Financial Conflict of Interest Procedures
Date: May 21, 2003
Sender: Beth Burnside, Vice Chancellor for Research; Jan DeVries, Vice Provost for Academic Affairs & Faculty Welfare
To: DEANS, DIRECTORS, DEPARTMENT CHAIRS, AND ADMINISTRATIVE OFFICERS
Subject: Financial Conflict of Interest Procedures
Faculty members at the University of California may engage in consulting activities for up to 39 days during the academic year (approximately 20% time). However, due to recent IRS restrictions, an increasing number of faculty members are receiving employment contracts instead of consulting agreements.
The Berkeley campus recognizes the problems these employee-consulting arrangements can create for our faculty who also receive gifts, grants and contracts for the same entity. To efficiently and fairly handle situations where an employment contract is signed in lieu of a consulting agreement, the campus has developed the attached procedures.
If you have any questions regarding conflict of interest or conflict of commitments issues, please contact Assistant Vice Chancellor Joyce Freedman or Academic Personnel Director Patti Owen.
Vice Chancellor for Research
Vice Provost for Academic Affairs & Faculty Welfare
Berkeley Campus Procedures for Conflict of Interest/Conflict of Commitment Cases
On July 1, 2001 the Office of the President issued its policy on “Conflict of Commitment and Outside Professional Activities of Faculty Members” (APM-025). This policy states:
“Establishing a Relationship as a Salaried Employee Outside the University:
with the exception of delivering occasional lectures or participating in UC-sponsored continuing education programs, compensated teaching or research at another institution while employed as a full-time faculty member at the University is not permitted without prior written approval of only the Chancellor or Executive Vice Chancellor.” 1
The implementation of this policy has become more complex because, due to recent IRS restrictions and
other business decisions, an increasing number of companies are using employment contracts rather
than consulting agreements to engage faculty for a small percent of time. While faculty members may
engage in consulting activities for up to 39 days during the academic year (approximately 20% time),
the UCOP prohibition on holding a salaried position requires campus approvals for what would formerly
have been a straightforward consulting arrangement.
If those individuals also receive research gifts, grants and/or contracts from the same business entities where they serve as an employee-consultant, they face these campus approvals prior to having their financial disclosure cases reviewed.
In recognition of the problems that the change in OP policies and new outside business practices have caused and will continue to cause many of our faculty, the Berkeley campus has developed procedures to efficiently and fairly handle situations when an employment contract is signed in lieu of a consulting agreement and a research gift, grant and/or contract is received from the same company.
These procedures are as follows:
- Prior to any faculty member entering into a 20% or less (39 days or less) “employment-in-lieu-of-consulting” agreement with an outside company, he/she must first file an APM-025 Category I disclosure and get approval from the Dean of the faculty’s School or College for this activity as required by current policy and procedures2.
- In those cases where faculty have employment agreements or have other significant conflicts of commitment with the business entity that are for more than 20% time (39 days during the academic year), the Category I disclosure will be forwarded to the Vice Provost for Academic Affairs and Faculty Welfare and Executive Vice Chancellor and Provost for final review and decision after approval of the Dean of the faculty’s School or College.
- APM-025 approval forms, the employment agreement (salary information redacted), the COI forms (700Us and addendum), along with all other required information, are then sent to the COI administrator for review by the COI committee.
- The COI Committee will review these cases to determine whether there are any potential financial conflicts of interest. In addition, the Committee will be responsible to determine whether or not the intellectual property commitments made to an outside employer are appropriate and permissible.
- If there are financial conflicts of interest, the COI Committee will make its recommendation on appropriate strategies for either managing or eliminating the conflicts of interest before the research funds can be accepted.
(Endnotes)1 This appears at the bottom of page 7. The entire policy can be found at the following URL: http://www.ucop.edu/acadadv/acadpers/apm/apm-025-07-01.pdf (PDF file) [current URL: http://www.ucop.edu/academic-personnel/_files/apm/apm-025-07-01.pdf]
2 The form can be found at URL: http://apo.chance.berkeley.edu/025_senate_memo.htm [current URL: http://apo.chance.berkeley.edu/policy.htm]
source: UC Berkeley CALmessages: https://calmessages.berkeley.edu/archives/message/17100