Department of Health and Human Services
 
OFFICE OF 

 
INSPECTOR GENERAL 

 
 
 
 
 
 
 
N   I
ATIONAL  NSTITUTES OF 

 
H  H  
EA  LTH S  ANDLING OF 

 
A C  
LLEGATIONS  ONCERNING 

 
C   I  
ONFLICT OF  NTEREST AND 

 
E V  
T  HICS  IOLATIONS 

 
 
 
Daniel R. Levinson 
  
Inspector General 

 
October 2008 
 
OEI-03-07-00220 
   
Office of Inspector General

http://oig.hhs.gov  
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as  
amended, is  to protect the integrity of the Department of  Health and Human Services  
(HHS)  programs, as well as the health and welfare of beneficiaries  served by those 
programs.  This statutory mission  is  carried  out through  a nationwide network  of  audits, 
investigations, and inspections conducted by the  following operating components:  
Office of Audit Services 
The Office  of  Audit Services  (OAS) provides auditing services  for HHS, either by  conducting  
audits  with its own audit resources or by  overseeing  audit work done by others.  Audits  
examine the performance of HHS programs and/or its grantees and contractors in carrying  
out their respective responsibilities and are intended  to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and  
mismanagement and promote economy and efficiency  throughout  HHS. 
Office of Evaluation and Inspections  
The Office  of  Evaluation and Inspections (OEI)  conducts national evaluations to  provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud,  waste, or abuse  and promoting  
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving  program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations  
of  fraud and misconduct  related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI  utilizes its resources 
by actively  coordinating with the Department  of Justice  and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to  criminal 
convictions, administrative sanctions,  and/or  civil monetary  penalties.  
Office of Counsel to the Inspector General 
The Office of Counsel to the  Inspector  General (OCIG) provides general legal services to 
OIG, rendering  advice and opinions on HHS programs and operations and  providing all  
legal support for OIGs  internal operations.  OCIG represents  OIG in all civil and 
administrative fraud and abuse cases involving HHS programs,  including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In  connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program  guidance, publishes fraud alerts, and provides other  
guidance  to  the health care industry concerning the anti-kickback statute and other  OIG  
enforcement authorities.    
   
  E X E C U T I V E   S U M M A R Y  
OBJECTIVE 
 
1. 	 To determine the number and nature of allegations related to  
conflicts of interest and ethics violations received by the National 
Institutes of Health (NIH) between January 1, 2006, and             
June 30, 2007. 
2. 	 To determine the final resolution of these allegations. 
3. 	 To determine how different Institutes and offices at NIH handle 
allegations of conflicts of interest and ethical misconduct.   
BACKGROUND 
Congress, the Office of Government  Ethics, and the Department of 
Health and Human Services (HHS) have promulgated 
conflict-of-interest statutes and ethics regulations to help ensure that 
Federal employees are not compromised by conflicts of interest when 
performing their official duties.  Although NIH employees are permitted  
to perform outside activities with non-Federal entities, they may not  
undertake activities that might cause actual or perceived conflicts of 
interest.   
The NIH ethics program is composed of the NIH Ethics Office within 
the Office of the Director and ethics offices within each of the Institutes 
and Centers (Institutes) at NIH.  The ethics program encompasses all of 
NIHs approximately 18,000 employees.   
The NIH Ethics Office was established to provide guidance and advice 
to the ethics offices within each Institute and to the NIH community as 
a whole.  In addition, the HHS Office of the General Counsel (OGC) 
maintains an ethics division at NIH to provide advice on ethics issues 
and the interpretation of HHS regulations.   
NIH staff members are  responsible for reporting employee  activities 
that they believe are criminal or improper.  The HHS Office of Inspector 
General (OIG) handles allegations of criminal offenses, including 
violations of conflict-of-interest statutes.  NIHs  Office of Management  
Assessment (OMA) handles allegations of noncriminal employee 
misconduct and conflicts of interest related to  NIH programs  and 
activities. 
We reviewed all documentation that we received from NIH pertaining to  
allegations of violations of conflict-of-interest statutes and violations of  
  OEI-03-07-00220   NIHS HANDLING OF ALLEGATIONS  CONCERNING  CONFLICT OF  INTEREST AND ETHICS  VIOLATIONS   i   
   
E X E C U T I V E   S U M M A R Y   
ethics regulations.  The allegations were received by NIH from    
January 1, 2006, to June 30, 2007. We surveyed 31 Deputy Ethics 
Counselors at the Institutes.  We also interviewed relevant staff in 
OMA, the NIH Ethics Office, and OGC Ethics Division to determine 
what role each plays in the handling of allegations.  As part of our  
interview protocol, we collected any relevant documentation or 
operating procedures that these offices maintain.     
FINDINGS 
The most common allegations involved National Institutes of Health 
employees not completing required  ethics  training or ethics forms.   
We received documentation from NIH for 565 allegations related to 
conflicts of interest and/or ethics violations.  NIH determined  that 542 of  
the allegations were substantiated and 23 were unsubstantiated. The 
majority of substantiated allegations (296 allegations) were related to 
employees not completing required ethics training.  The second most 
common substantiated allegation (194 allegations) was related to 
employees not completing required ethics forms.   
The majority  of allegations were resolved within the National 
Institutes of Health; however, for one-third of allegations, no final 
resolution was documented. NIH resolved 60 percent of substantiated 
allegations internally and forwarded another 7 percent to OIG for 
possible investigation.  The majority of allegations were resolved by 
having the employees complete the required ethics training or forms.  
NIH did not provide documentation regarding its final resolutions for  
33 percent of substantiated allegations.  The absence of documentation 
does not necessarily mean that the allegation was not resolved.  
However, without complete documentation, it is impossible to determine 
whether and how these allegations were resolved, including whether 
they were handled appropriately and consistently. 
The majority  of Institutes do not have written  procedures regarding 
how  to handle allegations and do not handle allegations uniformly.   
The majority of Institutes do not have Institute-specific policies or 
procedures for reviewing allegations regarding violations of the  
conflict-of-interest statutes and ethics regulations.   Institutes reported 
that when handling an allegation, they do not uniformly confer with the 
NIH Ethics Office, the OGC Ethics Division, or OMA.  For example, 
eight Institutes reported  that they would contact any of the three offices 
for guidance when reviewing allegations.  Another 15 Institutes 
  OEI-03-07-00220   NIHS HANDLING OF ALLEGATIONS  CONCERNING  CONFLICT OF  INTEREST AND ETHICS  VIOLATIONS   ii   
   
