oversight

Admin. Financial Violations (PI/PS) Applicant/Grantee/PI False Certification Grant Fraud

Published by the National Science Foundation, Office of Inspector General on 2007-02-23.

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: I03020007
                                                                                       11            Pagelof3    (11
     In February 2003 an NSF awardee1notified NSF OIG (OIG) that an internal audit had
     determined a university employee2had embezzled funds fiom the university that included funds
     fiom an NSF award3. After conducting a preliminary investigation and in conjunction with the
     local law enforcement agency, OIG referred this matter to the Department of Justice @OJ) for
     possible prosecution. After conferring with the various agencies involved, DOJ elected to allow
     the State Attorney's Office to prosecute the subject in state Superior Court. The subject was
     subsequently indicted4, and entered into a plea agreement5resulting in him pleading guilty to four
     of the nineteen counts identified in the initial indictment. The subject received a sentence6that
     included four years incarceration, to be followed by four years of parole and he was ordered to
     make restitution to the university for the amount of his embezzlement7.

     upon completion of the court proceedings against the subject, OIG recommended to NSF that he
,    be debarred for a period of five years. After considering this recommendation, NSF issued a
     debarment letter8 advising the subject of his debarment.

     In response to the university's internal investigation into the embezzlement, the university
     returned to NSF the portion of the embezzled funds9that it determined was embezzled fiom the
     NSF award account. As OIG was attempting to verify the amount of NSF funds involved in the
     embezzlement, it was determined that the university had significantly drawn down funds in
     excess of what it had actually expended to date. Based on these findings, the university returned
     to the award the excess funds1° it had obtained.

     OIG also identified that the university had submitted multiple cost sharing certifications each
     year containing inconsistent amounts that failed to match the cost sharing figures they initially
     submitted to OIG in response to this investigation. When OIG requested documentation to




    -1




     4




     8
         San Francisco State University
         Falafasa Tagaloa
         $487,425 was embezzled, including $4 15,500 in NSF Award hnds fiom NSF     warda and
       See Tab #1: Copy of Superior Court of the State of California Indictment of Tagaloa, dated June 13,2003
       See Tab #2: Copy of the transcript fiom Tagaloa7sChange of Plea Hearing held on December 29,2003
       See Tab #3: Copy of the transcript fiom Tagaloa7sSentencing Hearing held on March 12,2004
       $480,383.56
       See Tab #4: Copy o f the debarment letter sent to Tagaloa
       $4 15,000
     'O SFSU returned $656,181 to the award through the FCTR in September 2003
                                                          NATIONAL SCIENCE FOUNDATiON
                                                           OFFICE OF INSPECTOR GENERAL
                                                             OFFICE OF INVESTIGATIONS

                                                   CLOSEOUT MEMORANDUM

11   Case Number: I03020007                                                                   11             Page 2 of 3



          support the figures submitted, the university could not produce documentation for all of the
          expenses claimed1'.

          Additionally, during this investigation the university submitted a request to NSF to transfer the
          remaining open award12and remaining funds to another ~niversity'~.     The university identified
          the amount of un-obligated funds remaining in the award and NSF subsequently transferred the
          remaining award14. However, during this investigation OIG determined that a large amount of
          un-obligated funds remained in the award's original account at the university1'. OIG reported
          this finding to NSF and recommended they de-obligate the remaining fundsl6.

          Based on OIG's findings the matter was referred to Civil Division of the United States
          Attorney's office1' (USAO). The USAO and OIG then began to negotiate with the university
          to resolve the remaining issues that included excessive draw downs, inadequate documentation to
          support expenses claimed, the indirect costs associated with funds previously returned, the costs
          incurred by OIG during the investigation and concerns about the university's remaining active
          awards18. The university expressed its desire to resolve all of the remaining issues in one
          settlement agrekment that would cover not only the award associated with this investigation but
                                                                                                                                  '
          also resolve any similar covered conduct occurring previously on the university's active awards.

          The university entered into a settlement agreementlgwith the United States that resolved the
          remaining issues to both the Government and OIG's satisfaction. This settlement agreement
          required the university to make a paymen?' to the Government and enter into a 3 year
          compliance plan. This plan requires the university to implement a program to ensure its

          l 1 SFSU admitted that they had overstated their expenses by $267,623 that they could not produce adequate
          documentation for.
          l2 NSF Award -#
          1

          l4 NSF transferred award #                     t                     h                    e August 2004 based on
          SFSU's accounting of the h d s it had drawn down to date
          l5 In September 2005 SFSU attempted to request a no-cost extension for the award that had been transferred,
          indicating they h        a         d un-obligated funds remaining in the award account even though they had transferred the
          l6 111December 2005, NSF de-obligated the-                                                              award
          l7 Eastern District of Virginia
          l8 These remaining f m c i a l issues included: $267,623- the difference between what SFSU drew down from the
          award and the amount identified by SFSU as allowable costs by their contracted audit; $21,150- the indirect costs
          associated with h d s previously returned; $175,000- investigative costs
          l9 See Tab #5: Copy of the Settlement Agreement between SFSU and the United States
          20 $809,477.63                                                ,
                                             NATIONAL SCIENCE FOUNDATION
                                              OFFICE OF INSPECTOR G E N E W
                                                OFFICE OF INVESTIGATIONS

                                         CLOSEOUT MEMORANDUM

Case Number: I03020007
                                                                           11          Page 3 of 3



     compliance with the terms and conditions of all of its NSF awards, relevant laws and regulations,
     and to prevent fraud, false statements, and misspending of funds relating to awards it receives
     from NSF. The agreement requires the university to submit annual reports to OIG disclosing its
     progress in fulfilling the agreement.

     A proactive review file was opened to monitor the university's future compliance with the
     settlement agreement21.

     Accordingly, this case is closed.
                                                                              THE ANNEXED Ih. RUMLNT ISA
                                                                              CORRECT COPY O Q ,'HE ORIGINAL
                                                                                        ON FILE IN M Y OFFICE.
                                                                                                                      1
                                                                                                                      II


                                                                                                                      .I
                                                                                .        ATTEST: CERTIFIED            I
                                                                                                                      I
                                                                                                                      )I       :I
                                                                                          JUN 2 7 2003                ~i       '




                                               IN THE SUPERIOR COURT OF

                                           .   IN AND:FOR THE CITY AND COUNTY OF SAN FRANC1


         .     .         .       PEOPLE OF THE STATE OF CALIFORNIA,                 )       NOS.

                                                                Plaintiff,                  INDICTMENT .FOR
                                                                                            TO WIT': . .




   . .
                                         vs.   '




                             FALAFASA          TAGALOA and
                                                      also known as       '


                    -.                             p~


                                                                                                                       i)
                                                            .   Defendants.                 424. PC/Fel. (1 hount)
.---.-____
 . -,
             -.,                 _--'
                                                        .

