oversight

Semiannual Report - March 2017

Published by the National Science Foundation, Office of Inspector General on 2017-03-01.

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

 OCTOBER 1, 2016 — MARCH 31, 2017




SEMIANNUAL REPORT
TO CONGRESS




                                                            Semiannual Report To Congress
                                                            October 1, 2016 - March 31, 2017
                                                            National Science Foundation
                                                            Office of Inspector General




NATIONAL SCIENCE FOUNDATION   OFFICE OF INSPECTOR GENERAL
ABOUT THE NATIONAL SCIENCE FOUNDATION
The National Science Foundation (NSF) is an independent Federal agency created by Congress in 1950 “to promote the progress of
science; to advance the national health, prosperity, and welfare; to secure the national defense....” It is governed by the National Science
Board (NSB), which sets agency policies and provides oversight of its activities. NSF is vital because it supports basic research and
people to create knowledge that transforms the future. With an annual budget of $7.5 billion in fiscal year 2016, it is the funding source
for approximately 24 percent of all federally supported basic research conducted by America’s colleges and universities. In many fields
such as mathematics, computer science, and the social sciences, NSF is the major source of Federal backing.



ABOUT THE OFFICE OF INSPECTOR GENERAL
NSF’s Office of Inspector General promotes economy, efficiency, and effectiveness in administering the Foundation’s programs;
detects and prevents fraud, waste, and abuse within NSF or by individuals that receive NSF funding; and identifies and helps to resolve
cases of research misconduct. OIG was established in 1989, in compliance with the Inspector General Act of 1978, as amended. Because the
Inspector General reports directly to the NSB and Congress, the Office is organizationally independent from the agency.

CREDIT:
FRONT COVER GRAPHIC: SHUTTERSTOCK
COVER CONCEPT: ELIZABETH ARGERIS | REPORT LAYOUT DESIGN: CHITRA PRODUCTIONS
TABLE OF CONTENTS

        FROM THE INSPECTOR GENERAL	            1

        AUDITS AND REVIEWS	                    3
          Large Facility Recommendations
          Closed During this Semiannual Period	3
          Audits of NSF Awardees	6
          Single Audits	7


        INVESTIGATIONS	9
          Program Integrity Investigations	9
          Administrative Investigations	       10
          Research Misconduct Investigations	11


        CONGRESSIONAL TESTIMONY	              15

        STATISTICAL DATA	                     17
    FROM THE INSPECTOR GENERAL
    I am pleased to present our Semiannual Report, which summarizes the work and accomplishments of our office
    during the first half of fiscal year 2017.
    In this report, we focus on the impact of our work on the Foundation, and how our findings have inspired
    congressional action to improve the Foundation’s efforts to promote the progress of science; to advance the national
    health, prosperity, and welfare; and to secure the national defense.
    We are making a difference. Our work has prompted the Foundation to make positive changes that corrected
    numerous issues and improved its programs and operations. For example, the Foundation has made progress in its
    management of large facilities, updating its Large Facilities Manual and amending appropriate cooperative support
    agreements to help ensure stronger controls over large facility construction projects. 
    Congress also took notice of our work, calling on us to testify two times. Inspired in part by our findings,
    recommendations, and testimony, the 114th Congress passed the American Innovation and Competitiveness Act
    (AICA), which included key oversight requirements to strengthen NSF’s management of its large facilities, such
    as requiring a pre-award analysis of costs before making a large facility award and periodic external reviews on
    project management and performance. The AICA also requires the Foundation to report on its efforts to cut
    costs associated with employing individuals under the Intergovernmental Personnel Act (IPA). In 2015, NSF paid
    nearly $8.9 million for 27 executive level IPAs. Because IPA salaries and benefits are funded with program-related
    appropriations, savings in IPA costs would free up funds for additional research.
    We also have a strong relationship between our work investigating wrongdoing and our audits focused on fixing
    root causes. For example, a university agreed to pay nearly $1.2 million to settle allegations that it failed to maintain
    adequate records to support expenditures under NSF awards. An audit of the university conducted by our Office
    of Audits had identified salary and non-salary expenditures with insufficient or no supporting documentation.
    Our investigation determined that in preparation for the audit, and in response to the preliminary audit findings,
    university employees fabricated time and effort reports and provided them to the auditors.
    During this reporting period, OIG staff and contractors conducted audits of six NSF awardees that had expended
    more than $880 million of NSF funds during the respective audit periods. Five of the audits assessed the
    reasonableness, allowability, and allocability of costs across all NSF awards at the institutions, and one focused on
    costs and cash management practices for operations and maintenance of an NSF research ship.
    The five audits of all institutions’ awards identified, in total, almost $3 million of questioned costs. We made
    recommendations to NSF to recover the questioned amounts from University of California-Davis ($2.3 million),
    University of California-San Diego ($283,800), Pennsylvania State University ($135,700), Scripps Institution of
    Oceanography ($111,500), and Purdue University ($91,300). We also made recommendations for the awardees to
    strengthen controls over the areas that led to the questioned costs.
    This reporting period, our Office of Investigations continued the Pilot Program for Enhancement of Employee
    Whistleblower Protection, which provides whistleblower protections to employees of awardees who reasonably
    believe that they are being retaliated against for reporting allegations of misuse of Federal funds received by their




1      SEMIANNUAL REPORT TO CONGRESS
non-federal employers. Under the Pilot Program, we investigate such allegations and submit a report to NSF
management, the complainant, and the awardee. NSF then determines whether there is sufficient basis to conclude
that the awardee subjected the complainant to a prohibited reprisal.
Additionally, we have kept a close eye on the agency’s management of conflicts of interest, initiating a full scope
review and investigating an NSF Program Officer (PO) who ignored guidance provided to her by the NSF
Designated Agency Ethics Official (DAEO) and her division Conflicts Official (CO) regarding the management
of a cooperative agreement on which her home institution was a subawardee. The DAEO and CO told her that she
was limited to providing subject matter technical expertise and that she could not participate substantially in the
management of the agreement.
We continue to focus resources on areas of high risk — including the Small Business Innovation Research (SBIR)/
Small Business Technology Transfer (STTR) programs. We previously reported the conviction of a company owner
for false statements, false claims, and criminal conversion involving a $150,000 STTR Phase I award, and the
subsequent filing of a civil complaint.1 During this period, in response to our recommendation, NSF debarred the
company and its owner for 5 years.
Finally, on December 16, 2016, the Inspector General Empowerment Act of 2016 was signed into law. In addition to
strengthening the independence of the Inspectors General, the Act establishes new reporting requirements for the
semiannual reports to Congress, which you will see in this report for the first time.
Our work reflects our sustained commitment to helping NSF be an effective steward of taxpayer dollars and benefits
from the support of NSF management and staff from across the Foundation. We look forward to our continued
partnership with NSF, the National Science Board, and Congress to fulfill this goal.




 1	   March 2015 Semiannual Report, p. 20; September 2015 Semiannual Report, p. 23



                                                                                     NATIONAL SCIENCE FOUNDATION | NSF.GOV/OIG   2
    AUDITS AND REVIEWS
    The Office of Audits is responsible for auditing grants, contracts, and cooperative agreements funded by the
    Foundation. We review agency operations and ensure that financial, administrative, and programmatic aspects of
    agency operations are conducted economically and efficiently. By providing independent and objective assessments
    of NSF’s program and financial performance, we are committed to improving NSF’s business policies and practices
    to better support NSF in promoting science and engineering research and education.


    LARGE FACILITY RECOMMENDATIONS CLOSED DURING THIS
    SEMIANNUAL PERIOD
    During this reporting period, NSF and OIG closed a significant number of recommendations relating to large
    facility issues. The recommendations stemmed from audits of the Daniel K. Inouye Solar Telescope (DKIST), Large
    Synoptic Survey Telescope (LSST), National Ecological Observatory Network (NEON), Earthscope, Sikuliaq,
    and Advanced Laser Interferometer Gravitational-wave Observatory (LIGO) construction projects as well as
    the overarching memo on NSF’s Management of Cooperative Agreements. The closures were a result of NSF’s
    continued work to develop standard operating guidance, update its Large Facilities Manual, and amend appropriate
    cooperative support agreements to ensure stronger controls over large facility construction projects. Such updated
    procedures include withholding a portion of contingency funds until a bona fide need is demonstrated, requiring
    detailed reviews of supporting documentation for award budget estimates, and requiring verification of earned
    value management systems. These new policies and procedures represent important steps by NSF toward the goal of
    increased accountability over the Foundation’s largest and riskiest projects. While this progress is significant, NSF’s
    work in this area is ongoing.


