Chapter 3349-20 Policy on Funds, Transfers, Unallowable Costs and Financial Conflict of Interest
This rule establishes the university's process for identifying unrestricted residual funds from sponsored programs and outlines the process for moving them out of their original restricted index. This rule is designed to assure that unrestricted residual funds from sponsored programs are used to advance the university's mission and is intended to help principal investigators avoid conflicts of interest.
This rule applies to all sponsored programs proposed on or after July 1, 2011.
Consult rule 3349 7 01 of the Administrative Code.
(1) "Designated Residual Funds Index" refers to an index that is set up when there are residual funds related to a sponsored program. The fund manager of the index will be the principal investigator. The availability of these funds will not expire during the principal investigator's employment at university. This index will be subject to all university guidelines, policies and procedures.
(2) "Fixed Price Agreement" refers to an agreement in which the sponsor states that a set dollar amount will be given in exchange for a specific deliverable(s).
(3) "Principal Investigator" refers to the faculty or staff member designated by the sponsor to have the appropriate level of authority and responsibility to direct the project or program supported by the grant.
(4) "Restricted Index" an index set up to track revenue and expenses for a specific project or purpose that is funded by an external entity (sponsor) and is subject to terms and conditions set by said entity.
(5) "Sponsor" for the purposes of this rule, refers to an entity that awards funding for a specific purpose.
(6) "Sponsored Program" refers to an award funded via a grant, contract, cooperative agreement or subcontract from a federal, state or local government entity, the private sector, or an institution of higher education, whereby the university agrees to perform a certain scope of work, in accordance with terms and conditions set by the sponsor, for specific, budgeted monetary compensation.
(7) "Unrestricted Residual Funds" refers to an unobligated balance in a sponsored program award at the time of closeout that is not required to be returned to the sponsor. These funds are no longer considered funds of the sponsored program and as such will not follow sponsored program policies, but will still need to be spent in accordance with all applicable university policies and procedures.
(D) Body of the rule
Unrestricted residual funds resulting from a sponsored program award will be made available to the award's principal investigator by transferring the funds to a designated residual funds index when all of the following criteria are met:
(1) All terms and conditions of the award (including all deliverables) have been fulfilled;
(2) All expenses related to the project (except approved cost share) have been charged to the sponsored program;
(3) The sponsor has paid the university in full;
(4) The university has been reimbursed for the total maximum facilities and administrative ("F&A")(indirect) costs related to the project;
(5) Awards with unrestricted residual funds in excess of twenty per cent of the total amount awarded must be approved by the office of research and sponsored programs.
(1) Principal investigator ensures that all terms and conditions are met, all deliverables are provided and that all appropriate expenses are charged to the sponsored program index and that any funds transferred into a designated residual funds index will be spent to support the principal investigator's research or scholarly activities, teaching, or service as applicable.
(2) Grants accounting ensures that the sponsor has paid the university in full and that the university has recovered its maximum indirect costs. "F&A" (indirect) costs will be calculated based off of the total award budget at the residual funds rate determined by the office of research and sponsored programs when the fixed price of agreement was executed. Grants accounting will send a request of review to the office of research and sponsored programs when unrestricted residual funds are in excess of twenty per cent of the total amount awarded. If approved, grants accounting will initiate all necessary transfers. If not approved, grants accounting will return the remaining funds to the sponsor.
(3) Office of research and sponsored programs establishes the "F&A" rate at which indirect costs will be charged if there are unrestricted residual funds remaining at the end of the fixed price award. Reviews restricted indexes where unrestricted residual funds are in excess of twenty per cent of the total amount awarded to ensure that the university is complying with applicable regulations and internal procedures, which include consistency in budgeting costs, cost shared expenses, and possible changes in scope.
To assure the integrity of the university's charges for salaries, wages, goods and services on sponsored programs and other restricted funding transferred to and/or from a sponsored program or other restricted funding after an initial charge elsewhere in the university's accounting system.
In accordance with 2 C.F.R. 200 it is necessary to explain and justify transfers of charges onto federally funded sponsored programs, where the original charge was previously recorded elsewhere on the university's operating ledger. Timeliness and completeness of the explanation of the transfer are important factors in supporting allow ability and allow capability.
This rule applies to cost transfers, including the transfer of payroll and other direct costs associated with sponsored programs and restricted funding.
Consult rule 3349 1 01 of the Administrative Code.
(1) "Cost Transfer" refers to the reassignment of an expense to or from a sponsored program or restricted fund after the expense was initially charged to another sponsored program or non sponsored program. Cost transfers include reassignments of salary, wages, and other direct costs.
(2) "Sponsored Program" refers to an award funded via a grant, contract, cooperative agreement or subcontract from a federal, state or local government entity, the private sector, or an institution of higher education, whereby the university agrees to perform a certain scope of work, in accordance with terms and conditions set by the sponsor, for specific, budgeted monetary compensation.
(3) "Principal Investigator" refers to the faculty or staff member designated by the sponsor to have the appropriate level of authority and responsibility to direct the project or program supported by the grant.
(4) "Sponsor" for the purposes of this rule, refers to an entity that awards funding for a specific purpose.
(5) "Restricted Funds" refers to those funds provided by a sponsor for a specific purpose and subject to specified terms and conditions.
(D) Body of the rule
(1) The university is committed to ensuring that all cost transfers (either in the form of a labor redistribution or non salary journal entry) are legitimate and are conducted in accordance with the terms and conditions of the sponsored program, regulations and university rule.
(2) All principal investigators ("PI") and their business managers are responsible for ensuring that transfers of costs to or from sponsored program and restricted funds which represent corrections of errors are made promptly.
(3) Cost transfers must be supported by documentation which contains a full explanation of how the error occurred and a correlation of the charge to the sponsored program to which the transfer is being made. Explanations such as "to correct an error" or "to transfer to correct project" are unacceptable.
