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NIH Pre-Employment Ethics Clearance
Frequently Asked Questions
Individuals selected for positions subject to filing a Public Financial Disclosure Report (SF-278) at the NIH must receive ethics pre-clearance before an official job offer can be extended.
Q1: Why does NIH conduct a pre-clearance review?
A1: To help identify and resolve conflicts of interest between your personal and imputed interests prior to assuming your anticipated NIH duties. Otherwise, you may inadvertently run afoul of a federal statute that prohibits a government employee from participating personally and substantially in a government matter if that matter directly and predictably affects his or her personal or imputed interests.
Q2: What interests are imputed to me?
A2: For purposes of the government-wide conflict of interest statutes, the financial interests of your spouse and minor children, and any organization with whom you serve as an officer, director, trustee, general partner or employee, or with whom you are negotiating for employment, are imputed to you. Thus, the interests of these persons and organizations are viewed the same as if you directly owned the interests (the stocks, a payment under a contract, or an award of a grant).
Q3: What will I be asked to do?
A3: Prior to an official job offer being extended, you will be asked to complete a Public Financial Disclosure Report (SF-278) and a Confidential Report of Financial Interests in Substantially Affected Organizations for Employees of the National Institutes of Health (HHS 717-1) which will disclose your personal and imputed financial interests and outside relationships.
Q4:The form you provided says “Public Financial Disclosure Form,” does this mean that the form is publicly available?
A4: Yes. A requester can receive a copy of your form. However, we recommend you carefully review the form prior to filing the form release to assure that any sensitive information (e.g., account numbers, home addresses or family members' names) is included. We also carefully review the form for this information.
Q5: What relationships will I have to disclose?
A5: You will need to disclose those relationships where you or your spouse serve as an officer, director, trustee, or consultant, and have current or prospective employment.
Q6: How do I make these disclosures?
A6: You will be asked to complete the Executive Branch Personnel Public Financial Disclosure Report (SF 278)* during the pre-clearance phase and annually thereafter. Additionally, you will be asked to complete a “Confidential Report of Financial Interests in Substantially Affected Organizations” for Employees of the National Institutes of Health (HHS 717-1)*. The HHS-717-1 must be completed along with the SF-278. Future submissions of this form should be filed within 30 days of acquiring any new holding in an SAO.*See HHS 717-1: http://ethics.od.nih.gov/forms/HHS-717-1.pdf
Q7: Which financial interests must I disclose?
A7: The following is a list of financial interests that must be disclosed:
Assets (stocks, bonds and mutual funds), belonging to yourself, your spouse and your dependent children. Examples of the most common assets are those found in the following accounts and investment vehicles:
- Retirement accounts (IRAs, 401(k), 403(b)) and pension plan
- Self-directed or managed brokerage accounts; stock options
- 529 college savings plans
- Trusts where filer, spouse and/or dependent children are beneficiaries
- Variable account (annuities and life insurance)
- Contracts (fixed annuities, whole or universal life insurance plans and pre-paid tuition plans)
- Real estate held for investment
- Bank accounts aggregating more than $5,000
Sources of income other than the U.S. Government (for filer, source and amount over $200; for spouse, source over $1,000; for filer and spouse, honorarium over $200)
- Royalties from publications and inventions
Q8: Is there other guidance that I can seek to assist me in preparing the Public Financial Disclosure Report (SF 278)?
A8: Yes, additional information can be found on the websites of the NIH Ethics Office and the Office of Government Ethics. To access the information from both resources, please view the following web link: http://ethics.od.nih.gov/topics/forms278.htm. You may also contact your prospective Institute or Center’s Ethics Office – please see Question 16 for this information.
Q9: What if a conflict is identified?
A9: A conflict of interest can be resolved in three ways:
- You divest or otherwise dispose of the conflicting asset (i.e., stock), or sever the conflicting relationship;
- You disqualify (recuse) yourself from the government project (e.g., the contract, research project or grant); or
- You seek a waiver of the conflict, or otherwise get permission to participate in the government matter.
Q10: I am currently the PI on one or more scientific projects. Will I be able to continue this work once I am employed at NIH?
