oversight

Grant Fraud

Published by the National Science Foundation, Office of Inspector General on 1999-09-29.

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

                               NATIONAL SCIENCE FOUNDATION
                                    4201 WILSON BOULEVARD
                                   ARLINGTON, VIRGINIA 22230




          OFFICE OF
     INSPECTORGENERAL




Date: September 29,      lw
Subject: Closeout

Review 0biective

                                                                       at the
                                                                       ent NSF funds
                                                          y creating bogus purchase
                                                           n. Our review objective was
to ascertain whether there was evidence to support the allegation.

Responses to Review Obiective

I.      Interviews

       We interviewed the complainant and he could not provide us with any evidence to
substantiate the allegation. He did provide us with source documentation that was not
helpful in determining whether bogus purchase orders were created.

       The interviews with the employees and administrators did not reveal any evidence
that bogus purchase orders were created to inappropriately spend NSF funds. In
particular, we were told that:

1) Specialized vendors were retained for long periods of time because of the unique'
     nature of the exhibits being created

2) There was never a problem with the goods not being received after payment was made
     to vendors
3) The purchasing agent used same vendors repeatedly because of the good service

4) Some vendors were paid early to buy and hold expensive materials for later fabrication
      of an exhibit or to pre-construct certain parts of an exhibit

       Based on the information presented during our interviews, it did not appear that
bogus purchase orders were created to inappropriately spend NSF funds.

       The interviews did reveal that there were many problems between management
and the employees. However, these problems did not involve the creating of bogus
purchase orders. Specifically, there was high management turnover which resulted in
exhibit delivery and schedule problems. In attempting to resolve the problems,
administrators terminated certain employees and moved the exhibit services group from
an off-site location to the main building. We were told these changes assisted in resolving
most problems. Despite these problems, the exhibits were all built and everyone,
including NSF program managers, were satisfied with the results of the Starter Sets grant.

11.      Liniited Review of Accounting Records

       We conducted a limited financial compliance review on the administration of the
Starter Sets grant (January 1, 1993-June30, 1996) to provide assurance that payments to
vendors (iLppliers and subcontractors) were properly authorized, documented and
recorded. Based on our limited review, we did not encounter any evidence in the
accounting records that bogus purchase orders were created to inappropriately spend NSF
funds.

        In our review, we: 1) discussed whti-                       het-
n                 place during the administration of the grant; 2) reviewed how costs were
reported to NSF in the quarterly Federal Transactions Cash Reports; 3) reviewed how
direct, indirect and cost sharing expenses were accumulated; and 4) examined audit
                                repared in accordance with                        The
                                 any internal control problems.

         Finally, we selected a sample representing salary costs and vendor payments from




payments appeared to be properly authorized, documented and recorded. Accordingly,
we did not encounter any evidence in the accounting records that bogus purchase orders
were created to inappropriately spend NSF funds.
Conclusion:

       The interviews with the cornplainant-employees                  and administrators
and the limited review of the accounting records did not provide us with any evidence
that bogus purchase orders were createdin an effort to use all the NSF funds before grant
expiration. Accordingly, this matter is closed.