PMBA Conference Possible Considerations to Strengthen Internal Controls - Arising from Federal Grant Fraud Cases

Transcription

1 Possible Consideraions o Srenghen Inernal Conrols - Arising from Federal Gran Fraud Cases # Possible opporuniies o srenghen inernal conrols Case Summary Alleged misuse of gran funds Possible inernal conrol Allegaions / selemen Senence / Whisleblower Dae Link o fed. enhancemens o consider: Penaly / 1 Personal ravel, hoel and meals > Mainain i updaed d lis of people p approved Defendan: Universiy. i Relaed case WB was a ####### hp:// i for self, family and friends o work on he gran? agains cancer researcher / physician $2.93 million former universiy ce.gov/usao/iln/ pending - he was also he PI. purchasing pr/chicago/201 > Reconcile names on ravel, meal and coordinaor 3/pr0730 _ 01.h hoel receips o names of approved saff on : Maer alleged cancer research ml he projec? gran fraud by a former researcher and WB will receive physician a he universiy. over $490,000 > Assess he reasonableness of coss o deec muliple meals / ravel coss for a Universiy researcher allegedly charged single person? coss o federal grans over 7 year period for family rips (including meals and hoels) 2 Hiring unqualified friends and > require wrien conracs wih a for family, friends, and himself and for family as "consulans" and descripion of measureable deliverables? consuling fees for unqualified friends and subconracors - no services or family members, including his broher and deliverables provided for paymen > require supervisory signaure o confirm cousin. deliverables received prior o paymen if conrac > wihhold % of conrac unil final deliverables received? > COI disclosure by granee saff and by conracors and subconracors? Prepared by Emily Seed, based on publicly available info. Any opinions expressed here are my own and are no necessarily he opinions of oher panel members. 1 of 5

2 Possible Consideraions o Srenghen Inernal Conrols - Arising from Federal Gran Fraud Cases Alleged misuse of gran funds Possible inernal conrol Allegaions / selemen Senence / Whisleblower Dae Link o fed. enhancemens o consider: Penaly / 3 Failure o use gran funds o hire > idenify awards ha require granees o Defendan: Universiy professor (elecrical Guily plea, 11/30/12 hp:// subconracors for essenial work pay porion of gran o subconracors? engineering) hrough his solely-owned owned resigned from ce.gov/usao/pa required by award - personal use company universiy i m/news/2012/g /2012/G of gran funds ha he granee > monioring he use of funds where he rimes_11_30_2 represened would be used o pay award required granee o hire Guily Plea : $3 million federal research 41 mos. jail 012.hm for subconracors subconracors o complee work / fulfill gran fraud over 5 year period award promises? Over Def., was awarded federal gran o perform $640, research h( (o measure gases in infans' resiuion i blood o deec disease) hrough his solely- owned company. 4 Double-dipping - duplicae > ransparen process o rack sources of funding for he same work wihou funding? Award required defendan o pay approx. disclosing funding sources $500, o a Medical Cener o conduc > monioring i accuracy of funding source clinical research. The money was never disclosures? paid. The clinical sudies/rials were no performed. Gran funds were misappropriaed i for personal use. Def. also applied for second federal gran and said here was no oher funding when he had already received a federal gran. Prepared by Emily Seed, based on publicly available info. Any opinions expressed here are my own and are no necessarily he opinions of oher panel members. 2 of 5