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reported that they would seek assistance from only one or two of the 
offices. The remaining Institutes did not specifically report  conferring 
with any of the three offices. With regard to criminal allegations, most 
Institutes rely on the NIH Ethics Office, the OGC Ethics Division, or 
OMA to refer these allegations to OIG. However, several Institutes  
make referrals directly to OIG.    
Coordination among the Ethics Office, the Office of Management 
Assessment, and the Office of the General Counsel Ethics Division 
occurs but is not formalized in a written policy.   During interviews 
with staff at the NIH Ethics Office, OMA, and the OGC Ethics Division, 
it was clear that they understand their own roles and responsibilities 
with regard to handling allegations. However, although OMA has 
written policies and procedures in place to handle allegations, the NIH 
Ethics Office and the OGC Ethics Division do not. In addition, none of 
the offices have written procedures outlining the coordination between  
the three offices. 
RECOMMENDATIONS 
NIH employees have a responsibility to avoid the appearance of 
impropriety, which can undermine public confidence in the scientific 
integrity of  NIHs research program. Consequently, NIH has a 
responsibility to ensure that its employees abide by Federal statutes 
and regulations regarding ethics and conflicts of interest. Violations of 
these statutes and regulations could  jeopardize the scientific integrity of  
NIHs research programs. 
Because NIH is organized as various components, including Institutes, 
NIHs ethics program is composed of various offices that work to handle 
allegations of conflict of interest and ethics violations. To maintain 
consistency in how allegations are handled, we recommend that NIH: 
Develop a formal, written policy outlining how  allegations of conflicts 
of interest and ethics violations are to be handled among the 
Institutes ethics offices, the National Institutes of Health Ethics 
Office, the Office of the General Counsel Ethics Division, and the 
Office of Management Assessment. 
Ensure that documentation detailing how  allegations are ultimately  
resolved is maintained.  
 
   
OEI-03-07-00220   NIHS HANDLING OF ALLEGATIONS  CONCERNING  CONFLICT OF  INTEREST AND ETHICS  VIOLATIONS   iii   
   
E X E C U T I V E   S U M M A R Y
   
AGENCY COMMENTS 
NIH concurred with our recommendations, stating that as of         
August 15, 2008, the recommendations were implemented as a new 
chapter in the NIH Policy Manual.  However, NIH noted that our 
finding related to employees not completing required ethics forms was 
misleading because it did not provide as context  the number of 
employees required to take the training.  The official draft report shared 
with NIH did note in the background, as does this final report, that 
NIHs ethics program encompasses approximately 18,000 employees.   
 
 
  OEI-03-07-00220   NIHS HANDLING OF ALLEGATIONS  CONCERNING  CONFLICT OF  INTEREST AND ETHICS  VIOLATIONS   iv   
  T A B L E   O F   C O N T E N T S  
EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
  
 
 
I N T RO DUC T IO N  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1 
  
 
    
F I N D IN G S  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9 
  
Most allegations involved NIH employees not completing    
      
required ethics training or ethics forms. . . . . . . . . . . . . . . . . . . . . .  9 
  
One-third of allegations did not have documented resolutions. . .  10 

The majority of Institutes do not have written procedures 
      
regarding how to handle allegations  . . . . . . . . . . . . . . . . . . . . . . .  13 
  
Coordination among internal offices occurs but is not  
          
formalized in a written policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15 
  
 
R E C O MMEN D A T ION S  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17 

  Agency Comments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18 
  
 
APPENDIXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19 
  
A: 	Types and Number of Allegations Related to Conflict 

      of Interest and Ethics Violations Between January 1, 2006,  

    and June 30, 2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19 
  
 
B:	  Agency Comments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21 
  
 
   
A C K NO WL E D G M E N T S  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24 
    
   
  I N T R O D U C T I O N  
OBJECTIVE 
1. 	 To determine the number and nature of allegations related to  
conflicts of interest and ethics violations received by the National 
Institutes of Health (NIH) between January 1, 2006, and             
June 30, 2007. 
2. 	 To determine the final resolution of these allegations. 
3. 	 To determine how different Institutes and offices at NIH handle 
allegations of conflicts of interest and ethical misconduct.    
BACKGROUND 
NIH, located within the Department of Health and Human Services 
(HHS), is the primary Federal agency responsible for conducting and  
supporting medical research.  Organized into 27 Institutes and Centers, 
NIH spends billions of dollars annually to support its mission.  In fiscal 
year 2007, the total NIH appropriation was over $29.2 billion.  Much of 
this funding is distributed through almost 50,000 competitive grants to 
more than 325,000 researchers at over 3,000 universities, medical 
schools, and other research institutions across the country and around 
the world.1              
One of NIHs stated goals is to exemplify and promote the highest level 
of scientific integrity, public accountability, and social responsibility in 
the conduct of science.2  Maintaining this scientific integrity involves 
avoiding conflicts of interest in which employees performance of official 
duties might be affected by outside financial interests, such as stock  
holdings or  employment activities with non-Federal entities.  Although  
NIH employees are permitted to interact with non-Federal entities to 
perform certain outside activities that are crucial to maintaining 
technical proficiency, professional licenses, and  academic credentials, 
they may not undertake activities that might cause actual or perceived 
conflicts of interest.  Because NIH employees hold positions of trust,  
even the appearance of conflicts of interest can undermine the publics 
confidence. 
 
