University Research: Most Federal Agencies Need to Better Protect against Financial Conflicts of Interest
Published: 2003-11-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In fiscal year 2001, federal agencies provided $19 billion for university research, a vital part of the nation's research and development effort. GAO was asked to examine federal agencies' actions to ensure that (1) the results of the university research grants they fund are made available to the public and (2) universities receiving such grants implement policies for identifying and managing possible financial conflicts of interest. GAO reviewed the actions of eight federal agencies and conducted a Web-based survey of 200 leading research universities (refer to GAO-04-223SP). GAO also met with officials in the Office of Science and Technology Policy (OSTP) to discuss the National Science and Technology Council's role in coordinating federal science policy.
section_title: What GAO Found
paragraphs: Each of the eight federal agencies GAO examined relies on university scientists who receive federally funded research grants to make the results available to the public. Although university scientists customarily seek to publish their research results in peer-reviewed journals, agencies cannot require such publication as a condition for funding because it is impossible to ensure in advance that the results will be accepted for publication. Agencies do, however, explicitly encourage funding recipients to make results public. The Departments of Agriculture, Defense, and Energy; the Environmental Protection Agency (EPA); and the National Aeronautics and Space Administration (NASA) also disseminate the results of their funded research by posting them on their Web sites. Officials from these agencies said that posting the results is an effective way to share information among scientists, as well as with the public. In contrast, the National Institutes of Health (NIH) and the National Science Foundation (NSF) do not post research results on their Web sites. According to NIH officials, the risk associated with posting researchers' final reports before they have been validated by peer review is too great in the biomedical field. The Department of Education is considering how best to widely disseminate the results of research it funds. NIH and NSF are the only federal agencies that require universities to implement policies for identifying and managing possible financial conflicts of interest for the research they fund. The other six agencies do not have financial conflict of interest standards for university research grants. Of the 171 universities that responded to the GAO survey, 148 (87 percent) reported that all of their federally funded research is covered by financial conflict of interest policies that are consistent with either NIH's or NSF's standards. However, 17 universities reported that they do not extend either agency's requirements to cover research grants from other federal agencies. Unless federal agencies uniformly require that universities implement conflict of interest policies, the government cannot properly safeguard against financial conflicts of interest that might bias federally funded research.

section_title: Letter
paragraphs: University research is a vital part of the nation’s research and development  efforts. Because there is broad consensus that university research is a long- term, national investment in the future, the federal government has been  the primary source of funding for this research. In fiscal year 2001, federal  agencies provided $19 billion, or about 60 percent of all funding for  university research. Eight agencies—the Departments of Agriculture,  Defense, Education, and Energy; the Environmental Protection Agency  (EPA); the National Aeronautics and Space Administration (NASA); the  National Institutes of Health (NIH), within the Department of Health and  Human Services; and the National Science Foundation (NSF)—obligated  97 percent of the university research funding, with NIH and NSF alone  accounting for $14.2 billion. The Office of Science and Technology Policy  (OSTP) coordinates the development of standard practices among federal  agencies through the National Science and Technology Council. For  example, the Council is undertaking a review of policies, procedures, and  plans relating to the business relationship between federal agencies and  research performers with the goal of improving the performance and  management of federally funded research.
Historically, the primary return on the federal government’s investment in  university research was the advancement of scientific knowledge. Science  progresses through open communication among scientists and the sharing  of research results. Publication of research results in peer-reviewed  scientific journals is an academic tradition that both validates and  disseminates these results.
More recently, the federal investment in university research not only has  advanced scientific knowledge but also has yielded thousands of  inventions each year that have fostered the development of new  technologies, stimulated the creation of new jobs, and improved the quality  of life. For some universities, it has also yielded new streams of income  that helped to support their research and education missions. The Bayh- Dole Act of 1980 has facilitated commercialization of university technology  by giving universities, among others, the right to own their federally funded  inventions and license them to businesses. As the importance of university  research to technological innovation has increased, partnerships between  universities and businesses have also grown, giving rise to concerns that  financial conflicts of interest might restrict the dissemination of research  results or bias the conduct or results of federally funded research.
Industry groups and others have also expressed concerns about the need,  in certain instances, for access to the scientific data that underlie the  published results of federally funded research. In response, in November  1999, the Congress enacted a provision, commonly called the Shelby  Amendment, requiring the Director of the Office of Management and  Budget (OMB) to amend Circular A-110 for universities, hospitals, and  other nonprofit organizations. Under this amendment, federal agencies are  directed to provide scientific data in response to a Freedom of Information  Act (FOIA) request if the published results of federally funded research are  used in developing a federal agency action that has the force and effect of  law.