                                                                                            470 (a) PC/Fel. i(l
                                                                                                              count)
                                                                                            4 7 5 s PCIFe1. ( 1count)


                                 FWASA               ( and (
                                               .TAGALOA                                                          *A
                             .             defendants, are accused by the Grand J b i y of phe City
                             and. County of San ~rancisco, State of California, by thip
                             ~ ~ d i c t m e n t of
                                                 , the crime of felony, to wit: VIOLATION OF'~SECTION
                             424 OF THE CALIFORNIA PENAL CODE, committed as follows~ be said
                             defendants, FALAFASA TAGALOA and
                   1-        (                       between the 1st day of January, 1998,l through
                             the 31st day of December, 1998, both dates inclusive, atsthe city
                             and County of San Francisco, State of California,,beins persons
                             charged with the receipt, trans.fer or disbursement of bublic
                             monies, did

                                 1.     without authority of law, appropriate the same or any portion
                                                                                                                           I
                                        thereof to their own use or use of another,' or
                                                                                                                           I
      People vs. Falafasa Tagaloa
                       and




      3.
                                                             1I in an
           knowingly keep a false account or make a false entry


      4.
           account relating to said public monies, or
                                                             I1 -
           fraudulently alter or falsify any account of public monies,




                                             ---
      COUNT 2:

     FALAFASA TAOALOA and
                                                             I1
                                                               il
               defendants, are further accused by the Grand h y of the
     City and County of San Francisco, State of California,\by this
     Indictment, of the crime of felony, to wit: VIOLATION      SECTION
     470(a) OF THE CALIFORNIA PENAL CODE, committed as follows. The
     said defendants, FALAFASA TAGALOA and
     (                    between the 1st day of January, 1998, through
     the 31st day of December, 1998, both dates inclusive, at 'the City
     and County of San Francisco, State of California, did.llwith
     intent to defraud, sign the name of another person, kn&wing that
     they had no authority to do so, and did falsely make, alter and
,    forge any check, draft or due bill for the payment of Aoney, or
     request for payment of money, or who did utter, publisA or pass
     as true and genuine any of the above named false, alteled or




     -
     forged it-.    knowing the same to be false, altered and forged,
     with the intent to defraud San Francisco State University, the
     State of California and the United States of America.




                                             -ay
      COUNT 3:
                                                                  I
      FALAFASA TAGALOA and
               defendants, are further accused by the Grand qury of the
      City and County of San Francisco, State of California,      jby
                                                                   this
      Indictment, of the crime of felony, to wit: VIOLATION OF SECTION
      475a OF THE CALIFORNIA PENAL CODE, committed as follolos(: , The
    . said defendants, FALAFASA TAOALOA and
1   - (                   between the 1st day of January, 1998, through
      the 31st day of December, 1998, both dates inclusive, 1
      and County of San Francisco, State of California, did dave in
      their possession a completed check with intent to utter]and pass
      the same or to permit, cause 6r procure the same to be kttered or
      passed to defraud San Francisco State university, the state of
      California and the United States of America,
                                                                      I
                                                                      I
                                                           I


.People vs. Falafasa Tagaloa.




                                                    . .
SECTION '12022.6(a) (1) AS TO COUNTS 1 THROUGH 3

x t is further blleged that in th; commission
offenses, the said defendants, FALAFASA TAGALOA and
                                        with the
took funds and property of a value exceeding
property of San Francisco State University, the State 8f
                the United States of '~merica,w i t h .theI1 meaning
               Section 12022.6 (a) (1).
                                                           I




FALAFASA TAGALOA, defe'ndant, is further accused
of the City and County of San ~rancisco, State of
this Indictment, of the crime of felony, to wit: VIOLATION OF
SECTION 424 OF THE CAlrIFORNI2l PENAL CODE, c d t t e d as (follows:
The said defendant, FALAFASA TAGAtOA, between the 1st
January, 1999, through the 31st day of December, 1999,
inclusive, at the City and County of San Francisco, St
                                                           1
California, being a person charged with the receipt, txaxisfer     or
                                                           I
disbursement of public monies, did
                                                          il
1.   without authority of law, appropriate the same o r   dnY portion-
                                                          I,i,
                                                                         '



     thereof to his own use'or use of.another, or

3.   knowingly keep a false account oi:make a false'ent
     account relating to said public monies, or

4.   fraudulently alter or falsify any account of public! honies.
People vs. Falafasa Tagaloa
                 and




COUNT 5:   . .                                                           ,   .

FALAFASA TAGALOA, defendant, is further accused by the'!Grand jury
of the City and County of San Francisco, State of calikornia, by
this Indictment, of the crime of felony, to wit: VIOWlTION OF
SECTION 470(a) OF THE CALIFORNIA PENAL CODE, committed as
                                                          1
follows: The said defendant, FALAF'ASA TAGAMIA, betweeh the 1st
day of January, 1999, through the 31st day of December1 1999,
                                                       i
both dates inclusive, at tpe City and County of San Francisco,
State of California, did, with intent to defraud,-

(a)
                                                        II
                                                          I
      and knowing he had no authority to do so, sign th!? name or
      another or fictitious person to a reguest for payment    of
      mopey, writing obligatory or due bill for            of money.

(b)   counterfeit or forge the. seal or handwriting of another.

(c)
                                                          0
      falselyziake, utter and pass as. t'-e and genuine a request
      for payment of money, writing obligatory or due bkll for
                                                        /I
      counterfeit.                                        1 ;
      payment of money, knowing the same to be false, forged  or

                                                          I
COUNT 6:                                                  I




                                                          I
FALAFASA TAGALOA, defendant, is further accused by the Grand Jury
of the City and County of San Francisco, State of California, by
this ~ndictment, of the crime of felony, to wit: VIOLATION OF
                                                          I
SECTION 475(a) OF THE CALIFORNIA PENAL CODE, c o d t t e d ! as
follows: The said defendant, FALAFASA TAGALOA, betwe& the 1st
day of January, 1999, through the 31st day of ~ecember! 1999.
.both dates inclusive, at the City and County of Sam ~ r b c i s c o .
State ~f California, did have in his possession, with intent to
pass, a forged and altered item with intent to defraudl lpmwing
said item to be forged or altered.
        .   .

People vs. Falafasa,Tagaloa
                  and




SECTION '12022.6(a)(1)'AS TO COVNTS 4 THROUGH 6     - .   1   t .
                                                                    '
                                                                    .


~t is further alleged that in the commission of the above
                                                          J
offenses, the said defendant, FALAFASA TAGALOA, with tie intent
                                                          I
so to do, took funds and property of a value exceeding $50,000,
the property of S a n Francisco State University, the State of
california and the United States of America, within
of Penal Code Section 12022.6(a)(l).

 o m   7:

                    defendant, is further accused by
of the City and Couhty of San Francisco, State of
this Indictment, of the crime of felony, to wit: VIOLATION OF
SECTION 19705 (a)(1) OF THE CALIFORNIA REVENUE AND TAXATION CODE,
camirted as follows: The said defendant, FAIAFASA T A ~ A ,
between the 1st day of January, 2000, through the 31st Iday of
December, 2000, both dates Inclusive, at the City and
S a a Fxancisco, State of California, did willfully make
subscribe under penalty of perjury a false or
California personal income tax return for the year 1999, which he
                                                         11
did not believe to be true and correct as to every material
matter.
                                                          I
FALAFASA TAGALOA, defendant, is further accused by the larand Jury
of the City and County of San Francisco, State of California, by
this Indictment, of the crime of felony, to wit: VIOLATION OF
                                                          1
SECTION 424 OF THE CALIFORNIA PENAL CODE, committed as follows:
The said defendant, FALAFASA TAGALOA, between the 1st day of
January, 2000, through the 31st day of December, 2000, llboth dates
                                                       I1
inclusive, at the City-and County of San Francisco, State   of
                                                       J
~alifornia,being a person charged with the receipt, transfer or
disbursement of public monies, did

1.
                                                        II
     without authority of law, appropriate the same or any
                                                          Iportion
     thereof to his own use or use of another, or         1 ;
                                                          I
People vs     . Falafasa Tagaloa
                      and




3.
                                                          j
         knowingly keep,a false account or make a false ent-xyin an
                                                                    :
 .       a c c o ~ trelating to said public monies, or .
                                                          I

COUNT 9 :
                                                       I
                                                          'i
4. .fraudulently alter or falsify any account of public monies.



