oversight

Grant Fraud NSF Procedures/Errors/Reconsiderations

Published by the National Science Foundation, Office of Inspector General on 2003-05-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                                        NATIONAL SCIENCE FOUNDATION
                                                         OFFICE OF INSPECTOR GENERAL
                                                           OFFICE OF INVESTIGATIONS

                                                 CLOSEOUT MEMORANDUM

 Case Number: A02090044                                                                                   Page 1 of 1



          In reviewing long-distance calls made using NSF telephone resources, we observed a suspicious
          pattern of repetitive and lengthy long-distance calls made from a single NSF telephone. Our
          investigation ultimately revealed that an NSF employee' (subject) made 474 personal phone calls
          for a total of 113 hours during the period February 2002 through October 2002.2 These calls
          included numerous personal calls, and numerous calls made in support of the outside business
          activities of the subject. Further, time and attendance records show that the subject claimed a
          total of 59.50 credit hours on the same workdays on which she placed a total of 64.55 hours of
          personal phone calls. We also found a relationship between the times of the subject's phone
          conversations and the times that the subject signed in and signed out using ITAS. We estimate
          that the subject's practices minimally cost NSF $2149; we could not assign a cost to the lost
          productivity within [redacted] because of the subject's practices nor to the cost of credit hours for
          legitimate or non-legitimate purposes. The cost of personal calls made by the subject during the
          period reviewed is $17 1. The direct cost of the subject's time for the 113 hours of personal
          phone calls (at the subject's hourly wage of $17.50) is $1978.

          We concluded that the subject's use of the telephone was in direct violation of NSF policies,
         .specificallyNSF Bulletin 89-6 "Long-distance Telephone Usage" and NSF Manual 15 "Conflicts
          of Interest and Standards of Ethical Conduct."

          We issued a Report of Investigation to NSF dated March 3 1,2003, sent to the Division Director
          and the Branch Chief for the Employee Relations Branch (redacted). NSF prepared a notice of
          proposed separation for the employee, dated May 2,2003 with proposed effect to take effect 30
          calendar days later (redacted). The employee resigned effective May 23,2003 (redacted).

   1      Accordingly, this case is closed.




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   I,
   II


   I    ' redacted.
   :     The months examined for this investigative report correspond to the period of OIG's proactive review of phone call
         records. Telephone usage by the subject in other periods was not examined.

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NSF OIG Fonn 2 (1 1/02)
        National Science Foundation
          Office of Inspector General




                         Confidential
                     Investigation Report
                   Case Number A02090044
                        REDACTED

                          31 March 2003

CONFIDENTIAL

NSF 01G FORM 22B (1103)
                                                          Summary

                 In reviewing long-distance calls made using NSF telephone resources, we observed a
    '1           suspicious pattern of repetitive and lengthy long-distance calls made from a single NSF
                 telephone. Our investigation ultimately revealed that an NSF employee1(subject) made
                 474 personal phone calls for a total of 113 hours during the period February 2002 through
                 October 2002.' These calls included numerous personal calls, and numerous calls made in
                 support of the outside business activities of the subject. Further, time and attendance
                 records show that the subject claimed a total of 59.50 credit hours on the same workdays
                 on which she placed a total of 64.55 hours of personal phone calls. We also found a
-                relationship between the times of the subject's phone conversations and the times that the
                 subject signed in and signed out using ITAS. We conclude that the subject's use of the
     i
                 telephone was in direct violation of NSF policies, specifically NSF Bulletin 89-6 "Long-
                 distance Telephone Usage" and NSF Manual 15 "Conflicts of Interest and Standards of

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                 Ethical Conduct."

                 We estimate that the subject's practices minimally cost NSF $2149; we could not assign a
                 cost to the lost productivity within       because of the subject's practices nor to the cost
                 of credit hours for legitimate or non-legitimate purposes. The cost of personal calls made
                 by the subject during the period reviewed is $171. The direct cost of the subject's time for
                 the 113 hours of personal phone calls (at the subject's hourly wage of $17.50) is $1978.