You requested that we examine federal agencies’ actions to ensure that (1)  the results of the university research grants they fund are made available to  the public and (2) universities receiving such grants implement policies for  identifying and managing possible financial conflicts of interest. In  addition, as agreed with your office, appendix I provides information on  agencies’ actions in implementing the Shelby Amendment. Our review  focused on the Departments of Agriculture, Defense, Education, and  Energy; EPA; NASA; NIH; and NSF. As part of our review, we conducted a  Web-based survey of the 200 universities that received the most federal  funding for research and development in fiscal year 2000. We received  responses from 171 universities, an 86 percent response rate. The  universities’ aggregated responses are available at  http://www.gao.gov/special.pubs/gao-04-223sp.
subsections: section_title: Background
paragraphs: The Bayh-Dole Act of 1980 (Pub. L. No. 96-517, Dec. 12, 1980) has fostered  linkages between universities and businesses by giving universities, other  nonprofit organizations, and small businesses the option to retain title to  the inventions they make in the course of federally funded research. Before  1980, federal agencies generally retained title rights to any inventions made  in the course of the research they funded. Funding recipients seeking to  commercialize such inventions often faced long delays and uncertainty  when they asked the funding agencies to waive their rights. Since 1980,  universities have upgraded and expanded their technology licensing  efforts, particularly in such fields as biomedicine and computer technology.  Federal agencies and industry also substantially increased their funding of  university research—federal funding grew from $8 billion (in 2001 dollars)  in fiscal year 1980 to $19.2 billion in fiscal year 2001, and industry funding  grew from $461 million (in 2001 dollars) to $2.2 billion during this period.  For the Association of University Technology Managers’ survey for fiscal  year 2001, U.S. university respondents reported that they (1) executed  3,282 technology licenses and options, (2) received $852 million in gross  license income, and (3) held equity in 348, or 70 percent, of the 494 start-up  companies that were formed around university-licensed technology. (See  app. II for information from our survey about universities’ licensing  activities with start-up companies.)
OMB Circular A-110 establishes uniform requirements for the  administration of federal grants and cooperative agreements with  institutions of higher education, hospitals, and other nonprofit  organizations. For example, the circular requires that funding recipients  submit performance reports to the funding agency at least annually, with a  final technical report normally due within 90 days after the grant’s  termination or expiration. However, the circular provides flexibility by  allowing the agencies to specify the content of these reports or to waive the  final technical report. The National Science and Technology Council,  established by Executive Order 12881 in November 1993, coordinates the  development of governmentwide science and technology policies. For  example, the Council’s Subcommittee on Research Business Models is  examining the effects of the changing nature of scientific research on  business models for conducting federally funded research. In addition, 7  federal agencies, 84 research universities, and 6 other research institutions  participate in the Federal Demonstration Partnership (FDP), which seeks  to streamline the administrative processes for implementing OMB Circular  A-110.
In July 1995, the Department of Health and Human Services, which  includes NIH, promulgated regulations on Objectivity in Research and NSF  revised its Investigator Financial Disclosure Policy to establish consistent  requirements for universities and most other grantees to identify and  manage financial conflicts of interest. Specifically, the NIH and NSF  standards require that funding recipients implement policies for  (1) scientists to disclose any “significant financial interests” to an official  designated by the institution and (2) institutions to determine whether a  real or apparent conflict exists and, if so, take appropriate actions to  manage, mitigate, or eliminate the identified conflict. Under these  regulations, a conflict of interest exists when the institution’s designated  official determines that a significant financial interest could directly and  significantly affect the research design, conduct, or reporting. The financial  benefit may result, for example, from an investigator owning stock in a  company providing the research funding, or from an investigator having  ownership interest in a company that may profit from a university  invention. Conflicting interests are not necessarily unacceptable, and many  can be managed through disclosure and oversight. The NIH regulation  exceeds the scope of NSF’s policy in some areas. For example, it requires  that universities and other funding recipients report every identified  possible conflict of interest, while NSF requires that institutions report  only those conflicts that have not been resolved. (See app. III for a more  detailed comparison of the NIH and NSF requirements.)
section_title: Federal Agencies Rely on University Scientists and Agency Web Sites to Disseminate Research Results
paragraphs: Federal agencies rely primarily on the university scientists who receive  research grants to make their research results available to the public. Each  agency encourages grantees to publish research results in the scientific  literature, a practice that is steeped in academic tradition. Agriculture,  Defense, Energy, EPA, and NASA also disseminate the results of the  research they fund by posting scientists’ final technical reports on their  Web sites, and Education is considering whether to post research results.  While NIH, NSF, and Education do not post research results on their Web  sites, they post certain grant information, including abstracts submitted at  the time of the award.
subsections: section_title: Agencies Rely on and Encourage Grant Recipients to Make Research Results Available
paragraphs: The eight agencies we examined rely on university scientists to disseminate  the results of the research they fund, and their policies explicitly encourage  principal investigators and universities to disseminate those results  through presentations at scientific conferences and publishing in scientific  journals. (See table 1.) Similarly, FDP’s model terms and conditions for  research grants state, “The recipient is expected to publish or otherwise  make publicly available the results of the work conducted under the  award.” Publishing federally funded research results also is vital to  university scientists because research publications are key to obtaining  future grant awards, gaining professional recognition, and achieving  tenure.
