Department of Health and Human Services
 

OFFICE OF 

INSPECTOR GENERAL 

NATIONAL INSTITUTES OF 


HEALTH: CONFLICTS OF 


INTEREST IN EXTRAMURAL 


RESEARCH
 

Daniel R. Levinson
 

Inspector General 


January 2008
 

OEI-03-06-00460
 
 

 

 

 

 

 

 

 

 

 

 

 

 

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 http://oig.hhs.gov 

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as amended, is to protect the integrity of the Department of Health and Human Services 

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community, and issues fraud alerts and other industry guidance. 
 

 

 

 

Δ EXECUTIVE SUMMARY 

OBJECTIVES 

1.	 To determine the number and nature of financial conflicts of 

interest reported by grantee institutions to the National 

Institutes of Health (NIH). 

2.	 To determine the extent to which NIH oversees grantee 

institutions’ financial conflicts of interest. 

BACKGROUND 

NIH research grants are awarded through 24 Institutes and Centers 

(Institutes) that have grant-making authority. Each Institute is 

responsible for the daily management and oversight of its grants, and 

each has its own grants management office that handles the grants 

oversight and administrative functions. Institutes follow the grants 

management policies outlined in the NIH Grants Policy Statement 

developed and implemented by NIH’s Office of Extramural Research 

(OER). OER provides grantees with information about relevant policies 

and regulations through its Web site and through outreach activities 

such as targeted site reviews, regional seminars, and a bimonthly 

newsletter. OER also develops and maintains information systems 

related to extramural research grants administration. 

Pursuant to Federal regulations, each grantee institution receiving NIH 

funds must have a written policy for identifying financial conflicts of 

interest and ensuring that conflicts will be managed, reduced, or 

eliminated. Grantee institutions must certify that they have written 

and enforced administrative processes to identify and manage, reduce, 

or eliminate conflicting interests. They must also certify that existing 

conflicts of interest (but not the nature of the interest or other details) 

will be reported to the Public Health Service awarding component prior 

to the expenditure of any funds under that award; that these conflicts 

have been managed, reduced, or eliminated; and that any subsequently 

identified conflicts will be reported and the conflicts will be managed, 

reduced, or eliminated, at least on an interim basis, within 60 days of 

identification. 

We requested information regarding the receipt and oversight of 

grantee institutions’ financial conflict-of-interest reports from OER and 

the 24 Institutes with grant-making authority. 

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EXECUTIVE SUMMARY 
 

FINDINGS 

NIH could not provide an accurate count of the financial 

conflict-of-interest reports that it received from grantees during 

fiscal years 2004 through 2006. NIH provided us with 438 financial 

conflict-of-interest reports for fiscal years (FY) 2004 through 2006. 

However, this number does not represent the total number of conflicts of 

interest reported by grantee institutions because NIH’s Institutes and 

OER were unable to provide us with all of the actual conflict-of-interest 

reports they received from grantee institutions. 

NIH does not have a central source that can provide a total count of 

financial conflict-of-interest reports because OER’s database of financial 

conflict-of-interest reports is incomplete. Although the Institutes are 

asked to send all conflict-of-interest reports to OER, we found that OER 

and the Institutes did not send us the same reports for the 3-year 

period. 

NIH is not aware of the types of financial conflicts of interest that 

exist within grantee institutions because details are not required to 

be reported and most conflict-of-interest reports do not state the 

nature of the conflict. Although Federal regulations require grantee 

institutions to report financial conflicts of interest, the regulations do 

not explicitly require the nature of the conflict or other details to be 

reported. At least 89 percent of financial conflict-of-interest reports did 

not state the nature of the conflicts or how they would be managed. 

Because these reports contain minimal detail, grants officials have little 

information on which to follow up. 

We determined that 30 of the 438 reports we reviewed included detailed 

financial conflict-of-interest descriptions. These reports described cases, 

for example, in which investigators have intellectual property 

associated with the grant research or financial interests in companies 

that are subcontractors on the research grants. Fifteen reports 

provided a detailed description of how conflicts would be managed, 

reduced, or eliminated. These methods included disclosing the financial 

conflicts of interest in presentations and publications related to the 

research and appointing independent faculty members to provide 

oversight of the grant research or to review research reports. 

The information we reviewed in the 45 reports that did contain detailed 

information regarding the nature and management of conflicts could 

assist NIH officials in making a determination as to whether followup 

with the grantee institutions is necessary. 

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E X E E X E CUTIVE S U MMAR Y 

Many Institutes’ primary method of oversight is reliance on grantee 

institutions’ assurances that financial conflict-of-interest regulations 

are followed. According to the NIH Grants Policy Statement, the 

grantee’s roles and responsibilities have assumed greater importance as 

NIH relegates greater decisionmaking authority to grantees. Many 

Institutes rely on the good faith of the grantee institutions to ensure 

compliance with Federal financial conflict-of-interest regulations, rather 

than directly overseeing or reviewing grantee institutions’ management 

of financial conflicts of interest. 