(4) Cost transfers to any sponsored program account are allowable only where there is direct benefit to the sponsored program account being charged. An overdraft or any direct cost incurred in the conduct of one sponsored program may not be transferred to another sponsored program account merely for the sake of resolving a deficit or an allow ability issue. Cost transfers should not be used as a means of managing awards.
(5) Cost transfers that are initiated as a means to move expenses onto a sponsored program merely to spend the available balance are unallowable.
(6) Expenses that have been disallowed on one sponsored program or restricted fund are not to be transferred to a different sponsored program. Additional details can be found in the direct charging sponsored programs and unallowable costs rule.
(7) Cost transfers must be prepared and submitted within ninety days from the end of the calendar month in which the transaction appears on the award except in cases where the sponsor's (federal or non federal) terms and conditions are stricter than those of the university. Any cost transfers that are initiated after ninety days will require the approval of the department or college head and will be reviewed by the controller; approval may be given on a case by case basis.
The principal investigator is responsible for prompting the cost transfer form. Grants accounting is responsible for reviewing the form and completing the cost transfer process.
The university is required to ensure that any costs charged to federally sponsored programs follow costing requirements set forth in the office of management and budgets ("OMB") uniform guidance ( 2 C.F.R. 200 ). This rule also provides a foundation for direct charging costs to other, non federally sponsored programs.
This rule applies to all individuals involved in the decision making process for direct charging costs to sponsored programs.
Consult rule 3349 7 01 of the Administrative Code.
(1) "Direct Costs" refer to those costs that can be identified specifically with a particular sponsored program. Direct costs must also be allocated to one or more sponsored programs on a reasonable basis, where those direct costs benefit multiple projects or activities. If a cost is already included in the indirect cost rate (example, facilities and administrative costs rate), then it should not be charged again as a direct cost.
(2) "Indirect Costs" or "Facilities and Administrative Costs (F&A)" refers to those expenditures that have been incurred for common or joint objectives and cannot be readily identified with a particular sponsored program or activity. These costs consist of overall support of sponsored research activities and are therefore recovered through the university's "F&A" rate. Some examples include depreciation of buildings and equipment, the costs of operating and maintaining facilities, utility costs, library costs and general, department, and sponsored programs administration.
(3) "Allowable Costs" are those costs that are necessary and reasonable to perform the scope of work of the sponsored program. Allowable costs must also conform to the terms and conditions of the sponsor, of the award, and of the university's policies and procedures, the award terms and conditions. Allowable cost should be substantiated, by proper documentation or justification, to support its allocation to the sponsored program(s) being charged.
(4) "Unallowable Costs" refers to costs that are typically not permitted as direct or indirect "F&A" costs. Examples include alcohol, entertainment, fundraising, development, and bad debts. There may be sponsored programs that permit these types of costs in special circumstances. Prior written approval is required from the sponsor before these items can be purchased. Refer to the selected items of cost related to sponsored programs document for additional items that may require sponsor approval and are typically an unallowable cost.
(5) "Sponsored Program" refers to an award funded via a grant, contract, cooperative agreement or subcontract from a federal, state or local government entity, the private sector, or an institution of higher education, whereby the university agrees to perform a certain scope of work, in accordance with terms and conditions set by the sponsor, for specific, budgeted monetary compensation.
(6) "Allocable Costs" refers to costs incurred to benefit a sponsored program and charged based on the proportional benefit of that cost to the sponsored program. If a cost benefits multiple sponsored programs and/or other university activities, then the costs must be allocated accordingly.
(a) If a cost benefits two or more projects or activities, it must be charged in accordance with its benefits to each project respectively. Charges split between more than one grant must be split on the basis of proportional benefit or other reasonable method. The division of the expenditure cannot be split based on available funding or any other type of synonymous methodology. An expenditure that benefited two or more projects cannot be charged solely to one project because of funding constraints on another project.
(b) Any costs allocable to a particular project may not be shifted to other sponsored programs in order to meet deficiencies caused by overruns (deficits) or other fund considerations. Costs cannot be shifted to avoid restrictions imposed by law, by terms of the sponsored program, or for other reasons of convenience.
(7) "Consistent Treatment" means that each item of cost incurred for the same purpose must be treated consistently in like circumstances either as a direct or an indirect "F&A" cost in order to avoid possible double charging of federal awards.
(8) "Reasonable Costs" refers to costs incurred that reflect the judgment a prudent person would have used under the circumstances prevailing at the time of the decision. Costs must be reasonable relative to the nature or type of cost incurred and the price paid for the items in relation to the benefit received.
(D) Body of the rule
Costs to sponsored programs must meet the following criteria:
(1) Be adequately documented.
(2) Must be charged accordingly as either a direct cost or an indirect cost "F&A".
(3) Must be a reasonable costs, allocable costs, allowable costs, be accorded consistent treatment in order to be charged to the grant.
(4) Must not be included as a cost or cost sharing requirement of any federally funded sponsored program unless allowed under specific statute and sponsor approval.
(5) May include unlike circumstances where costs that are normally "F&A" types of costs (such as administrative and clerical salaries, computing devices, memberships, office supplies and postage) may be directly charged, when all of the following criteria have been met:
(a) The costs are integral to a project or activity;
(b) The costs can be specifically identified with the project or activity;
(c) The costs are explicitly included in the budget or have the prior written approval of the federal awarding agency; and
(d) The costs are not also recovered as indirect costs.
(6) May allow a typically unallowable costs in special circumstances with prior written approval from the sponsor.
Appendix A: guidance for direct charging select items of cost
The following items are typical items of cost that may be directly charged to sponsored programs:
(A) Personnel-faculty, staff and students devoting effort to a sponsored program.
(B) Fringe benefits-associated fringe benefits, charged based on a calculated fringe benefit rate.
(C) Supplies-items used in the sponsored program (example, pipettes, reagents, etc.).