A10: You may be authorized to continue work on the projects; however your institution will need to assign a new investigator to take over the projects. These projects should be discussed during the pre-clearance process with both your prospective supervisor and your Institute or Center’s Ethics Office, and the agreed upon arrangements will be noted in your ethics agreement. Contact information can be found at: http://ethics.od.nih.gov/coord.pdf
Q11: I am the editor of the scientific journal and would like to continue this work. Will I be able to do this?
A11: Most likely, yes. This activity, as well as other professional endeavors, such as leadership roles in scientific societies, may be permitted as an official duty activity if your supervisor feels that it is an appropriate use of NIH time and resources. You may also be able to pursue this activity in your personal capacity as an outside activity. As stated in question 14, if this activity is pursued as an outside activity, then a Request for Approval of Outside Activity HHS Form 520* is required, and your ethics official will help you with the necessary paperwork. You should raise these types of activities during the pre-clearance process, and the final arrangements will be noted in your ethics agreement.
Q12: I am committed to give one or more presentations that are scheduled for dates after when I expect to start at the NIH. Will I be able to deliver these presentations?
A12: The NIH may authorize you to honor these types of prior engagements, and they may be pursued as either part of your official duties, or as an outside activity. You should discuss these commitments during the pre-clearance, and the final arrangements will be noted in your ethics agreement.
Q13: I currently hold a patent for technology developed at my current institution. Is this something I should raise during the pre-clearance process?
A13: Yes. Such ownership interests [rights] may create a conflict and should be reviewed during the pre-clearance process.
Q14: Will there be a written document outlining the options I have and the actions I must take to maintain compliance with the Standards of Ethical Conduct?
A14: Yes, a written ethics agreement will be created that will identify conflicts and the necessary steps that you will take to resolve the identified conflicts.
Q15: What if the divestiture of a conflicting asset such as stock results in significant capital gains and, in turn, subjects me to a tax liability?
A15: Such divestiture may make you eligible for a certificate of divestiture (CD)*. Please note: you will NOT be eligible to receive a CD if you sell your stock PRIOR to submitting the necessary paperwork to request it.
Q16: What is a Certificate of Divesture?
A16: A Certificate of Divestiture (CD) is a mechanism which allows an employee who must divest certain financial interests to reduce a potential tax burden. The CD is used when you would realize a capital gain from the sale of a holding, and it permits you to defer the tax on the capital gain because you had to sell the holding due to your Government position.
Q17: How do I initiate a CD?
A17: Once you have been directed to divest, you will work with your Institute or Center Ethics Office to initiate the paperwork to request a Certificate of Divesture.
Q18: Is there additional information on CDs?
A18: Yes, the Office of General Counsel at HHS has FAQs on this process and the Office of Government Ethics has a pamphlet about the CD program. To view these documents, please access the following web links (this information can also be found on the NIH Ethics Website under Certificate of Divestures):
Q19: What if I have an SAO bond that will mature soon?
A19: Exceptions to an immediate divesture can be made on a case by case basis. Divesture will still take place after the agreed upon grace period from the employee’s starting date.
Q20: After completing the pre-clearance review and submitting the forms 278 and 717, will I be required to submit any other documents or forms?
A20: Perhaps. If you wish to continue to engage in an outside activity such as teaching a class or editing a journal, for example you most likely will need to seek prior approval to do so through the submission of an Request for Approval of Outside Activity HHS Form 520*. Continued participation of an outside activity will be discussed in your ethics agreement, and your ethics official will help you with the necessary paperwork.
Q21: What happens if I make a mistake on the ethics paperwork such as the financial disclosure form?
A21: You are required to provide the information requested. However, if you later identify an inadvertent omission, notify your ethics official and we can work with you to make the appropriate corrections.
Q22: To whom do I direct questions regarding this process?
A22: You should consult with your Institute or Center’s Ethics Office. Contact information can be found at: http://ethics.od.nih.gov/coord.pdf
Under 5 CFR 5501.109, a SAO is generally defined as a pharmaceutical, biotechnology and medical device manufacturing company; or other organization with similar interests or involvement. For additional information on SAOs, please see -- http://ethics.od.nih.gov/topics/sao/sao-intro.htm.