We found that the majority of the Institutes do not have any proactive 

methods for ensuring that grantees have financial conflict-of-interest 

policies. Several Institutes stated that they rely solely on information 

published by OER to ensure that grantees have conflict-of-interest 

policies in place. OER provides grantees with information about the 

relevant policies and regulations through its Web site. OER also 

conducts outreach activities, such as targeted site reviews, regional 

seminars, and a bimonthly newsletter to grantee institutions. 

Institutes infrequently and inconsistently follow up on reported 

financial conflicts of interest. Our review found very few cases in which 

Institutes followed up with grantee institutions regarding the nature of 

a financial conflict of interest and/or the management plan for a 

financial conflict of interest. 

RECOMMENDATIONS 

NIH provides billions of dollars to institutions in the form of research 

grants. It is imperative that the funds provided to grantee institutions 

be used appropriately and that the research conducted using these 

funds not be biased because of any conflicting financial interests of 

investigators. Although the responsibility of complying with Federal 

financial conflict-of-interest regulations ultimately falls to the grantee 

institution, NIH, as an oversight body, should take a more active role in 

overseeing financial conflicts of interest among grantee institutions. 

We recommend that NIH: 

Increase oversight of grantee institutions to ensure their compliance 

with Federal financial conflict-of-interest regulations. 

Require grantee institutions to provide details regarding the nature 

of financial conflicts of interest and how they are managed, reduced, 

or eliminated. 

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EXECUTIVE SUMMARY 

Require Institutes to forward to OER all financial conflict-of-interest 

reports that they receive from grantee institutions and ensure that 

OER’s conflict-of-interest database contains information on all 

conflict-of-interest reports provided by grantee institutions. 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

NIH stated that all of our findings were correct and concurred with two 

of our three recommendations. NIH did not concur with our 

recommendation to require grantee institutions to provide details 

regarding the nature of financial conflicts of interest and the way in 

which they are managed, reduced, or eliminated. NIH believes that 

although it is vital to maintain objectivity in research, responsibilities 

for identifying and managing financial conflicts of interest must remain 

with grantee institutions. Furthermore, NIH stated that its collection 

of specific details of the nature and management of financial conflicts of 

interest would effectively transfer the responsibility for managing 

financial conflicts of interest from the grantee institutions to the 

Federal Government. 

The Office of Inspector General (OIG) continues to recommend that NIH 

should collect details of the nature and management of financial 

conflicts of interest as part of its oversight responsibility of grantee 

institutions. Collection of this information can be accomplished without 

interfering with grantee institutions’ legal responsibility for managing 

financial conflicts of interest. 

We continue to recommend that NIH work with the Secretary of the 

Department of Health and Human Services to amend the current 

regulation and that NIH use its authority pursuant to 

42 CFR § 50.604(g)(3) to request details regarding the nature and 

management of financial conflicts of interest at grantee institutions. 

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BANNER 2ND PAGE Δ TABLE OF CONTENTS 

EXECUTIVE SUMMARY ..................................... i 
 

INTRODUCTION ........................................... 1 
 

FINDINGS ................................................. 9 
 

NIH could not provide an accurate count of financial 

conflict-of-interest reports ................................ 9 
 

NIH is not aware of the types of financial conflicts of interest 

that exist at grantee institutions .......................... 11 
 

Many Institutes’ primary method of oversight is reliance on

grantee institutions’ assurances that regulations are followed. . . 13 

RECOMMENDATIONS ..................................... 16 
 

Agency Comments and Office of Inspector General Response . . . 18 

APPENDIX ................................................ 19

 Agency Comments...................................... 19 
 

ACKNOWLEDGMENTS .................................... 23 
 
 

 

 

ΔΔ INTRODUCTION INTRODUCTION 

OBJECTIVES 

1.	 To determine the number and nature of financial conflicts of 

interest reported by grantee institutions to the National 

Institutes of Health (NIH). 

2.	 To determine the extent to which NIH oversees grantee 

institutions’ financial conflicts of interest. 

BACKGROUND 

Each grantee institution receiving NIH funds must have a written 

policy for identifying financial conflicts of interest and ensuring that 

conflicts will be managed, reduced, or eliminated. Because outside 

activities may create actual or perceived conflicts of interest, it is 

essential that conflict-of-interest issues be addressed not only among 

NIH intramural researchers but also among extramural researchers 

receiving NIH grants. With 80 percent of NIH funding allocated for 

extramural research grants, it is critical that any existing or potential 

financial conflicts of interest be identified, disclosed, eliminated, 

reduced, and/or managed by grantee institutions. 

National Institutes of Health Grants Administration and Oversight 

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 

(Institutes), NIH receives billions of dollars annually to support its 

mission. In fiscal year (FY) 2007, the total NIH appropriation was over 

$29.2 billion, 80 percent of which was 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 

Twenty-four of the twenty-seven Institutes have grant-making 

authority. Each of these 24 Institutes is responsible for managing and 

overseeing its grants, and each has its own grants management staff 

that handle these functions. Grants management specialists within 

each Institute are responsible for the day-to-day management of a 

portfolio of grants. The chief grants management officer (grants officer) 

1 NIH budget information. Available online at www.nih.gov/about/budget.htm. Accessed 

April 27, 2007. 