 
1 NIH. NIH Budget.  Available online at www.nih.gov/about/budget.htm.               
Accessed on July 3, 2008. 
2 NIH. About NIH.  Available online at www.nih.gov/about. Accessed on July 3, 2008. 
  OEI-03-07-00220   NIHS HANDLING OF ALLEGATIONS  CONCERNING  CONFLICT OF  INTEREST AND ETHICS  VIOLATIONS   1   
   
I N T R O D U C T I O N   
Conflict of Interest 
Congress has imposed prohibitions to help ensure that Federal 
employees are not compromised by conflicts of interest when performing  
their official duties.  For example, 18 U.S.C.  208 prohibits employees 
from participating in official matters in which they and certain others 
with whom they have relationships (such as spouses, dependent 
children, and outside employers) have a financial interest. A related 
statute, 18 U.S.C.  209, prohibits Federal employees from            
receiving any salary, or contribution to or supplementation of salary, 
from any source other than the United States as compensation for  
services as a Government employee (such as receiving an honorarium  
for giving an official speech).  Violations of these two statutes are 
considered criminal offenses.   
The Office of Government Ethics exercises leadership to prevent 
conflicts of interest on the part of  executive branch employees.  In 1992, 
the Office of Government Ethics promulgated Standards of Ethical 
Conduct for Employees of the Executive Branch (5 CFR pt. 2635), which 
included prohibitions against engaging in conflicting outside activities.  
In 1996, the Supplemental Standards of Ethical Conduct for Employees 
of HHS (Supplemental Standards), which prohibited all HHS employees 
from engaging in compensated outside activities involving HHS-funded 
grants, contracts, cooperative agreements, and cooperative research and 
development agreements, was issued.   
The Supplemental Standards were revised in August 2005, when 
additional prohibitions on outside activities were imposed.  These 
prohibitions prevented  NIH employees from engaging in outside 
activities with substantially affected organizations, supported research 
institutions, and health care providers or insurers.  The revisions also 
included additional prohibitions on  financial holdings for senior NIH 
employees, such that these employees and their spouses and  minor  
children must divest all holdings in substantially affected organizations 
in excess of $15,000 per company.  
NIH monitors outside activities and financial interests of its employees 
by reviewing the following forms: 
 	  Request for Approval of Outside Activity (HHS-520). This form is 
required for certain outside activity requests. It contains 
information on the employees position; the nature of the outside 
activity; the length of time over which the outside activity will be 
  OEI-03-07-00220   NIHS HANDLING OF ALLEGATIONS  CONCERNING  CONFLICT OF  INTEREST AND ETHICS  VIOLATIONS   2   
   
I N T R O D U C T I O N   
performed;  and the method of compensation, if any, for the outside 
activity. 
 	 Supplemental Information to the HHS-520 (NIH-2657). Outside 
activities involving consulting for industry, legal  
consulting/testimony, and professional practice by NIH employees  
require the submission of this form. 
 	 Annual Report of Outside Activity (HHS-521). NIH employees who 
conduct outside activities are also required to file this annual report  
of outside activities for the previous calendar year by February 28. 
 	 Public Financial Disclosure Report (SF-278) and Confidential 
Financial Disclosure Report (OGE-450). Office of  Government  
Ethics regulations outline which executive branch officials are 
required to file these forms.  
 	 Confidential Report of Financial Interests in Substantially Affected 
Organizations for Employees of the NIH (HHS-717-1). Under the 
revised HHS Supplemental Standards of Ethical Conduct, NIH 
employees who file public or confidential financial disclosure forms 
and clinical researchers must disclose the amounts that they invest 
in substantially affected organizations on this form.3  
Ethics Program at the National Institutes of Health  
The ethics programs of HHS agencies, including NIH, are coordinated  
by the Designated Agency Ethics Official, who also serves as the 
Departments Associate General Counsel for Ethics.  The Designated 
Agency Ethics Official appoints Deputy Ethics Counselors in each 
agency, issues policies and procedures for the HHS ethics program,  
establishes ethics training for the Deputy Ethics Counselors and HHS 
employees,  and conducts periodic site reviews of agencies ethics 
programs.   
The Deputy Director of NIH serves as the Deputy Ethics Counselor for  
all of NIH and the NIH  Ethics Office assists the NIH Deputy Ethics 
Counselor in overseeing the NIH ethics program.  The ethics program  
encompasses all of NIHs approximately 18,000 employees.  NIH 
requires more than one-third of these employees to submit financial 
disclosure forms on an annual basis. 
 