Agencies also indirectly encourage the dissemination of research results  through their grant award practices. Officials at each agency said that peer  review panels consider the publication record of the applicant (usually the  principal investigator) in assessing the grant proposal. NSF, for example,  requires that principal investigators requesting grant renewals include a list  of publications generated with NSF’s prior support. Agriculture officials  told us that they are less likely to recommend renewal applications for  continued funding if the funded project’s results have not been published.  Publications indicate to the agencies that the principal investigator has  made progress in his/her research and that the results are available to other  scientists in the field. However, a research project may not generate  publishable results because leading scientific journals require that  manuscripts be reviewed by other experts in the field to validate the  research findings prior to publication. The scientific journal may reject a  manuscript because, for example, the reviewers conclude that the work  adds little value to the field of study, the results are inadequately supported,  or the research failed.
All but five of the university respondents reported that they have a policy or  standard operating procedure that addresses whether sponsors are allowed  to delay the publication of research results under certain circumstances,  such as reviewing a manuscript for possible proprietary information or for  intellectual property. Three universities—the California Institute of  Technology, Howard University, and Iowa State University—reported that  they do not permit any publication delays, while 160 universities allow a  sponsor to review a manuscript prior to publication—typically from 30 to  90 days. However, 10 universities allow a longer period of up to either 120  days or 180 days, and 1 university allows up to 365 days for the sponsor to  review a manuscript for proprietary information.
Generally, research sponsors appear to adhere to the universities’ time  frames for reviewing manuscripts. Administrators reported the following:  Fourteen universities were aware of one or more cases during the past 3  years of a sponsor delaying the publication of unclassified and  nonsensitive research beyond the university’s time limits.
Three universities were aware of one or more cases during the past 3  years of a federal sponsor delaying the publication of research involving  sensitive, but not classified, information beyond the university’s time  limits.
Thirteen universities were aware of one or more cases during the past 3  years of a federal sponsor blocking, or attempting to block, publication  of research involving sensitive, but not classified, information.
However, several university administrators noted during the pretest of our  survey instrument that publication delays can occur without the  university’s knowledge if the sponsor and the research team reach an  accommodation without notifying university administrators.
section_title: Five Agencies Disseminate Research Results on Their Web Sites
paragraphs: As shown in table 2, Agriculture, Defense, Energy, EPA, and NASA use their  Web sites to post research results, in some form, for grants that they issue.  For example, EPA posts summaries of annual and final technical reports on  its National Center for Environmental Research Web site. These summaries  include research accomplishments or findings, the reporting date, EPA  agreement number, title, investigators, institution, research category,  project period, objective of research, progress summary, conclusions (if  applicable), publications/presentations, future activities, supplemental  keywords, and other relevant Web sites. EPA’s Web site also allows users to  search for publications associated with a particular grant. NASA primarily  posts abstracts of final technical reports on its Web site, although NASA  plans to post mainly full technical reports in 2004.
While Education, NIH, and NSF do not post research results on their Web  sites, they post a project abstract written at the time of award stating how  the research will be conducted and what researchers hope to accomplish.  In November 2002, the Education Sciences Reform Act of 2002 (Pub. L. No.  107-279) established the Institute of Education Sciences and directed it to  widely disseminate the findings and results of scientifically valid research  in education. An Education official told us that after the members of the  Institute’s National Board of Educational Sciences have been appointed  and confirmed, Education will consider how best to fulfill this requirement,  particularly for the results of Institute-funded research that have not been  peer reviewed. The official noted that the Institute’s National Center for  Education Evaluation currently disseminates the results of research  performed under contract either through research publications or through  its Web site after the results have been peer reviewed.
In addition to using their own Web sites, several agencies participate in  collaborative Web-based efforts to share information, including research  results. For example, Energy’s Office of Scientific and Technical  Information maintains Federal R&D Project Summaries, a Web-based  portal to summary and award information for Energy, NIH, and NSF  research grants. The office also maintains GrayLIT Network, a portal to  full-text reports located on the Energy, Defense, EPA, and NASA  information systems. In addition, an interagency working group from 11  major science agencies recently initiated the science.gov Web site, which  provides a gateway to federal research and development results and other  scientific information.