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INTRODUCTION 

of each Institute is the NIH official responsible for the business 

management and other nonprogrammatic aspects of the award. 

Institutes follow the grants management policies outlined in the NIH 

Grants Policy Statement developed and implemented by NIH’s Office of 

Extramural Research (OER). OER also develops and maintains 

information systems related to extramural research grants 

administration. 

Financial Conflicts of Interest 

Federal regulations at 42 CFR Part 50, Subpart F, establish standards 

to ensure that the design, conduct, or reporting of research funded 

under Public Health Service (PHS) grants will not be biased by any 

conflicting financial interest of an investigator. The regulations at 

42 CFR § 50.605(a) provide that a conflict of interest exists when the 

designated official at the grantee institution “reasonably determines 

that a significant financial interest could directly and significantly 

affect the design, conduct, or reporting of the PHS-funded research.” 

Pursuant to 42 CFR § 50.603, a significant financial interest is defined 

as anything of monetary value, including, but not limited to, salaries or 

other payments, equity interests, and intellectual property rights. The 

regulation excludes from this definition salaries or other payments from 

the investigator’s institution, income from public or nonprofit entities 

for selected services, salaries or other payments for services not 

expected to exceed $10,000 in a 12-month period from other sources, and 

equity interests not exceeding $10,000 in fair market value and not 

representing more than 5-percent ownership interest in any single 

entity. 

Responsibility of Grantee Institutions 

According to the NIH Grants Policy Statement, grantee institutions 

must have written standards of conduct that establish safeguards to 

prevent employees, consultants, or members of governing bodies from 

using their positions for purposes that are, or give the appearance of 

being, motivated by financial gain for themselves or for others with 

whom they have close ties. 

Pursuant to 42 CFR Part 50, Subpart F, each grantee institution 

receiving NIH funds must have a written policy for identifying financial 

conflicts of interest and ensuring that conflicts will be managed, 

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INTROD U C T U C T I O N I O N 

reduced, or eliminated. 2 These guidelines must also indicate how 

outside activities, relationships, and financial interests are reviewed by 

responsible and objective institution officials. Pursuant to 

42 CFR § 50.604, each institution must: 

(a) Maintain an appropriate written, enforced policy on conflict of 

interest . . . and inform each investigator of that policy, the 

investigator’s reporting responsibilities, and of these 

regulations. If the institution carries out PHS-funded research 

through subgrantees, contractors, or collaborators, the 

institution must take reasonable steps to ensure that 

investigators working for such entities comply with this 

subpart. . . . 

(b) Designate an institutional official(s) to solicit and review 

financial disclosure statements from each investigator who is 

planning to participate in PHS-funded research. 

(c) (1) Require that by the time an application is submitted to 

PHS, each investigator . . . planning to participate in the 

PHS-funded research has submitted to the designated 

official(s) a listing of . . . known significant financial interests 

(and those of his/her spouse and dependent children): (i) that 

would reasonably appear to be affected by the research . . . and 

(ii) in entities whose financial interest would reasonably 

appear to be affected by the research. (2) All financial 

disclosures must be updated during the period of award, either 

on an annual basis or as new reportable significant financial 

interests are obtained. 

(d) Provide guidelines . . . for the designated official(s) to identify 

conflicting interests and . . . ensure that such conflicting 

interests will be managed, reduced, or eliminated. 

(e) Maintain records of all financial disclosures and all actions 

taken by the institution with respect to each conflicting 

interest for at least 3 years from the date of submission of the 

final expenditures report. . . . 

(f) Establish adequate enforcement mechanisms and provide for 

sanctions where appropriate. 

2 Small Business Innovation Research Program and Small Business Technology Transfer 

Program Phase I awardees are not subject to these Federal conflict-of-interest regulations. 

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INTROD U C T I O N 

(g) Certify . . . that: (1) there is in effect . . . a written and 

enforced administrative process to identify and manage, 

reduce, or eliminate conflicting interests . . . (2) prior to the 

institution’s expenditure of any funds . . . the institution will 

report to the PHS awarding component the existence of a 

conflicting interest (but not the nature of the interest or other 

details) found by the institution and assure that the interest 

has been managed, reduced or eliminated . . . and, for any 

interest that the institution identifies as conflicting 

subsequent to the . . . initial report . . . the report will be made 

and the conflicting interest managed, reduced, or eliminated, 

at least on an interim basis, within 60 days of that 

identification; (3) the institution agrees to make information 

available, upon request, to the HHS regarding all conflicting 

interests identified by the institution and how those interests 

have been managed, reduced, or eliminated to protect the 

research from bias. 

The NIH Grants Policy Statement and the NIH grant application 

explain the financial disclosure responsibilities of grantees.3 By signing 

a grant application, the designated representative of the grantee 

institution is certifying that the applicant organization will comply with 

all applicable assurances and certifications referenced in the 

application, including those related to financial conflicts of interest. 