    NSF NEEDS TO STRENGTHEN INFORMATION TECHNOLOGY CONTROLS
    NSF depends on computerized information systems to process, maintain, and report essential information.
    Reliability of computerized data and systems is essential, and protecting information systems continues to be a
    challenge for NSF. In this reporting period, auditors identified challenges to the security of NSF’s information
    technology (IT) environment in Federal Information Security Modernization Act of 2014 (FISMA) and financial
    statement audits.

    FY 2016 FISMA AUDIT IDENTIFIES FIVE WEAKNESSES
    FISMA requires OIG to conduct an independent evaluation to assess the effectiveness of NSF’s information
    security program and practices and to determine compliance with FISMA requirements. Under a contract
    with OIG, Kearney & Company (Kearney) conducted a performance audit of NSF’s information security
    program and practices for FY 2016. Based on its independent evaluation, Kearney determined that NSF has an
    established information security program; however, further work is needed to address shortfalls in information
    systems and continuous process monitoring (ISCM) programs. Kearney identified five weaknesses in the areas of
    privileged account access; vulnerability remediation; and U.S. Antarctic Program (USAP) contingency planning,
    interconnection security agreements, and accreditation packages. The USAP contingency planning weakness was
    first identified in FY 2006. NSF’s plan to correct this weakness is currently not scheduled to be implemented until
    FY 2020.


3      SEMIANNUAL REPORT TO CONGRESS
New recommendations included the development, approval, and implementation of policies and procedures for
privileged account access provisioning. In addition, Kearney repeated prior year recommendations to develop
and implement policies and procedures for reviewing open security vulnerabilities and implement a disaster
recovery plan for Antarctic operations. NSF has provided a corrective action plan that, if implemented, should
address the recommendations.

FY 2016 FINANCIAL STATEMENT AUDIT IDENTIFIES A SIGNIFICANT DEFICIENCY IN THE IT
CONTROL ENVIRONMENT
Establishing and maintaining sound financial management is a top priority for the Federal Government because
agencies need accurate and timely information to make decisions about budget, policy, and operations. The Chief
Financial Officer’s Act of 1990 requires agencies to prepare annual financial statements, which must be audited by an
independent entity.
Under a contract with OIG, Kearney conducted an audit of NSF’s FY 2016 financial statements. Kearney issued
an unmodified opinion on the financial statements; however, the auditors reported a significant deficiency in
NSF’s internal controls over the IT control environment. Kearney identified several deficiencies within NSF’s
access controls process across the three tested financial systems. Specifically, NSF did not properly authorize and
recertify access at the application layer for two financial feeder systems, and it did not properly monitor privileged
users’ actions with the operating system and database layers for its core financial system and one of its financial
feeder systems.
Without an effective access control program, NSF is vulnerable to weaknesses that increase the risk that sensitive
financial information could be accessed by unauthorized individuals or that financial transactions could be altered,
either accidentally or intentionally, and remain undetected. These access control weaknesses could compromise
NSF’s ability to report financial data accurately. NSF has provided a corrective action plan that, if implemented,
should address the recommendations.
Auditors noted that NSF had made significant progress to correct weaknesses in prior financial statement audits
pertaining to the monitoring of cooperative agreements for large construction projects, which had been cited
as a significant deficiency each year beginning in FY 2011. As a result, NSF’s monitoring of construction-type
cooperative agreements is no longer considered a significant deficiency in the financial statement audit. In addition,
NSF addressed an instance of noncompliance with the Improper Payments Elimination and Recovery Act of 2010
reporting requirements, identified in the FY 2015 audit report.
Kearney also noted certain additional matters involving internal control over financial reporting, which did not rise
to the level of a significant deficiency, that it reported to NSF’s management in a separate letter.
Because management letter findings do not rise to the level of a significant deficiency or material weakness, we
decided to no longer track management letter recommendations for Office of Management and Budget (OMB)
Circular A-50, Audit Followup, purposes and closed several outstanding recommendations. However, auditors will
continue to review the status of any open recommendations in future financial statement audits.


NSF SHOULD TAKE ADDITIONAL STEPS TO ENSURE COMPLIANCE WITH
THE DIGITAL ACCOUNTABILITY AND TRANSPARENCY ACT OF 2014
The Digital Accountability and Transparency Act of 2014 (DATA Act) requires Federal agencies, including NSF,
to report financial and payment data by May 2017 in accordance with data standards, definitions, and guidance
established by the U.S. Department of Treasury (Treasury) and OMB. We conducted an inspection to evaluate the
processes, systems, and controls that NSF has implemented, or plans to implement, to report financial and payment
data in accordance with the requirements of the DATA Act and to determine whether NSF is positioned to meet the
statutory May 2017 reporting deadline.


                                                                                NATIONAL SCIENCE FOUNDATION | NSF.GOV/OIG   4
    We found NSF has made progress in implementing the DATA Act but needs to take additional steps to strengthen
    its project management practices to ensure compliance with all reporting requirements. We could not determine
    whether NSF will meet the DATA Act’s May 2017 reporting deadline, in part due to external challenges, such as
    changes and delays in implementation guidance.
    We recommended NSF strengthen its project management over DATA Act implementation by completing
    a detailed project management plan, improving its Risk Management Plan, documenting and tracking risks,
    developing a Human Resource Plan, and documenting decisions in a timely manner. NSF generally agreed with
    our recommendations, and recognized there are opportunities to strengthen project management practices to help
    mitigate risks to DATA Act implementation. NSF has already taken corrective actions, including developing a
    detailed project management plan and risk register, to address our recommendations.


    NSF RELOCATION BASELINE SCHEDULE IS INCOMPLETE
    NSF is preparing to move to its new headquarters in Alexandria, Virginia, on or about September 1, 2017. The
    leases on the buildings NSF currently occupies in Arlington, Virginia, expire at the end of December 2017, and
    rent will likely increase if NSF has to extend the leases.
    NSF established a baseline relocation schedule as of May 2016 to manage and monitor activities that NSF and
    several contractors must complete before the relocation. The baseline relocation schedule’s activities include the
    construction contractor’s activities to finish the building’s interior as well as both NSF’s and another contractor’s
    activities to ensure the building is operational prior to the move.
    We found NSF did not include all key information in its May 2016 relocation baseline schedule, such as the
    order in which certain tasks contained in the schedule must occur and the resources needed to complete the
    activities included in the schedule. We also found status information in the schedule may not always be current
    because NSF receives only monthly updates from the construction contractor instead of weekly or bi-weekly as
    recommended by the Government Accountability Office. These issues could undermine NSF’s ability to effectively
    use the schedule to support management oversight of the construction process by making it harder to identify and
    mitigate project risks.
    We recommended NSF senior management take appropriate action to strengthen the baseline schedule, including
    linking predecessor and successor activities and assigning resources to all activities in the schedule. We also
    recommended NSF work with the General Services Administration and other applicable parties to determine
    whether more frequent updates on the building’s construction are feasible.
    NSF responded that the General Services Administration lease controls the frequency of updates on the building’s
    construction and that NSF relies on other reports and meetings to gauge the progress of construction. NSF did
    not agree to update the baseline schedule with resources or link predecessor and successor activities. NSF believes
    the cost of updating the baseline schedule, as we recommended, would outweigh the possible benefits. In lieu of
    our recommendations, NSF provided us with an updated integrated project schedule on February 17, 2017, which
    we are reviewing. At OIG’s request, NSF also provided additional information in which it linked predecessor and
    successor activities.