(D) Travel costs-cost associated with project staff traveling to conferences, meetings or off campus work sites to discuss research, disseminate project related information, learn new research techniques, or carry out project related tasks.
(E) Equipment-items costing more than five thousand dollars that are used on the project; some sponsors require prior approval to purchase equipment using sponsored program funds.
(F) Equipment maintenance contracts-the costs of service contracts for equipment used in sponsored programs, prorate to reflect the project period.
(G) Independent contractors-outside services or people who assist with a project related task.
(H) Sub recipients-outside organizations performing a portion of the scope of work of the project with discretion as to how the scope of work will be carried out.
(I) Animal per diem charges and services-the costs associated with utilizing the comparative medicine unit for protocols associated with the sponsored program.
(J) Participant costs-cost associated with the recruitment and participation of human subjects in research studies, which may include travel reimbursement, patient remuneration (example, cash or gift cards) and other associated costs.
Appendix B: guidance for unlike circumstances
The following items are items of cost that are typically included in the facilities and administrative costs rate; however, because of unlike circumstances may be permissible as direct costs:
(A) Administrative or clerical staff-may be permissible as a direct cost when all of the following conditions are met:
(1) The costs are integral to a project or activity;
(2) Individuals involved can be specifically identified with the project or activity;
(3) Such costs are explicitly included in the budget or have the prior written approval of the federal awarding agency; and
(4) The costs are not also recovered as indirect costs.
(B) Office supplies-are not allowable for routine department administration; however, if the sponsored program requires incurring such costs they may be permissible as direct costs. For example, printing training materials, conducting surveys and extensive data accumulation may qualify as unlike circumstances to permit direct charging of the associated costs of these activities.
(C) Computing devices-means machines used to acquire, store, analyze, process, and publish data and other information electronically, including accessories (or "peripherals") for printing, transmitting and receiving, or storing electronic information. These may be directly charged when necessary and allocable to the sponsored program.
(D) Memberships-typically not permitted as direct costs, unless the costs are essential, vital, or fundamental to the project's goals and objectives; and such costs are explicitly included in the budget and budget justification or have been approved on the direct charging justification form.
(E) Postage-similar to office supplies, routine postage for department administration is not allowable; however, some projects may require shipping devices, samples, animals, or surveys and the associated postage, where allocable, may be directly charged to the sponsored program.
The university must ensure payroll costs, example, salary, wages, stipends and fringe benefits, that are charged to sponsored programs adhere to the effort reporting requirements in the office of management and budgets ("OMB") uniform guidance 2 C.F.R. 200Section 200.430.
This rule applies to all faculty, staff, students, and fellows with payroll charges or effort commitments on sponsored programs if they are paid directly by the sponsored award or cost shared from other funding sources.
Consult rule 3349 7 01 of the Administrative Code.
(1) "Actual Effort" is the actual effort expended on a sponsored program; and is usually expressed as a percentage of total effort.
(2) "Cost Sharing of Effort" is the portion of total effort not paid by the sponsor. For example, twenty per cent effort commitment with a request for fifteen per cent salary support results in a five per cent cost sharing commitment.
(3) "Effort Commitment" is the proportion of effort proposed by faculty, staff, students or fellows to carry out their stated role on a sponsored program. This can be expressed as a percentage or in person months. The terms "effort commitment" and "committed effort" are interchangeable.
(4) "Institutional Base Salary" is the annual compensation paid by the university for an individual's appointment, whether that individual's time is spent on research, instruction, administration, or other activities. Institutional base salary excludes any income that an individual earns outside of duties performed for the university.
(5) "Principal Investigator" refers to the faculty or staff member designated by the sponsor to have the appropriate level of authority and responsibility to direct the project or program supported by the grant.
(6) "Person Months" is a method of expressing effort percentage by normalizing an individual's effort percentage compared to their appointment length, which may be a partial year appointment. For example, an individual with a twelve month appointment devoting twenty per cent effort would be working 2.4 person months (calculated by multiplying twenty per cent times twelve months equals 2.4 person months). Many federal sponsors require effort commitments to be proposed in person months.
(7) "Significant Reduction in Committed Effort" is defined as a variance greater than twenty five per cent between committed effort and anticipated actual effort. For example, a personal investigator with a twenty per cent effort commitment who anticipates only being able to devote ten per cent effort would have a significant reduction in committed effort, calculated by the following: (effort commitment less anticipated effort) divided by effort commitment or numerically: (twenty per cent - ten per cent) / twenty per cent equals fifty per cent reduction in effort, which is greater than twenty five per cent and may require sponsor approval prior to reducing effort.
(8) "Total Effort" is the sum of all effort expended or planned to be expended for a period of time; this includes all activities for which an individual is paid their institutional base salary. The total effort calculation is based on the time necessary to fulfill one hundred per cent of activities for which an individual is compensated, regardless of the number of hours worked; it is not based on a forty hour work week.
(D) Rule statement
(1) Effort commitments are expressed in percentages or person months when proposed to the sponsor. Once the proposal is awarded, those effort amounts become effort commitments that must be met within a reasonable variance (example, +/ twenty five per cent change between committed effort and actual effort).
(2) Key personnel, which includes the principal investigator, co principal investigator, or other individuals named in the notice of grant award or contract, are typically required to request prior written approval from the sponsor when they anticipate a significant reduction in effort (example, a twenty five per cent reduction in effort or a twelve week absence).
(3) University employs an after the fact effort certification method as described in the Legacy OMB Circular A 21, Section J.10, which requires payroll distributions to be updated on a continual basis to account for new awards or changes in effort with actual effort being certified on a semi annual basis on time and effort certification reports.
(4) Sponsored programs will be separately identified on the time and effort certification reports with payroll charges expressed as percentages of payroll charged to the sponsored program in relation to all institutional base salary during the certification period.