Grantees can find more information about their responsibilities 

regarding conflicts of interest on the OER Web site, which contains 

multiple links to additional conflict of interest resources.4 Information 

on OER’s Web site includes the NIH Guide for Grants and Contracts; 

NIH Regional Seminars, which provide education and training on 

regulations and policies; and the NIH Extramural Nexus, a bimonthly 

newsletter from OER that provides updates on NIH policies and 

activities. OER also conducts presentations regarding financial conflicts 

of interest at professional meetings. 

OEI-03-06-00460 

3 NIH Grants Policy Statement. Available online at 

http://grants.nih.gov/grants/policy/nihgps_2003/index.htm. NIH grant application. 

Available online at http://grants.nih.gov/grants/funding/phs398/PolAssurDef.pdf. Both 

accessed August 22, 2007. 

4 Available online at http://grants1.nih.gov/grants/policy/coi/index.htm. 

Accessed May 3, 2007. 

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INTRODUCTION 

National Institutes of Health Oversight of Financial Conflicts of Interest 

Although OER and Institutes share responsibility for outreach to and 

education of grantees with regard to financial conflicts of interest, each 

Institute must directly oversee its grantees in this regard. Grantees 

must inform their respective funding Institute’s grants officer of any 

financial conflicts of interest before spending any NIH funds under a 

new grant. Conflicts identified during the grant period must be 

reported to the grants officer within 60 days of identifying them. These 

reports must indicate whether the financial conflict of interest has been 

managed, reduced, or eliminated. Institutes are asked, but not 

required, to forward reports of grantee financial conflict of interest to 

OER. OER developed an internal database in 2004 to capture the 

financial conflict-of-interest reports forwarded by the Institutes to OER; 

the database contains data from FY 2000 to the present. 

Institute procedures for reviewing financial conflict-of-interest reports 

are based on guidance posted on the internal NIH Grants Management 

Infonet “How-To” Web site. This guidance states that the Institutes 

should share reports with the appropriate Institute personnel; send a 

letter acknowledging receipt of the reported financial conflict of interest 

to the grantee; send a copy of the report to the Director of the Division of 

Grants Policy and Oversight, Office of Policy for Extramural Research 

Administrations within OER and ensure that all correspondence 

relating to the conflict is maintained in the official file; and request 

additional information from the grantee and take corrective action, if 

necessary. 

National Institutes of Health Targeted Site Reviews 

In FY 2006, the Office of Policy for Extramural Research 

Administration began conducting targeted site reviews of grantee 

institutions. The targeted site review program is part of NIH’s 

oversight responsibilities and was developed to determine whether: 

(1) grantee institutions are fully and correctly implementing the 

financial conflict-of-interest regulations at 42 CFR Part 50, Subpart F; 

and (2) reporting requirements are being met. NIH conducted 

18 targeted site reviews in FY 2006. The 18 grantee institutions 

reviewed represented approximately $4 billion in research grant awards 

for FY 2005.5 NIH reported that the $4 billion represented 

5 “Observations from NIH’s FY 2006 Targeted Site Reviews on Financial Conflict of 

Interest.” Available online at http://grants1.nih.gov/grants/policy/coi/index.htm. Accessed 

June 8, 2007. 

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INTRODUCTION 

approximately 25 percent of total research grant awards for FY 2005. 

NIH found no instances of intentional noncompliance by grantee 

institutions but found that more emphasis is needed on the appropriate 

definition of “investigator” as listed at 42 CFR § 50.603. NIH observed 

that grantee institutions have the most difficulty identifying and 

reporting financial conflicts that arise after the start of the research 

project and obtaining disclosures from investigators who join the project 

after its inception.6 Other compliance issues included (1) not having 

provisions in place to ensure that identified conflicts are reported to 

NIH by subgrantees through the prime grantee, (2) not having a 

consistent reporting process in place, (3) submitting grant applications 

prior to collecting significant financial interests information from 

investigators, and (4) expending grant funds prior to reporting 

identified financial conflicts of interest to NIH.7 

METHODOLOGY 

Scope 

This study is limited to NIH’s oversight of financial conflicts of interest 

among grantee institutions. Although NIH also allocates funds to 

contractors, we focused only on grantees because the majority of NIH 

funding is allocated for research grants. In addition, NIH contractors 

are required to adhere to a separate set of Federal regulations 

governing conflicts of interest. 

Data Sources and Data Collection 

We collected information from the 24 grant-making Institutes at NIH 

and from OER. We requested the following information: 

(1) Copies of all financial conflict-of-interest reports as well as 

documentation related to these reports that the 24 grant-making 

Institutes received from grantee institutions during FYs 2004 through 

2006. 

(2) Copies of all financial conflict-of-interest reports and associated 

documentation that OER received from Institutes during FYs 2004 

through 2006. 

6 Ibid. 

7 Ibid. 

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INTROD U C T I O N 

(3) An electronic copy of the OER database that houses the financial 

conflict-of-interest reports forwarded by the Institutes to OER. 