    NSF COULD STRENGTHEN ITS REPORTING OF CONFERENCE COSTS
    We conducted an audit to determine whether NSF’s conference costs and related reporting complied with OMB
    requirements and NSF policy and to determine whether opportunities exist to reduce conference costs. NSF
    reported it held 11 conferences each costing more than $100,000 from October 1, 2012, through June 30, 2015.
    We found that NSF could strengthen its reporting of conference costs to improve its compliance with OMB
    requirements. We identified three specific areas for improving conference reporting. First, NSF’s cost data was not


5      SEMIANNUAL REPORT TO CONGRESS
always accurate because NSF sometimes reported estimated rather than actual costs. Second, the reported costs for
some conferences did not include spending for contractors involved in conference planning. Therefore, NSF may
not have identified and reported all conferences that cost more than $100,000. Finally, NSF reported the estimated
number of attendees rather than the actual number of attendees.
In addition, we identified three actions NSF could take to reduce conference costs. Our suggested actions included
obtaining and reviewing all receipts for conference-related expenses, ensuring that per diem allowances are reduced
when meals are provided to NSF employees, and exploring ways to reduce hotel contract penalty charges for not
meeting minimum room or food/beverage commitments. NSF generally concurred with the recommendations, and
we agree that the proposed corrective actions adequately address the recommendations.


AUDITS OF NSF AWARDEES
OIG staff and contractors conducted audits of six NSF awardees that had expended more than $880 million of NSF
funds during the respective audit periods. Five of the audits assessed the reasonableness, allowability, and allocability
of costs across all NSF awards at the institutions, and one focused on costs and cash management practices for
operations and maintenance of an NSF research ship.
The five audits of all institutions’ awards identified, in total, almost $3 million of questioned costs. We made
recommendations to NSF to recover the questioned amounts from University of California-Davis ($2.3 million),
University of California-San Diego ($283,800), Pennsylvania State University ($135,700), Scripps Institution of
Oceanography ($111,500), and Purdue University ($91,300). We also made recommendations for the awardees to
strengthen controls over the areas that led to the questioned costs.
We note that $1.9 million of the questioned costs at University of California-Davis and Pennsylvania State
University involved salaries and associated costs that were claimed for senior research personnel in excess of NSF
limits. Similar charges have been questioned in several prior audits, but NSF has not sustained the questioned costs,
even when the awardee agreed to repay the disputed amount. Although we considered it unlikely that NSF would
reverse its course and uphold the related findings in these two audits, our opinion remains that the costs were in
violation of NSF policy in effect at the time the claims were made.
Our audit of ship operations and maintenance activities at Oregon State University found $3,000 of questioned
costs and identified an additional $315,000 of NSF funds that will be put to better use by implementing our
recommendations. We recommended NSF recover the questioned costs and direct the university to improve its
cash management practices to safeguard Federal funds and bring the program into compliance with Federal and
university requirements. We are working with NSF to resolve all audit findings and recommendations.
NSF also resolved four awardee audits during the semiannual reporting period. NSF sustained the following
amounts questioned in the respective audit reports: $334,949 for Columbia University (Audit Report No. 16-1-
021); $231,320 for Jackson State University (Audit Report No. 13-1-002); $92,667 for the University of Michigan
(Audit Report No. 09-1-014); and $35,573 for Cornell University (Audit Report No. 13-1-004).


AUDITS OF BOOZ ALLEN HAMILTON’S NSF CONTRACTS
Two audits of NSF contracts with Booz Allen Hamilton (BAH) were also resolved this period. The first, an audit
of BAH’s incurred costs for FY 2008, questioned $466,446 of direct and indirect costs on two NSF contracts and
the second, of BAH’s incurred costs for FY 2009, questioned $1,171,673 of indirect costs on three NSF contracts.
After completion of the audits, the Defense Contract Audit Agency, which performed the audits, provided updated
information that reduced the original questioned costs to $73,190 for FY 2008 and to $157,106 for FY 2009. Of
these amounts, NSF sustained $56,720 and $125,571 respectively, making the management decision to allow the
differences as immaterial, considering the total of amount of incurred costs of $24.5 and $30.4 million for those


                                                                                NATIONAL SCIENCE FOUNDATION | NSF.GOV/OIG   6
    specific contracts and the additional time it would take to reconcile these costs. We would have preferred that NSF
    recover all funds due to the Federal Government. However, given the complexity and nature of negotiations for this
    contract settlement, after the fact, we agree that it is no longer cost effective to pursue recovery.


    NSF HAS IMPLEMENTED NEW POLICIES AND PROCEDURES TO REDUCE
    OPERATING COSTS, IMPROVE CONTROLS, AND ENSURE COMPLIANCE
    WITH LAWS AND REGULATIONS
    During this reporting period, NSF took final corrective actions on six internal OIG reports. NSF reviewed how
    to reduce the costs associated with costs with employing IPAs and identified ways to reduce the costs of IPAs by
    approximately $3.4 million.
    NSF improved internal controls by developing policies and procedures for managing and overseeing its workers’
    compensation cases and strengthened controls over travel cards to prevent misuse and detect improper charges.
    NSF strengthened controls to ensure compliance with laws and regulations by developing a risk register and
    detailed project management plan to help ensure it can meet the reporting deadlines specified in the DATA Act.
    NSF also developed new guidance for procuring cloud computing services and new terms and conditions to
    enforce FedRAMP and OMB cloud computing requirements. Finally, the NSB updated its procedures to ensure it
    complies with the requirements of the Government in the Sunshine Act for its NSB meetings. The NSB created new
    procedures to help ensure it closes NSB meetings consistent with the exemptions in the Act and posts information
    to the public by the timeframes specified in the Act.


    SINGLE AUDITS
    OMB Circular A-133, Audits of States, Local Governments and Non-Profit Organizations, and Title 2 U.S.
    Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and
    Audit Requirements for Federal Awards (“Uniform Guidance”), provide audit requirements for state and local
    governments, colleges and universities, and non-profit organizations receiving Federal awards. Under the guidance,
    covered entities that expend $500,000 or more a year ($750,000 or more for audit periods ending on or after
    December 26, 2015) in Federal awards must obtain an annual organization-wide audit that includes opinions on
    the entity’s financial statements and compliance with Federal award requirements. Non-federal auditors, such as
    public accounting firms and state auditors, conduct these single audits. OIG reviews the resulting audit reports
    to ensure that the reports comply with the requirements of OMB Circular A-133, the Uniform Guidance, and
    Government Auditing Standards.

    PERCENTAGE OF SINGLE AUDITS THAT FULLY MEET FEDERAL REQUIREMENTS DECREASED FROM
    83 PERCENT TO 58 PERCENT IN 1 YEAR
    The audit findings in Single Audit Reports are useful to NSF in planning advanced monitoring site visits and
    other post-award monitoring efforts. Because of the importance of Single Audit Reports to this oversight process,
    we conduct desk reviews on all reports for which NSF is the cognizant or oversight agency for audit, and provide
    guidance to awardees and auditors to improve audit quality in future reports. In addition, we return to the awardees
    reports that are deemed inadequate so the awardees can work with the audit firms to take corrective action.
    During the period, we conducted desk reviews of 71 audit reports 2 and found that 41 (58 percent) fully met Federal
    reporting requirements. The quality issues identified in 30 reports included 18 reports in which the Schedule of
    Expenditures of Federal Awards did not include required information to allow for identification of awards received
    from or passed-through to other non-federal entities and/or did not adequately describe the significant


     2	 The audits were conducted by 45 different independent public accounting firms.



7      SEMIANNUAL REPORT TO CONGRESS
accounting policies used to prepare the schedule. In addition, 7 reports were not submitted to the Federal Audit
Clearinghouse in a timely manner; 5 reports included incomplete presentations of the audit findings; 3 reports
contained incomplete Corrective Action Plans to address the audit recommendations; 10 reports were submitted to
the Federal Audit Clearinghouse with an inaccurate Data Collection Form (Form SF-SAC); and 1 report failed to
include all of the required report elements.
As noted in Figure 1, after a steady increase in audit quality over the past several years, the percentage of reports
that fully met Federal reporting requirements during this period continued the recent trend downward and resulted
in a marked decrease in quality, falling from a high of 83 percent in March 2016 to 58 percent in this period.
While some of the deficiencies identified during this period can be attributed to the newness of the 2 CFR 200
requirements, the rate of decrease in 1 year is a cause for concern that we will continue to monitor.