Officials at the eight agencies identified both advantages and disadvantages  to posting all funded research results on agencies’ Web sites. Most of the  agency officials told us that posting technical reports on agencies’ Web  sites is an effective way to share information among scientists in the field  of research, as well as with the public. In explaining why they have chosen  not to post all results on their Web site, NIH and NSF officials cited  concerns that grant results posted prior to peer review and publication may  be incomplete or incorrect and could mislead other researchers or the  public. According to NIH officials, the risk associated with posting results  that have not been scrutinized and validated by peer review is simply too  great in the biomedical field. In addition, NSF officials were concerned that  a scientific journal would reject a manuscript because it views reports  posted on the Web as publications. Some agency officials also expressed  concern that a final technical report might be posted before the university  files a patent application for an invention, thereby preventing it from  obtaining a patent.
Among the 171 university respondents to our survey, 91 universities (53  percent) supported posting the grantee’s final technical reports on the  agency’s Web site, and 31 universities (18 percent) opposed posting the  final technical report, while 49 universities (29 percent) either were  uncertain or did not respond. Primary advantages that universities cited for  posting final technical reports on an agency’s Web site include facilitating  the access of other scientists to research results, facilitating collaboration  among scientists, providing prompt dissemination of research results, and  providing a public record if the results of a research project are not  published. Primary disadvantages that universities cited for posting final  technical reports are the potential for (1) an invention to be prematurely  disclosed, (2) a scientific journal to reject a manuscript because it views  posted reports as publications, (3) proprietary information to be disclosed,  (4) research results to be prematurely disclosed, (5) incomplete or  misleading report results to be prematurely disseminated, (6) an  investigator to be to harassed by opponents to the research, and (7)  universities to incur added administrative costs in complying with agency  requirements.
section_title: Only NIH and NSF Require Financial Conflict of Interest Standards for Grant Recipients
paragraphs: NIH and NSF, the two largest federal supporters of university research, are  the only federal agencies we examined that have adopted standards  intended to protect against financial conflicts of interest among university  grantees. The other six agencies do not require universities and other  grantees to identify and manage possible financial conflicts of interest  involving their research. According to officials from these agencies, it is the  universities’ responsibility to protect against conflicts of interest in  university research. While 87 percent of our survey respondents reported  that all of their federally funded research is covered by financial conflict of  interest policies that are consistent with either NIH’s or NSF’s standards, 17  universities—including 5 universities in the University of California  system—reported that they do not extend either the NIH or the NSF  financial conflicts of interest requirements to cover research grants funded  by other federal agencies.
subsections: section_title: Agencies without Financial Conflict of Interest Standards Believe Universities Should Take the Lead in Implementing Policies
paragraphs: While both NIH and NSF promulgated regulations in 1995 that require  universities to implement financial conflict of interest policies, the other  six federal agencies do not require that their grantees have similar  standards. According to Agriculture and Energy officials, universities  should take responsibility for developing and implementing policies for  identifying and managing financial conflicts of interest involving their  scientists. Defense and NASA officials told us that they have not  experienced enough problems to justify adopting financial conflict of  interest standards for universities and other grantees. These officials added  that the potential for financial conflicts of interest in the scientific fields  that they fund is generally lower than in the biomedical field. However, NSF  supports research in many of the same fields of research as these agencies.
section_title: Most Universities Report That Their Financial Conflict of Interest Policies Are Consistent with NIH and/or NSF Standards
paragraphs: All of the 171 university respondents to our survey reported that they had  one or more policies for addressing possible financial conflicts of interest  by research investigators. Of the respondents, 148 universities (87 percent)  reported having financial conflict of interest policies consistent with either  NIH’s or NSF’s regulations that apply to all federally funded research. More  specifically, 135 universities (79 percent) reported that they have a single  conflict of interest policy that applies to all of their research. These  universities’ policies are consistent with one of the 10 guidelines that the  Association of American Universities’ Task Force on Research  Accountability proposed for managing individual conflicts of interest:  “Treat research consistently, regardless of funding source—all research  projects at an institution, whether federally funded, funded by a non- federal entity, or funded by the institution itself, should be managed by the  same conflict of interest process and treated the same.”
In contrast, 17 universities reported that some of the federally funded  research they perform is not covered by financial conflict of interest  policies that are consistent with either NIH’s or NSF’s regulations. For  example, 5 universities in the University of California system reported that  their financial conflict of interest policies apply to research funded by NIH  or NSF, but not to research funded by other federal agencies. The  Massachusetts Institute of Technology and Yale University reported that  they have specific policies that cover research funded by NIH and NSF,  while their institutional policies cover all other funded research. Six other  universities did not provide a response.
