1. Dirty Deeds What can we learn from recent audits and investigations? Pamela A. Webb Associate VP for Research Administration

2. Dramatic Increase in Major Audits 2007 ?? CalTech, Vanderbilt, Georgia State, UMBC 2006 19 Yale, Chicago, Columbia, Berkeley, Penn 2005 13 Dartmouth, Cornell, Mayo Clinic, U Mass 20047 Harvard, Johns Hopkins, U Washington 20032 Northwestern 20022 20010 NSF in the midst of 30 “effort” audits

3. Recent Major Settlements 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

4. A-133 versus SAS-112 A-133 – Many universities have had few A-133 findings, yet government auditors have found major issues in these same universities SAS-112 – new accounting standard for universities and non-profits that mirrors Sarbanes- Oxley –Lowers the threshold at which auditors must make official findings –Increases sample sizes –Likely to increase reportable findings

5. 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 …

6. 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 Altered Email!

7. NSF Audit of Cal Tech Costs transferred from overexpended federal award to an NSF grant Inaccurate and untimely substantiation of effort Current and Pending support information in NSF proposals missing committed effort Payroll distribution system inadequate to track cost sharing and to ensure costs are properly included in F&A calculations (added to the research base)

8. NSF IG Audit of U of Penn Dept. administrators were certifying effort without being in a position to know whether the work was performed Effort reports weren’t certified in a timely manner Dept. Chairs weren’t held accountable for ensuring timely completion of effort reports

9. Criminal Penalties??

10. Recent Criminal Cases 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 for fabricating more than a decade’s worth of scientific data, and using it to obtain millions of dollars of NIH grants http://www.nytimes.com/2006/10/22/magazine/22sciencefraud.html

11. Other Recent Audits of Interest Georgia State Personnel action forms not able to be located Transfers made without explanation or source documentation Coop agreement charged for work done on another grant Georgia State didn’t follow its own policies and procedures Brandeis University Administrative and Clerical Costs –Text and reference books –Trade Journals –Supplies

12. Other Recent Audits of Interest U of Hawaii $1.7M of unsupported labor cost-sharing Cost-sharing was based on estimated rather than actual U of Arizona Inadequate documentation of payroll expense Could not locate time sheets for 18 out of 1132 transactions New Mexico Highland U (NSF) Lack of adequate fiscal monitoring of subrecipients Purchase of supplies near end of grant Salaries and wages charged for someone not working on the project Scholarship costs paid for students not eligible Lack of conflict of interest disclosures Lack of supporting documentation for cost-sharing

13. Other Recent Audits of Interest (continued) U of Maryland Baltimore County (NSF) UMBC didn’t always ensure that costs charged to NSF were accurate, allowable, and allocable ($174K of $9.4M) Inadequate subrecipient monitoring of costs Inadequate monitoring of subrecipient cost-sharing No procedures in place to detect errors in F&A costs claimed U of Connecticut (NIH) Request to return $65K in connection with non-compliance involving non-human primates on two grants UMBC charged with developing a comprehensive subrecipient fiscal monitoring plan, including reviewing cost sharing data and supporting cost documentation from its subrecipients on a regular basis

14. Other Hot Topics (Get more information at the closing plenary session) NIH Conflict of Interest –NIH Report: http://grants.nih.gov/grants/policy/coi/TSR_Observations_2-14-2007.doc http://grants.nih.gov/grants/policy/coi/TSR_Observations_2-14-2007.doc No instances of intentional non-compliance Confusion about Definition of “Investigator” Confusion about Reporting Confusion about requirement to report subrecipient COIs OIG Report: www.oig.hhs.gov/oei/reports/oei-03-06-00460.pdf www.oig.hhs.gov/oei/reports/oei-03-06-00460.pdf Deemed Exports Select Agents: www.oig.hhs.gov/oas/reports/region4/40601033.pdf. www.oig.hhs.gov/oas/reports/region4/40601033.pdf