  FIGURE 1: PERCENTAGE OF SINGLE AUDITS WITHOUT TIMELINESS OR QUALITY DEFICIENCIES

  85%

  80%

  75%

  70%

  65%

  60%

  55%

  50%

  45%

  40%
     Sep-­‐12 Mar-­‐13 Sep-­‐13 Mar-­‐14 Sep-­‐14 Mar-­‐15 Sep-­‐15 Mar-­‐16 Sep-­‐16 Mar-­‐17

Source: NSF OIG

For those errors that potentially impacted the reliability of the audit reports, we contacted the auditors and
awardees, as appropriate, for explanations of each of the potential errors. In most cases, the auditors and awardees
either provided adequate explanations and/or additional information to demonstrate compliance with Federal
reporting requirements. However, in two instances, the quality deficiencies were significant enough to call into
question the reliability of the audit results. We rejected these two reports and returned them to the auditors and
awardees for revision. After we completed our review of the other 69 reports, we issued a letter to each auditor and
awardee informing them of the results of our review and the specific issues they should work on to improve the
quality and reliability of future reports.




                                                                              NATIONAL SCIENCE FOUNDATION | NSF.GOV/OIG   8
    INVESTIGATIONS
    The Office of Investigations is dedicated to promoting efficiency and effectiveness in NSF programs and operations.
    We investigate wrongdoing involving organizations or individuals that receive awards from, conduct business with,
    or work for NSF. We assess the seriousness of misconduct and recommend proportionate action, and we work in
    partnership with agencies and awardees to resolve issues when possible.


    PROGRAM INTEGRITY INVESTIGATIONS
    As part of our mission, we investigate allegations concerning misuse of NSF funds, false statements in documents
    submitted to NSF, and employee misconduct. When we identify a violation of a criminal or civil statute, we refer
    our investigations to the Department of Justice for criminal prosecution or civil action. When appropriate,
    we also refer matters to NSF for administrative action, such as award termination and government-wide
    suspension/debarment.

    UNIVERSITY SETTLED INVESTIGATION FOR NEARLY $1.2 MILLION AND FORMER UNIVERSITY
    EMPLOYEE SENTENCED
    A university agreed to pay nearly $1.2 million to settle allegations that it failed to maintain adequate records to
    support expenditures under NSF awards. The settlement with the Department of Justice also required the university
    to implement a 5-year compliance plan to ensure it will exercise proper oversight of NSF awards in the future.
    An audit of the university conducted by our Office of Audits had identified salary and non-salary expenditures with
    insufficient or no supporting documentation. Our investigation determined that in preparation for the audit, and
    in response to the preliminary audit findings, university employees fabricated time and effort reports and provided
    them to the auditors. One former university employee who previously pled guilty to falsifying time and effort
    reports, and directing others to do so,3 was sentenced to 1 year of probation.

    FEDERAL EMPLOYEE IMPROPERLY RECEIVED NSF AWARD
    We received an allegation that an employee at another Federal agency improperly applied for and was granted
    an NSF award, thus violating a Federal ethics statute. We determined that the employee submitted the proposal
    to NSF using his university position (adjunct professor) in direct violation of written guidance provided by his
    agency’s ethics officials. The employee also lied to an agency ethics official and others when directly questioned
    about the NSF award. The employee’s actions not only violated Federal ethics law, but also agency ethics rules
    and NSF proposal guidelines. We referred the matter to the other agency’s OIG for information and action as
    deemed appropriate.

    EMPLOYEE INVESTIGATED FOR CONTRACT IRREGULARITIES
    We investigated a senior Government employee for contract-related irregularities. The investigation did not
    reveal facts sufficient to establish violation of a civil or criminal statute; therefore, the matter was not referred
    to the Department of Justice. However, we submitted the investigative report to management to consider for
    administrative action. The employee retired from Federal service.



     3	 September 2015 Semiannual Report, p. 23



9      SEMIANNUAL REPORT TO CONGRESS
NSF SUSPENDED AWARD TO SBIR COMPANY
In response to our recommendation, NSF suspended an SBIR Phase I award, pending the completion of our
investigation into allegations that the SBIR company owner made false statements in the proposal and to a PO.

GRANTEE EMPLOYEE ALLEGES RETALIATION FOR WHISTLEBLOWING
The Pilot Program for Enhancement of Employee Whistleblower Protection, 41 U.S.C. § 4712, provides whistleblower
protections to employees of awardees who reasonably believe that they are being retaliated against for reporting
allegations of misuse of Federal funds received by their non-federal employers. Under the Pilot Program, we investigate
such allegations and submit a report to NSF management, the complainant, and the awardee. NSF then determines
whether there is sufficient basis to conclude that the awardee subjected the complainant to a prohibited reprisal.
Under the Pilot Program, we investigated an allegation that a university removed a co-Principal Investigator from
an NSF award in retaliation for disclosing to university officials allegations of plagiarism and misrepresentations
in an award publication and for questioning the award’s Principal Investigator (PI) on budget irregularities. The
university maintains that it removed the employee due to budgetary concerns and because of the employee’s poor
performance and behavioral issues. We submitted a report of investigation to NSF management; the agency’s
determination is pending.

ACTIONS RESULTING FROM PREVIOUSLY REPORTED PROGRAM INTEGRITY INVESTIGATIONS
We previously reported4 that a former graduate student pled guilty to one count of wire fraud for falsifying portions
of a fellowship application, including fabricating a letter of support and forging an associated signature. In this
reporting period, a Federal court sentenced the former graduate student to 3 years of probation, including 50 hours
of community service, and ordered the graduate student to pay nearly $40,000 in restitution. We recommended that
NSF debar the student for 5 years; the agency’s decision is pending.
As previously reported,5 a community college returned more than $300,000 for improperly charged costs to an NSF
grant. Additional investigation revealed improperly charged costs of nearly $170,000 on another NSF grant; the
college returned these funds to NSF as well.
In addition, we previously reported the conviction of an STTR company owner for false statements, false claims,
and criminal conversion involving a $150,000 STTR Phase I award, and the subsequent filing of a civil complaint.6
During this period, in response to our recommendation, NSF debarred the company and its owner for 5 years.

ADMINISTRATIVE INVESTIGATIONS
Our office investigates a wide variety of allegations that are not pursued as criminal or civil matters or do not meet the
strict definition of research misconduct. These cases, which are resolved administratively, include (but are not limited
to) misallocation of grant funds, violations of human and animal subject regulations, violation of peer review, conflict
of interest, and employee misconduct. 

AGENCY PERSONNEL IGNORE CONFLICTS OF INTEREST GUIDANCE
An NSF PO ignored guidance provided to her by the NSF DAEO and her division CO regarding the management
of a cooperative agreement on which her home institution was a subawardee. The DAEO and CO told her that she
was limited to providing subject matter technical expertise and that she could not participate substantially in the
management of the agreement. However, her Section Head (SH) subsequently told her that she could manage the
award except for signing documents uploaded to the NSF eJacket award management system. Two fellow POs also
followed the SH’s guidance and facilitated the PO’s participation.



 4	 September 2016 Semiannual Report, p. 17
 5	 March 2016 Semiannual Report, p. 22
 6	 March 2015 Semiannual Report, p. 20; September 2016 Semiannual Report, p. 23



                                                                                   NATIONAL SCIENCE FOUNDATION | NSF.GOV/OIG   10
     The PO attended project oversight committee meetings with awardee and subawardee representatives (including
     from her home institution), reviewed quarterly reports and funding requests, and drafted analyses and funding
     recommendations for fellow POs to sign. These recommendations included funding for her home institution.
     Contemporaneous emails from the PO, the SH, and a fellow PO indicate that they were aware that the PO
     continued to engage in conduct that was inconsistent with advice provided by the CO and DAEO, and thought
     that they could maintain an appearance of compliance by attaching an unconflicted PO’s name to emails drafted,
     determinations made, and actions taken by the conflicted PO.
     The PO’s conduct was an apparent violation of 18 U.S.C. § 208. We therefore referred the matter to the Department
     of Justice, which declined prosecution. The PO’s conduct also was an apparent violation of the administrative
     conflicts-of-interest standards. We recommended NSF review these violations and determine if the subject PO, the
     other POs involved, and the SH violated conflicts standards and take appropriate action. NSF determined that the
     PO, her SH, and one other PO did violate the standards. All three had either returned to their home institutions or
     retired; NSF will bar them from serving as reviewers or consultants for 5 years.