We also sent surveys to the Director of the Division of Grants 

Compliance and Oversight and the grants officers at each of the 

24 grant-making Institutes. The Director and all 24 grants officers 

responded to our survey. Our questions covered topics such as how 

these offices ensure that financial conflicts of interest are reported to 

them; what policies and procedures for overseeing grantee conflicts of 

interest exist; and whether there are procedures in place to ensure that 

reported financial conflicts of interest have been managed, reduced, or 

eliminated. 

Data Analysis 

Some financial conflict-of-interest reports mentioned conflicts related to 

more than one grant. In these cases, we considered the conflicts 

mentioned for each grant to be a separate report. 

We compared the records in OER’s database to the paper copies of 

financial conflict-of-interest reports we received from OER to determine 

whether any paper reports were not entered into the database and 

whether there were entries in the database for which we did not receive 

corresponding paper reports. We then compared both OER’s paper 

reports and electronic entries with the paper reports we received from 

the Institutes to determine what reports OER and Institutes had in 

common. Combining all paper reports gave us a total of 438 unique 

financial conflict-of-interest reports for our review and analysis.8 OER’s 

database contained 30 entries for which we did not receive 

corresponding paper reports from either OER or the Institutes. 

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. 

Limitations 

For our analysis, we used the 438 financial conflict-of-interest reports 

that were received in paper form. The 30 electronic entries in OER’s 

database for which there were no corresponding paper reports were 

eliminated from our analysis because we did not have the source 

documentation to verify them. 

8 OER and Institutes submitted some financial conflict-of-interest reports that were 

outside our timeframe and were therefore not included in our analysis. 

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INTRODUCTION 

Standards 

This study was conducted in accordance with the “Quality Standards for 

Inspections” issued by the President’s Council on Integrity and 

Efficiency and the Executive Council on Integrity and Efficiency. 

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FINDINGS 

 

 

 

 

 

Δ FINDINGS 

NIH could not provide an accurate count of the 

financial conflict-of-interest reports that it 

received from grantees during fiscal years 2004 

through 2006 

NIH provided us with 

438 financial conflict-of-interest 

reports for FYs 2004 through 

2006: 73 for FY 2004, 139 for 

FY 2005, and 226 for FY 2006. 

However, these numbers may not truly represent the total number of 

conflicts of interest reported by grantee institutions. NIH’s Institutes 

and OER were unable to provide us with paper copies of all of the actual 

conflict-of-interest reports received from grantee institutions. Some of 

the Institutes were also unable to provide an accurate count or even an 

estimate of the reports that they received during the 3-year period. 

According to OER, the Institutes are the official receipt point for 

financial conflict-of-interest reports from grantee institutions. The 

Institute is responsible for reviewing reports, determining whether 

further specific information is needed, and maintaining documentation. 

OER provided the following explanation for why Institutes were unable 

to provide all of the conflict-of-interest reports requested: 

. . . the majority of [Institutes] maintain these reports with 

individual grant files by grant number. Unfortunately, because 

NIH has approximately 40,000–50,000 active grant awards at any 

given time, and each grant file contains thousands of pages of 

documents, finding every conflict of interest notification would 

require searching manually each individual grant file.9 

NIH does not have a central source that could provide a total count of 

financial conflict-of-interest reports because the Office of Extramural 

Research’s database of financial conflict-of-interest reports is incomplete 

OER’s database is the only centralized database in NIH that contains 

conflict-of-interest reports from across the Institutes. OER asks, but does 

not require, Institutes to forward to it the financial conflict-of-interest 

reports that they receive. Because the Institutes are not required to 

provide OER with conflict-of-interest reports, OER maintains that its 

database is not the official repository for all financial conflict-of-interest 

reports and that Institutes are responsible for maintaining documentation. 

We found that OER’s database of financial conflict-of-interest reports was 

incomplete. We found that 27 conflict-of-interest reports among the 

9 E-mail correspondence, dated March 21, 2007, from the Director of the Division of 

Grants Compliance and Oversight regarding the Office of Inspector General’s request for all 

conflict-of-interest reports. 

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FINDINGS 

276 provided to us by OER were not included in its database. Although all 

24 Institutes responded to our survey that they forward the reports to 

OER, we received an additional 36 financial conflict-of-interest reports 

from the Institutes that were not provided to us by OER. Table 1 below 

shows the number of reports received from the Institutes and OER. 

Table 1. Number of Financial Conflict-of-Interest Reports Provided 

by NIH for FYs 2004 Through 2006 

Source of Financial Conflict-of-Interest Reports Number of Reports 

Provided by Institutes and OER 126 

Provided by Institutes only 36 

Provided by OER only 276 

Total 438 

Sources: NIH, 13 Institutes, and OER. 

Nearly half of the Institutes were unable to provide any financial disclosure 

reports for fiscal years 2004 through 2006 

Thirteen of the twenty-four Institutes provided us with 162 financial 

conflict-of-interest reports for FYs 2004 through 2006. Eleven 

Institutes did not provide any reports for the 3-year period.10 The 

162 reports provided by the 13 Institutes may not represent all of the 

reports they received from grantee institutions. According to NIH, some 

of the Institutes may have provided only those reports that were readily 

accessible.11 

Besides requesting the actual conflict-of-interest reports, we also asked 

the Institutes to provide us with the number of reports that they had 

received for FYs 2004 through 2006. For 2006, 11 Institutes were able 

to provide us with the number of reports, 10 provided estimates, and 

3 could provide neither. For FYs 2004 and 2005, four Institutes were 

10 One of the eleven Institutes sent conflict-of-interest reports but not for the 

FYs 2004–2006 period. 

