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Dirty Deeds What Can We Learn from National Audits and Investigations?. Pamela Webb 02.17.2009. Many Major Audits. 2008 ? UC San Diego, UIUC, UCSF, Georgia Tech 2007 9 CalTech, Vanderbilt, Georgia State, UMBC 2006 19 Yale, Chicago, Columbia, Berkeley, Penn

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pamela webb 02 17 2009

Dirty Deeds

What Can We Learn from National Audits and Investigations?

Pamela Webb


many major audits
Many Major Audits
  • 2008 ? UC San Diego, UIUC, UCSF, Georgia Tech
  • 2007 9 CalTech, Vanderbilt, Georgia State, UMBC
  • 2006 19Yale, Chicago, Columbia, Berkeley, Penn
  • 2005 13Dartmouth, Cornell, Mayo Clinic, U Mass
  • 2004 7Harvard, Johns Hopkins, U Washington
  • 2003 2Northwestern
  • 2002 2
  • 2001 0

NSF in the midst of

30 “effort” audits

recent major settlements
Recent Major Settlements
  • 2008 $7.6M Yale – Effort Reporting
  • 2006 $2.5M U Connecticut – Service Center Billing Rates
  • 2005 $4.4M Cornell – Grant Money Paid to Non-Research Staff
  • 2005 $6.5M Mayo Clinic – Improper Cost Transfers
  • 2005 $11.5M Florida International – Improper Cost Transfers
  • 2004 $2.4M Harvard – Grants Billed for Unrelated Salaries
  • 2004 $2.6M Johns Hopkins – Faculty Effort Reporting
  • 2003 $5.5M Northwestern – Faculty Effort Reporting
yale 7 6m settlement
Yale - $7.6M Settlement
  • Investigation cover 6,000 federal grants received between Jan 2000 and Dec 2006
  • More than one million pages of documentation had to be submitted to investigators
  • Investigation between Jun 06 and Dec 08
  • $7.6M settlement is $3.8M in actual damages and $3.8M in penalties

Big signal!!

hhs audits yale
HHS Audits Yale
  • HHS Audit of Yale subaward to U Mass Medical School
    • Major signal about the responsibility to monitor subrecipients
    • Disallowed $194K of a $572K award
    • Disallowed cost transfers, effort, cost allocation methodology

But then …

nih dod and nsf audit of yale
NIH, DOD, and NSF Audit of Yale
  • FBI agents visit faculty and staff at home and on vacation to question them
  • Subpoenas served on 47 grants from 13 departments (many closed)
  • Sample of Issues found:
    • Allocation of expense not found to be reasonable
      • no written documentation describing basis for allocation
      • allocation done differently for supplies than equipment)
    • Unsigned effort reports (costs disallowed)
    • Emails saying things like: “Just zero out the grant”
    • PI committed more effort than was charged (failure to request prior approval for effort change)
    • No procedures in place to monitor effort expended versus committed



yale continued
Yale (continued)
  • Unallocable Cost Transfers
    • “Researchers allegedly were motivated to carry out these wrongful transfers when the federal grant was near its expiration date and they needed to spend down the grant funds”
  • Summer Salary Charges did not equate to Effort Devoted
    • 100% summer salary changed but non-grant activities (proposal preparation, vacation, other departmental duties) were conducted as well as grant activities
nsf vanderbilt
NSF - Vanderbilt
  • Effort certifications were not required to be dated
  • Effort reporting periods weren’t established
  • Institutional base salary not defined
    • (e.g., unclear whether grant proposal writing and university committee meetings included in institutional base salary)
  • “Significant change” requiring HSA not defined
  • No definition of “a suitable means of verification of effort”
  • No minimum percentage of effort required
hhs duke university
HHS – Duke University
  • Inappropriate charging of administrative and clerical costs
    • 210 transactions tested, 81 were unallowable
    • Actual costs determined to be unallowable were $17,829 in admin and clerical salaries and $10,657 in other admin costs
    • HHS has requested a $1.7M refund based on extrapolating the error rate for the entire federal award population

