About The National Science Foundation...
The National Science Foundation (NSF) is charged with supporting and strengthening all
research disciplines, and providing leadership across the broad and expanding frontiers of
science and engineering knowledge. It is governed by the National Science Board which
sets agency policies and provides oversight of its activities.
NSF invests approximately $7 billion per year in a portfolio of more than 49,400 research
and education projects in science and engineering, and is responsible for the establishment
of an information base for science and engineering appropriate for development of national
and international policy. Over time other responsibilities have been added including
fostering and supporting the development and use of computers and other scientific
methods and technologies; providing Antarctic research, facilities and logistic support; and
addressing issues of equal opportunity in science and engineering.
And 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 the NSF or by individuals that recieve NSF funding; and identifies and helps to
resolve cases of misconduct in science. The OIG was established in 1989, in compliance
with the Inspector General Act of 1978, as amended. Because the Inspector General
reports directly to the National Science Board and Congress, the Office is organizationally
independent from the agency.
About the Cover...
Front Cover: Original photograph by Kenneth Busch, Investigative Scientist.
Table of Contents
From the Inspector General................................................................... 3
Audits and Reviews................................................................................ 7
Audits of Proposed Costs for Telescope Construction.......................................7
Audits of NSF Awards.............................................................................................9
Inspection of NSF’s Relocation to New Headquarters Building.......................12
A-133 Audits...........................................................................................................13
Audit Resolution....................................................................................................15
Investigations....................................................................................... 17
Administrative Investigations...............................................................................17
Civil and Criminal Investigations.........................................................................19
Research Misconduct Investigations..................................................................25
Congressional Testimony.................................................................... 33
FY 2015 Top OIG Management Challenges........................................ 35
Statistical Data...................................................................................... 47
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From the Inspector General
This Semiannual Report to Congress highlights the activities of the
National Science Foundation (NSF), Office of Inspector General for the
six-month period ending September 30, 2014. During this reporting
period, nine audit reports and reviews were issued, four of which
questioned $4.2 million, and one of which found more than $11 million
of unallowable costs in a proposal for a major construction project.
Our investigative staff closed 80 administrative and criminal/civil
investigations, had eight research misconduct cases result in findings by
NSF, and recovered $1,133,085 for the government.
The audits, investigations, and other work in this report reflect our
attention to areas that present the greatest risk to the millions of dollars
in federal funds intended to support scientific research, that are managed
by NSF. To that end, for the past four years we have made numerous
recommendations for NSF to strengthen accountability over its high-risk,
high-dollar, cooperative agreements.
During the past six months, an audit of the $344 million proposed
construction budget for the Daniel K. Inouye Solar Telescope resulted
in a disclaimer of opinion due to significant deficiencies in the proposal,
including unsupported estimates, outdated vendor quotes, and the
inclusion of amounts for an unallowable contingency reserve. Because
the proposed costs could not be affirmed as an acceptable basis for a
fair and reasonable price, NSF can have no assurance that the
proposal is an acceptable basis for funding. Further, the inadequacy of
this cost estimate directly impacts the recipient’s ability to properly
monitor and manage federal funds.
Our alert memo on the $467.7 million proposed construction cost
for the Large Synoptic Survey Telescope raised concerns that NSF
lacked sufficient information to establish a reasonable basis for the
project’s cost. NSF’s internal review of the cost of this project could not
independently verify costs for any of the 136 proposed expenditures
sampled, including approximately $145 million in direct materials, nearly
$20 million for contingencies and more than $6 million in direct labor
costs.
Our investigative work continues to result in monetary recoveries for the
government and in recommendations to safeguard the integrity of NSF
operations. For example, during this period a company that filed false
financial reports and a PI who used NSF award funds for personal use
returned more than $145,000 to the government. In another case, NSF
withheld a $75,000 payment under the small business innovation program due to false
statements and claims, and withheld a $74,000 payment under that program when the
company could not accurately account for NSF funds.
Finally, our research misconduct investigations findings included a PI who fabricated
and falsified research results, an assistant professor who submitted three NSF
proposals containing extensive plagiarism, and a PI who plagiarized text and figures.
NSF applies its highest level of attention and scrutiny to determine the scientific merit
of the projects it decides to fund. It is imperative that NSF apply the same rigorous
attention and scrutiny to its financial management of its programs and operations.
Public trust and confidence demand the highest level of accountability, and we look
forward to working with NSF management, the National Science Board, and Congress
toward this goal.
Report Highlights
• An effort to audit the cost proposal for construction of the
Daniel K. Inouye Solar Telescope resulted in a disclaimer
of opinion due to significant deficiencies in the proposal,
including unsupported estimates, outdated vendor
quotes, and the inclusion of amounts for an unallowable
contingency reserve. After over four years of attempting
to audit proposed costs for construction of this telescope,
there continues to be a lack of adequate documentation to
determine if the proposed costs are fair and reasonable.
• Our alert memo expressed strong concern that NSF did
not have sufficient information to establish a reasonable
basis for the cost of the Large Synoptic Survey Telescope
project. We have been urging NSF for the past four years
to strengthen accountability of its high-dollar, high-risk
cooperative agreements for its large facility construction
projects. NSF applies its highest level of attention and
scrutiny to determine the scientific merit of the projects it
decides to fund. It is imperative that NSF apply the same
rigorous attention and scrutiny to its financial management
of these projects.
• A rotator, working at NSF as a program officer under the
Intergovernmental Personnel Act had conflicts of interests
with proposals she handled and issues with COI training
and timely filing of her financial disclosure. NSF’s Office
of General Counsel recommended that NSF terminate
the rotator’s assignment and that someone outside of the
rotator’s division review her award recommendations. The
rotator’s supervisor, who was not outside her division,
was charged with having that review conducted. The
supervisor and his staff wrote a memo to directorate
management falsely stating that the program officer
who reviewed the awards had not found any bias. The
supervisor sent this memo before he received the program
officer’s assessment. The supervisor first lied to NSF
management and then lied to OIG investigators. Finally,
the supervisor failed to follow up on concerns raised by
the program officer’s review; continued to misrepresent
that the rotator had no COIs; and urged the Office of
General Counsel not to terminate the rotator’s IPA
assignment.
5
Report Highlights
• Two Florida scientists were indicted for wire fraud, conspiracy to
commit wire fraud, aggravated identity theft, and falsification of
records in a federal investigation. They created two companies as
part of a scheme to fraudulently obtain approximately $10,000,000
in Small Business Innovation Research awards from NSF and other
government agencies.
• A PI at a California university fabricated and falsified results that were
included in an awarded NSF proposal, a published article, a declined
NSF proposal, and a submitted manuscript. We recommended that
NSF debar him for five years.
6
Audits & Reviews
Significant Deficiencies in $344 Million Cost Proposal for
Telescope Construction
An effort to audit the cost proposal for construction of the
Daniel K. Inouye Solar Telescope resulted in a disclaimer
of opinion due to significant deficiencies in the proposal,
including unsupported estimates, outdated vendor quotes,
and the inclusion of amounts for an unallowable contingency
reserve. The auditors stated, “In summary, AURA did not
support the material cost in their proposal using adequate
cost or pricing data, they did not use actual costs in the
rebaseline of the proposal when actual costs do exist, and
they included costs that were explicitly unallowable per the
OMB circular regulations.”
For FY 2010 through 2013, the report noted a total
overstated difference of nearly $8.8 million, not including an
additional $2.9 million in contingency costs, between AURA’s
rebaselined proposal amount and its A-133 audit report of
actual incurred costs. This was despite AURA telling the
auditors during the entrance conference that actual costs
were included in the rebaselined proposal. However, when
the auditors asked AURA to explain the differences found
during the audit, an AURA official stated that the numbers in
the cost book were budgeted amounts that did not include
actual expenses.
For four years, similar deficiencies have been documented in
audits of AURA (the entity submitting the proposal to build the
DKIST). This report confirms that AURA has not corrected
these deficiencies or improved its proposal estimating
practices. Because the proposed costs could not be affirmed
as an acceptable basis for a fair and reasonable price, NSF
can have no assurance that the proposal is an acceptable
basis for funding. Further, the inadequacy of this cost
estimate directly impacts the recipient’s ability to properly
monitor and manage federal funds.
After over four years of attempting to audit AURA’s proposed
costs for construction of this telescope, there continues to be
a lack of adequate documentation to determine if the costs
are fair and reasonable. Also, in one significant instance
(proposed contingency), the auditors state that NSF’s Large
Facility Manual conflicts with federal requirements. The
7
Audits & Reviews
repeated estimating deficiencies demonstrate lack of improvement on
the part of both AURA and NSF to exercise proper stewardship over the
millions of dollars awarded for this project and heighten our concerns
about unsupported costs being proposed and included in high-dollar,
high-risk awards.
In view of AURA’s estimating system and incurred cost deficiencies
found in this audit and the more than $344 million of taxpayer dollars at
risk, we recommended that NSF take appropriate action to ensure that
the deficiencies are fully addressed and corrected before funding any
additional amounts for the DKIST project or finalizing the project costs.
Insufficient Information about Proposed Costs for $467 Million
Large Synoptic Survey Telescope
The Large Synoptic Survey Telescope (LSST) project was the first
construction project NSF considered since we issued an alert memo
on the agency’s management of its high-risk, high-dollar cooperative
agreements in 2012. In that memo, among other things, we
recommended that NSF obtain proposal and accounting systems audits
to ensure that cost estimates for such projects were fair and reasonable
and that proposers’ accounting systems were adequate to bill the
government properly.