(5) Cost sharing of effort will not be displayed on the time and effort certification reports. When applicable, the employee must list all cost sharing of effort for the certification period. In the event effort is separately identified where the sponsored program is listed as payroll charges and also has cost sharing of effort, the total of the two combined funding sources is representative of the total effort for the project requiring certification.
(6) Time and effort certification reports must be certified by an appropriate individual.
(a) Faculty who are principal investigators may certify their effort for their own awards.
(b) All other individuals must have their effort certified by
(i) The named employee on the time and effort certification report; and
(ii) The principal investigator(s) for the sponsored program(s) that appear on the time and effort certification report.
(c) In special circumstances where an individual has terminated, is on an extended leave of absence, or not accessible, the following individual(s) may be appropriately certify that individual's time and effort certification report:
(i) The principal investigator(s), or
(ii) Named employee's supervisor, or
(iii) Department chair, or
(iv) Another responsible institutional official who has suitable means to verify the work was performed during the certification period. Proper documentation must accompany the time and effort certification report to justify the appropriateness of the alternate certifier.
(7) The certifier is responsible for reviewing all payroll lines on the time and effort certification report and certifying that the payroll percentages charged to each sponsored program (paid and cost shared) and all other activities reasonably agree with how the employee devoted their actual effort during the certification period.
(8) Supplemental earnings for duties outside of an individual's primary appointment (or job duties) for which they are paid an institutional base salary are not included on the time and effort certification report.
(9) All sponsored program activities must be reported on the time and effort certification report-even if those activities are not identified on the report prepared by grants accounting. This includes all cost sharing commitment and situations where the notice of award has not been issued, an index number has not been established, or payroll distributions have not been updated in time to be reflected on the time and effort certification report.
(10) An individual's payroll distribution must be promptly updated to agree with the certified time and effort certification report when changes are made.
(11) The time and effort certification report cannot be adjusted once certified, unless the adjustment is to reduce overstated effort.
(1) Principal investigator is responsible for adhering to this rule in its entirety.
(2) Office of research and sponsored programs is responsible for evaluating effort commitments at the proposal and award stages.
(3) Grants accounting is responsible for generating and tracking time and effort certification reports.
The university is committed to ensuring that the financial interests of investigators do not affect, or appear to affect, the design, conduct or reporting of research or compromise the welfare of human or animal subjects.
The purpose of this rule is to promote objectivity in research by establishing standards to ensure there is no reasonable expectation that the design, conduct, or reporting of research will be biased by an investigator's conflicting financial interest. This rule establishes procedures for the disclosure, evaluation, management, reduction, and/or elimination of investigator's significant financial interests. This rule complies with the following federal regulations:
Title 42 code of federal regulations (CFR), part 50, subpart F, responsibility of applicants for promoting objectivity in research for which public health service "PHS" funding is sought Title 45 code of federal regulations (CFR), part 94, responsible prospective contractors
(1) This rule applies to all investigators applying for, conducting, supervising, or reporting research at the university. This rule acknowledges that individual financial conflicts of interest may be inherent in the research process and does not preclude research in which a financial conflict of interest exists. This rule applies only to financial conflicts of interest in research.
(2) This rule applies to any investigator who is planning on participating in or is participating in research funded by the public health service "PHS" and any other funding agency that has adopted the "PHS" regulations or requires a conflict of interest rule. The research contemplated under this rule includes a research grant, contract, cooperative agreement, sub grant, subcontract, or sub-cooperative agreement which is funded in whole or in part by "PHS" funds (with the exception of "Phase I SBIR/STTR" applications).
(3) For purposes of determining the existence of a significant financial interest, this rule extends to the financial interests of the investigator and the investigator's immediate family.
(1) "Conflict of Interest Management Plan" is a written plan developed by the institutional officials in collaboration with the investigator to address the management, reduction or elimination of a financial conflict of interest.
(2) "Financial Conflict of Interest" refers to situations in which the university determines that an investigator's significant financial interests related to a externally funded research project could directly and significantly affect the design, conduct or reporting of the externally funded research.
(3) "Financial Interest" refers to anything of monetary value, whether or not the value is readily ascertainable.
(4) "Immediate Family" refers to the spouse (including individuals who are recognized as lawfully married under the law of any state) and dependent children of an investigator.
(5) "Investigator" refers to the project director or principal investigator and any other person, regardless of their title or position, who is responsible for the design, conduct, or reporting of research that is "PHS" funded, which may include, for example, collaborators or consultants. For the purposes of this rule, the term investigator includes financial interests held by the investigator's immediate family.
(6) "Institutional Responsibilities" refers to an investigator's professional responsibilities on behalf of the university and set forth in this rule. Institutional responsibilities include research, research consultation, teaching, professional practice, university committee membership and service on panels such as the institutional review board.
(7) "Institutional Officials" refer to the collaborative efforts of the chief technology transfer officer and the vice president for research.
(8) "Public Health Service Awarding component" is the organizational unit of the "PHS" that funds the research, e.g., national institute of health.
(9) "Principal Investigator" refers to the individual who is the project director or investigator who has primary responsibility for the design, conduct or reporting of the proposed research.
(10) "Research" is a systematic investigation designed to develop or contribute to generalizable knowledge relating broadly to public health, including behavioral and social-sciences research. The term encompasses basic and applied research and product development and includes any such activity for which research funding is available from an external source, including a "PHS" awarding component, through a grant or cooperative agreement.
(11) "Significant Financial Interest" is a financial interest consisting of one or more of the following interests held by the investigator or the investigator's immediate family that reasonably appears to be related to the investigator's institutional responsibility:
(a) Remuneration received from a publicly traded company that, when aggregated for an investigator and the investigator's immediate family for the past twelve months, or expected over the next twelve months, exceeds five thousand dollars. Remuneration includes:
(i) Salary or other payments for services (e.g., consulting fees, honoraria, paid authorship).
(ii) Equity interests (e.g., stocks, stock options or other ownership interests);
(iii) Intellectual property rights (e.g., patents, copyrights and royalties from such rights).