Overall, 124 universities strongly supported, and 25 universities somewhat  supported, creating a single financial conflict of interest policy for all  federally funded research. Among the other respondents, 19 universities  either did not have a strong opinion or did not respond to the question,  while only 3 universities either strongly or somewhat opposed a single  financial conflict of interest policy for all federally funded research. The  university respondents did not agree, however, on which agency’s  standards should serve as the basis for a single federal policy: among the  133 universities that expressed an opinion, 72 preferred the NIH regulation,  56 preferred the NSF regulation, while 5 stated that either would be  acceptable.
To implement their financial conflict of interest policies, 140 of the 171  universities (82 percent) reported that they require scientists to indicate  whether or not a conflict may exist when a grant proposal is submitted; 108  universities (63 percent) require scientists to annually submit financial  disclosure forms to appropriate institution officials; and 139 universities  (81 percent) require scientists to update financial disclosure forms during  the year if new possible financial conflicts of interest are identified. A  policy that incorporates all three of these requirements is consistent with  the Association of American Universities’ Task Force on Research  Accountability guideline: “Disclose financial information to the  institution—individuals engaged in research should disclose on an annual  basis all financial interests related to university research, and provide  updated information when new financial circumstances may pose a  conflict of interest and when grant applications are submitted.” All but 6 of  the 171 universities reported that they require at least one of these three  types of financial disclosure.
In addition, 56 universities reported that their policy requires that the  federal funding agency be notified whenever a financial conflict of interest  is identified. In comparison, 62 universities reported that their policies  require that only certain federal funding agencies be notified, 49  universities do not have a policy for notifying federal funding agencies  about identified financial conflicts of interest, and 4 universities did not  respond about their notification policies.
Our survey results indicate that several universities have tightened their  policies for financial conflicts of interest in recent years to comply with the  NIH and NSF requirements. Specifically, all of our 171 respondents  reported that they have financial conflict of interest policies, while a survey  reported in the November 2000 issue of the New England Journal of  Medicine found that 15 of the 250 institutional respondents (6 percent) did  not have a policy on conflicts of interest. In response to the November  2000 survey, NIH reviewed the financial conflict of interest policies of a  representative sample of more than 100 universities and other institutions.  NIH found that, generally, the institutions had developed policies that  reflected a serious desire to inform and assist their investigators in  complying with NIH’s regulation. However, NIH found several specific  areas of noncompliance and identified four major areas of concern that the  institutions’ financial conflicts of interest policies need to address: (1)  many policies are not separated from other institutional policies through a  distinct part, appendix, or document; (2) investigators face an increased  burden because the many policies do not provide electronic links to  supporting information; (3) many policies are confusing because their  applicability and terminology are unclear; and (4) many policies include  numerous examples of vague language or statements.
Upon review of our university survey results, officials at Agriculture,  Energy, EPA, and NASA told us that OMB should take the lead in  developing a uniform, governmentwide requirement for addressing  possible financial conflicts of interest that is consistent with NIH’s and  NSF’s standards. NIH and NSF officials also supported developing a  uniform requirement that is consistent with their standards. Defense  officials said they were ready to work with other federal agencies on  governmentwide regulations, if regulations are warranted. OMB and OSTP  officials believe that the National Science and Technology Council, which  OSTP coordinates, is in the best position to develop a uniform financial  conflict of interest standard for federally funded research.
section_title: Conclusions
paragraphs: A fundamental principle of scientific research is that wide dissemination of  research results is vital for validating these results and advancing the field  of science. Posting final research reports, or similar information, on federal  agencies’ Web sites can advance scientific research by providing other  scientists with timely access to research results and facilitating  collaboration. Posting this information also provides access to members of  the public interested in the research and a public record if the results of  agency-funded research are not published, thus maximizing the benefit of  the federal investment. For these reasons, five federal agencies, including  Energy and NASA, already routinely disseminate research results through  their Web sites. While posting research results might create concerns in  some fields, such as biomedical research, these concerns are less  applicable for Education, which like Energy and NASA, has a specific  statutory requirement to widely disseminate research results.
The growing relationship between universities and businesses since  passage of the Bayh-Dole Act has led to an increase in possible financial  conflicts of interest, as businesses have increased their funding of  university research and some universities have collected more than $10  million in royalties in a given year for technologies they have developed. In  response to the NIH and NSF requirements, all of the universities we  surveyed have implemented policies for identifying and managing possible  conflicts of interest. However, some universities have not extended their  policies to cover research funded by other agencies, which also provide  substantial amounts of research funding, and OMB Circular A-110 does not  address financial conflicts of interest. Unless all federal agencies require  that universities have appropriate conflict of interest policies, the  government cannot ensure that safeguards are in place to protect the  integrity of scientific research, and the public’s investment.
section_title: Recommendations for Executive Action
paragraphs: To better ensure that the findings and results of scientifically valid research  in education are widely disseminated, we recommend that the Secretary of  Education direct the new Institute of Education Sciences to post the final  technical reports of the research it funds on its Web site.