FALAFASA TAGALOA, defendant, is further accused by the' Grand Jury
                                                           1
of the City and County of San Francisco, State of ~ a l dornia, by
this ~ndictment, of the crime of felony, to wit: VIOLA?ION OF
SECTION 470 (a) OF THE CALIFORNIA PENAL CODE, committed as
follows: The said defendant, FALAFASA TAGALOA, betwe& the 1st
day of Januazy, 2000, through the 31st day of ~ecembe='2000,
                                                       I'
both dates inclusive, at the City and County of San Francisco,
State of California, did, with intent to defraud,
                                                       !I
                                                           I
(a) and knowing h e had no authority to do.so, sign tfi'e
                                                       1
                                                          name or
         another or fictztious person to a request for                 of
     -   honey, writing obligatory or due bill for                 of money.
                                                              :I
(b) counterfeit or forge the seal or handwriting of       allother.

(c) falsely make, utter and pass as true and genuine a requestI
    for payment of money. writing obligatory or due bill for
                                                     'I
    payment of money, knowing the same to be false, forged or
    counterfeit.
                                                              i
COUNT 10:                                                 II
FALAFASA'TAGALOA, defendant, is further accused by the,Grand Jury
of the City and County of San Francisco, State of ~alffornia,by
                                                                  .
this Indictment, of the crime of felony, to wit: VIOLA~IONOF
SECTION 475 (a) OF !l?HE CALIFORNIA PENAL CODE, committed as
follows: The said defendant, FALAFASA TAGALOA, between the 1stI
day of January, 2000, through the 311s day of ~ecemberl 2000,
both dates ificlusive, at the City and County of San ~rkncisco,
State of California, did have in his possession, with intent to
pass, a forged and altered item with intent to defraudl knowing
said item to be forged or altered.
                                             .   .   .
People vs. Falafasa Tagaloa
                                                         .   .
                 and




                                                                     I
~t is further alleged that i n the co2pmission of the *-re
.offenses, the said defendant, FALAFASA TAGALOA, .with the intent
so to do, took funds and property of a-value exceeding.$50,000,
the property of San Francisco State University, the s t b e of       I
California and the United states of America, within the meaning
of Penal Code Sectson 12022.6(a) (1).                    1 :. '
                                .   ~.   -


                                                                         p
COUNT 11:     F                                                          II


               .   AN^
F-ASA       TAGALOAA defendant, i s fu=ther accusgd by the1 ~ r & d JUN
of the City and County of San ~rancisco, State of California, by
this, Indictment; of the crime of felony, to wit: VIOLATION OF                .

S E ~ I O N19706 OF THE :CALIFORNIA REVENUE AND TAXATION C ~ D E ,
.committed as follows:. ~ h e ' s a i ddefendant, FALAF'ASA .TAGALOA,
between the 1st day of January, 2001. through the .3lstlday of .
December, 2001, both dates inclusive, at the City a n d . & o ~ t yof
San ~r&ncisco, State of California, did, within the t d e :required
by law and with intent to evade tax, willfully fail to!file a
              personal income tax. return
                                       .
                                             for the 'year.200b,.
                                                                 i
COUNT                                                            I

FALAFASA TAGALOA, defendant, is further accused by.the Grand ~ u r y
of the City and County of San Francisco, State of ~alibornia, by
this Indictment, of the . crime 'of 'felony, to wit: VIOLATION OF
SECTION 424 O F TEE CALIFORNIA PENAL CODE. committed as;)   f~llovs:
The said defendant, FALAFASA TAGALOA, between the 1st day I  '
                                                               of
January, 2001, through the 31st day of December, 200l,/ both dates
inclusive, at the City and County of San Francisco, state of
California, being a person charged with the receipt, tkansfer or
disbursement of public monies, did

1.
                                                                 I
     without authority of law, appropriate the same or any portion
     thereof to his own use or use of another, or        :       I
                                                                 !       I


                                                                 I
People vs. ~alafasaTagaloa
                   and




                                                        /I
3.. knowingly keep a false account or make a .false entry      in an
                                                          J
      account relatlng to said public modes, or

4.
                                                          I
      fraudulently alter or falsify any account of publiclmonies.



F W A S A TAGALOA, defendant,
of the City and County of San
this ~ndictment, of the crime of felony, to wit:
SECTION 470(a) OF THE ~ I F O R N I APENAL CODE,
follows: The said defendant, FALAFASA
day of January, 2001, through the 31st day ot ~ecembtrrj2001,
both dates inclu'sive, at the City and County of San ~rahcisco,
state of California, did, with intent to defraud,


 .  another or fictit5ous person to .a request' for
                                                          I
(a) and knowing he had no authority to do so, sign the name or
                                                          of
    .money, writing obligatory or due bill for
                                                          I
(b) counterfeit or forge the seal or handwriting of another.
                                                         !uI . ':   .
(c)   falsely make, utter and pass as true and genuine a request
      for payment'of money, writing obligatory or due b 3 l l for
                                                         I1
      payment of money, knowing the same to be false,; forged or
      counterfeit.                                       1 :
COUNT 14:

                                                         1
FALAFASA TAOAIOA, defendant, is further accused by the Grand Jury
of the City and County of Pan Francisco. State of ~alifornia. by
this Indictment, of the crime of felony, to wit: VTOLATION OF
SECTION 475(a) OF THZ CALIFORNIA PEN^ CODE, committed
follows: The said defendant, FALAFASA TAGALOA,
day of January, 2001. through the 31st day of ~ecember 2001,
                                                       ::
both dates inclusive, at the City and County of San F r ~ c i s c o ,
State of California, did have in his possession, with intent to
pars, a forged and altered item with intent to defraudj knowing
said item to be forged or altered.                      1
                                                         I
                              .   .
People vs. Falafasa Tagaloa
                 and




EXCESSIVE TAKING OF' FUNDS A&LEGA!PTON PURSUANT To P
                                                   -(        C(IDE
SECTION 12022.6ta) (1) AS TO COUNTS 12 THROUGH 14
                                                        I
                                                        I
~t is further alleged that in the commission of the above
offenses, the said defendant, F W A S A TAOALOA, with tlke intent
                                                        1
so to do, took funds and property of a value exceeding $50,000,
the property of San Francisco State University, the State of
~aliforniaand the United States of America, within theI meaning      -
of Penal Code .Section 12022.6 (a)(1) .                 I
COUNT 15:                                               I
FALAFASA TAGALOA, defendant, is further accused by the &and jury
of the City ahd County of San Francisco, State of ~alifornia,by
this ~ndictment, of the crime of felony, to wit: VIOLATION OF
SECTION 19705 (a)(1) OF THE CAIJIFORNIA REVENUE AND T-+ON   CODE,
committed as follows: The said defendant, FALAFASA T A W A ,
between the 1st day of January, 2002, through the 3lstlday of
December, 2002, both dates inclusive, at the City and dounty of
                                                        I
San Francisco, State of Califor~iia,did willfully make and
subscribe under penalty of perjury a false or fraudulent
California personal income tax return for the year 2001, which he
did not believe to be true and correct as to every mat&rial
matter.