We found that NSF’s initial internal review of the cost of the LSST
project could not independently verify costs for any of the 136 proposed
expenditures sampled, including approximately $145 million in direct
materials, nearly $20 million for contingencies, and more than $6 million
in direct labor costs.
After this critical report, independent proposal and accounting system
audits were clearly warranted to ensure the adequacy and proper
accounting of the proposed costs. Instead of obtaining those audits,
NSF had a contractor perform a “sufficiency review,” which is a less
rigorous assessment than an audit. Subsequently, NSF developed a
Cost Proposal Review Document to provide more detail and follow-up on
concerns raised by the internal review, but that document did not include
a full review of two of the most significant costs in the project’s proposed
budget—subcontracts/subawards and contingency costs.
In September 2014, we issued an alert memo expressing strong concern
that NSF did not have sufficient information to establish a reasonable
basis for the cost of the LSST project. As a result, NSF has limited
insight into the makeup of the project’s costs and little, if any, assurance
that they are reasonable.
8
OIG Semiannual Report September 2014
In addition, NSF will conduct the LSST project under a cooperative
agreement with the Association of Universities for Research in Astronomy
(AURA). In light of the known and continuing deficiencies with AURA’s
estimating practices and cost proposals, and the lingering uncertainties
about the reasonableness, accuracy, and currency of many of the costs
proposed for the LSST project, NSF should take immediate and strong
action to ensure that costs proposed for and incurred under the project
comply with federal and NSF requirements.
We have been urging NSF for the past four years to strengthen
accountability of its high-dollar, high-risk cooperative agreements for
its large facility construction projects. NSF applies its highest level of
attention and scrutiny to determine the scientific merit of the projects
it decides to fund. It is imperative that NSF apply the same rigorous
attention and scrutiny to its financial management of these projects, prior
to requesting NSB approval for award. The stakes are too high for the
Foundation to continue its current practice of requesting NSB approval
and making awards before it ensures that project costs are reasonable,
are supported by adequate documentation, and will use taxpayer dollars
efficiently.
More than $2.3 Million in Questioned Costs Found at University of
California, Los Angeles
An audit of 769 awards valued at more than $225 million made to the
University of California, Los Angeles (UCLA) identified questioned
costs of over $2.3 million. The questioned costs included more than
$2.1 million in overcharged summer salaries and over $131,000 in
unsupported per diem costs for travel, including trips PIs made to Paris
and Israel. In addition, the audit questioned over $73,000 for visa
application fees charged to NSF awards. Finally, the auditors questioned
nearly $16,000 for computer equipment, which was purchased within the
final 23 days of the award and thus was not available for use during most
of the award period, and did not benefit NSF programs.
We recommended that NSF require UCLA to repay the questioned
costs and ensure that the university strengthens administrative and
management processes and controls that led to the questioned costs.
UCLA stated that it would review its current travel policy and enhance
its controls over time charged to federal awards, but disagreed with
nearly all ($2.2 million) of the questioned costs. NSF is in the process of
resolving UCLA audit findings.
9
Audits & Reviews
Over $1.6 Million in Questioned Costs Found at Virginia Polytechnic
Institute and State University (Virginia Tech)
An audit of 109 NSF awards totaling $113 million at Virginia Tech
questioned over $1.6 million in costs claimed by the University. Over
$1.45 million of the questioned costs was for senior personnel salaries
that exceeded NSF’s two-month limit. The remaining $147,413 in
questioned costs related to unreasonable equipment and materials
charges, indirect cost overcharges, unreasonable travel expenses,
unallowable moving expenses, and unallocable immigration fees.
Auditors recommended that NSF resolve the questioned costs and
ensure that Virginia Tech strengthen its administrative and management
controls. The university agreed with the majority of the findings and
some of the questioned costs. However, Virginia Tech responded that
it believes that NSF policy for the limitation of salary charges for Senior
Project Personnel of two months in any given year are unclear, and that
the university is developing a new proposal management system, which
will be designed to capture the data necessary to assure compliance with
the NSF policy on salary limits for Senior Project Personnel rule, once
NSF clarifies the rule. Virginia Tech also stated that the university has
added two positions to its Office of Sponsored Programs’ Compliance
Team as a result of the audit. NSF is in the process of resolving Virginia
Tech audit findings.
$173,290 in Questioned Costs Found at the University of Illinois at
Urbana-Champaign
An audit of 1,294 NSF awards totaling more than $435 million of
expenditures at the University of Illinois at Urbana-Champaign
questioned $173,290 in costs claimed by the University. The questioned
costs included $52,584 in salaries that exceeded the two months of
salary allowable under NSF regulation. The auditors found the university
did not have policies to prevent more than two months of salary costs for
senior personnel from being charged to NSF, but instead relied on each
individual department to monitor its salary allocations. The audit also
questioned $41,734 in expenses incurred at the end of the award that did
not benefit NSF programs; and $39,296 of costs that lacked adequate
supporting documentation.
The auditors also reviewed seventy six awards that were funded with
Recovery Act funds and concluded those funds had been properly
accounted for and segregated, as required. Recommendations
included that NSF require that the university repay the questioned costs
and ensure that Illinois strengthens administrative and management
10
OIG Semiannual Report September 2014
processes and controls that led to the questioned costs. The university
disagreed with the questioned cost for salaries but agreed to remove the
expenditures charged to the NSF awards at the end of the award period.
Over $75,000 in Questioned Costs at New York University
An audit at New York University (NYU), which covered 394 awards
valued at more than $72 million identified $75,494 of questioned costs.
The costs, which included unallowable indirect charges, foreign travel,
equipment purchases, and conference fees, were questioned because
they did not comply with federal requirements. For example, NYU used
an incorrect indirect cost rate, which contained mathematical errors, and
caused more than $35,000 in unallowable costs to be charged to an NSF
award. In another example, a PI charged an NSF award for the cost of
numerous trips to foreign countries including Germany, India, and South
Korea, although no funding in the award was budgeted for foreign travel.
Recommendations included that NSF require NYU to repay the
questioned costs and ensure that the university strengthen processes
and controls that led to the questioned costs. In response to the
recommendations, NYU agreed with the $35,000 in questioned costs
associated with the indirect cost rate calculation and stated that it
has corrected the error that caused the miscalculation. NYU also
reported that it has controls and processes in place to address the other
recommendations.
Inadequate Controls over the Calculation and Expenditure of
Contingency on the Sikuliaq Construction Project
In August 2007, NSF entered into an agreement with the University of
Alaska Fairbanks (UAF) for construction and operation of the Alaska
Region Research Vessel –Sikuliaq. The project consisted of four
phases with a total awarded cost of $199.5 million, $38.1 of which was
contingency funds. Additionally, the $148 million construction phase of
the project (including $31.7 million in contingency funds) was funded
entirely by Recovery Act funds.
We conducted an audit of the Sikuliaq project for two reasons; the
large amount of Recovery Act funds awarded to the project and the
problems previous audits disclosed with contingency funds in NSF’s large
construction projects, which placed federal funds at a heightened risk of
being misused for non-contingent expenses or to hide cost overruns due
to poor management or lack of oversight.
11
Audits & Reviews
We found that the inclusion of the contingency for each project phase
did not comply with the certainty requirement in the OMB cost principles,
and that the contingency amounts in the proposed budgets were
not supported by adequate cost data. Therefore, since the project’s
total awarded amount was based on the approved budget, there is a
heightened risk that the contingency funds will be misused. Additionally,
since the contingency expenditures were not separately tracked in UAF’s
accounting system, we could not verify how the budgeted contingency
funds were ultimately spent. While UAF was not required to track
expenditures to budgeted contingency amounts, the lack of visibility over
contingency expenditures increases the risk that contingency funds may
be misused. We found that NSF generally complied with the Recovery
Act requirements we reviewed.
We recommended that NSF require awardees to only include allowable
contingencies in an award; to support contingency estimates in budget
proposals with adequate, verifiable, supporting data; and to properly
account for the funds consistent with their estimates and separately track
budgeted versus actual contingency costs.
In its response, NSF asserted that it was already in compliance with
the first two recommendations, and that it declined to implement the
third recommendation. In response to the third recommendation, NSF
disagreed that budgeted versus actual contingency costs should be
separately tracked. NSF pointed out that this level of tracking is not
required by OMB, and thus views this recommendation as an extra
administrative requirement that it declines to administer.
However, by not tracking budgeted versus actual contingency costs and
because the contingency budget and change order processes do not tie
to the accounting system, there is no way of verifying that contingency
funds were actually used in the manner proposed in the associated
change orders. If there is no way to ensure that contingency funds were
used in the manner proposed, the entire change order process becomes
invalidated and meaningless.
Missed Schedule Milestone Dates for its Relocation Could Cause
NSF to Incur Significant Costs
Our ongoing inspection of NSF’s relocation to its new headquarters in
Alexandria, VA has identified concerns about missed schedule milestone
dates that have occurred, and could continue to occur, as a result of the
ongoing impasse between NSF and AFGE Local 3403 (the Union) with
respect to issues related to NSF’s new headquarters and the possible
financial impact of the schedule slippage.