(b) Remuneration received from a non-publicly traded company that, when aggregated for an investigator and the investigator's immediate family for the past twelve months, or expected over the next twelve months, exceeds five thousand dollars or when the investigator or the investigator's immediate family holds any equity interest in the company;
(c) Intellectual property rights and interests (e.g., patents, copyrights) upon receipt of income related to such rights and interests.
(d) Any reimbursed or sponsored travel (i.e., that which is paid on behalf of the investigator and not reimbursed to the investigator), related to the investigator's institutional responsibilities, except for travel that is reimbursed or sponsored by a government agency, an institution of higher education or a teaching hospital, a medical center, or a research institute that is affiliated with an institution of higher education.
(e) The term "significant financial interests" does not include:
(i) Salary, royalties, or other remuneration paid by the university, including intellectual property rights assigned to the university and agreements to share in royalties related to such rights;
(ii) 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 those vehicles;
(iii) Income from seminars, lectures, or teaching engagements sponsored by a government agency, an institution of higher education or a teaching hospital, medical center, or research institute affiliated with an institution of higher education;
(iv) Income from service on certain advisory committees or review panels by a government agency, an institution of higher education or a teaching hospital, medical center, or research institute affiliated with an institution of higher education.
(D) Body of the rule
(1) University employment is a trust conferred by a public authority for a public purpose. Such status forbids employees from placing themselves in a position in which a private interest would conflict with a public duty. This principle applies to all research conducted on the university campus or supported by university resources.
(2) A financial conflict of interest exists if the institutional officials conclude that an investigator's significant financial interest could directly and significantly affect the design, conduct, or reporting of the externally funded research.
(3) Training for investigators. All investigators who engage in "PHS" funded research must complete conflict of interest training prior to engaging in the "PHS" funded research; at least every four years; and immediately upon obtaining employment as a university employee or as required by modifications to this rule.
(4) Disclosure requirements and management plans.
(a) Investigators are required to submit a financial conflict of interest in research disclosure form to university's institutional officials with each new grant application (and to update it annually during the period of the award, or within thirty days of discovering or acquiring (e.g., through purchase, marriage, or inheritance) a new significant interest financial interest.
(b) Within sixty days of the disclosure, whether the disclosure was timely or not, the university's institutional officials or their designee(s) will review the significant financial interest disclosed by the investigator and determine, with or without consultation with the investigator, whether the significant financial interest is related to "PHS" funded research and whether a financial conflict of interest exists. If the significant financial interest was not timely disclosed, the intuitional officials shall further conduct a retrospective review within one hundred twenty days of the untimely disclosure to determine if the research was biased during the period of nondisclosure and report any such finding of bias according in accordance with this rule.
(c) If it the institutional officials determine that a financial conflict of interest exists, they shall work with the investigators to develop a management plan that specifies the actions that have been, or will be, taken to manage the financial conflict of interest. The university will submit a financial conflict of interest report to the "PHS" awarding component within sixty days of the disclosure.
(d) The conflict of interest management plan shall include the following information, at a minimum:
(i) The role and principal duties of the conflicted investigator in the research project;
(ii) Conditions of the management plan;
(iii) How the management plan is designed to safeguard objectivity in the research project;
(iv) Confirmation of the investigator's agreement to the management plan;
(v) How the management plan will be monitored to ensure investigator compliance throughout the duration of the award; and
(vi) Other information as needed.
(e) The conflict of interest management plan may include the following limitations or restrictions to manage the financial conflict of interest:
(i) Public disclosure of financial conflict of interests;
(ii) Disclosure of financial conflict of interests to participants;
(iii) Appointment of an independent monitor;
(iv) Modification of the research plan;
(v) Change of personnel or personnel responsibilities, or disqualification of personnel from participation in all or a portion of the research;
(iv) Divestiture of significant financial interest; or
(vii) Severance of relationships that create actual or potential conflicts.
(f) Disclosure of any reimbursed or sponsored travel requires detailed information on the purpose of the trip, the identity of the sponsor/organizer, the destination, the duration, and the estimated expense of the travel.
(g) If a significant financial conflict of interest arises during the term of the grant, the investigator must immediately notify institutional officials in writing within thirty business days of obtaining such interest.
(5) Reporting financial conflict of interests to the "PHS" awarding component.
(a) University's institutional officials will manage and timely report financial conflict of interest reports to the "PHS" awarding component as required by 42 C.F.R. 50.604(h) and 605(b).
(b) Institutional officials will promptly notify the "PHS" awarding component when a financial conflict of interest has been disclosed by the investigator and that a plan to manage, reduce or eliminate the financial conflict of interest is in place to protect the research from bias.
(c) Reporting by the institutional officials will further include a finding as to whether any bias was found with respect to the design, conduct, or reporting of the "PHS" funded research and a mitigation report where any bias has been identified.
(6) Records. University's institutional officials will maintain all financial conflict of interest records for at least three years from the date the final expenditure report is submitted to the "PHS" awarding component, unless otherwise required by regulation.
(7) Enforcement. Failure to complete the requisite training, file the annual research conflict of interest disclosure form, provide information required by this rule or to comply with any conditions or restrictions imposed by the institutional officials regarding financial conflict of interests may result in disciplinary actions being taken against the investigator.
(a) The financial disclosure forms and the decisions of the institutional officials will be kept confidential to the extent permitted by law.
(b) University will make its financial conflict of interest in research rule publicly accessible on its website. University will respond to written requests for financial conflict of interest information within five days of receipt of the request.
(9) Subrecipient compliance. University will take reasonable steps to ensure that subrecipient investigators also comply with the terms of this rule, which will include, but is not limited to, incorporating conflict of interest compliance requirements as set forth in this rule into any written subrecipient grant agreements in which it is a party.
