Presented by: Maritza Zeiberg, CPA, Resolving SBIR/STTR Allegations of Waste, Fraud, and Abuse - NIH Perspective Presented by: Maritza Zeiberg, CPA, Director, Division of Program Integrity, OMA, Office of the NIH Director October 23, 2014

Presenter Director, Division of Program Integrity 27 years at HHS; 19 at NIH 1,000+ reviews $40 million recovered $500 million put to better use 

Purpose of Presentation Describe DPI Roles and responsibilities Process for resolving SBIR/STTR allegations Actions for SBIR/STTR recipients Discuss current issues and potential solutions Questions and answers

DPI Responsibilities Provide NIH with a centralized review capability for allegations of waste, fraud, abuse, and mismanagement Review issues referred from OIG NIH Liaison with OIG Office of Investigations, DOJ, and other law enforcement organizations

DPI Authority Misuse of Grant Funds– 45 C.F.R. 74.53 (e) - authority to conduct reviews of NIH grantees’ records and interview grantees’ personnel. Misuse of Contract Funds– 48 C.F.R. 52.215-2 (FAR) provides the authority to access records of NIH contractors. Employee Misconduct – Section 402(b)(1) of the PHS Act, 42 U.S.C. 282(b)(1) provides authority to conduct reviews of allegations of improper conduct by NIH employees.

DPI Purview Limitations Scientific Misconduct NIH Extramural Research Integrity Liaison Officer, OER Office of Research Integrity, HHS Human Subject Issues Office for Human Research Protections, HHS Animal Welfare Issues Office of Laboratory Animal Welfare, NIH Criminal Activities Office of Inspector General, HHS Personnel Matters Office of Human Resources, NIH Discrimination/ Harassment Office of Equal Opportunity and Diversity Management, NIH Disputes between Contractors and Subcontractors NIH does not have a direct contractual or legal relationship with subcontractors

Impact Recovered $6.5 per $1 spent in FY13 Provide data for decision making that allows the government to put money to better use Improve policies and internal controls at NIH and grantee institutions

FY13 NIH Funding Research grants – $20.9 billion Contracts – $4.3 billion SBIR – $617 million STTR – $80 million

Funding Environment Twohy, Mike. “Defunding Increases Aggression.” Illustration. The New Yorker, May 9, 2011.

Sources of Allegations

Active Cases

Proportion of SBIR/STTR Cases

Review Process Notify IC and SBC Prepare Review Plan Acknowledge Allegation Stress Confidentiality Prepare Review Plan Identify Issues, Criteria, Evidence Notify IC and SBC Coop./Confidentiality Agreement, Request Info Analyze Data Solicit Expert Opinions, Conduct Interviews Prepare Report Report to IC Director and SBC

What to do if…. …We notify you that we are reviewing your award? Sign cooperation & confidentiality agreement Be responsive to our request Call us if you have questions

Sample Notification

Collaborative Review Process DPI Scientific Grants Contracts Policy

Recommendations DPI NIH IC SBC initiate action with SBC issues report w/recs DPI closes case initiate action with SBC NIH IC informs DPI of SBC actions implements recs SBC informs IC of actions taken in response to recs

Areas of Concern Eligibility and general noncompliance Overlap Inadequate documentation Award transfers

Findings Providing false information on applications Requesting funds for work that is complete Using funds for other research activities Overlap of NIH and Non-NIH support Performing work outside the USA

Overlap Budgetary Commitment Scientific

Monetary Rewards for Publishing ~$30,000!

Possible Solutions Educate staff and raise awareness Define roles and responsibilities Maintain complete financial and scientific records Disclose sources of support Establish a culture of compliance Provide timely and unrestricted access to records

Actions We Take When We Find Indicators of Possible Criminal Activity

Fraud Indicators Missing or incomplete support for award expenditures and scientific progress Evasiveness/non-responsive/time extension requests to federal staff inquiries Favors, gifts, money, gratuities to grant/contract to staff at funding agency Early requests for next SBIR/STTR phase funding Lax enforcement of award requirements Multiple complaints Failure to obtain approval for significant budget or scope changes or for substitutions to key personnel

Criminal Issues

DPI Contact Information To report any concerns, please contact us. Phone: (301) 496-5586 Web site: http://oma.od.nih.gov Mail: National Institutes of Health Office of Management Assessment Division of Program Integrity 6011 Executive Boulevard Suite 601, MSC 7669 Rockville, Maryland 20852