12
OIG Semiannual Report September 2014
In June 2013, the U.S. General Services Administration announced that
it selected and signed a 15-year lease agreement on behalf of NSF for
a new headquarters building to be constructed. NSF is scheduled to
occupy the new building by December 30, 2016, and begin paying rent
on that building on January 1, 2017; however, depending upon the result
of schedule impacts, these dates could change.
The impasse on the outstanding issues between NSF and the Union has
caused milestone dates for the interior design of the new building to be
missed, which could affect the construction schedule. Any delays caused
by NSF (rather than by the builder) to the December 2016 completion
date will require NSF to pay delay costs in addition to rent costs at NSF’s
current headquarters.
Due to the building schedule’s milestone dates that NSF has already
missed, the potential cost of any delays, and the potential for protracted
negotiations with the union, it is imperative that NSF senior management
focus the highest level of attention on this issue.
A-133 Audits
Single Audits Continue to Identify Repeat Findings at One-Third of
Awardees with Findings
OMB Circular A-133 provides audit requirements for state and local
governments, colleges and universities, and non-profit organizations
receiving federal awards. Under this Circular, covered entities that
expend $500,000 or more a year in federal awards must obtain an annual
organization-wide audit that includes 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. The OIG reviews the resulting audit reports for findings and
questioned costs related to NSF awards, and to ensure that the reports
comply with the requirements of OMB Circular A-133.
The 220 audit reports reviewed and referred1 to NSF’s Cost Analysis and
Audit Resolution (CAAR) Branch this period covered NSF expenditures
of $8.4 billion as reported in the annual Single Audits during audit years
2012 and 2013, and resulted in 157 findings at 93 NSF awardees.
The auditors disclaimed an opinion on the financial statements of one
awardee. In addition, one awardee received a qualified opinion on its
financial statements, and 12 awardees received qualified opinions on
their compliance with federal grant requirements.
1 We also rejected one report based on audit quality deficiencies. The auditors revised the report and
resubmitted the report during the period, and the revised report is included in the total number of 220.
13
Audits & Reviews
Fifty-five of the 157 findings (35 percent), at 33 of the 93 awardees with
findings, were repeated from previous audits, calling into question the
awardees’ ability to adequately manage their NSF awards. Thirty-three
of the repeat findings, including one finding which had been repeated
for seven consecutive years, were identified as material weaknesses or
significant deficiencies. Six findings identified by the auditors, including
one material weakness and three significant deficiencies, resulted in
$796,538 in questioned costs to NSF awards.
Awardees’ lack of internal controls and noncompliance with federal
requirements included: untimely and/or incorrect reporting of time and
effort; failure to ensure that property purchased with federal funds
was adequately tracked and safeguarded; inadequate monitoring of
subrecipients; and late submission of financial and/or progress reports.
Desk Reviews Find Audit Quality and Timeliness Issues in One-
Third of Single Audits
The audit findings in A-133 reports are useful to NSF in planning
site visits and other post-award monitoring efforts. Because of the
importance of A-133 reports to this oversight process, the OIG conducts
desk reviews on all reports for which NSF is the cognizant or oversight
agency for audit, and provides guidance to awardees and auditors for the
improvement of audit quality in future reports. In addition, OIG returns to
the awardees reports that are deemed inadequate so that the awardees
can work with the audit firms to take corrective action.
During the period, we conducted desk reviews of 112 audit reports2 for
which NSF was identified as the cognizant or oversight agency for audit,
and found that 75 fully met federal reporting requirements. Thirty-seven
reports contained audit quality and timeliness issues. The quality issues
we identified included 13 reports in which the Schedule of Expenditures
of Federal Awards did not provide sufficient information to allow for
identification of awards received from non-federal “pass-through” entities
or did not adequately describe the significant accounting policies used
to prepare the schedule. In addition, 13 reports inadequately presented
the elements of the audit findings and/or the elements of the auditee
management’s plan to correct the deficiencies reported. Seven reports
were submitted to the Federal Audit Clearinghouse with an inaccurate
Data Collection Form (Form SF-SAC). Finally, two reports were filed after
the deadline established in OMB Circular A-133.
2 The audits were conducted by 65 independent public accounting firms.
14
OIG Semiannual Report September 2014
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, we rejected one report due to substantial non-
compliance with federal reporting requirements. After completion of all
122 reviews, we issued a letter to each auditor and awardee informing
them of the results of our review and the specific issues on which to work
during future audits to improve the quality and reliability of the report.
Audit Resolution
NSF Disagrees with Questioned Contingency Amounts in Proposed
Budgets for Three Large Facility Construction Projects
In May 2014, we escalated recommendations to the agency’s Audit
Resolution Official, from a large body of audit work conducted over four
years pertaining to NSF’s management of its large facility construction
projects. Audits of the proposed budgets for three high-dollar, high-risk
projects, totaling $1.1 billion identified $305 million of unallowable and
unsupported costs, including $223 million of unallowable contingency.
The contingency amounts included in the proposed budgets were
unallowable because they did not comply with federal requirements and
were not supported by adequate documentation.
Escalation of OIG recommendations is the final step available to the OIG
in an attempt to urge NSF to strengthen accountability and to exercise
proper stewardship of federal funds. We escalated the recommendations
because the actions NSF had proposed to address them fell short of the
standard necessary to adequately safeguard millions in federal funds,
leaving those funds at risk of misuse.
NSF disagreed with the recommendations we escalated on contingencies
and asserted that its practices properly followed OMB guidance. Thus,
NSF informed us that it will not require these awardees to remove
unallowable contingency from their budgets, as we recommended. It
is important to note that even if contingency amounts in the proposed
budgets met the definition in OMB guidance, as NSF asserts, there is a
second, serious problem with respect to the adequacy of the supporting
documentation for the contingency the three awardees provided. In
each of the proposal audits, despite months and in some cases years of
effort, auditors were unable to find adequate documentation to support
15
Audits & Reviews
the amounts identified for contingencies. Therefore, the OIG stands by
its recommendation for NSF to require awardees to remove unallowable
contingency from proposed budgets, or for NSF to hold the contingency
funds until the awardee demonstrates a bona fide need for the funds and
provides adequate supporting documentation.
The audits also questioned $81.7 million of non-contingency funds
in one of the proposal budgets. These costs included such things as
unsupported costs for labor, materials, and equipment. NSF is continuing
to consider its response to recommendations pertaining to these costs,
which the OIG has escalated.
Finally, NSF has stated that it will continue to work with the OIG on
other escalated recommendations including: obtaining updated cost
estimates and audits of awardees’ proposed budgets, requiring annual
incurred cost submissions and audits, and developing end-to-end cost
surveillance procedures for its large cooperative agreements. We look
forward to working with NSF to provide better cost surveillance at all
stages of the life cycle of the cooperative agreements it uses for its large
facility construction projects.
NSF Sustains $43,551 of $6.3 million of Questioned Costs at the
University of California, Santa Barbara
In response to our recommendations, NSF sustained $43,551 of the
$6.3 million in questioned costs at the University of California, Santa
Barbara (UCSB). The $43,551 questioned costs related to unallowable
equipment purchases, unapproved pre-award costs, and unallowable
indirect cost charges claimed by UCSB from January 1, 2008, to
December 31, 2010.
We escalated recommendations pertaining to $2.2 million in cost sharing
claimed for which UCSB did not have supporting documentation, $1.9
million of overcharged summer salaries, and more than $136,000 of
equipment purchased toward the end of a grant. NSF has informed
us that it does not intend to sustain any additional costs from the audit
stating that the university’s treatment of summer salaries complies with
its policy and that UCSB maintained adequate supporting documentation
for cost share. With respect to equipment purchases, NSF stated that
such purchases appeared to be reasonably allocated to NSF grants.
OIG disagrees with NSF’s decision to allow $6 million of costs questioned
in the audit.
16
Investigations
Administrative Investigations
Supervisor Lied to NSF Management, Staff, and OIG;
Program Officer Released Sensitive Document to Press
A rotator, working at NSF as a program officer under the
Intergovernmental Personnel Act (IPA), had conflicts of
interests (COIs) with proposals she handled, and issues
with COI training and timely filing of financial disclosures.
NSF’s Office of General Counsel (OGC) recommended
that NSF terminate the rotator’s IPA assignment and that
someone outside of the rotator’s division review her award
recommendations to determine if the awards were warranted.
Directorate management asked the rotator’s supervisor,
rather than someone outside her division, to oversee the
review of the rotator’s award recommendations. After
reviewing the recommendations, the supervisor asked a
program officer in a different division to review two grants he
had identified as potentially problematic.
The supervisor shared OGC’s recommendations regarding
the rotator with his staff and the rotator, and together they
wrote a “mitigation memo” to directorate management falsely
stating that the program officer who reviewed the awards did
not find any bias, and urged the directorate to ignore OGC’s
recommendation to terminate the IPA assignment. The
supervisor sent this memo to directorate management before
he received the program officer’s assessment. However, that
assessment subsequently highlighted several factors that
indicated potential COIs and bias. The supervisor did not
inform directorate management, or his staff who helped write
the memo, about the conclusions drawn in that assessment.
When we asked him about the review, he falsely told us that
he had not yet asked any program officer for an assessment.
He failed to follow up on the program officer’s concerns and
continued to misrepresent to division staff that the rotator had
no COIs. In a second interview, the supervisor again lied to
us about the review.
