Admin. Financial Violations (PI/PS) Grant Fraud

Published by the National Science Foundation, Office of Inspector General on 2013-09-26.

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: 109110068                                                                     Page 1 of 1

         The Recovery Act Transparency Board informed us that a company1 had improperly accepted an
         NSF award2 funded by the American Recovery and Reinvestment Act, while the company was
         excluded from receiving federal awards. Prior to accepting the NSF award, the company
         received a "Notice of Proposed Debarment" ("Notice") from another federal agency? The
         Notice, issued under the Federal Acquisition Regulation, has the same effect as a government-
         wide suspension. Although the company was then prohibited from participating in transactions
         such as the NSF award, we determined that the company had improperly accepted a $150,000
         NSF award and spent $100,000 of the NSF funds.

         We contacted the company, which conceded that it had received the Notice prior to accepting and
         spending the NSF award, but refused to return the NSF funds. In order to protect the re,maining
         NSF monies, we recommended the NSF terminate the award, which NSF did immediately,
         thereby saving $50,000 to be put to better use.

         Based on our investigation, the company's misuse of federal funds involving several federal
         agencies, its failure to properly inform NSF that it was an excluded party, and for accepting the
         NSF award while an excluded party, we determined the company lacked present responsibility.
         Consequently, we recommended that NSF debar the company and its affiliated companies for
         three years. 4 NSF agreed and sent the company and its affiliates a Notice. We forwarded the
         matter to the appropriate United States Attorney's Office for resolution of the expended funds, to
         be added in to ongoing negotiations to settle claims involving several federal agencies.
         Ultimately, the company and the government entered into a settlement agreement which included
         repayment of all of the NSF funds.

         NSF resolved the proposed debarment through an administrative agreement under which NSF
         and the Department of Health and Human Services required the company to implement a
         program to ensure compliance with federal administrative and ethical requirements.

         This case is closed with no further action taken.

NSF OIG Form 2 (11102)