3 The HHS-717-1 used to be referred to as the HHS-716.  For the purposes of this report, 
the HHS-716 and HHS-717-1 constitute the same form. 
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I N T R O D U C T I O N   
The NIH Ethics Office was established to provide guidance and advice 
to the ethics offices within each Institute and Center and to the NIH  
community as a whole.   It also serves as the ethics office for  senior NIH 
employees and Office of the Director employees  and, as such, provides 
guidance and advice to these employees.  It also assists with the formal 
and informal training of Institute officials.    
Each Institutes and Centers ethics office at NIH is also managed by a 
Deputy Ethics Counselor.  In addition, the Office of Director, the Office 
of Research Facilities, and the Office of Research Services (both located  
within the Office of Director) each  have their own Deputy Ethics 
Counselors as well.  Hereafter we will use the term Institute to 
represent all Institutes, Centers, and offices.  Each Deputy Ethics 
Counselor is responsible  for the overall coordination and management of 
that Institutes ethics program.   Deputy Ethics Counselors review NIH 
staff financial disclosure forms and requests to engage in activities with 
outside organizations.  Some of these forms are also initially reviewed  
by the employees supervisor.  Deputy Ethics Counselors can approve 
and disapprove outside activity requests based  on the requests 
compliance with current ethics regulations and policies.  Institutes may 
also have their own Ethics Coordinators, who provide administrative 
and program support for the Institutes ethics programs. 
The HHS Office of the General Counsel (OGC) maintains an ethics 
division at NIH.  The OGC Ethics Division functions as the NIH liaison 
to the Office of Government Ethics and provides advice on ethics issues, 
such as conflicts of interest, financial disclosures, and ethics training 
materials.  
The NIH Office of Management Assessment (OMA) also has a 
responsibility regarding the ethics program at NIH.  It is responsible for 
reviewing allegations referred to its  office.  OMA does not have any 
other ethics  functions. 
Policy and Procedures for Reporting Allegations of Misconduct 
All NIH employees, including management and supervisory  personnel, 
are responsible for reporting allegations of noncriminal misconduct to  
the appropriate supervisor, to a higher level management official within 
the organization, or to OMA.  According to Chapter 1754 of the NIH 
Policy Manual, OMA is responsible for reviewing allegations of 
noncriminal employee misconduct and conflicts of interest.  
All NIH employees also have the responsibility for reporting employee 
activities that they believe are criminal.  According to the NIH Policy 
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Manual, every employee, supervisor, and management official should  
report any allegation of criminal offense to the Office of Inspector 
General (OIG) for possible investigation.4 Depending on its assessment 
of the allegation, OIG may decide to conduct an investigation or to refer 
the allegation to OMA for administrative action.  
NIH employees may confer with OMA  at any time for advice and to 
determine whether allegations are criminal in nature. OMA does not 
have authority to investigate allegations involving criminal offenses by 
NIH employees.     
Reviews of National Institutes of Healths Ethics Program 
Multiple reviews conducted in recent years have  highlighted the 
weaknesses  of the NIH ethics program. The Office of Government 
Ethics has conducted five reviews since 1987. These reviews reported 
problems with the outside activity review process. In 2004, the most 
recent review, the Office of Government Ethics reported that . . . NIH 
has had a permissive culture on matters relating to outside 
compensation for more than a decade. It also noted that there is 
confusion at NIH as to  who is responsible for the ethics program.  
According to the report, this results from having OGC ethics staff at 
NIH as well as a separate NIH Ethics Office. 
In response  to conflict of interest concerns, NIH convened a Blue Ribbon 
Panel on Conflict-of-Interest Policies in 2004. The panel concluded that 
the many hiring authorities used by NIH, combined with different 
regulatory and statutory requirements regarding financial disclosure, 
create a patchwork of policies and procedures that could easily lead to 
misunderstandings.5 The panels recommendations helped in the 
development of revised Supplemental Standards, which were published 
in 2005. New provisions were added specifically for NIH employees. 
In 2005, OIG published a report entitled Outside Activities of     
Senior-Level NIH Employees (OEI-01-04-00150) that assessed NIHs 
process for reviewing outside activity requests between 2001 and 2003. 
The study found that limited information submitted by employees and 
inadequacies in the review process inhibit NIHs ability to effectively 
review outside activity requests. OIG recommended that NIH improve 
 
4 NIH Policy Manual, Chapter 1754, Reporting Allegations of Criminal Offenses, 
Misuse of Grant and  Contract Funds, or Improper Conduct by an NIH Employee. 
5 Report of the National Institutes of Health, Blue Ribbon Panel on Conflict-of-Interest 
Policies, June 22, 2004, p. 21. 
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I N T R O D U C T I O N   
the quality and extent of information collected for outside activities and 
address the inadequacies in the review process for outside activities.  
NIH concurred with the findings and recommendations of the report.  
NIH noted that it had already taken many steps to address the 
vulnerabilities identified in the report and had further initiatives 
planned.6    
METHODOLOGY 
Scope 
This study is limited to allegations provided by NIH that relate to 
violations of conflict of interest  statutes and violations of ethics 
regulations (hereafter referred to as allegations).7  We limited our 
review of allegations to those made during the 18-month period between  
January 1, 2006, and June 30, 2007.  To assess the handling of these 
allegations by NIH, we  focused  our review on the NIH Ethics office,  
OMA, the OGC Ethics Division at NIH, the Institutes, and Deputy 
Ethics Counselors.   
Data Sources and Data Collection 
We requested all documentation pertaining to allegations. We 
requested that the documentation include: 
(1) Allegations received by NIH (including the Institutes, the NIH  
Ethics Office, and OMA) and the OGC Ethics Division at NIH during 
the 18-month period between January 1, 2006, and June 30, 2007.  
Allegations included any evidence  of noncompliance that Deputy Ethics 
Counselors found in the course  of their ethics work and that involved  
clear, intentional, and preexisting or ongoing noncompliance.    
(2) Any letters, e-mails, memorandums,  records of phone conversations, 
or other materials relevant to the allegations.  
 
6 During its review, OIG also found that two outside activities may have violated  HHS 
supplemental regulations, which prohibit employees from providing consultative  or 
professional services for compensation to assist in the preparation of any grant application 
intended  for submission to HHS.  These two cases were referred to NIH for further review.  
NIH agreed that the cases appeared to violate HHS supplemental regulations and the 
outside activities should not have been approved. 
7 Conflict-of-interest statutes are established in 18 U.S.C.  208 and 209.  Ethics 
regulations are established in Executive Branch Financial Disclosure, Qualified Trusts, and 
Certificates of Divestiture; Standards of  Ethical Conduct for Employees of the Executive 
Branch; and Supplemental Standards of Ethical Conduct and Financial Disclosure  
Requirements for Employees of HHS (5 CFR pts. 2634, 2635, 5501, and 5502). 
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We also conducted structured interviews with relevant staff in OMA, 
the NIH Ethics Office, and the OGC Ethics Division to determine what 
role each office plays in the handling of allegations. Our questions 
covered topics such as roles and responsibilities in the ethics program, 
policies and  procedures for handling allegations, coordination among 
the different offices within NIH when handling allegations, and training 
and outreach efforts.   We conducted  these interviews onsite  at NIH. As  
part of our interview protocol, we collected any relevant documentation 
or operating procedures that these officials maintained. 
Additionally, we sent a survey to the Deputy Ethics Counselors for NIH 
and the Institutes.8 All of the Deputy Ethics Counselors responded to 
our survey, for a total of 31 survey responses.   
Our questions covered topics such as each Institutes policies and 
procedures for how employees report allegations; the Deputy Ethics 
Counselors understanding of the roles of OMA, the NIH Ethics Office,  
and the OGC Ethics Division; the circumstances under which 
allegations are referred  to the appropriate NIH offices and the referral 
policies and  procedures; the Institutes procedures for determining when  
disciplinary action is necessary; and the Institutes outreach and 
training regarding the reporting of allegations. 
Data Analysis 
We used a standard protocol to extract information from the  
documentation. From the information, we determined the number, 
nature, and  final resolutions of the allegations.  Some of the 
documentation we received involved allegations that related to multiple 
violations and/or instances of misconduct. For these allegations, each 
violation and/or instance of misconduct was counted separately. If the 
same type  of allegation  was made against a particular employee during 
different periods of time, the allegations were counted separately as 
well. If duplicate documentation regarding an allegation was received 
by more than one NIH office or Institute, the allegation was counted  
only once. 
From the survey data, we determined the frequency of responses to 
closed-ended survey questions and  reviewed and categorized responses  
to open-ended survey questions.   
 