HIGHLIGHTS
We referred the supervisor’s misconduct to the Department
Administrative
of Justice for consideration of prosecution for criminal Investigations ............... 17
false statements, but it declined given the adequacy Civil and Criminal
of administrative personnel actions available to NSF Investigations ............... 19
management. Accordingly, we addressed the supervisor’s Research Misconduct
Investigations ...............25
17
Investigations
actions and lies to OIG, to NSF management, and to his staff in a Report
of Investigation with recommendations for appropriate administrative
action. NSF’s decision is pending.
Further, one of the division’s program officers told our investigators that
he provided a copy of OGC’s recommendation to an online science
magazine. This act is a violation of NSF’s rule regarding release of
internal, sensitive information. We addressed this individual’s actions in
a separate Report of Investigation with recommendations for appropriate
management action. NSF’s decision is pending.
Debarment Recommended for Researcher Who Used NSF-funded
Supercomputers to Mine Bitcoins
We previously reported our investigation3 of a researcher who
engaged in the unauthorized mining of bitcoins on two NSF-funded
supercomputers. Based on our recommendation, NSF suspended the
researcher government-wide while we completed our investigation. After
we completed our investigation, while there was not enough evidence
to establish criminal intent, we recommended that NSF debar the
researcher for three years and recover the costs associated with his
mining activity. We also recommended that NSF treat the bitcoins as
program income to be recovered after their conversion.
NSF Returns Fraudulently-Obtained ARRA Funds to NSF Employee
We previously reported about an employee who abused approximately
$4,000 of transit subsidy money4 by taking more than 900 non-
commuting personal trips, requesting and accepting a $981 ARRA cash
reimbursement for transit expenses that she had not incurred, and $67
for unauthorized parking expenses. At first, NSF required her to repay
only the $67 for parking; then, it required her to repay some of the money
used for personal trips (less $524 she was allowed to keep). NSF also
required her to repay the $981 fraudulent ARRA reimbursement.
In April 2014, NSF returned $944 of the fraudulent ARRA reimbursement
to the employee and informed her that it had received “new information”
about her inappropriate use of the transit benefit. When we learned
about this payment, NSF stated that it refunded the money because
“NSF did not want to hold [her] responsible for the ARRA portion of the
case, due to its lack of traceability to specific usage and that it would
take much in the way of resources to search down the audit trail.” As
explained in our report to NSF, the employee admitted to us that she had
3 March 2014 Semiannual Report, pp.29-30.
4 September 2013 Semiannual Report, p.25; March 2014 Semiannual Report, p.30.
18
OIG Semiannual Report September 2014
requested and taken the money for personal use, and this information
was documented in the transit records we provided to NSF.
We also recently learned that the employee transferred most of the
$974 left on her old transit subsidy card accounts to new cards. She
acknowledged responsibility for this and repaid the $974.
NSF took the following actions in administrative cases previously
reported:
• As described previously,5 we recommended that NSF debar the
owners of a small business in California, and the business itself,
for submitting duplicate proposals, providing false certifications to
NSF, misrepresenting the company’s research capabilities, improper
expenditures, and a lack of consistent financial records. We also
recommended that NSF make a finding of research misconduct
against one of the owners, a former university professor. NSF
concurred and made a finding of research misconduct against the
ex-professor and debarred both owners and their company for three
years.
• NSF prohibited a former panelist from Texas from serving as a
reviewer, advisor, or consultant for NSF for three years.6 Based on
our investigation, NSF concluded the panelist knowingly breached
reviewer confidentiality by sharing six NSF proposals assigned to him
with his subordinates at his home institution. As noted previously,
NSF also accepted our recommendation to watermark proposals to
further emphasize the confidentiality of the review process.
• We previously described7 a panelist from Maryland who violated
NSF’s conflict of interests rules in reviewing a proposal. NSF has
prohibited the panelist from serving as a reviewer for two years.
Civil and Criminal Investigations
Two Scientists Indicted for Fraudulently Obtaining SBIR Awards
Two Florida scientists were indicted for wire fraud, conspiracy to commit
wire fraud, aggravated identity theft, and falsification of records in a
federal investigation. In a joint investigation with the Army Criminal
Investigation Command and OIGs for DoD, NASA, DOE, DHS, and EPA,
we uncovered evidence that the scientists created two companies as
part of a scheme to fraudulently obtain approximately $10 million in
Small Business Innovation Research (SBIR) awards from NSF and other
government agencies.
5 March 2013 Semiannual Report, p.34.
6 March 2014 Semiannual Report, pp.28-29.
7 March 2014 Semiannual Report, p.28.
19
Investigations
The fifteen-count indictment alleged that the scientists: created false
endorsements, emails, and letters of support in order to receive awards;
included false information regarding consultants, subcontractors,
facilities, and costs in proposals to NSF and others; and responded to
our inquiry with backdated and fabricated documents in an attempt to
influence our investigation. The scientists were arrested and released on
bond during this reporting period.
NSF Withholds $75,000 in SBIR Funds Due to False Statements and
Claims
Our ongoing investigation identified evidence of false statements and
false claims submitted by the PI of a small business in Massachusetts.
Based on our recommendation, NSF withheld the final payment and
reduced the amount of a SBIR Phase II award to the small business,
providing NSF with $74,959 put to better use.
Former Research Institute Employee Sentenced to 19 Months in
Prison
A former employee of a research institute that received federal
funds, including NSF grant funds, pled guilty and was convicted of
embezzlement. She was sentenced to 19 months in prison, three
years’ probation upon release, and was ordered to pay back $798,469
to the research insitute. We recommended that NSF debar the former
employee for five years.
Executive Director of Non-Profit Debarred for Five Years for False
Certification
Our investigation determined that the executive director of a
Massachusetts non-profit received federal funds from an NSF-funded
subaward while currently debarred for serious misconduct associated
with a prior NSF award. The executive director, on behalf of the
organization, falsely certified on both the contract and the subaward
agreement that neither the organization nor its principals, including
himself, were debarred. Based on our recommendation, NSF debarred
the executive director and the organization for five years.
20
OIG Semiannual Report September 2014
NSF Withholds $74,000 in SBIR Funds
In response to our recommendation, NSF withheld the final payment of
$74,944 remaining on a company’s active award after our investigation
found that the company misrepresented its timekeeping and accounting
systems and could not accurately account for NSF funds it received.
NSF Withholds $67,000 in SBIR Funds
Our investigation revealed that a company that received NSF SBIR
awards misrepresented its ability to accurately track its time and effort
and did not have systems to account for expenditure of federal grant
funds. Based on our recommendation, NSF permanently withheld the
final payment of $67,221 remaining on the company’s award.
University to Repay $54,000 to NSF for Unauthorized Equipment
Purchase
As part of a settlement agreement, a Michigan university agreed to repay
$54,076 for equipment it purchased under an STTR subaward. Prior to
making the award, NSF told company and university personnel that they
could not pay for equipment purchases under the subaward.
Actions Taken as a Result of Previously-Reported OIG
Investigations
PI for Small Business Award Sentenced to 3 Years Imprisonment
A PI on two grants awarded to a small business under the Small
Business Technology Transfer (STTR) Program was convicted of wire
fraud, mail fraud, falsification of records, and theft, following a two-week
trial.8 The PI was sentenced to three years in prison followed by three
years of supervised release, and ordered to pay $105,726 in restitution.
PI Enters Into Pre-Trial Diversion Agreement following Indictment
for SBIR Fraud
A company owner and PI of an NSF SBIR awardee company were
indicted based upon proposals, reports, and payment requests they
submitted which contained false information.9 The PI entered into a
8 March 2014 Semiannual Report, p.15.
9 March 2013 Semiannual Report, p.23.
21
Investigations
pre-trial diversion agreement with DOJ, under which, for 18 months, he
will be required to report regularly to a pretrial services officer, complete
50 hours of community service, and not apply for, or serve as PI on, any
grant funded by the federal government. The case against the company
owner is pending.
Small Business Returns Funds to NSF and Forfeits Final Payment
Under SBIR Phase II Award
In response to our recommendations, NSF suspended and then
revoked the final $75,000 payment of an SBIR Phase II award to
a Massachusetts small business, for failing to maintain adequate
timekeeping records.10 In a settlement with the Department of Justice,
the business agreed to return an additional $120,000 to NSF.
Debarment Recommended for Michigan Business Owner, His Wife,
and Three Businesses
A Michigan business owner and his wife, through one of his three
companies, used the NSF seal fraudulently for commercial gain and
shipped products to customers through the mail.11 The husband pled
guilty to mail fraud and misuse of the NSF logo, and his wife pled guilty
to one count of concealment of a felony. We recommended that the
owner, his wife, and his three companies be debarred for three years.
Civil Settlements Result in Return of $145,000 Voluntary Exclusions,
and Compliance Plans
A Connecticut for-profit company filed false financial reports and cash
requests with NSF, and the PI misused NSF award funds.12 The PI:
(1) made bonus payments to a family member; (2) rented property
from himself, without disclosing the self-dealing to NSF; (3) paid a
consultant for a personal conversation; and (4) retained over $19,000 of
unexpended grant funds in his account when he closed out the award.