     ACTIONS BY NSF MANAGEMENT ON PREVIOUSLY REPORTED ADMINISTRATIVE INVESTIGATIONS
     NSF has taken various actions to address our recommendations in administrative cases reported in previous
     Semiannual Reports:
           •	 In the case of a university PI with two suspended awards,7 NSF financially closed the two awards following
              their expiration date, resulting in nearly $300,000 of award funds put to better use. NSF had previously
              declined the PI’s request to transfer the two suspended awards to another university where the PI obtained
              a new faculty position.
           •	 In the case of the graduate student who submitted 11 NSF proposals to receive funding for work he had
              already completed,8 NSF imposed a 3-year debarment.
           •	 In the case of the professor who violated CAREER award requirements,9 NSF terminated the award, and
              more than $200,000 was put to better use.

     RESEARCH MISCONDUCT INVESTIGATIONS
     Research misconduct damages the scientific enterprise, is a potential misuse of public funds, and undermines the
     trust of citizens in government-funded research. It is imperative to the integrity of research funded with taxpayer
     dollars that NSF-funded researchers carry out their projects with the highest ethical standards. For these reasons,
     pursuing allegations of research misconduct (plagiarism, data fabrication, and data falsification) by NSF-funded
     researchers continues to be a focus of our investigative work.
     NSF takes research misconduct seriously, as do NSF’s awardee institutions. During this reporting period,
     institutions took actions against individuals found to have committed research misconduct, ranging from letters of
     reprimand to revocation of Ph.D. degrees and termination of employment. NSF’s actions in research misconduct
     cases ranged from letters of reprimand to a 5-year debarment.
     In every case discussed below, we recommended that the agency make a finding of research misconduct, issue a
     letter of reprimand, and require the subject to complete a Responsible Conduct of Research (RCR) training
     program. We also recommended additional significant actions as summarized below; unless otherwise specified,
     NSF’s decisions are pending.




      7	    September 2015 Semiannual Report, p. 28
      8	    March 2016 Semiannual Report, p. 24; September 2016 Semiannual Report, p. 23
      9	    September 2016 Semiannual Report, p. 20



11         SEMIANNUAL REPORT TO CONGRESS
GRADUATE STUDENT FALSIFIES DATA IN CONFERENCE POSTER
A graduate student who was supported by an NSF Graduate Research Fellowship Program award and was also a
participant on another NSF award falsified data in a poster that she presented at a conference. The other award’s PI,
who was the student’s mentor, then included the falsified data in the award’s Annual Report.
The student admitted to her actions and the university’s Inquiry Committee concluded the student’s data
falsification was intentional. The university suspended the student for 1 year and prohibited her from returning to
the University for an additional 3 years. The student departed the university.
We concurred with the university’s findings and recommended that NSF debar her for 3 years. We further
recommended that, for 3 years after the debarment period, NSF require certifications and assurances and
submission of a detailed data management plan, and bar her from participating as a peer reviewer, advisor,
or consultant for NSF.

GRADUATE STUDENT FALSIFIED DATA IN PAPERS AND DISSERTATION
A former graduate student falsified data in a research project supported by NSF. A university investigation into these
allegations concluded the graduate student intentionally falsified data and, thus, committed research misconduct.
The falsified data was contained in his dissertation as well as in two published research articles. The university
notified the articles’ co-authors of its finding and requested the journal retract them; it directed the former graduate
student’s advisor (PI on the NSF grant) to immediately change several laboratory practices to include ensuring
original data are retained. Based on the recommendation of the investigation committee, the university rescinded
the student’s Ph.D. degree.
We concurred with the university and concluded the former graduate student committed research misconduct.
We recommended NSF debar him for 1 year. We further recommended that, for 2 years after the debarment period,
NSF require him to provide certifications and assurances and bar him from serving as a peer reviewer, advisor,
or consultant.

ASSISTANT PROFESSOR SUBMITS PROPOSAL CONTAINING PLAGIARISM
An assistant professor submitted a proposal to NSF containing copied material in its background and motivation
section and its proposed research section. The assistant professor stated that he was unaware that proposals needed
to be held to the same citation standards as publications, and that one of his students had prepared the background
section. We referred the investigation to his university.
The university’s investigation concluded that the assistant professor committed plagiarism. It further found a pattern
of plagiarism in other NSF proposals, in a proposal submitted to another Federal agency, and in one conference
paper. It determined that, although the assistant professor asked his student to prepare a literature review, the
student did not know the purpose of the review and was not told that the assistant professor would use his text
verbatim. The university required the assistant professor to take online RCR training and, for 4 years, submit all
proposals to plagiarism detection software and provide evidence of this review to a university official before any
proposal submission.
We reviewed the university’s report and determined that we needed to clarify the assessment of intent. Our review
of intent concluded that the assistant professor had an awareness or understanding that he was including verbatim
material into the proposal, thereby acting with knowing intent. We recommended that NSF require the assistant
professor to submit certifications and assurances for 2 years.




                                                                                NATIONAL SCIENCE FOUNDATION | NSF.GOV/OIG   12
     ASSISTANT PROFESSOR INFORMS US OF ADDITIONAL PLAGIARISM
     An assistant professor submitted an NSF proposal containing copied material in its plan of work section describing
     nonstandard experimental procedures. During our inquiry, the assistant professor told us he did not know when
     to properly use quotation marks and acknowledged he failed to reference one of the sources we identified. He also
     informed us that the proposal contained additional copied text from other sources and that his two other NSF
     proposals also contained copied text. We referred the investigation to the assistant professor’s university.
     The university’s investigation concluded that the assistant professor intentionally committed plagiarism, which
     it deemed a significant departure from accepted practices. It further found a pattern of plagiarism in two other
     proposals submitted to another Federal agency. The university required the assistant professor to complete RCR
     training, be mentored by a senior faculty member, and have all proposal submissions reviewed for 3 years. It also
     required all his students to complete RCR training.
     Our investigation concluded that the assistant professor committed the plagiarism knowingly. We found that he
     had an awareness or understanding of his actions but did not act with a motive to achieve a specific illicit purpose
     through the misconduct. We recommended that NSF require the assistant professor submit certifications and
     assurances for 1 year.

     ACTIONS BY NSF MANAGEMENT ON PREVIOUSLY REPORTED RESEARCH
     MISCONDUCT INVESTIGATIONS
     NSF has taken administrative action to address our recommendations on eight research misconduct cases
     reported in previous Semiannual Reports. In each case, NSF made a finding of research misconduct, issued a letter
     of reprimand, and required RCR training. NSF also took additional significant actions in response to
     our recommendations:
            •	 In the case of a graduate student who falsified data,10 NSF found the graduate student committed research
               misconduct and debarred her for 5 years.
            •	 In the case of a university associate professor who falsified data and fabricated results in a published
               manuscript,11 NSF proposed a 5-year debarment followed by 5 years of certifications, assurances, and the
               submission of detailed data management plans with annual certifications of adherence. NSF also proposed
               barring the associate professor from serving as an NSF reviewer, advisor, or consultant for 5 years.
            •	 In the case of a doctoral student who fabricated data in an NSF-funded project that was published in a
               journal article,12 NSF debarred the student for 3 years and required certifications and assurances for 6 years.
            •	 In the case of an assistant professor who submitted nine proposals containing both plagiarized text and ideas
               already published by other researchers,13 NSF required 4 years of certifications and assurances, and imposed a
               2-year ban on service as a reviewer, advisor, or consultant for NSF. NSF also proposed a 2-year debarment.
            •	 In the case of a graduate student who fabricated data in multiple publications,14 NSF imposed a 1-year
               debarment and directed the student to provide certifications and assurances for 2 years.
            •	 In the case of a full professor whose awarded proposal was determined to have plagiarized text,15 NSF
               allowed the suspended award to expire without extension, resulting in more than $80,000 of Federal
               Government funds put to better use.




      10	   September 2015 Semiannual Report, p. 29
      11	   September 2016 Semiannual Report, p. 21
      12	   March 2016 Semiannual Report, p. 26
      13	   September 2016 Semiannual Report, p. 22
      14	   September 2015 Semiannual Report, p. 30
      15	   March 2016 Semiannual Report, p. 30 and
            September 2016 Semiannual Report, p. 24



13          SEMIANNUAL REPORT TO CONGRESS
   •	 In the case of a PI who submitted an NSF proposal in which three of five pages in the literature review
      contained copied text,16 NSF required the PI to submit certifications documenting his full compliance
      with the university-imposed actions, which require the PI to participate in a supervisory meeting to discuss
      the seriousness of his actions, identify steps to prevent future occurrences, take training about plagiarism
      prevention, and submit all grant proposals to a university official for review for 2 years.
   •	 In the case of an assistant professor who recklessly plagiarized,17 NSF imposed 1 year of certifications and
      assurances and a 1-year ban on serving as a reviewer, advisor, or consultant for NSF.