11E-mail correspondence, dated March 21, 2007, from the Director of the Division of 

Grants Compliance and Oversight regarding the Office of Inspector General’s request for all 

conflict-of-interest reports. 

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FINDINGS 

unable to provide us with any information. Therefore, we cannot 

determine an actual or estimated number of reports that the Institutes 

received from grantee institutions during these years. 

Conflict-of-interest reporting information is not readily available even from 

Institutes that have tracking systems 

Thirteen of the twenty-four Institutes indicated that they have systems 

for tracking the financial conflict-of-interest reports that they receive 

from grantees. Five of these Institutes’ systems were developed 

sometime in FY 2007. Of the 11 Institutes that were not able to provide 

us with conflict-of-interest reports for FYs 2004 through 2006, five had 

tracking systems and three had systems that captured financial 

conflict-of-interest reports for all 3 years. 

To retrieve information or to obtain a count of past financial 

conflict-of-interest reports, 11 Institutes—including 3 that indicated 

they had tracking systems—reported that they would have to search 

through individual paper or electronic grant files. Five Institutes 

indicated that they would retrieve this information from OER. 

NIH is not aware of the types of financial 

conflicts of interest that exist within grantee 

institutions because details are not required to 

be reported and most conflict-of-interest reports 

do not state the nature of the conflict 

Although Federal regulations 

require grantee institutions to 

report financial conflicts of 

interest, the regulations do not 

require them to report the 

nature or other details of the 

financial conflict of interest. 

Because these reports contain minimal detail, grants officials do not 

know what type of conflicts exist and have little information on which to 

follow up. 

The majority of reports did not list which individuals associated with 

the grants had the reported conflicts of interest. Of the 438 financial 

conflict-of-interest reports we received, 99 stated that the primary 

investigators had conflicts and 51 stated that others had conflicts.12 

From the information presented in the remaining 288 financial 

conflict-of-interest reports, we could not determine who had conflicts. 

12 The primary investigator is the individual, designated by the grantee, responsible for 

the scientific or technical aspects of the grant and for day-to-day management of the project 

or program. 

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F I NDING 
 S 

Although 93 percent of reports (408) did not detail the nature of the 

financial conflicts of interest, we reviewed 30 reports that included 

detailed descriptions. Some of the financial conflicts of interest that 

were detailed include: 

•	 investigators who invented technology or have intellectual 

property associated with the grant research, 

•	 investigators who have relationships with or financial interests 

in companies that are subcontractors on the grants, 

•	 investigators whose spouses are subcontractors of the grant, 

and 

•	 a grantee institution holding patents on technology used in the 

grant research and exclusively licensing the intellectual 

property to a company whose investors/owners are 

investigators on the grant. 

Eighty-nine percent of reports (388) did not explain how conflicts are 

managed but provided general statements saying that the financial 

conflict of interest would be managed, reduced, or eliminated. The 

remaining 50 reports provided a description of how conflicts would be 

managed, reduced, or eliminated. Two-thirds of these reports stated 

that the conflicts would be managed through a process of disclosure but 

did not explain how the conflicts would be disclosed. Fifteen reports 

provided more detailed descriptions of how conflicts would be managed, 

reduced, or eliminated. These methods included disclosing the financial 

conflicts of interest in presentations and publications related to the 

research, appointing independent faculty members to provide oversight 

of the grant research or to review research reports, recusing 

investigators from the grants, and terminating relationships with 

companies. 

The type of information we reviewed in the 30 reports that detailed the 

nature of conflicts and the 15 reports that detailed the management of 

conflicts could assist NIH officials in determining whether followup with 

the grantee institution is necessary. However, we found five cases in 

which a grantee institution resubmitted reports because NIH felt that 

the information originally provided was too specific or detailed. These 

five letters from the grantee institution stated that an assistant grants 

compliance officer at NIH advised a grantee that the previously 

submitted conflict-of-interest report included too much information. 

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FINDINGS 

To address the NIH officer’s concerns, the grantee institution submitted 

abbreviated versions of the reports. 

Many NIH Institutes’ primary method of oversight is According to the NIH 

Grants Policy reliance on grantee institutions’ assurances that Statement, the financial conflict-of-interest regulations are followed grantee’s roles and 

responsibilities have assumed greater importance as NIH relegates 

greater decisionmaking authority to grantees. While each Institute is 

responsible for the overall management of the grants it funds, the 

responsibility for promoting objectivity in research lies with the grantee 

institution. The designated representative of the grantee institution is 

responsible for ensuring that the grantee organization complies with 

applicable Federal laws and regulations. Many Institutes rely on the 

good faith of the grantee institution to ensure compliance with Federal 

financial conflict-of-interest regulations, rather than directly overseeing 

or reviewing grantee institutions’ management of financial conflicts of 

interest. 