Throughout the period of the misconduct, the PI also had sole control of
an affiliated non-profit organization’s bank account, and was transferring
money between the organizations, implicating NSF award funds. The
U.S. Attorney’s Office entered into civil settlements under the False
Claims Act, one with the for-profit company and the PI, and the second
with the non-profit company. Both settlements require a mandatory five-
year compliance plan to begin on the date that either company submits
10 March 2014 Semiannual Report, p.20.
11 March 2013 Semiannual Report, p.22.
12 March 2013 Semiannual Report, p.25.
22
OIG Semiannual Report September 2014
an NSF proposal. In addition, the for-profit company and the PI returned
$145,531 to the government, and agreed to a one-year voluntary
exclusion from receiving federal funds.
University Professor / Company Owner Sentenced
A university professor in Iowa pled guilty to false statements in
connection with SBIR awards to his outside company as well as awards
to his university, which resulted in personal gain to the professor and his
relatives.13 The court sentenced him to one year probation, a $5,000
fine, $1,200 in restitution, and a $200 assessment.
Joint Investigation Results in Indictment of SBIR PI and Company
Employee on 29 Counts
In response to our recommendation, NSF retained the final payment on
an SBIR Phase II award and suspended government-wide the PI and
the Texas small business as a result of false information submitted to
NSF.14 As a result of our joint investigation with NASA OIG, DOE OIG,
and DCIS, a grand jury indicted the PI and a company employee on 29
counts of conspiracy, false statements, and wire fraud.
NSF Employee Pleads Guilty to Embezzlement
An NSF employee, who was in charge of a program that provides
tuition assistance for NSF employees, was indicted on three counts of
embezzlement relating to abuse of her position because she authorized
NSF payment of her own graduate level classes, which is prohibited
under the program.15 NSF issued a notice of proposed termination from
employment, and she subsequently resigned from her position at NSF.
The former employee pled guilty in the local county circuit court and
sentencing is scheduled in November 2014.
NSF Employee Indicted for Using Government Purchase Card to
Buy Electronics for Personal Use
An NSF employee used a government purchase card to buy electronic
equipment and other items for personal use.16 The employee was
indicted on two counts of embezzlement in the local county circuit court
and NSF suspended her indefinitely without pay.
13 March 2014 Semiannual Report, p.16.
14 March 2013 Semiannual Report, p.23; September 2013 Semiannual Report, p.16.
15 March 2014 Semiannual Report, p.17.
16 March 2014 Semiannual Report, pp.17-18.
23
Investigations
Proposed Debarment for Former Program Officer
An NSF program officer resigned following an investigation into conflicts
of interests and bribery.17 Based on our recommendation, NSF issued a
notice of a proposed three-year debarment to the former program officer.
NSF Debars Former Research Facility Employee Convicted of Theft
A former employee at an NSF-supported research facility in Louisiana
was convicted of theft of equipment and sentenced to five years’
probation and ordered to pay restitution of $14,925.18 Based on our
recommendation, NSF debarred the individual for three years.
PI Debarred for Improperly Spending NSF Funds
The PI and an Alaskan non-profit organization misspent NSF funds.19
Based on our recommendation, NSF debarred the PI for three years,
and proposed debarment for the non-profit organization. Because the
organization sufficiently demonstrated its intent to dissolve within the
debarment period, NSF entered into an administrative agreement with
the organization in lieu of debarment.
NSF Debars PI and NSF Center Director for Diversion of Program
Income
A former PI on multiple NSF awards and a former NSF center director
diverted program income earned as a result of sales of curriculum
products developed under NSF awards, without the awardee institution’s
knowledge.20 Based on our recommendation, NSF debarred the former
PI, the former center director, and three companies for five years.
University Returns over $548,000 to NSF for Unallowable Charges
An employee at a university in Delaware charged significant travel
expenses, which were not related to an NSF award, and other
unallowable costs to an NSF award.21 The university returned $548,413
and implemented new policies and procedures to avoid future issues.
17 March 2014 Semiannual Report, p.16.
18 September 2013 Semiannual Report, p.17
19 September 2013 Semiannual Report, p.19.
20 September 2013 Semiannual Report, p.18.
21 September 2011 Semiannual Report, p.9.
24
OIG Semiannual Report September 2014
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. In recent years, we have seen a significant rise in
the number of substantive allegations of research misconduct associated
with NSF proposals and awards.
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 termination of employment. NSF’s actions
in research misconduct cases ranged from letters of reprimand to a
proposed five-year debarment. In every case, we recommended that
NSF 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.
PI Fabricates and Falsifies Research Results
A PI at a California university fabricated and falsified results that
were included in an awarded NSF proposal, a published article, a
declined NSF proposal, and a submitted manuscript. The university’s
investigation determined the PI committed fabrication and falsification in
numerous data figures, and issued a research misconduct finding. The
PI left the university, the journal retracted the published article, and the
submitted manuscript was declined for publication.
We concurred with the university’s finding that the PI inappropriately
manipulated the research images, and concluded that the PI intentionally
committed fabrication and falsification. We recommended that NSF
debar him for five years, and for the five years after the debarment
period: require certifications and assurances; require submission of a
detailed data management plan with annual certifications of adherence
for any resulting awards; and bar him from participating as a peer
reviewer, advisor, or consultant for NSF.
25
Investigations
Graduate Student Falsifies Data to Support Favored Hypothesis
A student entered into a voluntary settlement agreement with another
federal agency for three years, based on an admission of data
falsification in his graduate work that resulted in the retraction of
three research publications. The individual was supported by an NSF
graduate fellowship as well as other federal funding. The university
expelled the student under its academic integrity policy, based on his
admission of wrongdoing, and then completed an investigation under
its research misconduct policy, concluding that the student intentionally
falsified data. The university failed to notify NSF of the investigation, as
required.
We obtained the university’s investigation report, and the student
declined to provide any comments or additional information to us. We
concluded that the student intentionally falsified the data, and we
recommended that NSF debar the student for five years, and require
certifications and assurances for three years thereafter.
Professor’s Proposals Routinely Prepared by Graduate Students
and Postdocs
Our investigation determined that a professor at a Florida university
submitted multiple proposals to NSF over a period of four years that
contained plagiarism. The university investigation established that the
professor had minimal involvement in the preparation of the proposals.
He asked his graduate students and postdocs to write the proposals,
and he then submitted them without review or evaluation. The university
concluded that the professor plagiarized from his students and postdocs
in six proposals. The university investigation also established that the
proposals inaccurately listed research publications as “in press” and
inaccurately listed the professor’s current and pending support. The
university removed the professor from sole supervision of graduate
students, prohibited him from submitting proposals to external funding
agencies for a specified period, and mandated RCR training.
Our further investigation established the professor was the PI on four
additional NSF proposals that contained copied text. We concluded
that the professor’s plagiarism in a total of ten proposals established a
pattern of research misconduct. We recommended that NSF impose a
one-year debarment and for the following five years require certifications
and assurances, and prohibit service to NSF as a reviewer, consultant,
or advisor.
26
OIG Semiannual Report September 2014
One of the postdocs identified as an author of the plagiarized proposals
was the focus of a previous case in which NSF made a finding of
research misconduct based on plagiarism in multiple NSF proposals.
Our investigation established that in this case the postdoc was the
primary author of the four additional proposals considered in our
further investigation. We recommended that NSF impose a one-year
debarment and a subsequent five-year period of certifications and
assurances, and prohibit service to NSF as a reviewer, consultant, or
advisor.
Assistant Professor Resigns From University During Investigation
An assistant professor at a Florida institution submitted three NSF
proposals containing extensive plagiarism. The copied text comprised
the majority of the proposals’ introduction, background, and proposed
research sections. He acknowledged the material was inappropriately
cited and attributed the act to “miscommunications, fatigue and time
constraints.”
The university conducted an investigation, but the assistant professor
resigned prior to his scheduled interview, accepted a teaching position
outside the country, and did not respond to requests for information.
Based on the evidence we provided and student interviews, the
university concluded the assistant professor committed repeated acts of
plagiarism, which constituted a pattern of plagiarism.
The assistant professor also did not respond to our request for additional
information. Our investigation concluded that he knowingly committed
repeated acts of plagiarism. We recommended that NSF debar the
assistant professor for one year, require he provide certifications and
assurances for three years following the debarment, and bar him from
participating as a peer reviewer, advisor, or consultant for NSF for four
years.
PI Submits Inaccurate Annual and Final Reports
Our investigation determined that a Missouri PI’s annual reports were
inaccurate because most of the publications listed in the reports were
either inaccurate or were not related to his NSF-funded research. The
first annual report we reviewed cited fifty papers, but only eight of those
had appropriate attribution. We referred the matter to the PI’s university,
which concluded that the PI’s misrepresentations constituted falsification
in his annual reports and made a finding of research misconduct. It
required the PI to complete RCR training, and to provide quarterly
27
Investigations
progress reports for all externally-funded projects for one year. In
addition, for three years he must provide all annual reports he plans to
submit to any funding agency for advance review by the university.
We concurred with the university’s finding of research misconduct. For
one grant, more than 90% of the publications listed in his first annual
report and 80% of the publications in his second annual report were
falsified, in that they were inaccurate or not attributable to his NSF-
funded research. Furthermore, approximately 90% of the publications
listed in the annual and final reports for a second NSF grant were also
falsified, establishing a pattern of misrepresentations in his publications.
We recommended that NSF require the PI to provide certifications and
assurances for three years.
