PHS FCOI Requirements: Impact on New Proposals and Awards

Revised Public Health Service (PHS) financial disclosure regulations, effective August 24, 2012, require the Sponsored Projects Office to change the way it processes various types of transactions for PHS sponsors as well as several other non-PHS sponsors who also have adopted these same PHS FCOI requirements.

The following guidance is effective as of August 24, 2012 and describes what is required of UC Berkeley principal investigators (PIs) who plan to submit research proposals and/or receive research funding from any of the PHS funding agencies and non-PHS agencies that have adopted the PHS Financial Conflict of Interest (FCOI) regulations. A current list of these sponsors is provided at the end of this notice.

Please note: This guidance applies to all PHS funded research grants and cooperative agreements including research grants, career development grants, center grants, individual fellowship awards, infrastructure awards, institutional training grants, program projects, or research resources awards. It does not apply to NSF or any other non-PHS sponsor except those listed at the end of this announcement. Also, it does not apply to Phase I Small Business Innovative Research (SBIR) and Small Business Technology Transfer (STTR) applications, but it does apply to Phase II SBIR/STTR applications/awards.

Proposal Submission to Sponsors with PHS FCOI Policy

Before any new research proposal can be submitted by SPO to any sponsor that has adopted the PHS FCOI policy, the UC Berkeley PI must provide SPO with:

1. A faxed or scanned PI certification form signed and dated by the UC Berkeley PI. This is a new form entitled, “PHS FCOI Policy: Principal Investigator Certification.” In lieu of a signed/dated form, SPO also will accept an email directly from the PI with the certification language included.
2. A faxed or scanned PHS Financial Disclosure (Form 1) for each UC Berkeley investigator named in the proposal.
3. A faxed or scanned PHS Financial Disclosure (Form 5) for each subrecipient investigator named in the proposal, but only if the subrecipient does not have a PHS-compliant FCOI policy.

Note: UC Berkeley PIs who are notified after August 24, 2012 that they will be funded by a PHS sponsor or a non-PHS sponsor that has adopted the PHS FCOI policy must provide items 1-3 above to SPO if these were not provided at the proposal stage. The award will not be set up by SPO until these items are received and all positive disclosures have been approved by the UC Berkeley COI committee.

Determining if a Subrecipient has a PHS-Compliant FCOI Policy

The UC Berkeley PI should take these steps:

• First consult the FDP FCOI Clearinghouse to see if the subrecipient is listed. If the subrecipient is listed on the FDP FCOI Clearinghouse website, nothing more is required of the UC Berkeley PI for the subrecipient’s investigators.
• Each subrecipient must complete a UCB Subrecipient Commitment Form. The current version of the form, dated 9/2012, has questions pertinent to the new PHS financial disclosure regulations to determine if a subrecipient has a PHS-compliant policy in place. If the subrecipient has completed and signed a previous version of the UCB Subrecipient Commitment Form (earlier than 9/2012), and if the subrecipient is not listed on the FDP FCOI Clearinghouse website, the UC Berkeley PI must ask the subrecipient to complete and submit a UCB “Subrecipient Commitment Form: FCOI Addendum,” so that the new information is provided.
• If the subrecipient’s authorized official indicates on the Subrecipient Commitment Form or on the Addendum that it DOES NOT have a PHS-compliant FCOI policy, the UC Berkeley PI will need to submit to SPO a faxed or scanned PHS Financial Disclosure (Form 5) signed and dated for each of the subrecipient’s investigators named in the proposal.

PHS Non-Competing Continuation Applications (Progress Reports)

For a non-competing continuation application/progress report submitted to any PHS sponsor, the UC Berkeley PI must submit to SPO items 1-3 listed above on or before the date the non-competing continuation application/progress report is due to the PHS sponsor. Failure to do this will violate PHS FCOI regulations.

Other Covered Transactions

PHS FCOI regulations also require SPO to collect from the UC Berkley PI items 1-3 listed above prior to submitting a request for a no-cost extension or any supplement that extends the end date of the award.

PHS Sponsors

National Institutes of Health (NIH)
Food and Drug Administration (FDA)
Centers for Disease Control (CDC)
Agency for Healthcare Research and Quality (AHRQ)
Agency for Toxic Substances and Disease Registry (ATSDR)
Health Resources and Services Administration (HRSA)
Indian Health Services (IHS) Substance Abuse and Mental Health Services Admin (SAMHSA)

Non-PHS Sponsors adopting PHS FCOI Regulations

Alliance for Lupus Research
American Cancer Society
American Heart Association
Arthritis Foundation
Susan G. Komen for the Cure

For more detailed information about PHS financial disclosure requirements consult PHS Financial Disclosure on the RAC Conflict of Interest web site.

UCB Implements PHS Regulations for Financial Disclosure

The Public Health Service (PHS), including the National Institutes of Health, requires disclosure of significant financial interests by investigators who participate in PHS-funded research either directly or via subaward. The American Cancer Society, American Heart Association, Alliance for Lupus Research, Arthritis Foundation, and Susan G. Komen for the Cure have also adopted the PHS requirements.

The RAC Conflict of Interest Office has developed a three-stage process to implement the disclosure, review, and reporting requirements of the revised PHS financial disclosure regulations, which are effective August 24, 2012. This new process, with new PHS financial disclosure forms, has been designed to reduce and simplify the administrative burden associated with financial disclosure and review at the initial proposal submission stage for new and competing continuation/renewal proposals. Detailed information, guidance, and the new forms are available on the COI PHS Financial Disclosure page.