16	 March 2016 Semiannual Report, p. 27
17	 March 2016 Semiannual Report, p. 28



                                                                              NATIONAL SCIENCE FOUNDATION | NSF.GOV/OIG   14
     CONGRESSIONAL TESTIMONY

     The Inspector General testified before Congress twice this reporting period.


     A LOOK AHEAD: INSPECTOR GENERAL RECOMMENDATIONS FOR
     IMPROVING FEDERAL AGENCIES
     On February 8, 2017, the Inspector General testified before the U.S. Senate Committee on Commerce, Science, and
     Transportation at a hearing titled, “A Look Ahead: Inspector General Recommendations for Improving
     Federal Agencies.”
     The Inspector General’s testimony focused on four of NSF’s most pressing challenges for FY 2017: management of
     cooperative agreements for large facility research projects, management of the IPA program, management of the
     USAP, and improving grant administration. The testimony also briefly discussed risks associated with NSF’s move to
     its new building, which is scheduled to begin toward the end of this fiscal year.
     The Inspector General also highlighted NSF and OIG efforts to strengthen accountability. A key contribution to
     the progress to date has been made by the Stewardship Collaborative, a group which was established by NSF and
     OIG in 2010 as a collective effort by both offices to help achieve the shared mission of proper stewardship of the
     taxpayer’s investment in science, engineering, and education. Along with increasing positive communication, the
     Collaborative has been instrumental in resolving a number of critical audit recommendations.


     NATIONAL SCIENCE FOUNDATION PART 1: OVERVIEW AND OVERSIGHT
     On March 9, 2017, the Inspector General testified before the U.S. House of Representatives Committee on
     Science, Space, and Technology, Subcommittee on Research and Technology at a hearing titled, “National Science
     Foundation Part 1: Overview and Oversight.”
     The Inspector General’s testimony focused on three of NSF’s continuing accountability challenges and the
     Foundation’s progress toward addressing associated OIG recommendations:
         •	 Establishing accountability over large cooperative agreements;
         •	 Management of the IPA program; and
         •	 Ensuring the ethical conduct of research.

     ESTABLISHING ACCOUNTABILITY OVER LARGE COOPERATIVE AGREEMENTS
     Since 2010, OIG has issued 28 reports containing more than 80 recommendations to improve NSF’s use and
     management of cooperative agreements for the construction and operation of its high-dollar, high-risk research
     facilities. As a result of these reports, NSF has developed new policies and procedures to strengthen its monitoring
     of such facilities. OIG and NSF management continue to work together to resolve these recommendations.




15      SEMIANNUAL REPORT TO CONGRESS
MANAGEMENT OF THE IPA PROGRAM
In response to our recommendations related to the costs of IPAs, NSF no longer reimburses IPAs for lost consulting
income. NSF also formed a steering committee in April 2016 to explore opportunities to reduce IPA costs and
indicated that it will pilot a required 10 percent cost sharing of IPAs’ academic-year salary and fringe benefits in FY
2017. On March 3, 2017, the NSF Director issued a memorandum stressing how important it is for all employees
and rotators to uphold the highest ethical standards.
Moving forward, we will continue to monitor NSF’s actions in response to our IPA-related recommendations. We
will also examine NSF’s actions in response to the AICA, which required the Foundation to report on its efforts to
cut costs associated with employing IPAs.

ENSURING THE ETHICAL CONDUCT OF RESEARCH
NSF and OIG recently developed a new system to track the Foundation’s response to our recommendations related
to our research misconduct investigations. This system provides increased transparency and helps both NSF and
OIG track the status of the recommendations.
We also perform outreach to universities and others in the research community to provide training. In addition, our
website contains links to all research misconduct case close-outs, which illustrate the fact patterns from our cases
that can be used for training. We will continue our investigative and outreach efforts in this area.




                                                                               NATIONAL SCIENCE FOUNDATION | NSF.GOV/OIG   16
     STATISTICAL DATA
     AUDIT DATA
                          AUDIT REPORTS ISSUED WITH RECOMMENDATIONS FOR BETTER USE OF FUNDS

                                                                                                              Dollar Value


                                                                                                              $11,714,680
      A.         For which no management decision has been made by the commencement of the reporting period


      B.         Recommendations that were issued during the reporting period                                 $315,016


      C.         Adjustments related to prior recommendations                                                 $0


      Subtotal of A+B+C                                                                                       $12,029,696


      D.         For which a management decision was made during the reporting period                         $0


                 i: Dollar value of management decisions that were consistent with OIG recommendations        $0


                 ii: Dollar value of recommendations that were not agreed to by management                    $0


      E.         For which no management decision had been made by the end of the reporting period            $12,029,696


      For which no management decision was made within 6 months of issuance                                   $11,714,680




17     SEMIANNUAL REPORT TO CONGRESS
                                                  AUDIT REPORTS ISSUED WITH QUESTIONED COSTS

                                                                                               Number                                                     Unsupported
                                                                                                                     Questioned Costs
                                                                                               of Reports                                                 Costs

                              For which no management decision has been made
A.                                                                                             20                    $17,415,970                          $3,050,180
                              by the commencement of the reporting period

B.                            That were issued during the reporting period                     6                     $2,955,846                           $0


C.                            Adjustment related to prior recommendations                      10                    - $3,240,45118                       - $779,44419


Subtotal of A+B+C                                                                              36                    $17,131,365                         $2,270,736

                              For which a management decision was made during
D.                                                                                             7                     $5,591,856                           $1,890,325
                              the reporting period

                              i: Dollar value of disallowed costs                              N/A                    $912,074                            N/A

                                                                                                                                                          N/A
                              ii: Dollar value of costs not disallowed                         N/A                    $4,679,782

                              For which no management decision had been made
E.                                                                                             11                    $11,539,509                          $380,411
                              by the end of the reporting period

For which no management decision was made within 6 months of issuance                          5                     $8,583,663                           $380,411



      18	 A total of $3,240,451 questioned costs in 10 reports were removed from this audit table. Seven of the reports were single audits. As of 10/1/16, the responsibility
          for reviewing single audits was transferred from OIG to NSF. Thus, as shown below, the seven single audit reports with questioned costs for which no
          management decision had been made by the commencement of the reporting period were removed from this table:


                                                   REPORT NO.                                QUESTIONED COSTS REMOVED

                                  15-5-094                                                $15,846

                                  16-4-052                                                $962,298

                                  16-4-059                                                $328

                                  16-5-009                                                $137,687

                                  16-5-024                                                $5,745

                                  16-5-032                                                $1,196

                                  16-5-081                                                $37,419

                                  Single Audits Total                                     $1,160,519

     	   For the other three reports:
          •	    $625,701 questioned costs were removed from Report No. 13-1-002 as those costs were analyzed elsewhere in OIG.
          •	    All $76,905 questioned costs were removed from Report No. 16-6-006 because the awardee adjusted its indirect costs in the subsequent fiscal year
                based on its final rates.
          •	    $1,377,326 questioned costs were removed from Report No. 16-6-007 because that awardee also adjusted its indirect costs in the subsequent fiscal year
                based on its final rates.
                (1,160,519 + 625,701 + 76,905 + 1,377,326 = 3,240,451)



     19	 Associated with the adjustments in the footnote above, unsupported costs of $15,846 for Report No. 15-5-094, $137,687 for Report No. 16-5-009, $210 for
         Report No. 16-5-081, and $625,701 for Report No. 13-1-002 were also removed from this table. (15,846 + 137,687 + 210 + 625,701 =779,444)




                                                                                                                     NATIONAL SCIENCE FOUNDATION | NSF.GOV/OIG                  18
                    STATUS OF RECOMMENDATIONS THAT INVOLVE INTERNAL NSF MANAGEMENT OPERATIONS

     Open Recommendations (as of 09/30/2016)

      Recommendations Open at the Beginning of the Reporting Period                          146

      New Recommendations Made During Reporting Period                                       24

      Total Recommendations to be Addressed                                                  170

     Management Resolution of Recommendations20

      Awaiting Resolution                                                                    5

      Resolved Consistent with OIG Recommendations                                           148

     Management Decision That No Action is Required

     Final Action on OIG Recommendations21

      Final Action Completed                                                                 128

     Recommendations Open at End of Period (03/31/2017)                                      42




                                                          AGING OF OPEN RECOMMENDATIONS
     Awaiting Management Resolution

     0 through 6 months                                                                      2

     More than 6 months through 12 months                                                    1

     More than 12 months                                                                     2

     Awaiting Final Action After Resolution

     0 through 6 months                                                                      17

     More than 6 months through 12 months                                                    11

     More than 12 months                                                                     9




     20	 “Management Resolution” occurs when OIG and NSF management agree on the corrective action plan that will be implemented in response to the
         audit recommendation.
     21	 “Final Action” occurs when management has completed all actions it agreed to in the corrective action plan.