PI Plagiarized Text and Figures; $79,000 Put to Better Use
Our proactive review identified a funded proposal, authored by a PI in
New York, that contained text copied without appropriate attribution. Our
investigation identified additional proposals with unattributed copying.
Based on our recommendation, NSF suspended the grant, and we
referred the allegation to the awardee institution for investigation. The PI
subsequently withdrew all pending proposals from all funding agencies.
The awardee found the PI plagiarized a total of 444 lines and five
figures into four proposals. It made a finding of research misconduct
and required the PI to: receive formal supervision for two years, which
includes reviewing her proposals or manuscripts prior to submission;
watch a training video on plagiarism and certify she understood it; and
take a writing course. We concured with the awardee’s finding and
recommended that NSF require the PI to provide certifications and
assurances for three years and prohibit the PI from serving as a peer
reviewer, advisor, or consultant for three years. The suspended award
has since expired, resulting in $79,050 put to better use.
Assistant Professor Intentionally Plagiarized in Five Proposals
An assistant professor at a Maine university plagiarized text into an NSF
proposal for a collaboration between him and a researcher at another
university. The copied text comprised two-thirds of the professor’s
technical portion and half of his broader-impacts section. The university
determined that he intentionally plagiarized in the proposal to convey a
false sense of his capabilities to reviewers. The university recommended
that the assistant professor repay the money, but he resigned his
28
OIG Semiannual Report September 2014
position and returned to his home country. As discussed previously,22 the
university terminated the grant, resulting in $40,000 of funds put to better
use, and the university repaid the $26,000 already spent.
During our investigation, we found that the professor also copied text into
four additional NSF proposals. We recommended NSF impose three
years of certifications and assurances, and a ban on serving as an NSF
peer reviewer, advisor, or consultant.
California Professor Plagiarized in Four NSF Proposals
An associate professor at a California university copied text into four
proposals submitted to NSF, one of which was awarded. During the
university investigation, the professor acknowledged copying without
attribution. The university found that the professor recklessly plagiarized
in four proposals to NSF and required the professor to participate in
training and provide internal assurances for three years. The professor
was also issued a formal reprimand.
We concurred with the university that the professor committed
research misconduct. We recommended that NSF require two years of
certifications and assurances, and bar the professor from serving NSF
as a reviewer, advisor, or consultant.
Adjunct Faculty Plagiarizes in Proposal
An adjunct professor in Massachusetts copied portions of a literature
review without attribution in a funded NSF proposal. The NSF program
officer stated she had used the literature review as an indication that the
professor was qualified to perform the work on the award. As reported
previously,23 the institution terminated the grant early, resulting in more
than $162,000 of federal funds put to better use. We recommended
that NSF require two years of certifications and assurances, and bar the
professor from serving NSF as a reviewer, advisor, or consultant.
Professor Plagiarizes in Research Reviews
Our investigation determined that a Kansas university professor
committed plagiarism in two research publications supported by NSF.
The professor copied large sections of text verbatim from publications of
others, and did not use quotation marks around the copied text, although
he usually cited the source. The professor claimed that he provided
22 March 2014 Semiannual Report, p.29.
23 March 2014 Semiannual Report, p.29.
29
Investigations
adequate attribution. The university investigation committee did not
agree; the publications were subsequently retracted, and the university
issued a public censure. We recommended that NSF require two years
of certifications and assurances, and bar the subject from acting as a
reviewer, advisor, or consultant for NSF.
Actions by NSF Management on Previously Reported Research
Misconduct Investigations
NSF has taken administrative action to address our recommendations
on ten research misconduct cases reported in this semiannual and 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 as summarized below.
In the case of a former graduate student at a Michigan university who
intentionally fabricated and falsified data and research materials,24 NSF
finalized a three-year debarment. NSF also barred her from participating
as a peer reviewer, advisor, or consultant for three years, and required
three years of certifications and assurances as well as certifications of
adherence to a detailed data management plan for any new proposals.
In the case of a PI at an Illinois university who committed plagiarism by
copying ideas and text from an awarded proposal,25 NSF proposed to
debar the PI for one year. It also required three years of certifications
and assurances, and banned the PI from serving as an NSF reviewer for
three years.
In the case of a Tennessee professor who copied text in three NSF
proposals and received duplicate reimbursements from his university for
his service as an NSF review panelist,26 NSF debarred the professor for
two years; he filed an appeal which is pending.
In the case of an Illinois graduate student who falsified microscope
images,27 NSF imposed a one-year debarment followed by two years of
certifications and assurances, and prohibition from service as an NSF
reviewer, advisor, or consultant.
24 March 2014 Semiannual Report, pp.22-23.
25 March 2014 Semiannual Report, pp.23-24.
26 March 2014 Semiannual Report, p.23.
27 September 2013 Semiannual Report, p.20.
30
OIG Semiannual Report September 2014
In the case of a Kentucky graduate student who fabricated data,28 NSF
debarred the student for one year, followed by one year of certifications
and assurances, and prohibition from serving as a reviewer, advisor, or
consultant.
NSF finalized the one-year debarment proposed of a former post-
doctoral fellow at a Washington university who intentionally falsified
data.29
In the case of a professor at a Texas university who plagiarized in
his NSF proposal,30 NSF required that he provide certifications and
assurances for three years.
In the case of a student in Pennsylvania who plagiarized text into his
NSF-funded dissertation,31 NSF required two years of certifications
and assurances, and submission of a corrected dissertation to his own
university’s library as well as the national repository. NSF also required
the student to take RCR training.
In the case of a North Carolina professor who plagiarized a modest
amount of text from multiple sources into his NSF proposal,32 NSF
required him to submit certifications for one year.
In the case of a team leader in Illinois who recklessly plagiarized,33 NSF
required RCR training.
28 September 2013 Semiannual Report, pp.20-21.
29 March 2014 Semiannual Report, p.26.
30 March 2014 Semiannual Report, p.24.
31 March 2014 Semiannual Report, p.25.
32 March 2014 Semiannual Report, p.26.
33 March 2014 Semiannual Report, p.26.
31
Investigations
32
Congressional
Testimony
In June 2014, the Inspector General testified before the
House Science, Space, and Technology Committee’s
Subcommittees on Oversight and Research and Technology
at a hearing titled, “Reducing the Administrative Workload
for Federally Funded Research.” The Inspector General’s
testimony discussed the OIG’s perspective on the National
Science Board (NSB) report, “Reducing Investigators’
Administrative Workload for Federally Funded Research”;
our audits of Federal Demonstration Project pilots of effort
reporting systems; and the comments our office provided
the Office of Management and Budget during its creation
of uniform guidance on administrative requirements, cost
principles, and audit requirements for federal awards.
Both the NSB report and the Uniform Guidance addressed
the need for changes to the effort reporting process. Every
year, billions of dollars in federal funds are spent for salary
costs of individuals who work on federal grants. Labor effort
reports are essential documents for ensuring accountability
over grant funds, as they represent the main support for
salaries and wages charged under those awards.
Over the years, OIG auditors and investigators have
repeatedly found that not all such charges are appropriate—
and some are even fraudulent. We have had numerous
investigations involving university grantees that have failed
to adequately track time and effort. For example, we have
had multiple investigations in which university personnel have
simultaneously held full-time positions at U.S. institutions
and abroad without disclosing the dual employment to either
university or to the Federal agencies funding their research.
The cases that have been resolved, to date, have resulted
in criminal convictions, civil settlements under the Civil
False Claims Act, and government-wide suspensions and
debarments. In many cases, those outcomes would not have
been possible without effort reports.
As part of the Federal Demonstration Project, labor effort
pilots using universities’ payroll distribution systems are
underway at four universities. Our office and the HHS OIG
are auditing these pilots, and we hope to complete our work
by the end of the calendar year. The NSB report identified
33
Congressional Testimony
effort reporting as a top area of concern and recommended that OMB
identify a way for the piloted approaches to be used by universities and
accepted by OIGs.
NSB’s report also urged universities to consider requiring receipts only
for large purchases. The lack of such receipts would have an immediate
and detrimental impact on both an institution’s and an OIG’s ability to
detect and prosecute fraudulent purchases. Requiring receipts only
for large purchases would not provide protection for situations where
individuals make many small fraudulent purchases with grant funds that
eventually add up to a large amount of money.
Finally, to put the burden imposed by audits in perspective it is important
to realize that most institutions are not audited by an OIG on a regular
basis. NSF funds approximately 2000 colleges, universities and other
institutions annually; due to size and resource constraints OIG typically
audits fewer than 20 of such recipients in a year.
With respect to the Uniform Guidance, our office led an IG community
working group that carefully followed and communicated with OMB as
the guidance was being created. The working group supported OMB’s
efforts to tailor its regulations to impose the least burden and worked
diligently to ensure that the right balance between reducing burden and
maintaining accountability was struck. The circulars include many tools
essential to combating fraud, waste, and abuse. Using those tools, OIGs
have identified situations where recipients have misused grant dollars
and been able to pursue criminal, civil, and administrative actions to
recover those funds.
Unlike contracts, the federal government has little insight as to how grant
funds are used by awardees. It is therefore essential that tools like IG
audits and Single Audits, which are used to ensure accountability over
Federal funds, remain robust and provide sufficient oversight.
