Importance of Foreign Conflict of Interest Policies and Disclosure Requirements: What We Can Learn From the 2019-2020 GAO ReportJanuary 22, 2021
Government Accountability Office Insights and Recommendations
It is a new year and we have a new administration. However, one enforcement trend that remains in full force is the increased scrutiny of potential foreign influence on U.S.-based research, including concerning transparency regarding potential foreign conflicts of interest.
A December 2020 report published by the United States Government Accountability Office (“GAO”) provides further insight and recommendations for universities and individual researchers on best practices in proactively disclosing and addressing threats of foreign influence in federally funded research.
Federal agencies that fund research, and universities and researchers that receive funding, have a strong interest in ensuring research is free of bias and in safeguarding against undue foreign influence. Over the past three years, the government has revisited regulations and policies in these areas. Federal grant recipients would be prudent to revisit any renewed internal procedures and policies to address the risk of undue foreign influence especially in light of the recent policy shifts.
GAO’s Audit Findings Regarding Conflicts of Interest Policies, Rules and Regulations
The GAO’s recent report derives from a yearlong audit of federal rules and regulations and grantee policies governing Conflict of Interest (“COI”) disclosures conducted from December 2019 through December 2020. The audit, which included key stakeholder interviews, focused on:
(1) the extent to which selected agencies and universities have COI policies and disclosure requirements that address potential foreign influence;
(2) the extent to which selected agencies have mechanisms to monitor and enforce policies and requirements; and
(3) the views of selected stakeholders on options to improve the ability of agencies and universities to identify and address foreign influence in federally-funded research. The audit also included key stakeholder interviews.
The GAO used the following conflict of interest definitions when conducting its audit:
- Financial conflict of interest: is a situation in which an individual, or individual’s spouse or dependent children, has a financial interest or financial relationship that could directly and significantly affect the design, conduct, reporting or funding of research.
- Nonfinancial conflict of interest: is a situation in which an individual accepts or incurs conflicting or inconsistent obligations between or among multiple employers or other entities. This includes conflicts of commitment, such as conflicting commitments of time and effort, including obligations to dedicate time in excess of institutional obligations, and obligations to improperly share information with, or withhold information from, an employer or funding agency.
Lack of Defined Requirements for Reporting Financial Conflicts of Interest
The GAO reviewed the policies and disclosure requirements of the five agencies with the largest amount of funding for federal research – the Department of Defense (“DOD”), the Department of Energy (“DOE”), the National Aeronautics and Space Administration (“NASA”), the National Institute of Health (“NIH”), and the National Science Foundation (“NSF”). The review found that only three of the five agencies reviewed (NIH, NSF and NASA) have agency-wide policies addressing COI, and that those policies do not address or independently define nonfinancial conflicts of interests such as foreign affiliations, associations or activities. The remaining two – DOD and DOE – have not adopted agency-wide policies addressing COIs or financial conflicts of interest (“FCOI”), which has given rise to inconsistent understandings across research funding recipients. However, research institutes, universities and researchers should not presume that no obligation exists, even where policies are silent. This is because, when interviewed, NIH and NSF officials explained that they still require researchers to disclose all foreign and domestic interests, including financial interests, even if FCOI are not specifically defined. When interviewed, most agencies reported that they were still working to improve their COI policies.
The audit further confirms that despite collecting information directly from grant recipients and researchers, each of the major five funding agencies rely heavily on universities to self-regulate by collecting information and monitoring potential FCOIs. Some agency officials explained that, in their view, universities, as the grantees, bear the primary responsibility for addressing researchers’ FCOIs. When reviewing the disclosure requirements, the GAO highlighted that disclosure of FCOI is a uniform requirement in the grant proposal process across all of the major five agencies. As for information collected through regular channels, such as progress reports and foreign collaboration/foreign components, review and use of that information varied across the agencies. For example, NSF officials said they use the information to determine the extent of international collaborations in agency-sponsored research, while the DOD uses the information to evaluate the progress of the project, among other things. Surprisingly, only the NIH uses the information disclosed n progress reports to detect potential foreign influence by identifying discrepancies between the reported information in the progress report and other sources, such as publications.
In fact, the main source of intelligence on potential failures to disclose FCOIs and other noncompliances are tip lines, other agencies (including the FBI), internal program offices, and even universities themselves. The details on how information is shared internally among agencies, however, remain opaque. While three of the five agencies – NASA, DOD and DOE – lack clear written processes or procedures for how to manage reports of suspected nondisclosure, NIH and NSF have in place specific written procedures for managing allegations of failure to disclose required information, such as foreign affiliations. Their procedures outline the investigation process and establish roles and responsibilities for the investigation. They also allow for the nuances of each case. For example, NIH’s procedures provide details on the routing of allegations to different groups in the agency and options for administrative actions.
Of course, agencies can take a range of administrative or enforcement actions when an allegation of failure to disclose required information is substantiated. These range from asking the researcher’s university to open an investigation, to suspending the grant or referring the case for prosecution. However, the GAO has emphasized the need for all agencies to develop clear and consistent procedures and policies for an effective internal control system for reporting and investigating allegations of noncompliance so administrative actions can be undertaken consistently.
Institutional Policies’ Failure to Mandate Reporting of FCOIs
As part of its audit, the GAO reviewed university COI policies and disclosure requirements from 11 universities, randomly selected from a subset of grant recipients who have received more than $500 million in combined research grant funding from at least two agencies in 2018 and 2019. The audit found that all 11 universities had publicly available FCOI policies for federally funded research, but that only one specifically required reporting of foreign financial interests. Similarly, the GAO audit found that while all policies address nonfinancial conflicts of interest, only one specifically mentioned foreign commitments as a concern. Notably, the GAO flagged, that under these policies’ memberships in a foreign talent recruitment program, might not necessarily be deemed a reportable FCOI. The GAO noted that, due to recent concerns about influence, some universities have added specific disclosure questions related to foreign affiliations, associations and activities. Most of those changes are not required by government-wide guidance.
What this Means for Compliance Moving Forward
The GAO report underscores the inconsistency in how federal agencies and institutions alike have viewed and handled the reporting of foreign FCOIs. From an institutional standpoint, effectively addressing the threat of foreign influence in federally-funded research depends, in large part, on agency-wide policies on COI, written procedures to address alleged violations, and timely guidance on how to improve policies and address foreign threats. However, institutions must be vigilant in monitoring their own faculty and researchers to ensure that they do not run afoul of federal rules and procedures – especially where policies are constantly being updated and revised.
Steps to Take Now
Even absent further revisions, universities and individual researchers can take steps to safeguard their own grants. These include revisiting and updating policies, with particular attention to the definition of COI, investigating early and often according to more robust policies, monitoring international collaborations, instituting regular system-wide audits to track collaborations and financial expenditures, and investing in and implementing faculty and staff training on new rules, and encouraging multiple forms of disclosure.