FALAFASA TAGALOA, defendant, is further accused by the
                                                        i1- rand
                                                              mry
of the City and County of San Francisco, State of Cali o d a , by
this Indictment, of the crime of felony, to wit: VIOLATXON OF
                                                        /
SECTION 424 OF THE CALZFORNIA PENAL CODE, committed an follows:
The said defendant, FALAFASA TAGALOA, between the 1st day of
                                                        I
January, 2002, through the 31st day of December, 2002, both dates
inclusive, at the City and County of San Francisco, State of
                                                       11
California, being a person charged with the receipt, transfer  or
disbursement of public monies, did                      1   .
1.
                                                        !I
     without authority of law, appropriate the same or any portion
     thereof to his own use or use of another, or       I
                                                        s
People vs   . ~ a l aasa
                     f
                      and
                         Tagaloa,




3.. knowingly keep a false account' or make a false
    account relating to'said public monies, or

4.
                                                        !I
     fraudulently alter or falsify any account of public monies.
                                                        'I

                                                         I
COUNT 17:                             .   .


                                                        1
FALAFASA TAGALOA. defendant, is further accused by the rand ~ u r y
of the City and County of San Francisco, State of California, by
this Indictment, of the crime of felony, to wit: VIOLATION OF
                                                        I
SECTION 470 (a) OF THE CALIFORNIA PENAL CODE, committed as
follows: The said defendant, FALAFASA TAGALOA, between the 1st
day of January, 2002, through the 31st day of December) 2002,
both dates inclusive. at the City and County of S a n Prhcisco,
State of California, did, with intent to defraud,

(a) and knowing he had no authority to do so, sign theII name or
                                                      JI
    another or fictitious person to a request for payment   of
                                                       II
    money, writing obligatory or due bill for payment of money.

(b) counterfeit or forge the seal or handwriting of another,
                                                        I

(c) falsely make, utter and pass as true and genuine   a1
                                                       request
    for payment of money, writing obligatory or due bill for
    payment of money, knowing the same to be false,
    counterfeit.



FALAFASA TAGALOA, defendant,  is further accused by the1 Grand Jury
of the City and County of San Francisco, State of California, by
this Indictment, of the crime of felony, to wit: VIOLA~ION OF
SECTION 475 (a) OF THE CALIFORNU PENAL CODE, committed(ad
follows: The said defendant, FALAFASA TAGALOA, betweek the 1st
day of January, 2002, through the 31st day of ~ecember! 2002,
both dates inclusive, at the City and County of San Fr+ncisco,
State of California, did have in his possession, with intent to
pass, a forged and altered item with intent to defraud1 .knowing
said item to be forged or altered.
                                                       I
People v s . -FalafasaTagaloa
                   and




COUNT 19:                       .   .
                                                     ,



                                                             1
FALAFASA TAGALOA. defendant, is further accused by the G r a M Jury
of the City and County of San Francisco, State of California, by
this Indictment, of the crime of felony, to wit: VIOLATION OF
SECTION 19705 (a)(1) OF THE CALIFORNIA REYENLIE AND TAXATION CODE,
committed as follows: The said defendant, FALAFASA T A W A ,
between the 1st day of January, 2003, through the 30thll day of
April, 2003, both dates inclusive, at tbe City and County of San
                                                             u
Francisco, State of California, did willfully make and'srfbscribe
under penalty of perjury a false or fraudulent California

believe to be true and correct as to every material matter,  1
personal income tax return for the year 2002, which he did not
                                                                           \
                                                             I1

~t is filrther alleged that in the commission of t h b c d v e
offenses, and pursuant 'to a pattern 0.f related felonious conduct.


or more separate victims or against the same victim on:/l
                                                        two or
more separate occasions, gnd that aaid pattern of relayed felony
conduct involves the taking of more than one hundred thousand
dollars ($100,000) .                                   I ' .

ALLEGATION PURSUANT TO PENAL CODE SECTIONS 7 9 9 AND 8 0 3   kil C ) (1)
                                                             1(I
During or near late October, 2001, while sorting out disbursement
checks, San ~ranciscoState University
(                           became suspicious about a $ 6 ?500.00
 "stipendX check issued in the name of (                 k c h check
                                                             I
was picked up by Falafasa '~agaloa,the Director of San Francisco
 State university's Office of Research and Special Projects
  (ORSP). When, on a subsequent occasion, about 'one month later,
he noticed a similar incident involving the same parties,*          m
c      k   e     d the registration status of          Ad
determined that w      a     s not in fact a registered ktudent nor
an employee at San Francisco State University (SFSU),
                                                             I
                                                             I
         -
         People vs. Falafasa Tagaloa
                          and




                      advised SFSU
         concern and provided w    i t
                                            '




         number of w h i c h information -placed
         file.

           Within a few weeks,            -was
                                                             of his
                                        h the reported social Security
                                                       in his "to do"
                                                                       11




                                                                       I(
                                                                       1
                                                     'nade aware of other1
           circumstances relating to Falafasa Tagaloa lpbich caused
           and
                                                                            -
                                                                            ,


                                                       to research the stipend

    .-
          payments made to -and                the related docubents.
           determined that numerous University checks, drawn against
         --. -
                                                                     1
           accounts funded by-publiE-monies, had been negotiated for face
                                                                     I
          value. The checks were the product of requisitions in various
           forms, which forms and requisitions were verified by Falazasa
           ~ a-g a l o a - i n
                             his official capacity
                                             -    - and which forms also bore the
           forged signature of
                                                                        I
         After the audit,                                  on or       I
                                                                     aboue April
         10, 2002, first contacted the SFSU Police Department to report
         their findings. An official police investigation was initiated.
-
                                                                       (
         The investlgation revealed that, among other findings, Falafasa
         Tagaloa shared a common address with w a n d that he had
         opened an account at an SFSU campus branch of the stat& Employees
         Credit M i o n in his name and the name of            It w&s
         subsequently determined by
         o         n or about October 23, 2002, that almost all of the
         suspect checks were negotiated through that account and have
         e n d o r s e m e n t s actually written by Falafasa ~ a ~ a l b a .
                                                                       1
                              CERTIFICATION OF COUNTY CLERK


    STATE OF CALIFORNIA                           1
                                                      ss.
.   City and County 0.f.Sari '~rancisco           1
                                                                                  i
                                                                                  /I
              f, GORDON PARK-LI, Clerk of the Court of the City and1 County of
    San ~rancisco, S t a t e of California, do hereby certify that dhe within
    5s an original indictment found by the Grand Jury of the ~ i t band
    County of San Francisco, which was this day presentea, in oden court
    by the foreananlforeperscn of, and in the presence of, the said! rand
    Jury, and that the said indictment was thereafter on this
    with me as a record of said court. ,

           IN WITNESS WHEREOF, I have hereunto set'my hand and the seal of
    the said court.                                             I
    DATED :                                       CORDON PARK-LT, Clerk           I            .        .