While there is a need for a reasonable amount of flexibility to limit
administrative burden, acceptance of public money brings with it a
responsibility to uphold the public trust. NSF awardees must never
forget that they are spending the public’s money and that they will be
held accountable for using that money for its intended purpose.
34
FY 2014 Top OIG
Management Challenges
CHALLENGE: Establishing Accountability over Large
Cooperative Agreements
Overview: As of August 2013, NSF had 23 cooperative
agreements worth over $50 million each and totaling over
$4.2 billion. Over the last four years, audits of the proposed
construction budgets for three of these non-competitive
proposals valued at $1.1 billion found that they contained
approximately $305 million (almost 28 percent), in
unallowable or unsupported costs.
It is essential that NSF exercise strong cost surveillance
controls throughout the lifecycle of its high-risk, high-dollar
large facility projects. At the pre-award stage, proposed costs
by awardees should be supported by current, accurate, and
complete documentation and awardees’ accounting systems
must be capable of properly managing federal funds. After
an award has been made, NSF and the OIG should have
access to information needed for adequate oversight of these
projects.
After four years of audit effort, NSF’s proposed actions in this
area remain short of the standard necessary to adequately
safeguard federal funds and leave millions of dollars at
risk. Therefore, in May 2014 the OIG escalated a series
of recommendations made to address these concerns
to the Deputy Director, who is NSF’s Audit Follow-up
Official. Escalation of recommendations is the final step
available to the OIG in an attempt to urge NSF to strengthen
accountability and to exercise proper stewardship of federal
funds.
Challenge for the Agency: It is an ongoing challenge for NSF
to establish accountability for the billions of federal funds in
its large cooperative agreements at the pre- and post-award
stages and throughout the lifecycle of the projects.
The Large Synoptic Survey Telescope (LSST) project was
the first construction project NSF considered since our 2012
alert memo on the agency’s management of its high-risk,
high-dollar cooperative agreements. Among other things,
that memo recommended that NSF obtain proposal and
35
Management Challenges
accounting systems audits to ensure that cost estimates for such
projects were fair and reasonable and that proposers’ accounting
systems were adequate to bill the government properly.
We found that NSF’s internal review of the cost of the LSST project
could not independently verify costs for any of the 136 proposed
expenditures sampled, including approximately $145 million in direct
materials, nearly $20 million for contingencies and more than $6 million
in direct labor costs.
In September 2014, we issued an alert memo expressing our strong
concern that NSF did not have sufficient information to establish a
reasonable basis for the cost of the LSST project. As a result, NSF
has limited insight into the makeup of the project’s cost, and little if any,
assurance that they are reasonable.
In addition, NSF is conducting the LSST project under a cooperative
agreement with the Association of Universities for Research in
Astronomy (AURA). For four years, audits have repeatedly documented
significant estimating deficiencies with AURA and concluded that AURA
does not have an effective process for preparing adequate proposals.
In light of the known and continuing deficiencies with AURA’s estimating
practices and cost proposals and the lingering uncertainties about the
reasonableness, accuracy, and currency of many of the costs proposed
for the LSST project, NSF should take immediate and strong action to
ensure that costs proposed for and incurred under the project comply
with federal and NSF requirements.
In addition to the problems with the LSST proposal, an effort to audit the
cost proposal for construction of the Daniel K. Inouye Solar Telescope
(DKIST formerly ATST) resulted in a disclaimer of opinion due to
significant deficiencies in the proposal, including unsupported estimates,
outdated vendor quotes, and the inclusion of amounts for an unallowable
contingency reserve. The auditors stated, “In summary, AURA did not
support the material cost in their proposal using adequate cost or pricing
data, they did not use actual costs in the rebaseline of the proposal
when actual costs do exist, and they included costs that were explicitly
unallowable per the OMB circular regulations.”
For four years, similar deficiencies have been documented in audits
of AURA (the entity submitting the proposal to build the DKIST). This
report confirms that AURA has not corrected these deficiencies or
improved its proposal estimating practices. Because the proposed costs
could not be affirmed as an acceptable basis for a fair and reasonable
price, NSF can have no assurance that the proposal is an acceptable
basis for funding. Further, the inadequacy of this cost estimate directly
impacts the recipient’s ability to properly monitor and manage federal
36
OIG Semiannual Report September 2014
funds. The repeated estimating deficiencies demonstrate lack of
improvement on the part of both AURA and NSF to exercise proper
stewardship over the millions of dollars awarded for this project and
heighten our concerns about unsupported costs being proposed and
included in high-dollar, high-risk awards.
We have been urging NSF for the past four years to strengthen
accountability of its high-dollar, high-risk cooperative agreements for
its large facility construction projects. NSF applies its highest level of
attention and scrutiny to determine the scientific merit of the projects
it decides to fund. It is imperative that NSF apply the same rigorous
attention and scrutiny to its financial management of these projects, prior
to requesting NSB approval for award. The stakes are too high for the
Foundation to continue its current practice of requesting NSB approval
and making awards before it ensures that project costs are reasonable,
are supported by adequate documentation, and will use taxpayer dollars
efficiently.
OIG’s Assessment of the Agency’s Progress: NSF stated that it
has published guidance on cost analysis of construction cost estimates
and has drafted guidance on the use and management of contingency
in large facility cooperative agreements. NSF also reported that it
continues to review the risk management process for large facilities
and that in FY 2014 it conducted four business system reviews of large
facility awardees.
CHALLENGE: Improving Grant Administration
Overview: NSF’s mission of “promoting the progress of science”
is accomplished largely through the making of grants in support of
promising scientific research. In FY 2013, NSF competitively reviewed
approximately 49,000 proposals for research, education and training
projects, and funded close to 11,000 new awards. As of September
30, 2014, NSF had a portfolio of over 41,000 active awards totaling
approximately $36.6 billion. Since most of these awards are grants, it
is vital that NSF’s grant management processes ensure that grantees
spend their funds appropriately.
Challenge for the Agency: Ensuring that grant funds are spent as
intended has always been challenging because grant recipients are
not required to present supporting documentation, such as invoices
and receipts, in order to receive payment from the agency. In addition,
while recent efforts to reduce the administrative impact on grantees are
worthwhile, care must be taken to ensure that accountability for public
funds is not compromised in the process. Therefore, the challenge
37
Management Challenges
for NSF is implementing controls over the spending of grant funds
that ensure transparency and accountability, while not creating undue
administrative impacts on awardees and federal program officers.
One step federal agencies have taken to reduce such impacts on
researchers is to streamline the written guidance for administering
grants. While a reduction in extraneous guidance is welcome, we are
concerned that some useful guidance has also been eliminated and
will increase the risk that inconsistent interpretations and direction will
be given to awardees. With scores of program officers overseeing
thousands of awards and fielding questions from numerous awardees
on a daily basis, NSF will be challenged to provide consistent messages
across the spectrum of awardees and ensure its replies do not
contradict each other or its written policies. OIG has observed several
recent situations in which awardees individually have requested NSF’s
interpretation and direction on a particular issue, but the direction
provided conflicted with NSF’s published policy and/or prior informal
guidance received from NSF personnel.
Recent changes to government-wide grants policy also presents
challenges for NSF. On December 26, 2013, OMB issued its final rule,
2 CFR Part 200, “Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards” (Uniform Grant Guidance or
UGG). The UGG streamlined eight OMB administrative, cost, and audit
circulars into one circular that covers all types of non-Federal entities
that receive Federal awards. However, as part of this initiative OMB
raised the single audit threshold from $500,000 to $750,000. Using
data for single audits of entity fiscal year 2012 (the most recent year
with complete data), NSF will lose single audit visibility for approximately
$11.8 million in NSF funds provided directly to awardees, and will need
to take additional steps to oversee the awardees who expend these
funds.
In addition, OMB changed requirements related to documentation
of labor effort, making it more challenging to assess the allowability
of salaries and related costs on an ongoing basis. Under the UGG,
colleges and universities are permitted to charge awards for salary costs
based on budget estimates, rather than on the basis of actual work
performed, provided only that “significant changes” are entered “in a
timely manner” and that the final amount charged to the Federal award
is accurate, allowable, and properly allocated. NSF faces the challenge
of implementing OMB guidance over awardee spending for research
salaries–generally the largest item of expense in research awards–that
only requires awardees to ensure salary costs are reasonable at the end
of an award.
38
OIG Semiannual Report September 2014
Finally, OMB significantly shortened the audit resolution timeframe.
Prior to the UGG, Federal agencies had 6 months to issue management
decision letters on findings affecting the agency from the time they
received an audit report. The new OMB requirement allows 6
months from the date that the report is submitted to the Federal Audit
Clearinghouse. For NSF, this change would effectively shorten the audit
resolution timeframe by 30 days, unless the agency can establish a
new accelerated process for identifying and tracking reports that require
resolution.
OIG’s assessment of the Agency’s Progress: NSF recently issued
a draft of the December 2014 “Proposal and Award Policies and
Procedures Guide” (PAPPG), which, in conjunction with NSF’s “Grant
General Conditions” (GC-1), will serve as the agency’s implementation
of the UGG. Also, OIG and NSF have entered into discussions about
possibly transferring responsibility for identifying single audit findings
that require NSF resolution to NSF in FY 2015. Finally, NSF continues
to use its Award Monitoring and Business Assistance Program (AMBAP)
to provide advanced internal control monitoring of awardee institutions.