The COI Office has also revised the NSF Financial Disclosure Form for applicants to the National Science Foundation. Applicants to NSF must disclose project-related financial interests for themselves and all other project investigators at the proposal submission stage. This requirement applies to subcontracts from NSF, and the UCOP Special Research Programs have also adopted the NSF requirements.

NIH Announces Special Review for Applications from PIs with More than $1 Million Direct Costs for RPGs

The National Institutes of Health has announced a new Special Council Review policy. In September 2012, Advisory Council members will provide additional consideration of new and renewal applications from investigators who currently receive $1 million per year in direct costs from active NIH awards for Research Project Grants (RPGs).

In May 2012, NIH piloted Special Council Review procedures to provide additional review of applications from investigators with NIH funding of  $1.5 million per year in total costs. The main change from the pilot is that the threshold was changed from $1.5 million total costs to $1 million direct costs from active NIH awards.

Applications that will be given special review include:

• New and renewal applications from investigators who currently receive $1 million or more in direct costs for RPGs, excluding no cost extensions

Applications excluded from special review include:

• Pending applications received in response to requests for applications
• P01s and other multi-component RPGs, unless all the investigators exceed the $1 million threshold
• Multi-PI applications, unless all the investigators exceed the $1 million threshold
• Administrative supplements
• Subprojects within complex applications (This may be revisited by NIH when complex applications are accepted through eRA Commons.)

The August 20 NIH Guide Notice (NOT-OD-12-140) and a Rock Talk post on Moving Forward with Special Council Review provide additional details.

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May 22, 2012 Research Advocate: NIH Piloting Special Review for PIs with Over $1.5M in Research Project Grants

Campus Guidance on F&A Rate Increases

The campus has a new multi-year Facilities and Administration (F&A) rate agreement.

Awards in which the University’s F&A costs were not waived (all or in part), have start dates on or after July 1, 2011, and were awarded with a provisional F&A rate will be subject to the new F&A rate agreement/rate increases. The Controller/EFA will automatically apply the appropriate rate for the effective period based on the new F&A agreement.

Example: An award was made to UC Berkeley with a start date of 7/1/11 for a period of three years. The approved budget included the provisional F&A rate of 53.5% across all three project years.
The Controller/EFA will now apply the appropriate predetermined F&A rate for each effective period according to the new rate agreement:

Year 1: 7/1/11-6/30/12 - 53.5% of MTDC (no change)
Year 2: 7/1/12­-6/30/13 - 55.5% of MTDC (+2.0%)
Year 3: 7/1/13-6/30/14 - 56.5% of MTDC (+3.0%)

To cover the change/increase in F&A in Years 2 and 3, the Principal Investigator (PI)/Department has two options:

1. The PI could request additional funds from the sponsor to cover the increase in F&A. The feasibility of this option, as always, depends on sponsor policy.
2. The PI/Department could rebudget to make more funds available for F&A costs. This action may or may not require sponsor approval depending on sponsor policy.

The following provides the campus with guidance on how to manage the impact of the new F&A rate agreement/rate changes on awards from different types of sponsors:

1. National Science Foundation (NSF)

NSF awards that meet the criteria listed above made directly to UC Berkeley (or via a subagreement/MCA) will be charged F&A according to the new rate agreement. NSF policy is not to provide additional funding to cover any increase in F&A costs that result. Therefore, PIs/Departments will need to rebudget for the increase in F&A costs. This may be done without additional NSF approval as long as Research Terms and Conditions (RTC) apply to the NSF award. PIs/Departments should consult the NSF award document for this information. If RTC does not apply, the PIs/Department should contact the SPO Research Administrator (RA) assigned to their unit for guidance.

2. National Institutes of Health (NIH)

When SPO receives a Just-in-Time (JIT) request for a possible award from NIH, SPO will provide the new campus F&A rate agreement to NIH and attempt to get the appropriate new rates included as part of the new award.

For already established NIH awards that meet the criteria listed above made directly to UC Berkeley (or via a subagreement/MCA), NIH is not obligated to make any supplemental or other award for additional F&A costs just because a grantee’s rate agreement has changed. However, NIH will allow grantees to charge NIH projects at the newly negotiated rate in effect at the time direct cost expenditures are made during each project year covered under the new rate agreement.

Therefore, PIs/Departments will need to rebudget for any increase in F&A costs. This may be done without additional NIH approval as long as Research Terms and Conditions (RTC) apply to the NIH award. PIs/Departments should consult the NIH award document for this information. If RTC does not apply, the PIs/Department should contact the SPO RA assigned to their unit for guidance.

3. All Other Awards

PIs/Departments should consult the terms and conditions of individual awards that meet the criteria listed above to determine if the sponsor’s policies allow it to provide additional funds for changes in indirect cost rates. If allowed, the PIs/Department should contact the SPO RA assigned to their unit to make this request.

PIs/Departments that decide to rebudget to cover an increase in F&A costs should consult their award document to determine whether Research Terms and Conditions (RTC) apply. If RTC terms do not apply, PIs/Departments should consult with the SPO RA assigned to their unit to determine if sponsor approval for re-budgeting is required and work with the SPO RA to make this request. (Note: For NASA, substitute FDP Terms and Conditions for RTC in this paragraph.)

Impact on the Project’s Scope of Work

Typically small changes in F&A costs do not impact the scope of work of the project. Fluctuations in fringe benefit rates and other costs during the life of a project often occur and most project budgets can accommodate small changes in F&A rates as well. However, if a PI determines the scope of work will change as a result of changes in F&A rates (or any other reason), PIs/Departments should contact the SPO RA assigned to their unit to notify the sponsor.

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Please contact SPO Director Pamela Miller if you have questions about this guidance.

For questions about the process for rebudgeting to accommodate the new predetermined F&A rates, please contact Extramural Funds Accounting.