Duke is duking it out … stay tuned

duke continued
Duke (continued)
  • No evidence that admin and clerical costs were related to “major projects or activities”
  • No evidence that the amount of admin and clerical work needed on the projects justified any unusual amount of admin support
  • No evidence in proposals or award documents that admin/clerical support would be needed
  • Duke charged office supplies on routine projects
  • “The Office of Sponsored Research did not provide adequate scrutiny to ensure that these charges fully complied with Federal regulations”
nsf audits uc san diego 2008
NSF Audits UC San Diego (2008)
  • Late Effort Reports and Timeliness
      • 59% not submitted within due date
  • Lack of Formal Written Timeliness Standards and Enforcement re: Effort Certification
  • Proposals Written on Grant-Funded Time
  • Violations of NSF 2 Summer months rule
  • Incentive award violation
  • Unpaid contributed committed effort not accounted for in University organized research base
  • Effort Certification Process not Independently Evaluated
nsf audit university of illinois
NSF Audit – University of Illinois
  • Effort – Certification did not include total employee workload
    • Non-sponsored information must be provided so that total effort is known
  • Late Effort Reports
  • Lack of Formal Written Timeliness Standards and Enforcement
  • Effort Certification Process not Independently Evaluated
  • Need to Establish Effort Tolerance policy (how much actual effort can vary from planned effort without doing an HSA)
    • 5% cited as an example ‘at other Universities’
nih uc san francisco
NIH – UC San Francisco


On Direct Charging of Administrative and Clerical Costs!

nsf uc berkeley
NSF – UC Berkeley






  • Some salary rates charged exceeded appointment letters
  • 2% of salaries were for activities not benefitting the NSF project
  • 40% of effort reports certified late
  • 21% of effort reports were missing dates or were dated prior to the effort report distribution date
  • 25 certifiers didn’t have “suitable means of verification”
nsf utah
NSF -Utah
  • 51% of effort reports certified late
  • 25% of salaries charged to NSF were improperly allocated because significant changes in effort weren’t updated timely
  • 2% did not have “suitable means of verification”
other audit findings
Other Audit Findings
    • Costs transferred from overexpended federal award to an NSF grant (Cal Tech)
    • Cost transfers made without explanation or source documentation (Georgia State)
    • Current and Pending support information in NSF proposals missing committed effort (Cal Tech)
    • Personnel action forms not able to be located (Georgia State)
    • Payroll sheets not found in 18 out of 1132 transactions (Arizona)
    • Awards charged for work done on another grant (Georgia State, New Mexico Highland U)
    • $1.7M of Unsupported cost-sharing (Hawaii)
    • Scholarship costs paid for students not eligible (New Mexico Highland0
other audit findings1
Other Audit Findings
    • Inappropriately charged reference books and trade journals (Brandeis)
    • Charged office supplies (Brandeis)
    • Purchase of supplies near the end of a grant (New Mexico Highland)
    • Lack of adequate fiscal monitoring (Yale, New Mexico Highland U, U of Maryland Baltimore)
    • Failure to monitor subrecipient cost-sharing (U of Maryland Baltimore)
    • Request to return $65K in connection with non-compliance involving non-human primates on two grants (U of Connecticut)
recent criminal case
Recent Criminal Case
  • DOJ/U of Tennessee (April 2008)
    • Director of Plasma Research at Atmospheric Glow Technologies and U researcher assigned a Chinese grad student to an Air Force contract without advising the Air Force or obtaining an export license
      • Work being done for the for-profit was proprietary
    • Director of Plasma Research enters a guilty plea for conspiring to violate the Arms Export Control Act
recent criminal cases continued
Recent Criminal Cases(continued)
  • DOJ/NSF – U of Tennessee former faculty member indicted and pled guilty on one count of wire fraud and one count of mail fraud
    • Employees supported on a U of Tennessee Center NSF grant were knowingly re-directed by the PI to work on a U of Alabama Huntsville grant (same PI on both) but their costs charged to the Tennessee grant

U of Vermont Scientist sentenced to 1 year and 1 day in jail and paid

$180,000 fine for fabricating more than a decade’s worth of

scientific data, and using it to obtain millions of dollars of NIH grants