                                           By.:



                                                          FIXING BIECL
                                                                                  I
                          ORDER ASSIGNING CAUSE A N I ~                                                     .   .

                                                                              .
           '~tis hereby ordered that a bench warrant issue for thel'arrdst
    of each of the within named defendants and that bail as to &ch
    defendant be fixed in the sum of:                                             1.
              DEFENDANT
       F A L H - % ~ ~*w&

           In the event that bail be posted by PROPERTY BOND8                tab       amount
    thereof shall be twice the amount hereinbefore fixed.                '




                                                                names indictm&&
                                                                                  1    1   .       ..




                                                                                  1
           It is further ordered that the within                                       and cause
    be assigned to Department NO.       &&.
                                                                                  !
                                                            .                     I
'People vs. Falafasa Tagaloa
                  and




It is further alleged that if convicted of the above offenses,
the court may order the defendants to pay restitution to the
victim(s) of the offenses, and to the Restitution Fund, pursuant
to Penal Code Section 1202.4.



A True Bill                        TERENCE HALLINAN
                                   Distrfct Attorney




          /
  I
Foreperson of   the f rand Sury
                                   &ERT   K. MURRAY
                                   Assistant District
                                                       :   ,




Names of witnesses examined before the Grand Jury on finding the
foregoing Indictment:
                                                                                                                                                                . .
                                                                             . .                           NATIONALSCIENCE FOUNDATION
                                                                                   .   .                                                                ',
                                                                                                                 4201 W,ILSON BOULEVARD             >




                                                                                                                ARLINGTON, VIRGINIA 22230
                                                                                                                                            .   .



                                                                                                                                                            i

.            .                                                          ..                                                                              I   ! .
                                                                                                                                                            I
                                                           OFFICE OF THE                                                                                    I
                                                          DEPUTY DIRECTOR

                                                                                                                                                        I

        . .                       .           .
                                                            .       .
                          .           .
                                                                                                                                                        I
'                  Falafasa Tagaloa V-30023
                     ,
                                                                                                                                                        I
        .. . .   . Mule Creek State Prison
                     .
                                                                                           ,                                                            I
           . . P . 0 Box 409099
             ,
                                                                                                                                                        I

               .. Iones, CA 95640

                 .,               ,   .           .                                                Rei. Notice of ~ebarment        .   .
                                                                                                                                                        I



                 .            .       .   .           .         .
                                                                                                                                                        !
                              Dear Mr. Tagaloa:

                              On August 24,2004, the National Science Foundation (NSF) sent you a Notice o f Proposed ~ebarmentin
                              which NSF proposed to debar you fiom directly or indirectly obtaining the benefits of Federal grants for a
                              period of three years. The Notice sets forth in detail the circumstances giving rise to your debarment.
                              NSF's deb'arment action is based upon the agency's administrative record indicating that you pleaded
                              guilty'to multiple charges relating to the theft of NSF funds over a five-year period. You were sentenced
                              to four years in California State prison and were ordered to pay restitution in the amount of $480,383.56.
                              In that Notice, NSF provided you with thirty days to respond to the proposed debarment. Over thirty days
                              have elapsed since you received the Notice and NSF has not received a response. Accordingly, you are
                              debarred until August 24, 2007. Debarment precludes you fiom receiving Federal financial and non-
                              financial assistance and benefits under non-procurement Federal programs and activities unless an agency
                              head or authorized designee makes a determination to grant an exception in accordance with 45 CFR
                              Section 620.2 15. Non-procurement transactions include grants, cooperative ageements,' scholarships,
                              fellowships, cantracts of assistance, loans, loan guarantees, subsidies, insurance, payments for specified
                              use, and donation agreements.
        ..           ..
                              I n addition, you are prohibited fiom receiving Federal contracts or *roved          subcontracts under the
    .                .         Federal Acquisition Regulations (FAR)at 48 CFR Subpart 9.4 for the period o f this debarment. 45 CFR
                               Section 620.1 10(c). During the debarment period, you may not have supervisory responsibility, primary
                               management, substantive control over, or critical influence on,.a grant, contract, or cooperative agreement
                               with any agency of the Executive Branch of the Federal Government                                     .                                .


                               If you have any questions regarding the foregoing, you may contact Lawrence Rudolph, General Counsel,
                               National Science Fouirdation, 4201 Wilson Boulevard, Room 1265, Arlington, Virginia 22230.

                                                                                                   Sincerely,



                                                                             u Joseph Bordogna .
                                                                                                   Deputy Director
                                                          Settlement Agreement
                                                                 Between
                                                       The United States of America
                                                                   And                                       I



                                                     The San Francisco State University        .


                          1. This Settlement Agreement (the 'Settlement Agreement") is entered into betweenthe United
                States of America (the United States) and the San Francisco State University (SFSU). The United States
                and SFSU may be referred to individually as 'Party" or collectively as 'the Parties."    I
                                                                                                             i
                 I.   The Covered Conduct

                       -   .   2. .The National Science ~oundation(NSF) solicited proposals for awards underh-t


I           .



                           3. The solicitation fbi the award indicated thattheawardwas to be administered in compliance




                -
                with award conditions, including a requirement that award recipients maintain financial systems to meet
                c e a i n minimum standards. SFSU applied for the award, rep~sentmgthereby that its financial systems
                met these minimum standards. SFSU was a selected awardee and entered niot-
                w        i    t    h NSF. The -incorporated                             by reference awa@ conditions,
                including a requirement that recipients maintain financial systems to meet certain minimum standards.
                                                                                                             1
                         4. The award committed NSF to provide up-ot         funds. SFSU has rdceived funds




                                                                                                   -
                in the amount o          f from NSF. SFSU committed to provide cost sharing in the amount of


                         5. The united States contends that SFSU provided misleading representations to NSF
    :           concerning its appro~riateuse of award funcls and the amount SFSU contributedas mt-share durina the


        '
                SFSU submitteda total of 28 Federal Cash Transaction R ~ ~ ~ ~ ( F Cand       S )on a number of such
                                                                                         T Rthat
                FCTRSSFSUfabelycertifiedthat disbursements had been made in accordancewith the award's purpose
                and conditions and cost-share obligations had been met Finally, the United States contends that SFSU
                drew down amounts in excess of the allowable costs associated with the
                                                                                                             J
                                                                                                             !
                               6.   The conduct deswibed in paragraphs 2 5 is the 'Covered Conduct."   '
                                                                                                             '!


                               7. The United States contends that SFSU may have provided false certifications to NSF
                pertainingto its appropriate use of award funds and its cost share contributionsand may have misspent .
                                             riod of 15 0ctober r o u g h 30 ~ a n u a r under       y B


                        8. SFSU acknowledges, based on the findings of a subsequent review of expenditures under
                the award,that it drew down amounts in excess of the allowable costs associated with ht-
                            SFSU contends that at the times the drawdowns were made SFSU believed the costs on
                which they were based to be valid, and denies that any misrepresentationswere made by SFSU or its
                representatives in mnnection with the award.

                :         9. WHEREAS, the Parties desire to settle their disputes regarding the allegations covered by     ,   ,




.       .   .   the investigationto avoid further expense and theunchainties of litigation. The Parties desire also
                 to settle any possible dispute regarding conduct identical to the covered conduct herein, which may
                 have occurred.prior to 31 August 2006 and which may be discovered i n the future, regarding.
                 administratioh of the following NSF awards:  '             .      .