The majority of the Institutes do not have any proactive methods to ensure 

that grantees have financial conflict-of-interest policies 

Grantee institutions are required to certify in all NIH grant applications 

that they are in compliance with 42 CFR Part 50 Subpart F and, thus, 

have a financial conflict-of-interest policy in place. Ten Institutes 

indicated that the only method they use to ensure that grantees have 

these polices is the grantees’ self-certification of compliance on the initial 

grant applications. Five Institutes stated that they rely solely on 

information published by NIH and/or OER to ensure that grantees have 

financial conflict-of-interest policies in place. OER provides Institutes and 

grantees with information about the relevant policies and regulations 

through its Web site. OER also conducts outreach activities, such as 

targeted site reviews, regional seminars, and a bimonthly newsletter to 

grantee institutions. Two Institutes reported that they do nothing to 

ensure that grantees have financial conflict-of-interest policies in place. 

Some Institutes use some type of outreach method to ensure that grantee 

institutions have conflict-of interest-policies. Three Institutes use site 

visits and training seminars to ensure that grantee institutions have 

policies in place. One Institute reported that it follows up with grantees if 

it has any concerns. Three other Institutes reported that they use more 

than one of the methods described above. 

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F I NDING 
 S 

Many Institutes rely solely on grantees’ assurances that they are 

appropriately reporting and managing, reducing, or eliminating financial 

conflicts of interest 

Nine Institutes indicated that they rely solely on the grantees to ensure 

reporting of financial conflicts of interest. Another four Institutes rely 

on the grantee institutions’ self-certification of compliance on the grant 

applications. An additional four rely on the grant applications and/or 

the information published by NIH (including OER) to ensure that 

grantees are reporting conflicts. 

Five Institutes reported using a number of methods, including outreach, 

training, and site visit activities, to ensure that grantees are reporting 

conflicts. One Institute follows up with grantees that it believes may 

have reporting problems. For the remaining Institute, we could not 

determine from its response how it ensures that grantees are reporting 

conflicts. 

When asked what procedures they have for ensuring that financial 

conflicts of interest are being managed, reduced, or eliminated, 

17 Institutes answered that they rely on grantees to do this. Four 

Institutes stated they do follow up or remind grantee institutions in 

acknowledgment letters about this requirement. Two rely on published 

NIH policies. One Institute uses a checklist when reviewing grant 

renewal applications to ensure that grantee institutions have 

procedures in place. 

Institutes infrequently and inconsistently follow up on reported financial 

conflicts of interest 

Although OER has followed up with grantee institutions during the 

small number of targeted site reviews it has performed (18 in FY 2006), 

in our review of the documentation, we observed very few instances in 

which Institutes followed up with grantee institutions regarding the 

nature or management of financial conflicts of interest. Instead, we 

found internal memorandums from one Institute that stated, “. . . if you 

have any concern that this [conflict] could harm the project, we can ask 

for additional information, however, this would only be done in 

rare/exceptional situations. . . .” An internal memorandum from 

another Institute stated, “We should not follow up for additional details 

about the nature of the conflict or how it was managed unless there is 

sufficient programmatic concern to do so.” 

Our survey results confirm that some Institutes do not follow up on 

reported financial conflicts of interest. Eight Institutes stated that they 

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FINDINGS 

never needed to follow up with grantee institutions regarding reported 

financial conflicts of interest. In addition, Institutes varied on what 

types of information they would request when following up with grantee 

institutions. Seven Institutes stated that they would request additional 

information from grantee institutions such as investigators’ names, 

grant numbers, and financial conflict-of-interest policies. Five 

Institutes indicated that if followup was needed, they would ask for 

additional information regarding the nature of the financial conflict of 

interest and/or how the financial conflict of interest would be managed. 

Two Institutes indicated that they would request a combination of 

information described above. Another two Institutes did not respond to 

our question about followup with grantees. 

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Δ RECOMMENDATIONS 

RECOMMENDATIONS 

NIH provides billions of dollars to institutions in the form of research 

grants. It is imperative that the funds provided to grantee institutions 

be used appropriately and that the research conducted using these 

funds not be biased because of any conflicting financial interests of 

investigators. The responsibility of complying with Federal financial 

conflict-of-interest regulations ultimately falls to the grantee 

institutions. However, as an oversight body, NIH should take a more 

active role in overseeing financial conflicts of interest among grantee 

institutions. 

We recommend that NIH: 

Increase Oversight of Grantee Institutions To Ensure Their Compliance With 

Federal Financial Conflict-of-Interest Regulations 

OER and each of the grant-making Institutes should expand oversight 

activities to ensure that grantee institutions have financial 

conflict-of-interest policies and procedures that comply with Federal 

regulations. Options to implement this recommendation could include 

increasing site visits by OER and Institutes’ collecting and reviewing 

grantee institutions’ financial conflict-of-interest policies. 