8 The NIH Deputy Ethics Counselor serves as the Deputy Ethics Counselor for NIHs 
senior employees. 
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I N T R O D U C T I O N   
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspections issued by the Presidents Council on Integrity and 
Efficiency and the Executive Council on Integrity and Efficiency. 
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  F I N D I N G S  
 
The most common allegations involved National  We received documentation from 
Institutes of Health employees not completing  NIH for 565 allegations related to 
conflicts of interest and/or ethics 
required ethics training or ethics forms 
violations between January 1, 2006, 
and June 30, 2007. According to the documentation, NIH determined 
that 542 of the allegations were substantiated and 23 were 
unsubstantiated. 
Table 1 below shows the categories and numbers  of allegations received  
by NIH.  Appendix A provides more  details on the specific types and 
numbers of allegations. 
For the 542 substantiated allegations, the majority (296) involved 
employees failure to complete required ethics training.  All of these 
allegations came from two Institutes.  One Institute had 279 allegations 
and the other Institute had 17.  
 
  Table 1. Number of Allegations Related to Conflicts of Interest and 
Ethics Violations by NIH Employees Between January 1, 2006, and    
 
July 30, 2007 
 
Number of  Number of 
Category of  Total Number of 
  Unsubstantiated  Substantiated 
Allegations   Allegations  
Allegations   Allegations   
  Failure To Complete 
Required Ethics   13  296  309 
 
Training  
Failure To Complete 
  2  194  196 
Required Ethics Forms  
  Violations Related to 
Outside 
4  18  22 
  Activities/Outside 
Entities 
  Violations Related to 
Conflict of Interest  0  15  15 
  Statutes 
Other  2  10  12 
 
Misuse of Position          2  9  11
 
  Total   23  542  565 
 
Source: OIG analysis of NIH allegation documents. 
 
 
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The second most common substantiated allegation was related to 
employees not completing required ethics forms.9 We reviewed 
documentation for 194 of these allegations at 15 Institutes. These 
allegations included: (1) failing to file required forms (162 allegations), 
(2) filing required forms in an incomplete manner (26 allegations), and 
(3) filing required forms in an untimely manner (6 allegations). 
Of the 162 substantiated allegations related to failure to file required 
forms, 65 percent involved financial disclosure forms (OGE-450, SF-278, 
HHS-717-1, and/or an unspecified financial disclosure form). The 
remaining 35 percent were related to failure to file an outside activity 
form (HHS-520, HHS-521, and/or NIH-2657) or Section 502 
authorization request.   
There were 52 substantiated allegations that were not related to ethics 
training or ethics forms. Eighteen of these allegations involved  
violations related to outside activities or outside entities. Examples of 
this type of allegation include employees conducting prohibited outside 
activities or holding prohibited financial interests in outside entities. 
Another 15 allegations were potential criminal violations of           
conflict-of-interest statutes. Ten allegations involved other issues, such 
as employees using Government resources for personal use.  The 
remaining nine allegations were related to employees inappropriately 
using their  official titles or inappropriately using their authority in the 
workplace. 
 
NIH provided documentation that 
The majority of allegations were resolved within 
detailed how it resolved 60 percent 
the National Institutes of Health; however, for 
of substantiated allegations      
one-third of allegations, no final resolution was  (326) internally and referred 
documented  another 7 percent (39) to OIG.     
For the remaining 33 percent of 
 
9 Required forms include the HHS-520, HHS-521, NIH-2657, SF-278, OGE-450, and 
HHS-717-1. We received one allegation related to an employee not filing a Section 502 
authorization request. This permits an employee who knows that a particular matter 
involving specific parties is likely to have a direct and  predictable effect on the financial 
interest of a member of the employees household, or who knows that a person or entity with  
which the employee has a covered relationship is or represents a party to such matter, to 
participate in the matter because the interest of  the Government in the employees 
participation outweighs the concern that a reasonable person may question the integrity of  
the agencys programs and operations (5 CFR  2635.502). 
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F I N D I N G S  
allegations (177), NIH did not provide documentation about               
how it resolved the allegations.  Table 2 below shows how the             
542 substantiated allegations were handled. 
Table 2. Final Resolutions of Allegations Related  to Conflicts of Interest and Ethics Violations by  
NIH Employees Between January 1, 2006, and July  30, 2007 
Number of 
Number of  Number of 
Substantiated  Number of 
Category of  Substantiated  Substantiated 
Allegations Without    Substantiated 
Allegations   Allegations Resolved   Allegations Referred 
Documented   Allegations  
by NIH  to OIG  
Resolution  
Failure To Complete 
Required Ethics   196  0  100  296 
Training  
Failure To Complete 
Required Ethics   116  12  66  194 
Forms 
Violations Related to 
Outside 
5  11  2  18 
Activities/Outside 
Entities 
Violations Related to 
Conflict of Interest  1  14  0  15 
Statutes 
Other  4  1  5  10 
Misuse of Position         4  1  4  9
  Total   326  39  177  542 
Source: OIG analysis of NIH allegation documents. 
 