                                                                                                            i
                      10. NOW THEREFORE, in furtherance of such desire, the Parties have negotiated a settJement
                of all allegationscovered by this investigation,and have,negotiateda settlement of all possible disputes
                that might arise in the fbture as a result of conduct identi41to the covered conduct, descibed herein,
                that may have occurred prior to 31 August 2006, in the administration of the NSF awards identified in
                paragraph9 above. This settlement is neither $in admission of liability by SFSU nor a concession by
                the United States.
                                                                           .   .

    .       .         1 1. In reliance upon the representationsdained herein arid in co"siderati6n. of the mutual
                promises, covenants, and obligations inthis Agreementand the resolution of the claims set forth below,
                and' for good and valuable consideration, receipt of which is set forth in .this document, the Parties
                agree as follows:'                                            .   .
                                                                                                               . .
                II.   ~errnsand Conditions.                        .   .                                   .   ,




                 ,
                          12. SFSU shall pay a total sum of $809,477.63 ("the total Settlement Amount") to the United
                States.
        13. SFSU agrees to pay the total Sefflement Amount within ten (10) calendar days after
execution of this Settlement Agreement by all Parties. The total sl.lrn of payment shall be made by
means of electronic funds transfer in accordance with instructions to be provided to SFSU by the
Financial Litigation Unit of the United States Attorney's Office for the Eastern District of Virginia, in
Norfolk, Virginia. Such instructions may be obtained by telephoning Ms. Ginger ~wamvdrthat (7'57)
441-3179.                                                                                    !


                                                                                             I




        14. Subject to the exceptions in Paragraph 18, below, in considemtion of the obligations of
SFSUset forth inthis Agreement and conditioned upon SFSU's full payment of the SettlementAmount,
the United States (on behalf of itself, its officers, agents, agencies, and departments) agrees to release
SFSU, its present and former officers, directors, and employees (collectively the 'Rejeased Parties")
from any civil or administrative monetary claim the United States has or may have under common law
theories including payment by mistake of fact, unjust enrichment, disgorgement, restitution, breach of
contract, and breach of fiduciary duty for the Covered Conduct, and under the Program Fraud Civil
Remedies Act, as such relate to the covered conduct..
        15. SFSU agrees to release the United States and its officers, agents, employees and
contractors and their employees for any and all claims, causes of action, adjustments and set-offs of
any kind arising out of or pertaining to the Covered Conduct, including the investigationof the Covered
Conduct under this Settlement Agreement,

     16. The Parties agree that the "Compliance Commitmentsn(attached hereto and incorporated by
reference) are to be fully implemented by SFSU to ensure SFSU compliance with all relevant laws and
regulations governing NSF awards and to prevent fraud, false statements, and misspending of funds
related to NSF awards, contracts, and cooperative agreements by SFSU, its officers, faculty, other
relevant employees, and relevant sub-recipients and subcontractors. The Pam'esagree that SFSU shall
comply with the terms of the attached Compliance Commitments and that NSF OIG will act as the
agent for the United States in ensuring such compliance. However, notwithstanding any failure of
SFSU to fulfill one or more of the Compliance Commitments, or any other subsequent act or omission
by SFSU, the release granted in Paragraph 14 shall remain in full force and effect.

        17. Subjectto the exceptions noted in Paragraph 18, below, in consideration of the obligations       -
of SFSW as set forth in this Agreement, and at such time as full payment of the total Settlement Amount
is made by SFSU, the United States shall terminate its NSF 01G investigation into the covered conduct
as set out in paragraphs 2-5, above.

      18.            The Parties agree that s~ecificallvexcluded froni the scope and terms of this
Agreement are:
        (a) any disputes or claims arising under the Civil False Claims Act, Title 31 U.S.Code Sections
             3729-3733.
        (b) any disputes or claims arising under the Internal Revenue Code, Title 26 U.S. Code;
        (c) any issues of criminal liability of any individual or entity;
        (d) any disputes or claims for the enforcenient of the terms of ,thisAgreement;
        (e) any claims or administrative actions arising from a breach of this Settlement Agreement.

Ill.    Breach and Default Provisions
                                                                                            !

        19. NSF OIG shall monitor compliance issues on behalf of the United States Attorney's Office
for the Eastern District of Virginia (USAO-EDVA). In the event that NSF OIG believes' SFSU has
breached any of its obligations underthis SettlementAgreement or has breached any of its compliance
Commitments (attached hereto). NSF OIG will immediately notify NSF and will provide relevant and
necessary information to USAO-EDVA concerning the alleged breach.
       20. In the event that NSF believes SFSU has breached any of its obligations under this
Settlement Agreement, NSF will immediately notify NSF 01G and NSF OIG will provide relevant and
necessary information to the USAO-EDVA concerning the alleged breach.
        21. Within 24 hours of identification or notice of a suspected breach of obligations under this
SettlementAgreement or the attached ComplianceCommitments, SFSU shall be notified of the alleged
breach by written notice, by email and by certified mail (return receipt requested) to SFSU's Authorized
Organizational Representative(AOR), specifying the nature and extent of the alleged breach. SFSU
will have sixty (60) days from receipt of the notice to (a) cure said breach or (b) otherwise satisfy NSF
and NSF OIG, on behalf of the USAO-EDVA, that it is in full compliance with this Agreement and the
attached Compliance Commitments or that the breach cannot reasonably be cured withh sixty (60)
days, but that SFSU has taken action to cure the breach and is pursuing such action with diligence.
NSF OIG shall thereafter keep the USAO-EDVA informed of attempts at resolution of any suspected
breach.                                                                                       I
       22. If, at the end of the sixty (60) day period described above, NSF determines that SFSU
continues to be in breach of any of its obligations under this Agreement or the attached Compliance
Commitments, NSF will notify NSF OIG of such determination and may initiate proceedings to
undertake appropriate administrative action, including but not limited to the suspension or termination
of any or all NSF awards and/or suspension or debarment of SFSU. NSF OIG shall notify
USAO-EDVA of such action.
       23. If, at the end of the socty (60) day period described above, NSF OIG determines that SFSU
continues to be in breach of any of its obligations under this Agreement or the attached Compliance
Commitments, NSF OIG shall notify SFSU by email and by certified mail (return receipt requested) to
SFSU's AOR, of this determinationand shall refer the matter to the USAO-EDVA. NSF 01G may also
refer the matter to NSF to initiate proceedingsto undertake appropriate administrativeaction, including
but not limited to the suspension or termination of any or all NSF awards and/or suspension or
debarment of SFSU.                                                                         I

        24. Sho~~ld  any action to enforce or interpret this Settlement Agreement or to resolve any
dispute hereunder be required, the Parties acknowledge and agree that the appropriate jurisdiction
for any such matter is the U.S. District Court in the Eastern District of Virginia.