Require Grantee Institutions To Provide Details Regarding the Nature of 

Financial Conflicts of Interest and How They Are Managed, Reduced, or 

Eliminated 

It is difficult to determine whether followup with grantee institutions is 

warranted if the details regarding the nature and management of financial 

conflicts of interest are not collected. Although the current regulations 

authorize NIH to seek additional information regarding any conflicting 

interest and how the interest was managed, grantees are initially required 

to report so little information that NIH would rarely have reason to even 

know that it should request follow-up information. Collecting basic details 

regarding the nature of financial conflicts of interest and how they are 

managed might enable NIH to question whether certain conflicts could 

affect the grant research being conducted. Collecting this information 

might also enable NIH to determine whether grantee institutions are 

appropriately managing specific types of financial conflicts of interest. 

We recommend that 45 CFR § 50.604(g)(2) be amended to require grantee 

institutions to report certain details to the appropriate HHS public health 

research funding agency—in this case NIH—about any conflicting 

financial interest and how it was managed, reduced, or eliminated. 

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RECOMMENDATIONS 

Enough details should be provided so that NIH can identify concerns and 

adequately monitor whether grantees are complying with the regulatory 

requirements to identify and manage conflicts. We recognize that this 

regulation is applicable to all Public Health Service research grants or 

cooperative agreements. Because NIH is responsible for the largest share 

of public health research funding, we recommend that NIH work with the 

Secretary’s Office to amend the current regulation. In the meantime, we 

recommend that, after a grantee submits a report identifying the existence 

of a conflict, NIH use the current regulatory authority at 

42 CFR § 50.604(g)(3) to request details about the particular financial 

conflict of interest and how it was managed, reduced, or eliminated. 

Require Institutes To Forward to OER All Financial Conflict-of-Interest 

Reports That They Receive From Grantee Institutions and Ensure That 

OER’s Conflict-of-Interest Database Contains Information on All 

Conflict-of-Interest Reports Provided by Grantee Institutions 

Although OER asks Institutes to forward financial conflict-of-interest 

reports to OER, Institutes are not required to do so. A central repository 

for financial conflict-of-interest reports would enable NIH to have a more 

accurate picture of the number and nature of financial conflicts of interest 

reported to NIH. The absence of financial conflict-of-interest reports from 

grantee institutions does not necessarily indicate a problem. However, 

with a complete and comprehensive OER conflict-of-interest database, 

NIH can look at reporting and management trends and thus focus 

training and outreach efforts on grantee institutions where it sees 

potential issues or problems. Therefore, Institutes should be required to 

send all conflict-of-interest reports to OER for inclusion in its database. 

NIH staff informed us that OER had recently developed a Web-based 

financial conflict of interest tracking and monitoring system for internal 

NIH use. Institute grants management and program staff will be able 

to enter their own records and view financial conflict-of-interest reports 

across NIH. The database will remind grants management personnel to 

send an acknowledgment to the institution and a copy of the report to 

OER. The database is in the testing phase and NIH expects to make its 

use mandatory in 2008. 

We recommend that this new system capture the following information 

about each grant listed on a conflict-of-interest report: the grant 

number; the name of investigator or other individual or entity with the 

financial conflict of interest; a description of the nature of the conflict; 

and a description of how the conflict is managed, reduced, or eliminated. 

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R E C O MMENDA T I O N S 

In the future, NIH also plans to permit grantee institutions to 

electronically submit financial conflict-of-interest reports through eRA 

Commons, which is NIH’s Web-based system that grantees use to 

conduct their extramural research administration business 

electronically. 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

NIH stated that all of our findings were correct and concurred with two 

of our three recommendations. NIH did not concur with our 

recommendation to require grantee institutions to provide details 

regarding the nature of financial conflicts of interest and the way in 

which they are managed, reduced, or eliminated. NIH believes that 

although it is vital to maintain objectivity in research, responsibilities 

for identifying and managing financial conflicts of interest must remain 

with grantee institutions. NIH also points to 42 CFR Part 50, Subpart 

F, which assigns responsibility for identifying and managing financial 

conflicts of interest to grantee institutions rather than to the Federal 

Government. Furthermore, NIH stated that its collection of specific 

details of the nature and management of financial conflicts of interest 

would effectively transfer the responsibility for managing financial 

conflicts of interest from the grantee institutions to the Federal 

Government. The full text of NIH’s comments is presented in the 

Appendix. 

The Office of Inspector General (OIG) continues to recommend that NIH 

should collect details of the nature and management of financial 

conflicts of interest as part of its oversight responsibility of grantee 

institutions. Collection of this information can be accomplished without 

interfering with grantee institutions’ legal responsibility for managing 

financial conflicts of interest. 

We continue to recommend that NIH work with the Secretary of the 

Department of Health and Human Services to amend the current 

regulation and that NIH use its authority pursuant to 

42 CFR § 50.604(g)(3) to request details regarding the nature and 

management of financial conflicts of interest at grantee institutions. 

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Δ APPENDIX 

Agency Comments 

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APPENDIX 
 

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APPENDIX 
 

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APPENDIX 
 

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Δ ACKNOWLEDGMENTS 

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 this report include Diane Epstein and 

Maria Johnson, and central office staff who contributed include Ayana 

Everett. 

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