Sixty percent of allegations were resolved internally  within the National 
Institutes of Health  
Because most of the 326 substantiated allegations that were resolved by 
NIH involved violations of ethics training and form requirements, NIH 
resolved these violations by having employees complete the required  
training or forms.    
For 195 of the 296 substantiated allegations involving ethics training, 
NIH provided documentation to show that the employees had  
eventually completed the required training.  For one additional 
allegation,  NIH provided documentation that the employee no longer 
worked at NIH.    
Of the 194 substantiated allegations concerning required ethics forms, 
NIH resolved 116 using a number of approaches.  It resolved 101 by 
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F I N D I N G
  S  
having the employees submit the missing required forms and/or missing 
information.  NIH resolved another 10 ethics form allegations by:  
suspending administrative actions (leave requests, travel requests, and  
bonuses) for five employees until ethics forms were completed; directing 
two employees to cease conducting the outside activities; placing a letter 
regarding the violation in one employees personnel file; failing to 
approve an employees late HHS-520 request; and having one employee 
resign from his/her position at NIH.10  For five allegations related to the 
untimely filing of paperwork, the employees were counseled as to the 
importance of submitting paperwork on time.   
NIH resolved 14 of the 52 substantiated allegations not related to ethics  
training or forms.   NIH resolved these 14 allegations using a number of 
different methods.  These methods included:  removing an employee  
from NIH employment, restricting  an employees  use of Government 
property, and having an employee  return travel  expenses to the outside 
entity that paid for them. 
Seven percent of allegations involved potential criminal violations and were  
referred to the Office of Inspector General for possible investigation 
Because NIH does not have authority to investigate allegations 
involving criminal offenses, it forwarded 39 potentially criminal 
allegations to OIG for possible investigation.  Fourteen of the fifteen 
allegations related to potential criminal violations of conflict-of-interest 
statutes were included in this group.   
One allegation involving a potential violation of 18 U.S.C.  208 was not 
referred to  OIG.  This allegation involved an employee who was working 
on an NIH-funded research project and whose spouse was listed as a 
contractor on the same  project.   This allegation was not forwarded to 
OIG because it was resolved internally by removing the employee from  
the NIH research project. 
The 39 allegations involved potential violations of conflict-of-interest 
statutes, as well as violations of other ethics regulations.  Examples of 
the potential criminal allegations include employee(s) who:  
  served as a director of a company that submitted an application for 
an exclusive license to develop and commercialize a drug privately 
while participating as an NIH employee in research and data 
collection for the same drug, 
 
10 Other allegations led to the employees resignation.  
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 	 influenced the award of a contract to a university from which the 
employee is on a leave of absence, 
 	  improperly acted as a consultant for pharmaceutical companies, 
 	 used position and influence to  encourage an NIH Board of Scientific 
Directors to deny funding to an intramural research program  
investigating a drug because of the employees financial ties with a 
pharmaceutical company developing a competing drug, 
 	  conducted prohibited outside activities, and  
 	  accepted compensation from prohibited outside entities. 
Thirty-three percent of allegations had no documented final resolution 
NIH did not provide documentation showing its final resolution of      
177 substantiated allegations. The absence of documentation does not 
necessarily mean that the allegations were not resolved. However, 
without complete documentation, it is impossible to determine whether 
and how these allegations were resolved, including whether they were  
handled appropriately and consistently. 
We could not determine whether ethics training was completed for the    
100 allegations related to employees not completing the required 
training. For 66 allegations related to employees not completing 
required  ethics forms, there was no documentation to show that the 
required forms and/or missing information were submitted. We could 
not determine the final resolution of 11 allegations related to other 
types of violations, such  as employees inappropriately using their 
official titles and using Government resources for personal use.   
 
Twenty of thirty-one Institutes do  
The majority of Institutes do not have written 
not have written procedures for 
procedures regarding how to handle allegations 
reviewing allegations regarding 
and do not handle allegations uniformly  
violations of the 
conflict-of-interest statutes and ethics regulations. Although                 
11 Institutes reported that they have written procedures, the 
documentation we reviewed indicated that these were not 
Institute-specific procedures that detailed a review process.   Rather, the  
Institutes were referring to more general policies or procedures 
established by NIH, OIG, or Federal regulation.       
 