To safeguard against bias in the design, conduct, or reporting of federally  funded research, we recommend that the National Science and Technology  Council coordinate the development of uniform federal requirements for  universities and other funding recipients to identify and resolve financial  conflicts of interest. The NIH and NSF standards provide a useful starting  point for this requirement.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided Education, OSTP, Agriculture, Defense, Energy, EPA, NASA,  NIH, and NSF with a draft of this report for their review and comment.  Education agreed with our recommendation to post the results of the  research it has funded on its Web site, stating that the department is  currently exploring how to best implement the Education Sciences Reform  Act’s provisions while not discouraging grantees from having their work  published in scientific journals. (See appendix IV for Education’s written  comments.) We met with OSTP officials, including the Associate Director  for Science, who agreed with the thrust of our recommendation that the  National Science and Technology Council coordinate the development of  uniform federal requirements to identify and resolve financial conflicts of  interest. However, the OSTP officials noted that recent experience in  developing a common rule for research misconduct has demonstrated that  the process for reaching consensus among federal agencies can be difficult  and prolonged. We continue to believe that federal agencies should develop  a single, uniform requirement for financial conflicts of interest. Through  their experiences in implementing standards since 1995, NIH and NSF can  provide important insights into the benefits and costs of alternative  approaches in areas where their requirements differ.
The Deputy Administrator for Extramural Programs within Agriculture’s  Cooperative State Research, Education, and Extension Service stated, in  oral comments, that the Service agreed with our recommendation and will,  where appropriate, implement financial conflict of interest standards  similar to those of NIH and NSF. Defense, Energy, EPA, NASA, NIH, and  NSF agreed with the factual presentation of the report. (See app. V for  NASA’s written comments, and app. VI for NIH’s written comments.)  Several agencies also provided specific comments to improve the report’s  technical accuracy, which we incorporated as appropriate.
section_title: Scope and Methodology
paragraphs: To assess the actions that federal agencies have taken to ensure the public’s  access to authoritative and unbiased scientific research at universities, we  examined the policies and procedures of the eight federal agencies that  primarily fund university research—Agriculture, Defense, Education,  Energy, EPA, NASA, NIH, and NSF. Specifically, we performed the  following audit steps:  To assess agencies’ actions to ensure that the results of the university  research they fund are made available to the public, we reviewed each  agency’s policies and procedures for disseminating research results and  interviewed agency officials. We also accessed the final technical  reports for several university grant projects from the Web sites of the  five agencies that post research results.
To assess agencies’ actions to ensure that universities implement  policies for identifying and managing possible financial conflicts of  interest, we examined whether each agency has regulations or policies  requiring that universities identify and manage possible financial  conflicts of interest. We also interviewed cognizant officials about their  procedures for ensuring that universities are implementing financial  conflict of interest policies. We did not examine the extent to which  agencies have taken additional actions to protect against financial  conflicts of interest for research involving human subjects, a topic  examined in a November 2001 GAO report.
To assess agencies’ actions to implement the Shelby Amendment, we  examined the 1999 legislation; OMB’s revisions to Circular A-110; and  the actions each agency has taken to implement the circular’s revisions.  We also discussed these actions with cognizant agency officials, asked  them whether they had received any FOIA requests that cited the Shelby  Amendment, and, if so, asked them to provide information about each  such request. We then reviewed the agency’s disposition of these FOIA  requests.
In addition to our review of federal agencies’ actions, we conducted a Web- based survey of the 200 universities and colleges that received the most  federal research funding in fiscal year 2000. The survey contained 42  questions that asked about (1) their policies and procedures for ensuring  that federally funded research results are made available to the public, (2)  their views of the advantages and disadvantages of posting a grant’s final  technical report to the agency’s Web site, (3) their conflict of interest and  financial disclosure policies, (4) any FOIA requests federal agencies had  received that asked for access to research data, and (5) data on their  research funding and technology transfer activities.
We pretested the content and format of the questionnaire with research  office administrators at the Georgia Institute of Technology, Emory  University, Washington University, the University of Missouri, the  University of Colorado, the Colorado School of Mines, George Washington  University, and the University of Maryland. During the pretest, we asked  the administrators to determine whether the survey questions were clear,  the terms used were precise, and the questions were unbiased. We also  assessed the usability of the Web-based format. We made changes to the  content and format of the final questionnaire based on pretest results.