19     SEMIANNUAL REPORT TO CONGRESS
LIST OF REPORTS
                                                       OIG AND CPA-PERFORMED REVIEWS22

                                                                                                                            Better Use
 Report Number          Subject                                           Questioned Costs       Unsupported Costs
                                                                                                                            of Funds


 17-1-001               Pennsylvania State University                     $135,695               $0                         $0


 17-1-002               University of California – Davis                  $2,330,503             $0                         $0


 17-1-003               Purdue University                                 $91,281                $0                         $0


 17-1-004               Audit of R/V Oceanus Operations Award             $3,050                 $0                         $315,016


                        Scripps Institution of Oceanography, University
 17-1-005                                                                 $111,516               $0                         $0
                        of California, San Diego


 17-1-006               University of California, San Diego               $283,801               $0                         $0


 17-2-001               FY 2016 Financial Statement Audit                 $0                     $0                         $0


 17-2-003               FY 2016 FISMA Metrics Report                      $0                     $0                         $0


 17-2-004               FY 2016 FISMA Independent Evaluation              $0                     $0                         $0


 17-2-005               FY 2016 Financial Statement Management Letter     $0                     $0                         $0


 17-2-007               Audit of NSF’s Conference Spending                $0                     $0                         $0


 17-3-001               DATA Act Readiness Review                         $0                     $0                         $0


 17-3-002               NSF Relocation: Part 3 Schedule                   $0                     $0                         $0

  Total:                                                                  $2,955,846             $0                         $315,016




  22	 The Office issued 13 reports this semiannual period.



                                                                                             NATIONAL SCIENCE FOUNDATION | NSF.GOV/OIG   20
     SUMMARY TABLE
                                                 REPORTS ISSUED ON OR BEFORE 9/30/1623 WITH
                                                UNIMPLEMENTED RECOMMENDATIONS AS OF 3/31/17
                                                                                                                 Dollar Value of
                      Number of Reports with Unimplemented              Number of Unimplemented
     Year                                                                                                        Aggregate Potential
                      Recommendations                                   Recommendations
                                                                                                                 Cost Savings24

     2006             1                                                  2                                        N/A

     2007             2                                                  2                                        N/A

     2009             1                                                  4                                        $92,667

     2012             1                                                  2                                        N/A

     2013             2                                                  8                                        $266,893

     2014             2                                                  3                                        $11,714,68025

     2015             5                                                  67                                       $3,870,316

     2016             13                                                 97                                       $5,241,012

     Total            27                                                175                                      $21,185,568




         23	 NSF has commented on all reports within 60 days of receipt.
         24	 Aggregate potential savings are questioned costs if the recommendations have not been resolved, and sustained costs if the recommendations have
             been resolved.
         25	 The $11,714,680 (for Report No. 14-1-005) is funds put to better use (potential cost savings), not questioned costs (potential costs that could be
             returned to the government).



21     SEMIANNUAL REPORT TO CONGRESS
DETAILED TABLE26

 REPORTS ISSUED ON OR BEFORE 9/30/16, FOR WHICH NO MANAGEMENT DECISION HAS BEEN MADE BY 3/31/17,
           INCLUDING THE AGGREGATE POTENTIAL COST SAVINGS OF THOSE RECOMMENDATIONS


Report No.        Issue Date       Title                    Summary                  No. of Recs.      Why Mgmt. Decision         Desired         Aggregate
                                                                                     w/o Mgmt.         Has Not Been Made          Timetable for a Potential Cost
                                                                                     Decision                                     Mgmt. Decision Savings



                                    Independent
                                    Audit of
                                    Association                                                        NSF is awaiting
                                    of Universities         Audit of                                   results of an AURA
                                    for Research            re-baselined                               audit, due 9/30/17,
14-1-005          9/30/14           in Astronomy            proposal for             1                 and will decide            After 9/30/17        $11,714,68027
                                    (AURA) Cost Book        ATST/ DKIST                                then whether an
                                    Evaluation for          telescope                                  estimating system
                                    the Rebaselined                                                    audit is needed.
                                    ATST/DKIST
                                    Project

                                    Alert Memo: NSF’s
                                                                                                       NSF is awaiting
                                    Management of
                                                            Assessed the                               results of an AURA
                                    Costs Proposed
                                                            reasonableness                             audit, due 9/30/17,
                                    for the Large
14-3-002          9/30/14                                   and integrity of         1                 and will decide            After 9/30/17        N/A
                                    Synoptic Survey
                                                            proposed LSST                              then whether an
                                    Telescope
                                                            costs                                      estimating system
                                    Construction
                                                                                                       audit is needed.
                                    Project

                                                                                                       Loss of 25% of
                                    University of           Incurred cost
15-1-012          3/31/15                                                            13                resolution staff from      5/31/17              $1,863,351
                                    California Berkeley     audit
                                                                                                       FY 15 to the present.

                                    University of                                                      Loss of 25% of
                                                            Incurred cost
15-1-014          3/31/15           Wisconsin at                                     18                resolution staff from      6/15/17              $1,669,588
                                                            audit
                                    Madison                                                            FY 15 to the present.

                                                                                                       Loss of 25% of
                                    Stanford                Incurred cost
15-1-020          9/30/15                                                            15                resolution staff from      4/30/17              $337,377
                                    University              audit
                                                                                                       FY 15 to the present.


                                                                                                       Loss of 25% of
                                    University of           Incurred cost
16-1-004          2/11/16                                                            14                resolution staff from      7/31/17              $2,003,109
                                    Washington              audit
                                                                                                       FY 15 to the present.


                                    Performance
                                    Audit of
                                    Management Fees         Audit to evaluate                          NSF provided a
                                    at Association          how AURA                                   proposed resolution
16-1-019          8/10/16                                                            5                                            5/31/17              N/A
                                    of Universities         tracked and spent                          3/31/17, and OIG is
                                    for Research            management fees                            reviewing it.
                                    in Astronomy
                                    (AURA)




26	 This Detailed Table shows only recommendations that are unimplemented because they are unresolved, either because NSF has not provided corrective
    action plans, or NSF and OIG have not agreed on the adequacy of the proposed corrective actions. The prior Summary Table includes additional
    reports/recommendations because it includes the reports with unresolved recommendations shown in this table, plus reports with resolved recommendations
    that have not yet been implemented.
27	 The $11,714,680 represents funds put to better use (potential cost savings), not questioned costs (potential costs that could be returned to the government).



                                                                                                               NATIONAL SCIENCE FOUNDATION | NSF.GOV/OIG               22
      REPORTS ISSUED ON OR BEFORE 9/30/16, FOR WHICH NO MANAGEMENT DECISION HAS BEEN MADE BY 3/31/17,
                INCLUDING THE AGGREGATE POTENTIAL COST SAVINGS OF THOSE RECOMMENDATIONS

     Report No.        Issue Date       Title                    Summary                 No. of Recs.      Why Mgmt. Decision         Desired         Aggregate
                                                                                         w/o Mgmt.         Has Not Been Made          Timetable for a Potential Cost
                                                                                         Decision                                     Mgmt. Decision Savings



                                         Performance
                                         Audit of
                                                                 Audit to evaluate                          NSF provided a
                                         Management
                                                                 how NEON                                   proposed resolution
     16-1-020          6/16/16           Fees at National                                 5                                            4/5/1728           N/A
                                                                 tracked and spent                          3/31/17, and OIG is
                                         Ecological
                                                                 management fees                            reviewing it.
                                         Observatory
                                         Network (NEON)

                                                                                                            Awardee disagreed
                                                                                                            with proposed
                                                                                                            management
                                         University of           Incurred cost
     16-1-023          9/29/16                                                            24                decision, and              5/31/17            $2,710,238
                                         Michigan                audit
                                                                                                            additional
                                                                                                            discussion was
                                                                                                            needed.