                 The Office of Inspector General conducted a proactive review of long-distance telephone
                 records of calls made by NSF employees fiom February 2002 through October 2002. The
                 records include a listing of numbers called, originating phone number, length of the call,
                 and date and time of the completed calls. We were drawn to a suspicious pattern of a
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                 large number of calls, and fiequent lengthy calls, to a single telephone number in
                 Portsmouth V A . ~Almost all calls to this number made fiom a single NSF telephone.4 Our
                 web search of the Portsmouth VA number revealed a link to a business with no plausible
                 NSF connection.

                 The Portsmouth VA number appears on a website associated with [redacted], a purveyor of
                 adult-oriented ~ i d e o s .The
                                              ~ Portsmouth VA number is listed as a source for information
                 about purchase of adult-oriented videos.6 The Portsmouth VA number is highlighted in its
                 appearance, as is the name of the Vice President of the production company: "[redacted]"
                 (vide infia).


         0   ' redacted.
             * redacted
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       We initiated an inquiry to further assess this matter.


                                               OIG Inquiry

       The NSF extension from which the majority of the phone calls to Portsmouth VA was
       made is associated in NSF phone directories with the names of several individuals within a
       single NSF program.7 Several calls to the Portsmouth VA number were made outside
       usual working hours (with some on weekends). We obtained time and attendance records
       for these individuals and found a correlation between the times for the calls and the time
       and attendance records suggesting that the subject made the calls.
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       We interviewed the subject on 17 December 2002. In the interview, the subject confirmed
       that she made numerous calls to the Portsmouth VA number.' The subject stated that the
       calls to the Portsmouth VA number were of a personal nature. The subject also provided
       information during the interview about her involvement in an external business in
       association with the person in Portsmouth VA whom she was calling. The subject stated in
       her first interview that her supervisor and co-workers were not aware of her extensive use
       of the telephone for personal calls. She also stated that she had no long-distance service
       on her home telephone number.

       The subject stated that the calls to the Portsmouth VA number were made to the
       Webmaster for an adult-oriented website9 owned by the subject. The subject stated that
       her website contained links to other sites from which purchases of adult videos from their
:      producer could be made.'' (The subject later stated in the second interview that the
       Webmaster was also the "producer" of the adult-oriented videos advertised on the web site
       that she owned.)

       The registration information for the domain address of the subject's website confirms the
       subject was its owner. " The registration information for the web domain lists the subject
       at both her home address in [redacted], and at the NSF business address of 4201 Wilson
       Boulevard, Arlington VA 22230. The Webmaster's site website includes many images
       with captions associated with the producer and webmaster.12 In one of the image captions,
       an individual called [redacted]). The email given by the subject on the website registration
       is [redacted]. AOL provides the following information about this member:13


                   [redacted]
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          The subject's NSF Position is Program Assistant. We concluded that the subject is
          [redacted] identified on the Webmaster's site as a Vice President of that company. We
          concluded that there was sufficient substance to open an investigation into the matter.


                                              OIG Investigation
i         We compiled a complete Record of Calls placed fiom the subject's desk telephone in the
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1         period from February 2002 to October 2002 (Tab 6).14 In our second interview with the
          subject on 7 January 2003, she admitted that many of the other calls in the Record of Calls
          were also ersonal phone calls.15 She specifically identified calls to several additional
          numbers1  8
                     as calls to reach the Webmaster. However, the subject maintained that no phone
          calls were made from NSF in support of her website business activities.l 7

          The subject was unable to identify many of the called numbers listed on the Record of
          Calls, and has provided no further information about these calls, although she committed
          during the interview to do so.'' However, in our web search of all numbers called, we
          identified some numbers as businesses that seem to have a clear relationship to the
          business activity of the subject.lg Further, the subject stated she had a business
          relationship with the Webmaster.

