Conflict of Interest Committee
Review of Consulting Businesses
The COI Committee policy working group provides the following guidance for review of situations where faculty or staff members have created businesses (often Limited Liability Corporations or LLCs) to manage their outside consulting.
Outside Activity Reporting and Conflict of Interest Review of LLCs
The ownership in the consulting firm and the total payments to the firm by clients for consulting services should be reported on the OAR. An OAR identifying ownership of a consulting firm will be assigned to a member of the COI Committee for review. The review will be based on both the amount of payments by clients to the consulting firm and ownership of the consulting firm by the faculty or staff member.
Committee Member Review
When a COI Committee member reviews faculty or staff who have a consulting business (e.g., LLC), he or she should ask the individual whether the consulting firm receives compensation from any individual client exceeding review thresholds ($10,000 and $20,000). If so, the reviewer may recommend a management plan for the individual’s relationship with that client and/or with the consulting firm, itself, as appropriate.
An LLC Disclosure Request Letter will be sent to the investigator. As per the LLC Disclosure Request Letter, the investigator will respond to the following:
"In order for the Committee to make an informed decision on whether or not potential conflicts may exist, you will need to provide, within 30 days, an updated outside activities report detailing the activities within the reported business activity where compensation from a single entity has exceeded or is expected to exceed $10,000. The COI Committee will use this information to make a determination of whether a limited management or full management plan is needed to eliminate or reduce any potential for conflicts of interest according to the following thresholds."
For example, Jane Doe, a human subjects researcher, creates JD Consulting, LLC to manage consulting activities. She is the sole owner of the LLC and reports that the LLC has received a total of $27,000 for consulting services in 2007. The committee member assigned to this review will inquire about the amount paid for services by individual clients. If any one client pays the LLC $10,000 or more, a management plan may be issued for Dr. Doe's relationship with that client in addition to her LLC, if appropriate.
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