     
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F I N D I N G
  S  
When reviewing allegations, Institutes consult with or receive  guidance from  
different offices 
Some Institutes reported that they  do not uniformly confer with the 
NIH Ethics Office, the OGC Ethics Division, or OMA.  For example, 
eight Institutes reported  that they would contact any of the three offices 
for guidance when reviewing allegations.  Six Institutes stated that they  
would contact either the NIH Ethics Office or the OGC Ethics Division 
for guidance regarding how to proceed with an allegation. Another five 
Institutes reported contacting either the NIH Ethics Office or OMA  
when reviewing an allegation.  Three Institutes reported contacting only  
the NIH Ethics Office, and one reported contacting only OMA.  
In contrast,  some other Institutes did not cite any of the three offices 
when describing how they review allegations. Three Institutes stated 
that they follow NIH policies and procedures in  reviewing allegations.  
Another five Institutes reported that they review relevant documents  
and facts, but did not specifically state that they  confer with the NIH  
Ethics Office, the OGC Ethics Division, or OMA.   
Several Institutes refer allegations of  criminal offenses directly to the Office  
of Inspector General, but most rely on  other National Institutes of Health 
offices to make the referral  
As stated in the NIH Policy Manual, Chapter 1754, . . . every 
employee, supervisor, and management official shall report any 
allegations of criminal offenses to the OIG. . . .  This would include 
violations of the financial conflict of interest statutes (18 U.S.C.  208  
and 209). We found that the majority of Institutes work with the NIH 
Ethics Office, the OGC Ethics Division, or OMA before referring 
criminal allegations to OIG.  Seventeen Institutes forward criminal 
allegations to the NIH Ethics Office, the OGC Ethics Division, or OMA; 
these Institutes rely on these offices to refer the  allegation to OIG if 
they believe it is warranted.  Eight Institutes reported that they refer  
allegations of criminal offenses directly to OIG only after consultation 
with the NIH Ethics Office, the OGC Ethics Division, or OMA.   
Other Institutes reported that they  would forward criminal allegations 
directly to OIG. Three Institutes reported that they follow the 
procedures outlined in the NIH Policy Manual, Chapter 1754, to 
determine when and how to refer allegations to OIG.  Two Institutes did 
not specifically mention involving the NIH Ethics Office, the OGC 
Ethics Division, or OMA in the referral process,  but reported that they 
refer allegations of criminal offenses  directly to OIG.  The remaining 
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F I N D I N G S  
Institute did not respond to our question regarding referral procedures 
to OIG. 
The majority of Institutes refer allegations of noncriminal offenses to the 
Office of Management Assessment 
According to the NIH Policy Manual, allegations of improper employee 
conduct, such as violations of standards of conduct, shall be reported to  
OMA.  Eighteen of the thirty-one Institutes reported that they refer  
allegations of noncriminal violations of the regulations directly to OMA.  
An additional seven Institutes stated that they refer allegations 
requiring further investigation to OMA.  Three Institutes stated that 
the nature of the allegation would determine whether they refer 
allegations to OMA. One Institute replied that referrals would not be 
made directly to OMA, but did not elaborate further.  Two Institutes did 
not provide  a response to our question regarding referral to OMA. 
 
Coordination among the Ethics Office, the  From interviews with staff at 
Office of Management Assessment, and the  the NIH Ethics Office, OMA, 
and the OGC Ethics Division, it 
Office of the General Counsel Ethics Division 
was clear that they understand 
occurs but is not formalized in a written policy  
their own roles and  
responsibilities with regard to handling allegations.  They reported that 
OMA is responsible for reviewing reported allegations, the OGC Ethics 
Division provides legal advice and guidance, and the NIH Ethics Office 
maintains the role of ethics policy expert.  Because the three offices 
have distinct roles and responsibilities, they work together as necessary 
to handle allegations.  However, this coordination is not outlined in a 
written policy.  If staff were to change, this coordination might not occur 
because there are no policies in place to guide new staff. 
All three offices encourage employees to report allegations.  Although 
employees can report allegations to  any of the three offices, the OGC  
Ethics Division and the NIH Ethics Office understand that OMA is 
responsible for case development.   The NIH Ethics Office reported that, 
for tracking  purposes, it forwards to OMA allegations that need further 
investigation or need to be referred to OIG.  If the NIH Ethics Office 
needs help in determining whether an allegation is criminal, it will seek 
assistance from the OGC Ethics Division.  If an allegation is reported to  
the OGC Ethics Division, it consults with the Designated Agency Ethics 
Official to determine whether the allegation should be referred to OMA 
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or directly to OIG. The OGC Ethics Division reported that, as a matter 
of courtesy, it informs OMA if an allegation is referred to OIG.    
OMA follows a standard procedure for handling allegations as they are 
received.11 However, these procedures do not address OMAs 
coordination with either  the NIH Ethics Office or the OGC Ethics 
Division. OMA reported that it seeks advice from the OGC Ethics 
Division and the NIH Ethics Office when necessary. If OMA needs legal 
advice regarding an allegation or clarification of whether an allegation 
is within the purview of OIG, it contacts the OGC Ethics Division and 
requests a written legal opinion.  If OMA has a policy question 
regarding an allegation, it consults the NIH Ethics Office.           
Unlike OMA, the OGC Ethics Division and the NIH Ethics Office do not  
have written policies for handling allegations.  They also do not have  
any written procedures outlining coordination among the three offices.   
The NIH Ethics Office is currently developing a policy to help employees  
determine where allegations should be reported and to provide some  
general guidance for managers and employees.      
 
11 OMA is currently in the process of revising its internal manual, which outlines the 
case review policies and procedures. 
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F I N D I N G S  
  R E C O M M E N D A T I O N S  
 
 
NIH employees have a responsibility to avoid the appearance of 
impropriety, which can undermine public confidence in the scientific 
integrity of  NIHs research program.  Consequently, NIH has a 
responsibility to ensure that its employees abide by Federal statutes 
and regulations regarding ethics and conflicts of interest.  Violations of 
these statutes and regulations could  jeopardize the scientific integrity of  
NIHs research programs. 
Because NIH is organized as various components, including Institutes, 
NIHs ethics program is composed of various offices that work to handle 
allegations of conflict of interest and ethics violations.  To maintain 
consistency in how allegations are handled at NIH, we recommend that  
NIH: 
Develop a Formal, Written Policy Outlining How  Allegations of 
Conflicts of Interest and Ethics Violations Are to be Handled Among 
the Institutes Ethics Offices, the National Institutes of Health Ethics 
Office, the Office of the General Counsel Ethics Division, and the 
Office of Management Assessment 
This policy should outline:   
  when managers and Deputy Ethics Counselors should report 
allegations and to which office they should report them; 
  which office should handle questions  regarding allegations; as part 
of this clarification, NIH may want to designate a single, 
centralized office for allegation intake; 
  how the Deputy Ethics Counselors, NIH Ethics Office, the OGC 
Ethics Division, and OMA coordinate and share information 
regarding an allegation; 
  how much factfinding/case development should be conducted by 
each office regarding an allegation; and 
  the definitions of criminal and noncriminal allegations. 
Ensure That Documentation Detailing How  Allegations Are Ultimately  
Resolved Is Maintained 
Because we  found no documented resolutions for one-third of  
substantiated allegations, we believe that NIH should require all of its  
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R E C O M M E N D A T I O N S  
 