(1) Complete a financial conflict of interest in research disclosure form for each new proposal submitted to the office of sponsored research programs. The office of sponsored research programs will not submit grant proposals if an investigator's disclosure forms are not included with the application.
(2) Update the disclosure form within thirty days after acquiring a new financial interest and at the time of annual review of each approved proposal.
(3) Identify all individuals who are responsible for the design, conduct or reporting of the proposed research and to ensure that all such individuals complete and submit a disclosure form.
(4) Investigators conducting research under Food and Drug Administration regulations related to applications for a human drug, biological product or device must update the financial conflict of interest in research disclosure form during the study and for one year following completion of the study.
(5) Comply fully and promptly with all conflict of interest management plans put in place.
Under Ohio law, all discoveries or inventions resulting from research or investigations conducted in any college or university are the sole property of the university. The purpose of this rule is to establish a framework for university intellectual property protection and development that will transfer the benefits of its innovations to society, and at the same time, obtain appropriate financial gains for the university and its inventors.
(1) This rule applies to all discoveries, inventions, or innovations made by any university employee if such discovery or invention was:
(a) The result of research carried on by or under the direction of any university employee, the cost of which was paid for, in whole or in part, with funds of, under the control of, or administered by university; or
(b) The invention, discovery, or innovation resulted from efforts by a university employee using university facilities or resources available as a result of his or her employee status.
(2) Inventions not involving any university funds, equipment, facilities, or personnel are the property of the inventor, so long as the invention, discovery, or innovation is not in a substantive area of research in which the inventor is customarily engaged on behalf of the university.
(1) "Composition of Matter". Generally relates to chemical compositions and can include mixtures of ingredients as well as new chemical compounds per se.
(2) "Conditions of Patentability". The person who first invents or discovers must demonstrate that it is new, unobvious and useful. Any process, machine, manufacture, or composition of matter, or any new and useful improvements thereof. Obtain a patent, subject to conditions and requirements of the patent statute. An inventor must apply for a patent before one year has gone by from the date the inventor first describes the invention in a printed publication or uses the invention publicly; otherwise any right to a patent will be lost.
(3) "Copyright". Original works of authorship fixed in tangible media of expression.
(a) "Works of Authorship" include but are not limited to literary, musical, dramatic, audiovisual, architectural, pictorial, graphic and sculptural works and sound recordings. Computer software are works of authorship to the extent they are protected by the federal copyright laws.
(b) "Tangible Media of Expression" include physical, digital and other formats now known or later developed form which copyrightable works may be stored, reproduced, perceived or otherwise communicated, either directly or with the aid of a machine or device.
(4) "Date of Conception". The date the idea for a new product, process or composition of matter first occurs to the inventor.
(5) "Direct and Significant Allocation of Resources". A requested and approved allocation of resources not routinely available to members of an employee's unit. University resources include, but are not limited to, staff time, equipment, funds, computer usage and release time from assigned duties. Clarification of whether an allocation is "direct and significant" should be sought by the employee at the time of the request for allocation.
(6) "Disclosure". Reporting of an invention or discovery in sufficient detail to communicate an understanding of the invention or discovery.
(7) "Discovery". The finding out of some substance, mechanical device, improvement or application not previously known. It is something less than invention and may be the result of industry, application or be merely fortuitous.
(8) "Employee". Any part-time or full-time faculty, staff or student or volunteer appointee of the university whether paid a salary or not.
(9) "Intellectual Property." Inventions, discoveries, innovations, and copyrightable works.
(10) "Innovation". A new model, idea, or product. A useful application of new inventions or discoveries.
(11) "Invention". The act or operation of finding out something new; the process of contriving and producing something not previously known or existing by the exercise of independent investigation and experiment. Inventions include, but are not limited to, products, methods, or uses, whether or not they are patentable.
(12) "Inventor". One who invents or finds out something new; a contriver; especially, one who invents mechanical devices, new drugs, new processes, or other useful objects or procedures.
(13) "Manufacture". (noun) all manufactured articles.
(14) "Net Royalties". Gross royalties or other payments, such as option payments, received by university, minus any fees or costs directly attributable to the invention being licensed. Examples of such direct fees are patent filing fees, fees for patent searches and legal advice, fees arising out of litigation, marketing costs and maintenance fees. Indirect university overhead and other costs normally associated with the operation of a university shall not be deducted from gross royalties or otherwise allocated to costs or fees associated with the invention.
(15) "Patent" is a grant via the United States patent and trademark office to an original inventor of certain rights as defined by the claims of the patent. The term of a patent is seventeen years from the date of the grant. The right conferred by the patent is the right to exclude others from making, using, or selling the invention (as defined in the patent claims). Separate application must be made for foreign patent rights.
(16) "Prior Art". Existing patents or other publications which describe or teach the subject matter proposed to be patented.
(17) "Publication". A published article or abstract in a technical journal, bulletin, newspaper, textbook or other tangible medium which gives sufficient information about the discovery or invention to permit one skilled in the art to practice the invention.
(18) "Reduction to Practice". The act of successfully completing an invention, including demonstrating its usefulness for its intended purpose.
(19) "Software". Computer instructions (algorithms and code), data and accompanying documentation.
(a) "Algorithm" means a logical arithmetical or computational procedure that if correctly applied ensure the solution of a problem.
(b) "Source Code" means an original computer program written by a programmer in human-understandable form. It is converted into the equivalent object code (written in machine language) by the complier or assembler in order to run on a computer.
(c) "Object Code" means the form of a program that is executable by a machine, or usable by an assembler that translates it directly to machine-understandable language. This form of software is not readable or modifiable by human beings other than through extraordinary effort.
(20) "Trade Secret". Information, including a formula, pattern, compilation, program, device, method, technique, or process that:
(a) derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and
(b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
(21) "Unobvious". Not obvious to a person having ordinary skill in the art to which said subject matter pertains.
