Approved: 4/6/05

PURPOSE

This policy establishes the School of Medicine rules for distribution and use of residual funds from sponsored clinical trials. This policy is designed to assure that residual funds from clinical trials are used to advance the mission of the School of Medicine, to avoid potential conflicts of interest for investigators, and to preserve for faculty members the desirability of serving as Principal Investigator’s on clinical trials.

POLICY STATEMENT

If any unspent funds remain after the completion of a clinical trial and the payment of all expenses associated with that trial (“Residual Funds”), and if the clinical trial agreement with the sponsor does not require the return of these funds, then the Residual Funds will be transferred to the Department.

On the recommendation of the Department Chair, the School of Medicine Finance Office will establish an unrestricted fund, consistent with the terms of the industry sponsored clinical trial agreement, to receive Residual Funds. Such Residual Funds will be allocated at the discretion of the Chair as either:

  1. 93 fund(s) for the department, used to support the department’s mission, and/or
  2. 93 fund(s) under the direction of the Investigator(s) of record to be used to support the Investigator’s research at Washington University.

Disbursement of funds under the direction of the department shall be at the discretion of the Chair. Disbursement of funds under the direction of the Investigator shall be at the investigator(s) discretion, to support the mission of the institution, subject to approval by the Chair and accountability to the administration of the School of Medicine. The use of the clinical trial residual balances must be in accordance with the University and School of Medicine policies on the proper use of institutional funds. In either case, the funds shall be used to support the mission of the School of Medicine and shall never be used as a source of Non-Academic Benefit for any individual. In addition, faculty investigators may not receive personal compensation, such as bonuses or salary increases, that are calculated based upon the amount of Residual Funds generated by the clinical studies in which they participate as investigators.

All funds generated during the conduct of clinical trial research are institutional funds. In the event that an investigator resigns from the University, retires, dies, or is separated from University employment for any other reason, the balance in any 93 fund (and any other Residual Funds) will revert to the department to support its mission.

The Department will be responsible for paying, out of Departmental funds, any expenses related to a closed clinical trial (such as expenses related to an FDA audit or documentation storage fees). It is strongly suggested that the department reserve against these types of post-trial expenditures at the time that the residual balances are transferred.

REASON FOR POLICY

In contrast to most other forms of sponsored research, the funding for the performance of clinical trials may result in Residual Funds that can be retained by the School of Medicine. Lack of proper restrictions on the use of Residual Funds creates a potential conflict of interest for investigators that could subject the University to liability.

It should be noted that it is not the intention of the School of Medicine to participate in clinical trials for the purpose of generating Residual Funds. However, if Residual Funds remain at the completion of a trial, those funds may be used to support the research of the faculty of the School of Medicine.

Good business practices dictate that once a clinical trial has been completed, the funds should be closed out and the residual balances (if applicable) transferred to an unrestricted fund and used as described above. It is important that clinical trial accounts only be charged for the reasonable cost of performing the clinical research and not expenses unrelated to the performance of the clinical trial. It is also important that the department closeout the clinical trial account on a timely basis and transfer the balance to an unrestricted department fund before using the Residual Funds for any purpose unrelated to the performance of the clinical trial.

DEFINITIONS

Residual Funds: Residual Funds are those funds remaining at the completion of a clinical study after all costs incurred in conducting the study, including indirect costs, have been paid.

Non-Academic Benefit: Any use of clinical trial funds, including Residual Funds, for the personal benefit of a private individual constitutes a Non-Academic Benefit under this policy. This includes the use of clinical trial funds for private expenses (i.e. not related to University business) and for expenses that are not authorized under University policies (such as First Class travel).