiving income from a sponsored award and the sponsored research can be properly identified and managed.

What are the Potential COI Issues in these Situations?

For purposes of RA20 and federal conflict of interest regulations, significant financial or business interests (e.g. company ownership, payment for services) of spouses must be disclosed to the University as if the significant financial or business interests were held personally by the University researcher. Thus, company ownership and payments received by a non-University employed spouse of a Penn State researcher must be disclosed if they are “related to” University research. Payments made directly from sponsored research funds brings a scenario like Dr. Blue's under the umbrella of “related to” University research.

The conflict of interest issue in these situations can be identified as the potential for or the perception that the spouse or the spouse-owned company was selected to perform on the sponsored research solely or primarily because the researcher ultimately stands to benefit financially through payments to his/her spouse or his/her spouse's company. Taking the analysis one step further, it could be said that this conflict has the potential to compromise the related sponsored research if hiring the spouse or spouse-owned company was not the best or most prudent use of research funds, if the services provided are not up-to-standard and/or if amounts paid to the spouse or to the company are inflated or unreasonable as compared to similar service providers. (1) For example, in the Dr. Blue scenario, the conflict of interest concern would be that Dr. Blue is hiring Mrs. Blue's company not because of their expertise in the area but because any income earned by Mrs. Blue's company is shared personally with Dr. Blue.

The COI Committee has recently developed a Standard Operating Procedure for these types of scenarios, such as Dr. Blue's scenario, when total payments to the non-University spouse or spouse-owned company are less than $15,000 per year of the project (see the full-text of the SOP here). The SOP, which allows the COI staff in the Office for Research Protections to administratively review such disclosures without full Committee review, includes standard COI management language. The management language includes terms, such as: disclosing the spouse relationship to the sponsor, co-investigators and any human subjects the spouse may come in contact with; review and approval of services and invoices by someone other than the researcher; and review and approval of the hiring of the non-University spouse or company by the researcher's department. For those situations where payments to the spouse or spouse-owned company exceed $15,000 per year of the project, the disclosure will then be reviewed by the full COI Committee and could include any additional management provisions deemed appropriate under the circumstances. The COI Committee feels these “standard” management provisions address each of the COI issues identified above and will protect the research and the researcher from perceptions that the use of sponsored funds were used for personal financial gain.

What Should A Researcher in this Scenario Do?

The scenario described at the beginning of this article is fairly common and should be disclosed by the Penn State researcher and reviewed by the COI staff and/or COI Committee prior to expending or committing any sponsored funds to the non-University employed spouse or spouse-owned company. The standard management terms developed by the COI Committee are straight forward and have not proved to be burdensome for researchers or departments to implement. Transparency, as in all COI situations, is the key and should not be avoided out of fear or lack of understanding of the COI process.

(1) A related but different concern might arise if the University researcher was also performing services on the same sponsored research through the spouse-owned company and being paid for those services by the company. Penn State policy prohibits Faculty and staff members from serving as consultants for University activities, either directly as private consultants, or through a third-party. In situations where consulting services are required from currently employed faculty and staff, compensation must be as an employee, whether within the scope of their appointment or through supplemental compensation. Refer to Penn State Policy HR80.