(22) "Work Made for Hire". Includes works prepared by an employee as a specific responsibility of the position for which the employee is hired, works specifically commissioned or ordered by university for which a written agreement specifying copyright ownership has been executed prior to the completion of the work, works created under a sponsorship/contractual agreement with copyright provisions defined, and other work created through a direct and significant allocation of university resources to a specified project. *Note: A faculty member's general obligation to produce scholarly works does not constitute a specific responsibility as included in this definition.
(D) Body of the rule
(1) General considerations
(a) The university education and research missions are preeminent over that of the transfer and commercialization of research results.
(b) The university is committed to active engagement and support of innovation, technology development and entrepreneurial activities through the efficient and effective deployment of its resources for the betterment of society and the generation of unrestricted revenue to support its mission.
(c) University resources may be used for non-university purposes so long as they are appropriately serve the public interest. Any such use must be in conformance with university rule and set forth in appropriate agreements between the parties.
(d) The university will respect the intellectual property of its partners and collaborators.
(e) When the university owns intellectual property under this rule, the inventor or creator may play an active role in the entire licensing process, unless such participation is inconsistent with conflict of interest regulations or university rule.
(2) Patent rule
The goals of the patent rule are to define the rights and interests of all parties in the context of academic freedom, provide incentives and institutional support to those employees whose research and scholarly activities lead to inventions, discoveries, or innovations that might be patented for societal use and to provide for equitable distribution of income resulting from inventions, discoveries, and innovations between university and the inventor.
It is well understood that publication of research results is an essential part of the activity of a university researcher. The university rule recognizes this need; however, timing of the publication of research results, in light of patent activity, can be of critical importance. Failure to take timely steps to patent can result in possible reduction in, or the entire loss of, adequate patent protection in the United States or abroad.
The safest course is to file a United States patent application before any public use, disclosure or sale of the invention occurs. There is a period of one year from the date of publication to file an application for a United Sates patent; however, in most foreign countries, the publication itself bars valid patent protection with no grace period.
(4) Government grants
Under The Bayh-Dole Act or Patent and Trademark Law Amendments Act, Pub. L. 96-517, (1980)
The university generally is able to obtain title to inventions and patents arising under United States government contracts/grants, subject to certain rights reserved by the government, provided that invention reporting requirements and formalities are followed.
(5) Technology commercialization activity
Inventions disclosed to the university will be evaluated to determine scientific merit, likelihood of patentability or other protection, potential for societal benefit, market potential, barriers to market and other criteria concerning commercialization potential.
(6) Rights and obligations of the parties
(a) In accordance with section 3345.14 of the Revised Code, unless otherwise modified by contract, all rights to and interests in discoveries or inventions to which this rule is applicable shall be the sole property of university. Rights to inventions arising in the course of government and other sponsored research may be controlled by the terms of the underlying research agreement.
(b) Inventor rights and obligations
(i) Confidential disclosure of the invention to the general counsel shall precede an inventor's public disclosure, publication of information concerning an invention, discovery, or innovation. Once an invention, discovery or innovation is reduced to practice, an invention disclosure form shall be promptly submitted by the inventor to the general counsel. Invention disclosure forms are available from the general counsel or on the university website.
(ii) University requires that researchers maintain adequate laboratory notebooks which document critical information about the discovery or invention. Guidelines for the format of these laboratory notebooks are outlined in attachment "C". Notebooks and other materials pertaining to research activities leading to a patent application are the property of university and will remain at university even after termination of employment.
(iii) The inventor shall assign title to the invention, discovery, or innovation to university.
(iv) The inventor shall cooperate in:
(a) Executing applications and legal documents;
(b) Any litigation arising out of the patent application; and
(c) Reasonable marketing efforts related to the invention or discovery.
(v) The inventor has a right to receive a share of any royalties or licensing fees received for the discovery, invention or innovation according to the schedule contained in paragraph (D)(10) of this rule.
(vi) If the general counsel and the vice president for research recommends that university surrender all rights in the discovery or invention and the president agrees with this recommendation, the president will have the authority to surrender all rights of the university with respect to the discovery, invention, or innovation. After surrender, the inventor shall have the option to pursue a patent application in the inventor's own name at his/her own expense, in which case, any royalties or licensing fees received would be the sole property of the inventor; however, the inventor will grant to university a royalty-free, irrevocable, perpetual, non-exclusive license to make and use the invention for its own purposes.
(vii) The inventor has a right to timely publication of his or her findings as required by the principles of academic freedom, subject to the university's right to protect its interest in the intellectual property.
(7) University's rights and obligations
(a) University has the sole right to license, sell, assign, or otherwise dispose of the rights to inventions, discoveries, or innovations which are owned by or have been assigned to university.
(b) The university shall timely determine whether it chooses to retain or assign title, submit to an external source for evaluation of patentability, file a patent application or surrender title to the inventor.
(c) Should the university choose to file a patent application, it shall file in a timely manner any documentation necessary to prosecute a patent and shall pay all filing fees, maintenance fees, attorney fees and other costs related to prosecuting and maintaining the patent. These costs will be recovered by the university before any payments are made in accordance with this rule.
The general counsel and the vice president for research shall have overall responsibility for administration of the university's patent program, including assuring valuable property rights are not lost. Specific responsibilities shall be to:
(a) Function as contact points and resources with regard to this rule and procedure;
(b) Receive reports of all discoveries or inventions that are subject to the university's patent rule;
(c) Conduct or cause to be conducted due diligence studies to determine patentability, market potential, barriers to market, and other criteria deemed necessary to determine commercial potential.
(d) Act upon the due diligence conducted to promote the interests of the university and to the extent appropriate the university inventors.
(9) The general counsel and the vice president for research may utilize university funds to engage appropriate consultants, legal and business professionals to evaluate all discoveries and inventions disclosed to university for potential patentability and commercialization. These reports will be sent directly to the general counsel and will be protected from disclosure under attorney work product.