          In contrast to her claim in her first inter vie^,^' in her second interview with OIG, the
          subject stated her administrative officer had admonished her to avoid excessive telephone
          use.2 1

          Although the Record of Calls shows that the subject often made personal calls soon after
1         she completed ITAS sign-in, or just prior to ITAS sign-out; she offered no explanation for
          these correlations.

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          We also found that the subject completed lengthy personal calls on days she claimed credit
          hours. The Linked Compilation lists calls the subject made between April 2002 and
          October 2002 and links them to the subject's ITAS sign-in and sign-out times.22 A
          "LINK" notation is given in the last column on the right of the table when the subject
          initiated personal calls within ten minutes of her ITAS sign-in or sign-out, or when the
          subject made personal long-distance calls outside of ITAS hours. The information at Tab
          10 is a Credit Hour Compilation of all days within the full nine-month period in which the
          subject claimed credit hours; the total minutes of personal phone calls made by the subject
          on those particular days is also shown. The Credit Hour Compilation shows that the

     l4  redacted
     IS  redacted
     l6 redacted
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     20 redacted
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      22 redacted
          subject claimed a total of 59.50 credit hours on days during which she completed 64.55
          hours of personal phone calls.

      After the second interview with the sub'ect, OIG interviewed the subject's administrative
      officer23and then the division director; The administrative officer told us that the subject
      had been involved with a second business endea~or.~'The subject's administrative officer
      stated that the subject had passed out business cards in connection with the legal services
      company at work, and she had counseled the subject about not conducting personal
      business activities at N S F . ~We
                                       ~ identified calls in support of the legal services business in
      the Record of            As we noted above, the subject stated in her first interview that her
      supervisor and co-workers were not aware of her extensive use of the telephone for
      personal calls. In contradiction, the subject's administrative officer states explicitly that
      she had counseled the subject about telephone use and its interference with the subject's
      job performance.28The Division Director told us in his interview that the subject's job
      performance had been a continuing issue of concern.29

A         Our examination of the complete list of telephone numbers called from the subject's desk
          telephone reveals only eight calls3' unambiguously related to NSF business from a total of
          616 calls made by the subject during the nine-month period we studied. The subject made
          456 calls (lasting 112 hours) in support of her web site business." and made an additional
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          5 calls (lasting 0.32 hours) in support of her legal services business.32 Thirteen calls are
          identified as personal calls for [redacted] (identified in the notes with m). The subject did
          not provide a reason for the remaining 134 calls (lasting 28 hours). We concluded the
          subject made a total of 474 personal business related and other personal calls lasting 113
          hours over the nine-month period.

          We calculated the minimal loss to the government for the subject's actions to be
          approximately $2 149; we could not assign a cost to the lost productivity [redacted] because
          of the subject's practices nor to the cost of credit hours for legitimate or non-legitimate
          purposes. The cost of the 474 personal calls made by the subject during the period
          reviewed is $171. The direct cost of the subject's time for the 113 hours of personal phone
          calls (at the subject's hourly wage of $17.50) is $1978.

          From our interviews and examination of the Record of Calls, we learned that:

                   The subject made 474 personal long-distance calls using NSF telephone resources
                   in a nine-month period in 2002.

     23 redacted
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     24 redacted
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     27 redacted
4    28
        redacted
     29 redacted
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     31 redacted
     32 redacted
1                The subject made 450 calls to the Webmaster.
                 She made calls to businesses with a clear connection to her external business
                 interests (6 additional calls to businesses in apparent relationship to the website
                 business, and 5 calls associated with the legal services business).
                 The subject made 13 other calls that appear to be personal calls.
                 Two years before the start of the period of our review, the subject's administrative
                 officer counseled her that excessive personal telephone use was reducing the
                 quality of her job performance.
                 A correlation exists between the subject's ITAS sign-in and sign-out times and
                 lengthy personal phone calls she made (Tab 9), and the subject repeatedly made
                 long-distance personal calls after ITAS sign-out.
                 The subject claimed credit hours on many days on which she made lengthy
                 personal phone calls. She claimed a total of 59.50 credit hours on days during
                 which she completed 64.55 hours of personal phone calls (Tab 10).