offices to maintain complete documentation regarding how they resolve 
allegations about ethics and conflicts of interest. 
AGENCY COMMENTS 
NIH concurred with our recommendations, stating that as of         
August 15, 2008, the recommendations were implemented as a new 
chapter in the NIH Policy Manual.  This new chapter is entitled 
Managing Employee Non-Compliance with Government Ethics 
Requirements.  However, NIH noted that our finding related to 
employees not completing required ethics forms was misleading because 
it did not provide as context the number of employees required to take 
the training. NIH stated that its policy requires all employees to 
complete ethics training.  In contrast, Federal regulation requires only 
those who file public and confidential financial disclosure forms to  
complete annual ethics training.  Therefore,  NIH reported that ethics 
training noncompliance would be less than 2 percent of the total 
population of approximately 18,000 NIH employees required to take the 
training. The official draft report shared with NIH did note in the 
background, as does this final report, that NIHs ethics program 
encompasses approximately 18,000 employees.  
The full text of NIHs comments is presented in Appendix B.  
 
 
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  A  P P E N D  I  X   A   
 
Types and Number of Allegations Related to Conflicts of Interest and Ethics Violations Between 
January 1, 2006, and June 30, 2007 
Number of  Number of 
Total Number of
Category of  Allegations   Specific Type  of  Allegation  Substantiated  Unsubstantiated 
Allegations 
Allegations   Allegations  
Failure To Complete Required  
NA  296  1
 3  
309

Ethics Training (Total = 309) 
Failure To File the OGE-450 
 62  
0  62  

Failure To  File the HHS-520 
 45  
1  4
 6  

Failure To  File the HHS-717-1   38  
1  3
 9  

Failure To  
Failure To  File the HHS-521 
 10  
0  10

File 

Paperwork 

Failure To File the SF-278 
 4  
0  4

(Total = 164) 

Failure To  File an Unspecified 

1  
0  1

Financial Disclosure Form 
Failure To  

Failure To File a Section 502 

Complete  Authorization Request1   1  
0  1

Required  
Ethics Forms  Failure To File the NIH-2657 
 1  
0  1  

(Total = 196)  

Filing an Incomplete 
21  
0  21

HHS-717-1 

Filing 

Filing an Incomplete HHS-520 
 2  
0  2

Incomplete 

Paperwork 

Filing an Incomplete SF-278
   2  
0  2

(Total = 26) 
Filing an Incomplete NIH-2657 
 1  
0  1  

Untimely  

Filing of 

Untimely Filing of the HHS-520 
 6  
0  6

Paperwork 

(Total = 6) 

Conducting a Prohibited 

5  
3  8
 

Outside Activity   
Financial Interest in Outside 
Entity Influencing Professional  3  
0  3  

Decisions 

Holding Prohibited Financial 
3  
0  3

Interests in Outside Entities 
Inappropriately Accepting 
Reimbursement of Travel  3  
0  3

Violations Related to Outside 
Expenses From Outside Entity  
Activities/Outside Entities  Accepting Prohibited
(Total =  22 )  Compensation From Outside  1  
1  2
   

Entities 

Comingling Outside Activities  
1  
0  1

With Official Duties 
Conducting an Outside Activity  
as an Official Duty Without  1  
0  1  

Approval 
Asking Outside Entity To 
Donate Honoraria to Private  1  
0  1  

Foundation 

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A P P E N D I X   ~   A  

 
Number of  Number of 
Total Number of 
Substantiated  Unsubstantiated 
Allegations 
Allegations  Allegations 
Category of  Allegations   Specific Type  of  Allegation 
Violation of 18 U.S.C.  208  13  0  13 
Violations Related to Conflict 
of Interest Statutes  (Total = 15)  Violation of 18 U.S.C.  209  1  0  1 
Violation of 18 U.S.C.  2052   1  0  1 
Using Government 
6  0  6 
Resources for Personal Use 
Misuse of Federal Funds by  
Not Complying With  0  1  1 
Government Travel Rules 
Supervisory Failure 
1  0  1 
Regarding Ethics Duties 
Other (Total =  12) 
Overuse of Vendor  1  0  1 
Improper Purchase of 
1  0  1 
Government Equipment 
Violation of Employment Law   1  0  1 
NIH Staff Denying Funding to 
0  1  1 
Outside Entity  
Inappropriate Use of Official 
7  2  9 
Title 
Misuse of Position (Total = 11) 
Inappropriate Use of Authority  2  0  2 
  Total     542  23  565 
Source: Office of Inspector G eneral analysis of National Institutes of Health allegations documents. 
1 This permits an employee who knows that a particular matter involving specific parties is likely to have a direct and predictable effect 
on the financial interest of a member of the employees household,  or who knows that a person or entity  with  which the employee has a  
covered relationship is or represents a party to such matter, to participate in the matter because the interest of the Government in the 
employee's participation outweighs the concern that a reasonable person may question the integrity  of the agencys programs and  
operations (5 CFR  2635.502). 
2 18 U.S.C.  205 prohibits employees from representing the interests of an outside entity before a Government agency. 
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 A P P E N D I X ~ B  
 
Agency Comments 
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A P P E N D I X   ~   B  
 
  OEI-03-07-00220  NIHS HANDLING OF ALLEGATIONS CONCERNING CONFLICT OF INTEREST AND ETHICS VIOLATIONS  22   
   
A P P E N D I X   ~   B  
 
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A P P E N D I X  
  A C K N O W L E D G M E N T S
This report was prepared under the  direction of  Robert A. Vito, Regional 
Inspector General for Evaluation and Inspections in the Philadelphia 
regional office, and Linda M. Ragone, Deputy Regional Inspector 
General. 
Tanaz Dutia served as the team leader for this study.  Other principal 
Office of Evaluation and Inspections staff from the Philadelphia 
regional office who contributed to the report include Diane Epstein and  
Maria Johnson; central office staff who contributed include Ayana 
Everett and Rita Wurm.  
 
 
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