What is an Annual Financial Interest Disclosure?

By Amy Baugh

Another school year has come and gone. Academic year 2014-2015 is quickly approaching, and that means it's time to submit annual financial interest disclosures. What is annual financial interest disclosure? Disclosure is the act of making information known to others. Financial interest disclosure is confidentially revealing to a university official the details of your personal significant financial holdings that appear to be related to your institutional responsibilities. Disclosure will ensure that potential, perceived or apparent conflicts of interest between your personal financial holdings and your responsibilities as a Texas Tech employee are identified and managed. The purpose of proactive disclosure is to identify, address, and, therefore minimize the risk of allegations of bias due to a conflict of interest. The goal of financial interest disclosure is transparency.

“TTU recognizes its responsibilities as a public institution to encourage interaction between its employees and the public and private sectors as an important component of its research, instructional, and service activities. The university encourages the recruitment, retention, and recognition of creative individuals who promote interactions with industry, the business community, and other public or private entities consistent with their primary commitment to the university,” TTU OP 70.37.

TTU OP 70.37 asks all employees and other individuals planning to act as investigators, including their spouses and dependent relatives or household members, to disclose: 1) any significant business or financial interest (SFI) that would reasonably appear to be related to the investigator's institutional responsibilities; and 2) any SFI in an entity whose business or financial interest would reasonably appear to be related to the investigator's institutional responsibilities. For the purpose of this article, I have combined the Public Health Service disclosure requirements and TTU's general disclosure requirements. Please refer to the OR&I financial disclosure website and OP 70.37 for specific disclosure requirements. (An update to OP 70.37 will be posted in August 2014 and will be re-categorized as OP 74.17.)

A SFI is anything of monetary value including:

• Remuneration (salary and any payment for services, e.g., consulting fees, honoraria, paid authorship) in excess of $5,000 received from a publicly traded entity in the 12 months preceding the disclosure.
• Equity interest (stock, stock option, or other ownership interest) in excess of $5,000 in a publicly traded entity as of the date of disclosure.
• An aggregate of the above two items in excess of $5,000.
• Remuneration in excess of $5,000 received from a non-publicly traded entity in the 12 months preceding the disclosure.
• ANY equity interest in a non-publicly traded entity as of the date of disclosure.
• Equity interest that represents more than a 5 percent ownership interest in an external entity.
• Service as a member of the governing board in the capacity of a director, advisory director, trustee, or otherwise in an external entity.
• Intellectual property rights and interests (e.g., patents, copyrights), excluding those assigned to the investigator's current institution and agreements to share in royalties related to such rights.
• Reimbursed or sponsored travel in excess of $5,000 (requirement does not apply to travel that is reimbursed or sponsored by a federal, state, or local government agency, an institution of higher education, an academic teaching hospital, a medical center, or a research institute that is affiliated with an institution of higher education).
• Other significant business or financial interests that possibly could affect, or be perceived to affect, the results of the research or educational activities performed by the investigator as a part of a sponsored project or as a member of Texas Tech University.

If you or your household members have outside financial or business interests, ask yourself this: Is there any way that a student, colleague, supervisor, frenemy, taxpayer, organization, business, industry, sponsor, etc., can spin my business interests to be in conflict with my institutional responsibilities, or perceive that my relationship with Entity X could:

1. significantly impair [my] objectivity, or
2. create an unfair competitive advantage for any person or organization?” (The National Academies)

If the answer is “Yes” to either question, you are vulnerable to perceptions of mistrust and bias. The first step to minimize your risk is to disclose your financial interests on the general disclosure form. The form is available in electronic and paper format on the OR&I financial disclosure website. The disclosure form asks closed-ended questions to determine whether or not you have any of the above SFIs; therefore, investigators who have no significant business or financial interests as described above must submit a completed disclosure form to that effect.

If you have a SFI, the additional detailed disclosure form must be completed. The detailed “disclosures should provide sufficient information about the nature, scope, duration, and monetary value of relationships to allow institutions to assess the risk that secondary interests might unduly influence judgments about research, clinical care, education, or other primary interests.” (Institute of Medicine (US) Committee on Conflict of Interest in Medical Research, Education, and Practice; Lo B, Field MJ, editors. Conflict of Interest in Medical Research, Education, and Practice. Washington (DC): National Academies Press (US); 2009. 3, Policies on Conflict of Interest: Overview and Evidence, available here.

The Associate Vice President for Research – Integrity will review the financial interest disclosure to determine whether or not a manageable financial conflict of interest exists. A financial conflict of interest means that a SFI could perceivably and significantly affect the design, conduct or reporting of funded research. If a potential conflict exists, a financial conflict of interest management plan will be created to outline strategies to maintain a firewall between your outside interests and your institutional responsibilities, including research. A Financial Conflict Of Interest Management Plan is developed to protect your reputation so you may avoid unnecessary accusations that might interfere with your primary responsibilities of educating students and scholarly research. Disclosure itself can be a management strategy. A disclosed interest may not be declared a conflict, but the simple fact that it was disclosed can protect the investigator if a question arises. Disclosure of SFIs does not automatically mean investigators have a conflict, and having a potential conflict does not mean the research is biased. Rather, it merely means that the investigator has a complicated professional life, and should have objective eyes to assess the risk for perceivable conflict of interest.

Annual disclosure and financial conflict of interest management sends a message to the community that Texas Tech and its faculty are committed to conducting themselves and their activities in a manner consistent with the highest standards of integrity. “The primary goal [of disclosure] is to promote objectivity by establishing standards that provide a reasonable expectation that the design, conduct, and reporting of research funded under PHS (Public Health Service) [and other] grants, cooperative agreements and contracts will be free from bias resulting from Investigator financial conflicts of interest.”(PHS and Health and Human Service)

Amy Baugh is financial disclosure administrator in the Office of Research & Innovation.