We received responses from 171 of the 200 universities surveyed, for a  response rate of 86 percent. Respondents included 44 of the 50 universities  that received the most federal funding in fiscal year 2000. We performed  analyses to identify inconsistencies in the data and resolved them. The  universities’ aggregated responses are available at  http://www.gao.gov/special.pubs/gao-04-223sp.
We conducted our review from August 2002 through September 2003 in  accordance with generally accepted government auditing standards.
We are sending copies of this report to the appropriate House and Senate  Committees, the Director of OSTP, the Secretary of Agriculture, the  Secretary of Defense, the Secretary of Education, the Secretary of Energy,  the Administrator of EPA, the Administrator of NASA, the Director of NIH,  the Director of NSF, and the Director of OMB. We also will make copies  available to others upon request. In addition, the report will be available at  no charge on the GAO Web site at http://www.gao.gov.
If you or your staff have any questions about the report, please contact me  at (202) 512-3841. Key contributors to this report were Richard Cheston,  Vondalee Hunt, Ulana Bihun, Donald Pless, and Lynn Musser.
section_title: Agencies’ Actions in Implementing the Shelby Amendment
paragraphs: The Omnibus Consolidated and Emergency Supplemental Appropriations  Act, 1999, (Pub. L. No. 105-277) required the Director of the Office of  Management and Budget (OMB) to amend Circular A-110 by incorporating  a provision known as the Shelby Amendment. Among other things, the  Shelby Amendment requires that (1) federal awarding agencies ensure that  all data produced under an award will be made available to the public  through the procedures established under the Freedom of Information Act  (FOIA) and (2) if the agency obtaining the data does so solely at the request  of a private party, the agency may charge a reasonable user fee equaling the  incremental cost of obtaining the data. The Shelby Amendment grew out of  a controversy that arose over the Environmental Protection Agency’s  (EPA) proposal to tighten Clean Air Act standards for small airborne  particulates in 1997. EPA’s proposed rule cited the published results of a 30- year epidemiological study funded by the National Institutes of Health  (NIH) and conducted by Harvard University. Various industry groups that  opposed EPA’s proposed regulation asked to review original data of the  study. However, Harvard denied the requests, citing both confidentiality  agreements with human subjects and the volume of data accumulated.
On November 6, 1999, OMB published revisions to Circular A-110 in the  Federal Register in response to the Shelby Amendment. Under the revision,  a subject institution must provide the research data to the funding agency  in response to a FOIA request if a federal agency has used the published  research findings in developing an agency action that has the force and  effect of law. In March 2000, 15 federal agencies published an interim final  rule in the Federal Register that codified the OMB Circular A-110 revision.  These agencies included Agriculture, Defense, Energy, Education, EPA, the  National Aeronautics and Space Administration (NASA), and NIH. National  Science Foundation (NSF) officials told us that NSF incorporated the  revision by reference to OMB Circular A-110 in its grant agreements.
Only NIH and EPA have received FOIA requests citing the Shelby  Amendment. In reviewing the requests, both agencies determined that the  requests did not meet the OMB Circular A-110 criteria. (See table 3.) Of the  40 requests received by NIH, 20 requested copies of either funded grant  applications or contract records, not research data; 9 requested data  generated from grants funded prior to the effective date of the NIH  regulation implementing the Shelby Amendment; and 4 were withdrawn.  NIH officials told us that NIH determined that the remaining seven requests  were not applicable to the Shelby Amendment; however, information on  the basis for this decision was unavailable because NIH had destroyed the  FOIA files 2 years after its final response, in accordance with the National  Archives and Records Administration’s (NARA) records retention  schedule. EPA denied both requests it received because the requested data  were generated by projects funded prior to the effective date of its  regulation implementing the revision to OMB Circular A-110.
More recently, OMB published a proposed bulletin and guidelines to ensure  that agencies conduct peer reviews of the most important scientific and  technical information relevant to regulatory policies that they disseminate  to the public, and that the peer reviews are reliable, independent, and  transparent. The guidance would supplement the requirements that many  agencies have for peer review of “significant regulatory information,”  which is scientific or technical information that qualifies as “influential”  under OMB’s information quality guidelines and is relevant to regulatory  policies. Specifically, the proposed guidelines state that, to the extent  permitted by law, an agency shall have an appropriate and scientifically– rigorous peer review conducted on all significant regulatory information  that the agency intends to disseminate. In addition, the proposed guidelines  state that, to the extent permitted by law, an agency shall have formal,  independent, external peer review conducted for so-called “especially  significant regulatory information” which would apply to significant  regulatory information if (1) the agency intends to disseminate the  information in support of a major regulatory action, (2) the dissemination  of the information could otherwise have a clear and substantial impact on  important public policies or important private sector decisions with a  possible impact of more than $100 million in any year, or (3) the  Administrator of the Office of Information and Regulatory Affairs  determines that the information is of significant interagency interest or is  relevant to an administration policy priority.
section_title: Universities’ Acceptance of Equity in Start-up Companies
paragraphs: Among the 171 respondents to our survey, 155 universities reported that  they, or their affiliates, have the option to accept equity as a means of  payment for licensed technology. As shown in figure 1, since the enactment  of the Bayh-Dole Act in December 1980, these universities have  increasingly begun receiving equity in start-up companies in lieu of  receiving license fees and royalties. Prior to the act, only 10 universities  accepted equity in start-up companies.