                                              OIG's Assessment

      Actions of the subject: The subject habitually abused NSF long-distance telephone service
      to make personal phone calls not allowable under NSF policy put forth in NSF Bulletin 89-
      6 (Tab 14). She made the majority of these calls in support of her external business
      activities. She states that she knowingly made long-distance personal calls from her desk
      telephone at NSF. She continued to do so even after she was informed that excessive use
      of the telephone was degrading her job performance.33 The subject stated that she was
      familiar with the NSF telephone usage

          Intent of the subject: The subject's actions were completed in knowing disregard of NSF
          policy, specifically NSF Bulletin 89-6, and NSF Manual 15. The record shows explicitly
          that the subject repeatedly used NSF long-distance telephone services in support of her
          external business interests. We believe that the correlation of her ITAS sign-in and sign-
          out times with her initiation and completion of personal long-distance calls, and her
          placement of long-distance calls after ITAS sign-out, demonstrate the subject's specific
          intent to use NSF telephone resources for personal long-distance calls. The subject's
          statement that she had no long-distance service on her home telephone service further
I         supports our assessment of the subject's intent. She used NSF's telephone to avoid paying
          the cost of these calls herself.
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          Although the subject agreed to be interviewed by us, we believe many of her responses
Ij        were less than forthcoming. Her claim that her numerous and lengthy calls to the

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          Webmaster were not related to her outside business activities is belied by the evidence
          establishing that she is a Vice President of the Webmaster's company. She also failed to
          provide us with any additional information about the many calls she made for which we
t

i         could not readily identify a recipient or a purpose-including several that she called

11   33   redacted
     34   redacted
     multiple times and for lengthy periods. We believe this behavior supports a conclusion
     that she knew that her conduct violated NSF policy.


                                          OIG Conclusions

     We conclude:

         1. The subject knowingly violated NSF phone policy. NSF phone policy is set
            forth in NSF Bulletin No. 89-6, dated February 21, 1989 (Tab 14). Calls are
            authorized when

                a) they do not adversely affect the job performance of the employee,
                b) when the calls are of reasonable duration and frequency, and
                c) when the calls could not reasonably have been made at another time.
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        The subject's repetitive and lengthy calls to many different numbers for personal- and
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        outside business-related matters fail to meet any of the stated criteria. We calculated
        the cost of the subject's time for the 113 hours of personal phone calls (at the subject's
        hourly wage of $17.50) is $1978.
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     2. The subject's personal calls were inappropriately billed to NSF. The subject's
        personal calls during the nine-month period reviewed cost NSF $171. The subject
        knowingly made the calls. Her clear intent was to have them charged to NSF because
        she had no long-distance service at home.

     3. The subject claimed credit hours for time worked on days when lengthy personal
        phone calls were made. The Credit Hour Compilation (Tab 10) shows that the
        subject claimed a total of 59.50 hours of credit hours specifically on days on which a
        total of 64.55 hours of personal phone calls were made.

     4. The subject violated Standards for Ethical Conduct by NSF employees. NSF
        policy is given in NSF Manual Number 15, "Conflicts of Interest and Standards of
        Ethical Conduct." The subject made numerous phone calls in support of at least two
        external businesses. The subject's conversations with the Webmaster, whom she
        reached at several Portsmouth VA telephone numbers, were related to her ownership of
        an income-generating domain name. The subject also made phone calls in support of
        her association with a legal services business. Section 56, Miscellaneous Restrictions
        in Manual Number 15 (pp 29-30) prohibits the unauthorized use of government
        property, including phone services. The prohibition reflects the language at 41 CFR
        101-35.20 1, which codifies the authorized use of government telephones for official
        business only.


                                      OIG Recommendations
We refer this case to the National Science Foundation for appropriate administrative
action. Please inform us of the actions taken in this case.