N.     Costs

        25. The ~ar(iesfurther agree that each Party to this Settlement Agreement shall bear its own
costs, expenses, and fees (including attorney fees), except as otherwise provided in paragraph 12
herein.                                                                                 I
                                                                                         I
        (a) SFSU agrees that all costs incurred by or on behalf of SFSU in axlnedibn wlh the
following are, except as specifically noted, unallowable costs to United States Government awards
under the cost principles applicable to such awards:

            1. NSF's investigation of the Covered Conduct,
            2. SFSU's investigation, defense, and corrective actions undertaken in response to NSF's
            investigation in connectionwith the Covered Conduct (includingattorneyfees), except that
            actions by SFSU to implement the Compliance Commitments shall be allowable F&A
            (indirect)costs togovernment awards to the extent that they areotherwise allowable under
            the applicable cost principles;                                               1
            3. the negotiation of this Settlement Agreement, and                           I
                                                                                           I

            4. the payment made pursuant to this Settlement Agreement,
       (b) These unallowable costs will be separately estimated and accounted for by SFSU and
SFSU will not charge such ~lnallowablecosts to any Federal award(@, including, but not limited to
awards, contracts and cooperative agreements.

V,    Integration Clause

        26. This Agreement, incorporating herein the attached Compliance commitments: embodies
the entire agreement and understanding of the Parties with respect to the subject matter contained
herein. There are no restrictions, promises, representations, warranties, covenants, or undertakings
other than those expressly set forth or referredto in this SettlementAgreement and the aforementioned
Compliance Commitments. This Agreement may not be amended except by written agreement of the
Parties.
     27. This Settlement Agreement, together with the provisions of the attached Compliance
Commitments herein incorporated by reference, supersedes any and all prior agreements and
understandings between the Parties with respect to this subject matter.               I



       28. SFSU represents that this Agreement is freely and voluntarily entered into without any
degree of duress or compulsion whatsoever.

        29. Each person who signs this Agreement in a representative capacity warrants that he or
she is duly authorized to do so.

THE UNITED STATES OF AMERICA                                                          I

                                                                                      I

Chuck Rosenberg                                                                       I
United States Attorney


Paula P. Newett
Assistant United States Attorney
2100 Jamieson Ave.
Alexandria, VA 22314
703-299-37600                                                                         I
                                                                                      I
                                          TY (SFSU)

                                                         Date:
                                                          .   +if+&
                           I\                            Date:    ?//d l 6
Robert 3. Kenney, Esquire
Counsel for SFSU
Hogan & Hartson, LLP
555 13' Street, N.W.                                                                  i
Washington, D.C. 20004-1109
202-637-5707
  COMPLIANCE COMMITMENTS

Preamble
San Francisco State University (SFSU)is committed to implementinga Compliance Programto ensure compliance
with the terms and conditions applicable to any NSF grants and awards; to ensure compliance with all relevant laws
and regulations governing NSF awards; and to prevent fraud, false statements, and misspending of funds related
to NSF grants, contracts, and cooperative agreements by SFSU, its officers, faculty, other relevantemployees, and
relevant subrecipients and subcontractors.
                                                                                                        I
                                                                                                   I
Scope of Comniitments
SFSU is fully committed to achieving the compliance objectives set forth in the body of this document. While this
document reflects SFSU's commitments regarding the application for, receipt of, and administrationof NSF funds,
SFSW recognizes that this is only the beginning of a successful research compliance program. SFSU's goal is to
establish a culture of compliance at SFSU that is self-sustaining and continuous.
Responsible Compliance Official
The President has designated the Provost as the President's representative and the SFSU official ultimately
responsible to tlie President for achieving the compliance objectives set forth in the body of this document. The
Provost shall oversee SFSU's sponsored research Compliance Program, including, where appropriate, the review
of awards, the development of training programs, and the submission of comprehensive written annual reports to
the President, to NSF OIG, and to NSF on the status of compliance at SFSU. The Provost is a member of senior
management of SFSU and reports directly to the President.
Compliance Committee
The Provost shall chair a Compliance Committee that shall oversee the Compliance Program throughout SFSU.
The responsibilities of the Compliance Committee will include, without limitation,. the review and approval of
significant compliance policies and procedures and any modifications to existing procedures; the review and
consideration of reports from the Compliance Officer and Internal Auditor on the state of compliance in sponsored
research programs; and any information relating to a material deviation from SFSU policywith respect to sponsored
research. In addition to the Provost, the members of the Compliance Committee shall include the following SFSU
officers:Compliance Officer; Canipus Counsel; CFONice Presidentfor Administration and Finance; Associate Vice
Presidentfor Research, and Associate Vice Presidentfor Academic Affairs. The Compliance Committee shall meet
quarterly. The Provost shall immediately act upon compliance-related matters as they may arise and will notify the
Compliance Committee at a time and in a manner he may deem appropriate.
Compliance Officer
The Compliance Officer manages the daily operation of the sponsored research Compliance Program at the
University. The Compliance Officer's chief responsibility is to monitor internal controls to ensure compliance with
all federal laws and regulations regarding the use and expenditure of NSF and other federal and non-federal
sponsored award funds. The Compliance Officer will report to the Provost, a member of the President's cabinet,
through theAssociate Vice PresidentforAcademicAffiirs. 'The Compliance Officerwillreport directly to the Provost
any compliance issues that need immediate attention.                                                I
                                                                                                      I
                                                                                                    I
Compliance Program                                                                                  #



SFSU will identify positions throughout the University that have roles and responsibilities in the application for,
receipt of, and administration of NSF awards. All individuals in such positions will be provided with (or have
electronic access to) written policies andlor procedures applicable to their positions for (1) a Code of Conduct
holding SFSU personnel to high ethical standards of professional conduct and integrity in the conduct of NSF
research; (2) accurate time and effort repolling under NSF awards to meet the standards of the L s t principles
specified in OMB Circular A-21 and the Federal administrative requirements contained in OMB Circi~lar A-110; (3)
accurate charging of costs under NSF awards; (4) accurate monitoring, managing, and reporting of cost sharing;
(5) accurate monitoring of subrecipients, consultants, and subrecipient charges; (6) accurate relconciliation of
                                                                                                 I
accounting records; and (7) document management and retention.
                                                                                                      1
                                                                                                          !
Reports                                                                                               l    r
At six (6) months from the date of the Settlement Agreement, SFSU will provide to NSF and NSF,OIG an initial
report setting forth SFSU's immediate progress with respect to these Compliance Commitments. This initial report
will describe the composition, role, and progress of the Compliance Committee; will address the roles and
responsibilities of those involved in grant administration; and will include copies of all policies and procedures
currently in place and newly implemented to address compliance, a training calendar and copies of training
materials, copies of confidential disclosure mechanisms, and an implementation plan for further Compliance
Commitments.
                                                                                                          I
At twelve (12) months after delivery of the initial report, and annually thereafter, for three (3) years, SFSU mmmits
to providing NSF and NSF OIG a written report addressing the status of the development, implementation, and
documentation relating to the Compliance Program. SFSU also commits to identifying deficiencies hiscov'ered by
any means, including internal audits or any other audit or review, in such reports and will identifyithe corrective
actions undertaken to address such deficiencies. Finally, SFSU shall attach the most recent A-133 audit and any
other financial review of its federal awards. With approval of NSF OIG, this twelve-month reporting date may be
adjusted forward to coincide with SFSU's annual alldit and reporting cycle.                            .  I
SFSU furthercommits to reportingevery materiaiviolation discovered during any audit or review immddiatel~to NSF
and NSF OIG and remedying such within sixty (60) days of SFSUJsknowledge of such material violation. A
'material violation' is one that has a siginificant adverse impact on the administrative, financial, or'programmalc
aspects supported by NSF Awards. If SFSU cannot cure any such material violation within sixty (60) days, SFSU
will inform NSF and NSF OIG of such determination within the sixty (60) days following SFSU's knowledge of such
violation and, with approval of NSF and NSF OIG, provide an agreed upon timeframe to cure theviolation. The final
report addressing the material violation shall include notice of action taken to prevent recurrence of the violation.
These reports on SFSU1s corrective actions shall include a certification by SFSU1sCompliance h c e r that all
deficiencies have been identifiedand addressed to ensure SFSU1scompliance with all requirementsof ~edemllaw,
regulations, and these Compliance Commitments.                                                       '1
                                                                                                      I