(a) For all inventions for which the university receives royalties or other payments, the net royalties will normally be distributed as follows:
Forty per cent to the inventor(s)
Twenty per cent to the inventor's department(s)
Twenty per cent to the university research & office
Twenty per cent to the technology transfer office
(b) All monies received by the departments, the university research office, or university technology transfer office are considered university funds and will be administered in accordance with established accounting procedures.
(c) If multiple inventors are involved, the royalties as specified above shall be distributed equally among the parties set forth in paragraph (D)(10)(a) of this rule, unless a written proposal for art alternate distribution is jointly presented by the inventors and approved by the general counsel and the vice president for research.
(d) The inventor shall continue to receive the specified share of royalties even when the inventor is no longer affiliated with university. In the event of the inventor's death, royalties due and payable under this rule will be paid to the inventor's estate for the remainder of the royalty period.
(e) The inventor's department(s) shall continue to receive the royalties specified above as long as the inventor is affiliated with said department. Should the inventor leave the university, all departmental royalties shall become the sole property of university and will be shared equally by the university research office and technology transfer office.
(11) Research agreements collaborators and industry involving patent rights
It is not uncommon for university employees to receive awards to conduct research which are funded by private industry. It is also not uncommon for employees to conduct research in cooperation with colleagues at other institutions. University recognizes that, to continue these relationships, it must be willing to consider a variety of contractual terms and conditions. In order to protect traditional academic freedom, to assist employees in evaluating proposals and to protect university's interest in discoveries, inventions, or innovations, the following policies shall apply to these external relationships:
(a) All written agreements with private industry or with other institutions utilizing university resources to conduct research must first be reviewed by the general counsel and the vice president for research. The general counsel and the vice president for research will only approve those agreements which assure that the rights of the university are appropriately protected.
(b) In dealing with inventions which are conceived or developed in the course of research sponsored by a third party and/or pursuant to an agreement with another institution, the university will abide by the terms of the agreement with that third party. Where an option exists, the university will seek agreements and contracts, or waivers thereof, that will allow patent rights to remain with university.
(c) University will not waive the right to publish results of research. University will only agree to delay publication for reasonable periods of time so appropriate action can be taken to protect patentable discoveries or inventions. In agreeing to delay publication for a reasonable period, university will not agree to delays that effectively inhibit a student's timely completion of a course or degree.
(d) Title to all documents, records, biological materials, software, databases, notebooks and other repositories of information from research shall be held by university. Those materials must remain at university should the inventor's employment at university be terminated for any reason, unless specifically authorized by the university.
(e) University will agree that proprietary information remains the property of private industry. However, written agreements must clearly define what information is considered to be proprietary in nature.
(f) University will agree to protect the trade secrets of third party research sponsors. Trade secrets will be kept confidential and will not be subject to disclosure under the provisions of section 149.43 of the Revised Code. If a request for such information is received, the university will notify the owner of the proprietary information of the request so that they may timely file objections with a court of competent jurisdiction.
(12) Copyright rule
(a) The university copyright rule seeks:
(i) To maximize academic freedom and creative expression for the public good;
(ii) To preserve traditional academic practices and privileges with respect to the publication of scholarly works;
(iii) To apply uniform principles and procedures that provide allocation of income resulting from commercial publication;
(iv) To apply funds accruing to university from copyrighted materials to advance and encourage scholarly endeavor;
(v) To disavow any claims by university in an individual's copyrightable work simply because of the individual's membership in the university community; and
(vi) To protect university's assets and preserve its reputation of excellence.
(b) Copyright ownership
(i) The university encourages scholarly and creative activity by faculty, students and staff. These activities include the production of works resulting from academic research or scholarly study. Authors of copyrightable works may register the copyrights and publish the works as their own except for "works made for hire" or any other work specified in this rule or covered by an agreement to the contrary. In the case of a "work made for hire", the employer or contractor by law is the author, and hence the owner of the copyright. University's general counsel in consultation with the author and the vice president for research shall determine if work is made for hire.
(ii) Personal copyrights
Works by a university employee which do not use the significant resources of the university as set forth below, are not works made for hire, and are not subject to a written agreement to the contrary are the property of the employee. This category includes the products of research and scholarship, and other creative and artistic works. Employees may contribute their copyright interests to university. If accepted, a confirming agreement will be executed.
Individuals often use significant university resources in their work. University requires that its resources be used for university purposes and not for personal gain, commercial advantage, or any other non-university purpose. Unless the author or creator of the work obtained written authorization from the vice president for research and the general counsel prior to using significant university resources, university may claim copyright to works produced with significant use of its resources, are considered university property. University property includes works that are supported by a specific allocation of university funds or that are created at the direction of the university for a specific university purpose.
The university will retain title to all copyrighted software developed by, or substantially with, university resources, unless prior written waiver of university rights is issued.
(iii) The following notice is to appear on all university-owned material:
Copyright "C" (year) Northeast Ohio medical university, Rootstown, Ohio. All rights reserved.
The date in the notice should be the year in which the work was first fixed in any tangible mode of expression.
(iv) The general rule of the university is to register only those of its works which have potential for royalty return. University copyright ownership may be relinquished only upon the authorization of the vice president for research and the general counsel. These officers are authorized by the board to surrender such rights if they believe it is in the best interest of the university to do so. If such rights are relinquished, the university will retain a nonexclusive, royalty free, license to use these works.
(v) Sponsored works
The disposition of copyrights of works created with support from an outside sponsor shall be governed by an agreement.
(c) Rule administration
The general counsel with the vice president for research will:
(i) Determine the rights of university in any copyrightable works created or to be created with university resources;
(ii) Develop and approve agreements for the use of university resources in the creation of copyrightable works;
(iii) Provide assistance as appropriate for securing the registered copyright to the works the university deems it appropriate;
(iv) Provide assistance in licensing or distributing copyrightable works in which university holds;
(v) Distribute royalties to the author or others as set forth in pertinent agreements.