As of March 2003, 123 universities reported that they held equity in at least  one start-up company, and 44 of these universities reported that they held  equity in at least 10 start-up companies. The Massachusetts Institute of  Technology held equity in 116 start-up companies at that time.  Furthermore, 93 universities reported that they held, on average, less than  10 percent of the start-up companies’ equity, and 31 universities reported  that they held, on average, 10 percent or more of the start-up companies’  equity. While 16 universities limit equity ownership to at most 10 percent,  116 universities reported that their institutional policy does not restrict the  percentage of equity ownership they can hold in a start-up company.
section_title: Comparison of NIH’s and NSF’s Financial Conflict of Interest Standards
paragraphs: On July 11, 1995, the Department of Health and Human Services, which  includes NIH, promulgated regulations and NSF revised its Investigator  Financial Disclosure Policy to establish consistent requirements for  universities and other grantees, with certain exceptions, to identify and  manage real or apparent financial conflicts of interest. The stated purpose  of these requirements is to ensure a reasonable expectation that the design,  conduct, and reporting of research will be unbiased by any conflicting  financial interest of the investigator. The effective date of these standards  was October 1, 1995.
Both NIH and NSF define a “significant financial interest” as anything of  monetary value with the following exceptions:  salaries, royalties, and remuneration from the applicant institution;  any ownership interest in the institution, if the institution is an applicant  under the Small Business Innovation Research program;  income from seminars, lectures, teaching engagements, and service on  advisory committees or review panels;  an equity interest that—when aggregated for the investigator, spouse,  and dependent children—does not exceed $10,000 and does not  represent more than 5 percent ownership interest in a single entity; or  salary, royalties, or other payments that—when aggregated for the  investigator, spouse and dependent children—do not exceed $10,000  over the next 12 months.
The NIH regulations (42 C.F.R. Part 50 and 45 C.F.R. Part 94) require that  each institution, except Phase I applicants for the Small Business  Innovation Research program, takes the following actions:  Maintains a written, enforced policy on conflict of interest complying  with the regulations, and inform investigators of the policy. The  institution must take reasonable steps to ensure that subgrantees  comply with its policy.
Designates an institutional official who will review financial disclosure  statements.
Requires that each investigator submit to the institutional official, by the  time the application is submitted for funding, a listing of significant  financial interests that would reasonably be affected by the research.
Provides guidelines for designated officials to identify conflicts of  interest and take necessary action to manage, reduce, or eliminate those  conflicts. Under the regulations, a conflict of interest exists when the  designated official reasonably determines that a significant financial  interest could directly and significantly affect the design, conduct, or  reporting of the funded research.
Maintains records for 3 years after the date of the submission of the final  report of expenditures.
Establishes adequate enforcement mechanisms and provide for  appropriate sanctions.
Certifies in each application for funding that the institution has an  administrative process to manage conflicts of interest and that, prior to  any expenditure of funds, the institution will report the existence of a  conflict and assure that it is being managed, reduced, or eliminated.
If an investigator fails to comply with the institution’s policies and has,  thereby, biased the research, the institution must report the noncompliance  immediately to NIH and inform NIH of the action that has been, or will be,  taken. If this failure occurs in a project whose purpose is to evaluate the  safety or effectiveness of a drug, medical device, or treatment, the  institution must require that it be disclosed in each public presentation of  the results of the research.
NSF’s policies were developed in close conjunction with the NIH  regulations but differ in the following significant respects:  NSF has no conflict of interest requirement governing subgrantees.
NSF exempts all entities with less than 50 employees from its standard.
NSF requires that records be retained for 3 years after the termination of  the award instead of 3 years after the last financial statement has been  submitted.
NSF requires that the institution provide notification of a conflict of  interest only if the institution is unable to resolve the conflict.
NSF permits research to proceed, in spite of disclosed conflicts, if the  review determines that restrictions would be ineffective or that the  benefits of proceeding outweigh the consequences of any negative  impact. NIH does not address this issue in its policy.
section_title: Comments from the Department of Education
section_title: Comments from the National Aeronautics and Space Administration
section_title: Comments from the National Institutes of Health
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