Records                                                                                            I
SFSU commits to retaining for three years from the date of the final annual report all record4 generated in
connectionwith these Compliance Commitments, including reports to NSF OIG and NSF and documents reflecting
the policies and procedures referenced in the report or amendments to those policies and procedures. SFSU
further commits to making such records available to NSF OIG and NSF, upon request This commitment b over
and above the obligations to which SFSU will continue to be subject under the record retention requirements of its
NSF awards.                                                                                        1
                                                                                                      I       '
Training                                                                                                I
SFSU shall institute and maintain a comprehensive training program designed to ensure that kach relevant
employee, subcontractor, or subrecipient, is aware of all applicable laws, regulations, and standards of conduct that
such individual is expected to follow in order to comply with all rules and regulations applicable to NSF awards and
the consequences, both to the indi,vidualand to SFSU, that will ensue from any violation of such kquirements.
Relevantemployees, subcontractors, and subrecipients are defined as those individualswith a role oiresponsibility
in the application for, receipt of, or administration of NSF awards and those individuals who conduct projects
                                                                                                      I
supported by NSF awards.
Each relevant employee shall receive at least one (1) hour of initial training that shall include a discussion of the
contents of these Compliance Commitmentsas well as the relevantaward requirementsand shall receive additional
training of at least one (1) hour on an annual basis. A training schedule and information on percentageof personnel
trained shall be included in the annual report submitted to NSF and NSF OIG.
SFSU will develop a package of guidance materialssetting forth SFSU's expectationsfor compliancewith NSF rules
and regulations and SFSU policies by subrecipientsand subcontractors.The packageof materialswill bedistributed
to every subrecipient and subcontractor, and it will include, among other materials as applicable, information on:
preparing invoices to SFSU, accountingforcosts, documenting expendituresand cost matching expenditures, and
audit requirements.
SFSU anb'cipates that plans, policies, and materials necessary for the following short-term milestones for the
implementation of the training program will be accomplished and approved by the Provost to allow completion by
the dates indicated below:
. Description                                                                                                         Completed By


 1. The Compliance Officer will lead and conduct special training sessions for all ORSP grant administratrve          August 31,2006
 staff regarding the documentation of 'in-kindbstshare commitments, effort reporting, and reimbursed
 released lime processing timelines.

 2, The Compliance Officer will lead a discussion on compliance principles and requirementswith all new faculty August 31,2006
 attending the SFSU New Faculty Orlentation Weel(.
                                                                              -

 3. SFSU will hire a Training Specialist who will lead the process of designing haining materials and will work September 30,2006
 with the Compliance Officer and the Associate Mce President for Academic Affairs to implement pmfessional
 training programs.


 4. The ComplianceOfficer willconduct atraining programforthe Deans Council (comprisedof every Deanfrom October 31,2006
 each college) to inMuce compliance principles and requirements.

 5 The Trainlng Specialist will design a training calendar for ongoing compliance training and w~lldevelop a          November 30,2006
 comprehensive outline of training materials to be used for training programs.


 6. The Compliance Officer will conduct a training program for Department Chairs to introduce compliance              ~ovehber30,2006
 principles and requirements.                                                                                             I



7. The Compliance Officer and the Training Specialist will jointly conduct a pilot training for facully in order to   November 30,2006
gauge the eWveness of training materials.                                                                                 I
                                                                                                                          I




8. The CMlp~anceOfticerand the Train~ngSpecialistwill hold training pmgrams for groups of Pl's and faculk ~ebru!ary2007 to April
to address the rules and regulations applicable to federal awards and the consequences, both to the individual 2007
and to SFSU, that will ensue from any violation of such requirements.
Confidential Disclosure Program
SFSU will continue to implement and abide by the confidential disclos~~re
                                                                                                           1
                                                                           and whistleblower procedures currently
                                                                                                                                   c



established by the State of California and existing within the University. The confidential discloshe mechanism
enables employees, sub-recipients, and subcontractors to disclose anonymously any practicesces,procid~~res,
                                                                                                          or acts
deemed by the individual to be inappropriate. SFSU is committed to ensuring that the confidential disclosure
mechanism is known to each individual.                                                             I
Debarred and Suspended Persons                                                                                 I
SFSU will comply with 45 C.F.R. part 620 in dealing with debarred or suspended persons. As itq persons or
contractors who become excluded while they are employed by or under contract with SFSU, SFSU,WIII notify NSF
in accordance with the requirements set forth in the aforementioned regulation.              1                 I

Audit, Annual Review, and Inspection                                                                           1
In addition to the single audit requirements contained in OMB Circular A-133 and any State of California audit
requirements, and in conjunction with the aforementioned annual written reports to NSF on SFSU:s Compliance
Program, SFSU shall arrange for an independent review, based upon agreed procedures, of SFSU's Compliance                      ,

Program, to be annually conducted in accordance with a Statement of Work (SOW) designed.l(l) to ensure
compliance with the terms and conditions applicable to any NSF grants and awards and (2) to assess the efficacy
of SFSU's Compliance Program relative to (a) establishment of a code of conduct; (b) effectiveness'ofsenior level
oversightand provisionof resources to SFSU's Compliance Program; (c) effectivenessofthe screening of personnel;
(d) effectiveness of SFSU's training program; (e) SFSU's confidential disclosure (whistle blower) procedures; (f)
establishment of a system of appropriate encouragement of compliance and appropriate disciplinad measures for
engaging in criminal conduct or failing to take reasonablesteps to prevent or detect such conduct; and (g) SFSU's
ongoing risk assessments and responses taken thereto. SFSU will provide a copy of the SOWto NSF OIG 30days
prior to the initiation of the review. NSF OIG will have the right to require additional procedures if it detemiines, within
ten (10) workng days after receiving the advance copy of the SOW, that the SOWlacks sufficient detail to ensure
accomplishments (1) and (2) above. SFSU will submit to NSF and NSF OIG a copy of the independent reviewer's
written report and findings as a supplement to the annual written reports required elsewhere in the+ Compliance
Commitments. The review referred to in this section may be conducted in whole or in part by SFSU's internal
auditors, provided that SFSU provides NSF OIG with adequate assurance of their independence in dnnecfion with
the SOW.                                                                                                      I



SFSU commits providing NSF 010, in addition to any other right that NSF OIG has pursuant /o NSF award
conditions or other authoriG, the right to examine and copy SFSU1srecords, including audits and audit workpapers,
for the purpose of verifying and evaluating (a) SFSU's performance of these Compliance Commitinents and (b)
SFSU's compliance with any NSF requirements. SFSU agrees to niake records available at any reasonable time
                                                                                                   I
for inspection, audit, andlor reproduction.                                                        I
                                                                                                                   I