3 Possible Consideraions o Srenghen Inernal Conrols - Arising from Federal Gran Fraud Cases Alleged misuse of gran funds Possible inernal conrol Allegaions / selemen Senence / Whisleblower Dae Link o fed. enhancemens o consider: Penaly / 5 Purchase unapproved equipmen > monioring wheher equipmen o be Defendan: Researcher 2 years of 04/01/13 hp:// (no approved by he gran) o purchased is auhorized by he award? supervised ce.gov/usao/inn assis on he gran projec - he Guily Plea: Thef from a program receiving i /press _ / equipmen was used on he federal funds. Def. pled guily o purchasing documens/201 funded projec bu i was no a camera for a projec for which he received 6 monhs of 3/Mar_2013/ma approved dby he gran a $10, gran - federal gran funds locaion r%201%2013% awarded for a science projec hrough a monioring on 20sb%20harris Universiy. home %20e%20al%2 deenion 0h 0.hm 6 Personal use of equipmen ha > monioring i use of gran equipmen Def. purchased he camera for he gran bu was purchased for a gran ouside he gran scope - invenory conrol he used i for personal and professional Resiuion over equipmen? use, and o assis on he gran work. The over $32,000 camera was no par of he approved projec coss nor did he ge approval o use he camera for personal maers. 7 Failure o saisfy award funding > idenify and flag for follow up awards wih Defendan: Employee / scienis / VP of 1yrfed fed. 11/29/11 hp:// condiions ha were essenial o funding condiions, such as maching by he company prison ce.gov/opa/pr/2 execue he projec - - and lying recipien i before reimbursemen? 011/November/ / abou i (in his case promising o Unauhorized use of fed. funds - use of 6mos 11-crm- mach funding and hen no > validae invoices submied o fed. o funds for aciviies ouside scope of award - supervised 1547.hml maching) monior wheher funding condiions saisfied (employees used d$ o pay hemselves and (such as maching) before reimbursemens o fund anoher company) submied o fed.? $100, Award: fed. agreed o mach company's resiuion 8 Use of funds o pay for unrelaed > monioring o ensure federal funds only resources (up o 50% reimbursemen rae) expenses ouside he award used for award scope - validaing use of for coss o develop elecric baery for separae company Def. submied 10 fraudulen invoices and falsely l claimed ha he was maching federal funding (as he had promised) - he go more han $700, in federal funds and dhe used di o pay himself and ohers. Prepared by Emily Seed, based on publicly available info. Any opinions expressed here are my own and are no necessarily he opinions of oher panel members. 3 of 5

4 Possible Consideraions o Srenghen Inernal Conrols - Arising from Federal Gran Fraud Cases Alleged misuse of gran funds Possible inernal conrol Allegaions / selemen Senence / Whisleblower Dae Link o fed. enhancemens o consider: Penaly / 9 Use of unspen award funds o > monior wheher coss are charged o he Defendan: Mayo Foundaion $6.5 million WB was 05/26/05 hp:// fund a differen, overspen projec correc gran (o deec "ransferring" selemen employee in he ce.gov/opa/pr/2 unspen gran $)? /D Def. allegedly charged dfed. for research 005/May/05 /05_ civ research coss ha were ouside he scope accouning _292.hm > assess wheher accouning sysems able of he award (used $ o pay for oher deparmen o effecively monior wheher charges are research projecs) made o he correc award? WB will receive Allegaion seled: $1.3 million > Def. charged coss o an award ha relaed o differen projecs. > AND Def. accouning sysem unable o effecively monior and manage charges made o federal gran awards 10 Use of funds o pay for coss > monioring appropriaeness of source of Defendan: Nonprofi (re-raining / $3.4 million WB will receive 9/31/06 hp:// ouside he award - in his case, funds for consrucion? employmen services) over $620, ce.gov/opa/pr/2 office improvemens and 006/Augus/06 _ arificially inflaed lease coss > monioring reasonableness of lease coss / Def. (Workforce Cenral civ_586.hml charged o fed.? Florida and Workforce Cenral Florida Foundaion Inc.) allegedly misused gran funds o do office consrucion and overcharged lease coss Def. was awarded grans o provide job placemen and raining, and relaed services. Allegaions seled: > Def. misused fed. funds o make improvemens o heir privaely-owned adminisraive i i offices and hen charged excessive lease coss o federal grans. Prepared by Emily Seed, based on publicly available info. Any opinions expressed here are my own and are no necessarily he opinions of oher panel members. 4 of 5

5 Possible Consideraions o Srenghen Inernal Conrols - Arising from Federal Gran Fraud Cases Alleged misuse of gran funds Possible inernal conrol Allegaions / selemen Senence / Whisleblower Dae Link o fed. enhancemens o consider: Penaly / 11 Use Purchase Card o buy iems > monioring wheher iems purchased wih Defendan: PI a Universiy PI pled guily 07/05/05 "Federal Grans for an award, reurn he iems for federal funds were in fac used on funded and resigned News" July / a refund and keep refunded d $ projec? PI charged iems o federally funded d Augus 2013 awards, hen reurned he iems for refunds 2 years issue and kep he refunded money. probaion The universiy reurned $160,435 o NSF, $2,525 which included he fraudulen sums and penaly oher quesionable charges. Universiy reurned $160,435 o fed. Prepared by Emily Seed, based on publicly available info. Any opinions expressed here are my own and are no necessarily he opinions of oher panel members. 5 of 5