                                         NSF’s Oversight
                                         of the Large            Assessed
                                                                                                            Issue complexity —
                                         Synoptic Survey         potential cost and
     16-3-001          12/10/15                                                           1                 awardee’s unfunded         9/30/17            N/A
                                         Telescope               schedule risks to
                                                                                                            liabilities.
                                         Construction            the project
                                         Project


                                         NSF’s Negotiation,                                                 NSF did not agree
                                                                 Audit of NSF’s
                                         Award and                                                          that fees should be
                                                                 management-
                                         Management of                                                      based on need for
     16-6-008          6/16/16                                   fees’ processes,         1                                            5/31/17            N/A
                                         Management Fees                                                    financial viability.
                                                                 and of fees’ use at
                                         Awarded to AURA                                                    Discussions with
                                                                 AURA and NEON
                                         and NEON                                                           OIG will continue.

      Total: 11                                                                               98                                                          $20,298,343




     28	 The five open recommendations for Report No. 16-1-020 were resolved and closed 4/5/17, just after the end of this semiannual period (3/31/17).


23     SEMIANNUAL REPORT TO CONGRESS
INVESTIGATIONS DATA
OCTOBER 1, 2016 – MARCH 31, 2017

                                                              INVESTIGATIVE ACTIVITIES

 Referrals29 to Department of Justice Criminal Prosecutors                            4


 Referrals to Criminal State/Local Authorities                                        0


 Indictments/Criminal Information                                                     0


 Arrests                                                                              0


 Criminal Convictions/Pleas                                                           1




 Referrals to Department of Justice Civil Prosecutors                                 4


 Referrals to Civil State/Local Authorities                                           0


 Civil Settlements/Judgements/Compliance Plans                                        2




 Investigative Reports Issued to NSF Management for Action30                          12


 Research Misconduct Findings Issued by NSF                                           6


 Government-wide Suspensions/Debarments/Voluntary Exclusions                          6


 Administrative Actions taken by NSF31                                                22




 Total Investigative Recoveries32                                                     $2,540,529.14




 Substantiated Whistleblower Retaliation                                              0


 Substantiated Agency Interference                                                    0




29	 We count referrals of individuals and entities separately.
30	 We count only Investigative Reports issued to NSF that include recommendations for administrative action
     (e.g. findings of Research Misconduct, imposition of Government-wide Suspension or Debarment, or suspension/
    terminations of awards).
31	 This includes sanctions related to findings of Research Misconduct and suspension/termination of awards.
32	 This includes funds returned to NSF, restitution, fees, and funds put to better use.



                                                                                                           NATIONAL SCIENCE FOUNDATION | NSF.GOV/OIG   24
                                                                  CASE STATISTICS

                                                       Preliminary                                        Investigations

     Cases Active at Beginning of Period                2                                                  235


     Cases Opened this Period                           6                                                  44


     Cases Closed this Period                           6                                                  61


     Cases Active at End of Period                      2                                                  218




                                     FREEDOM OF INFORMATION ACT AND PRIVACY ACT REQUESTS

     Our office responds to requests for information contained in our files under the Freedom of Information Act (“FOIA,” 5 U.S.C. § 552) and the
     Privacy Act of 1974 (5 U.S.C. § 552a). During this reporting period:


     Requests Received                                                            25


     Requests Processed                                                           26


     Appeals Received                                                             2


     Appeals Denied                                                               1


     Response times ranged between 1 day and 32 days, with the median around 14 days and the average around 14 days.




25    SEMIANNUAL REPORT TO CONGRESS
RESEARCH MISCONDUCT (RM) STATISTICS FOR FY 2005 THROUGH
FY 2016 AND THE FIRST HALF OF FY 2017

                                                           ALLEGATIONS AND INVESTIGATIONS

                                             RM Allegations Received33                                                  RM Investigations Opened34
 FY
                    P                   Fab                 Fal                 Total35             P                   Fab                 Fal             Total36


  2005               86                  11                  3                    100                 66                  3                   2              71


  2006               67                  8                   7                    82                  48                  3                   5              56


  2007               90                  8                   6                    104                 67                  6                   0              73


  2008               132                 7                   10                   149                 99                  5                   6              110


  2009               108                 0                   11                   119                 83                  0                   10             93


  2010               90                  4                   10                   104                 70                  3                   3              76


  2011               85                  17                  15                   117                 58                  15                  8              81


  2012               96                  9                   8                    113                 80                  7                   5              92


  2013               84                  10                  11                   105                 80                  8                   10             98


  2014               37                  7                   5                    49                  35                  7                   5              47


  2015               64                  9                   11                   84                  64                  9                   11             84


  2016               35                  10                  11                   56                  24                  6                   9              39


  1st half
                     24                  2                   1                    27                  21                  2                   1              24
  2017


  Totals             998                 102                 109                  1209                795                 74                  75             944



These tables only provide information about allegations that come to our office’s attention and cases we open.
Accordingly, they do not reflect the total universe of research misconduct related to NSF proposals or awards,
only a subset.




 33	 Key to allegations: P = Plagiarism; Fab = Fabrication; Fal = Falsification. Allegations were made against both funded and declined NSF proposals, or products that
     stemmed from NSF awards.
 34	 We define an investigation as any case in which investigative activity occurred, including case activity defined as “Inquiry” in the RM regulation.
 35	 Over the reporting period FYs 05–16, we used 3 different methods of capturing allegation data. The periods were: FY05 through FY12; then FY13, when we were
     granted Statutory Law Enforcement authority, through FY15; and finally, FY16 onward, when we switched to a new Investigative case management system. For
     this reason, one cannot make a meaningful comparison or identify trends related to allegations across the entire reporting period. A further limitation on the
     ability to identify such trends arises from the fact that we ran several proactive assessments looking for plagiarism over the years encompassed in the tables,
     which inflated the number of plagiarism allegations we had in some years. We ran the last such proactive in 2013, but allegations resulting from it were still being
     identified in 2014.
 36	 There are a small number of allegations involving RM, which result in Criminal or Civil investigations. We have not included those allegations in this report.



                                                                                                                   NATIONAL SCIENCE FOUNDATION | NSF.GOV/OIG                26
                                                                      INVESTIGATIVE OUTCOMES37

                                                                                 Total RM Findings


                                                                                                                                Included
      FY38                   P                                   Fab/Fal                         Multi39                Total
                                                                                                                                Debarment40


      2005                   4                                   3                               1                      8       2


      2006                   5                                   1                               0                      6       1


      2007                   11                                  1                               0                      12      5


      2008                   9                                   3                               0                      12      5


      2009                   16                                  0                               1                      17      5


      2010                   9                                   2                               0                      11      2


      2011                   14                                  3                               0                      17      5


      2012                   18                                  0                               0                      18      2


      2013                   13                                  3                               0                      16      6


      2014                   19                                  7                               0                      26      7


      2015                   9                                   2                               0                      11      6


      2016                   11                                  4                               0                      15      3


      1st half 2017          3                                   3                               0                      6       0


      Totals                 141                                 32                              2                      175     49




     37	 The outcomes reported in this table cannot be linked to the allegations and investigations by FY, due to
         the varying amount of time it takes to investigate and adjudicate allegations of RM.
     38	 These data reflect RM findings by NSF in the fiscal year of the finding.
     39	 “Multi” indicates that an allegation of plagiarism and either fabrication or falsification was substantiated
         in our investigation. NSF makes a single finding of RM, even if we refer multiple allegations to NSF.
     40 	The debarment action taken by NSF typically lags NSF’s RM finding (debarment is a multi-step process
         with a separate appeal), but in this display we link the debarment data to the date of the RM finding.



27      SEMIANNUAL REPORT TO CONGRESS
National Science
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              SCIENCE     FOUNDATION           Office OF
                                              OFFICE  of Inspector
                                                          INSPECTORGeneral
                                                                     GENERAL
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                                      22230    AnonymousHOTLINE:
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