During FY 2014, NSF planned and completed 30 AMBAP reviews.
CHALLENGE: Management of the U.S. Antarctic Program
Overview: Antarctica is the coldest, driest, windiest, most remote
continent on earth. The weather changes frequently and abruptly;
temperature drops of as much as 65 degrees F in twelve minutes have
been recorded.
NSF, through the United States Antarctic Program (USAP), manages
U.S. scientific research in Antarctica. The program’s goals are: to
understand the Antarctica and its associated ecosystems; to understand
the region’s effects on, and responses to global processes such as
climate; and to use Antarctica’s unique features for scientific research
that cannot be done as well elsewhere. The USAP supports research
in virtually every area of science funded not only through NSF, but also
through other federal agencies such as the U.S. Geological Survey,
the National Oceanic and Atmospheric Administration, and the National
Aeronautics and Space Administration. The Antarctic Support Contract,
which was awarded to Lockheed Martin in December 2011is NSF’s
largest contract, valued at nearly $2 billion over 13 years.
Challenge for the Agency: Establishing and maintaining a world-
class scientific research program in Antarctica’s remote and harsh
environment is a formidable logistical challenge. The July 2012 report
by the Blue Ribbon Panel, commissioned by NSF and the Office of
Science and Technology Policy, found that U.S. activities in Antarctica
39
Management Challenges
were well-managed, but suffered from an aging infrastructure, lack of a
capital budget, and the effects of operating in an extremely unforgiving
environment. To address these pressing challenges, the Panel made
recommendations pertaining to ten topic areas and provided 84
implementing actions to support these overarching recommendations.
In March 2013, NSF responded to the recommendations with a summary
report and a working matrix describing the status of the 84 implementing
actions. In June 2013, we issued a memorandum to NSF making
several suggestions to improve the usefulness of its working matrix,
such as including timelines for action and identifying a responsible
person for each action. NSF has been tracking progress in its working
matrix and has improved that document.
In May 2014, we began an audit to assess the effectiveness of NSF’s
oversight and the contractor’s performance to ensure the overall health
and safety of USAP participants. The audit will include an assessment
of health and safety programs and related policy, procedures and
training, the adequacy of incident reporting, and NSF’s progress toward
implementing Blue Ribbon Panel recommendations related to health and
safety. It is noteworthy, however, that more than three years after the
Panel’s report, NSF has not provided a public, point-by-point response to
the Panel’s recommendations.
Another challenge for NSF is to control the cost of the USAP and to
ensure adequate oversight of payments to the USAP contractor. Our
2013 audit of the medical screening process for travelers to Antarctica
found that NSF’s medical review panel has made recommendations that
could reduce the cost of this process, but NSF has not implemented
many of these recommendations. For example, for the last five years
the panel recommended that NSF base required medical tests on
factors such as how long an individual will be in Antarctica, and what
their duty station and job responsibilities will be. Revising the number
of medical tests performed to reflect these criteria could lower costs of
the screening process, which currently totals approximately $860 per
person.
Finally, cost containment issues are also a challenge for NSF. The
Antarctic Support Contract, which was awarded to Lockheed Martin
in December 2011, is the agency’s largest contract, valued at
approximately $1.925 billion over 13 years, and is a cost reimbursement
contract. Such contracts are inherently risky because the government
assumes much of the risk that poor performance on the part of the
contractor will result in cost overruns. In addition, the contract includes
a provision for the contractor to receive an award fee based on an
assessment of its performance. An NSF official in the Division of
Polar Programs makes the final decision about whether the contractor
40
OIG Semiannual Report September 2014
receives an award fee and then also determines the amount of the
award fee based on a panel recommendation. Absent input from an
external, independent entity, it may be a challenge for NSF to objectively
evaluate the contractor’s performance.
OIG’s Assessment of the Agency’s Progress: NSF’s has improved its
internal tracking matrix for the 84 implementing actions, by adding target
dates and identifying a responsible person for each action, among other
things.
In response to our audit on reducing costs of the medical screening
process, NSF concurred with the OIG’s recommendations and has
formalized its process for addressing and tracking medical panel
recommendations.
CHALLENGE: Moving NSF Headquarters to a New Building
Overview: In June 2013, the U.S. General Services Administration
(GSA) announced that it signed a 15-year lease agreement on behalf
of NSF for a new headquarters building to be constructed in Alexandria,
VA. The new building will be approximately the same size as NSF’s
current location. NSF is scheduled to occupy the new building by
December 30, 2016, and begin paying rent on it on January 1, 2017.
Any delays in the occupancy date caused by NSF could have a
significant cost to NSF.
Challenge for the Agency: The OIG issued an Alert Memo in
September 2014, which expressed strong concern about missed
schedule milestone dates that have occurred already and which could
continue as a result of an ongoing impasse between NSF and its
union. NSF received the Union’s written opposition to certain issues
in September 2013, but these issues have not been resolved despite
multiple mediation sessions and other attempts to address concerns.
The Union filed a Request for Assistance with the Federal Labor
Relations Authority’s Federal Service Impasses Panel (FSIP) in June
2014. Depending on the FSIP’s decision, (which is binding) NSF could
incur additional schedule delays. If delays like this continue and cannot
be mitigated, they could result in significant charges to the agency
because NSF may have to pay certain costs (which have yet to be
negotiated) for every day it causes the occupancy date to be delayed.
Due to the significant risks of continued impasse, it is imperative that
NSF senior management focus the highest level of attention on this
issue.
41
Management Challenges
Continued missed milestone dates are likely to impact other schedule
milestones, such as the interior construction and occupancy date. While
NSF has told us that it may be able to make up lost time, it is difficult to
know how much continued schedule slippage can be mitigated.
Another challenge is planning the logistics of the actual move. NSF
stated that computers, chairs, and tables will be moved to the new
building and that its primary cost will be for workstation furniture that
cannot be moved. NSF will need to procure new workstation furniture
in a timely manner and tightly control moving expenses for the items it
moves from Arlington. NSF is considering different options and there
may be a period of time when it is operating in both buildings, which
could be a challenge for holding merit review panels, which are essential
to NSF’s mission of awarding grants for scientific research.
OIG’s Assessment of the Agency’s Progress: NSF has been
planning for a possible move since 2008, when it hired a project director.
NSF created the Future NSF Headquarters Office (FNSF) to coordinate
and manage the move. The FNSF’s project director assisted with NSF’s
last move in 1993 from Washington, DC to Arlington. NSF reported
that it has held more than 80 staff design review meetings to ensure
the timely response to design submittals, in accordance with the lease
requirement. In addition, NSF informed us that it plans to negotiate a
construction delivery schedule that minimizes the financial risk to NSF.
CHALLENGE: Managing Programs and Resources in Times of
Budget Austerity
Overview: Given the limitations placed on future federal budgets by
the Budget Control Act of 2011, NSF’s efforts to maintain and possibly
increase its funding will be subject to great scrutiny. Lean budget times
like these require management to pay even closer attention to how
money is spent in order to ensure that the agency’s expenditures are
cost-effective, investments in programs provide a strong return on the
taxpayer’s dollars, and that those investments align directly with national
priorities.
There are numerous discretionary purchases that occur on a weekly
or monthly basis within an organization as large as NSF that offer real
opportunities for savings. For example, OIG completed an audit of
purchase cards and found that NSF’s controls over the purchase card
program needed to be strengthened to prevent and detect inappropriate
purchases. Prompted by suspicious purchases identified by its auditors,
OIG conducted an investigation which led to the cardholder pleading
guilty to stealing more than $94,000 from NSF. In response to the
42
OIG Semiannual Report September 2014
audit’s recommendations, NSF issued a revised purchase card policy,
implemented improved training for cardholders, and improved its review
and monitoring of purchase card transactions.
OIG’s audit of the United States Antarctic Program’s Medical Screening
Process determined that NSF should consider opportunities that exist for
cost savings on medical screenings. OIG found that nearly 20 percent of
applicants withdraw each year before completing the medical screening
process, representing a significant amount of time and effort for staff
as well as incurring medical examination costs. This OIG audit also
found that NSF needs to improve oversight of Antarctic support contract
medical processing payments, due to a risk that applicants may submit
claims for expenses that are not eligible for reimbursement, and that the
contractor may submit inaccurate invoices for medical costs to NSF. The
OIG will continue to perform reviews or audits to identify possible cost
savings of NSF operations and programs.
Challenge for the Agency: There are many opportunities to conserve
money within a $7 billion organization like NSF without compromising
the accomplishment of the agency’s core mission. The agency is
therefore challenged to identify opportunities to streamline administrative
processes and cut costs where it can to send a clear message to its
employees and stakeholders that strong, sound management controls
are being applied; reasonable ideas to reduce spending are welcome
and will be implemented; and that NSF is a responsible steward of the
public’s funds.
OIG’s Assessment of the Agency’s Progress: NSF continues to make
progress in identifying ways to reduce administrative costs during FYs
2013 and 2014. To instill an agency-wide culture of cost-saving, NSF
encouraged staff to submit ideas for cost savings. NSF management
concurred with OIG’s audit recommendations to improve controls
over purchase cards and consider opportunities for cost saving for
United States Antarctic Program’s Medical Screening Process. The
agency has also introduced or continues to implement specific cost
cutting initiatives for travel, conferences, printing, mobile devices, and
telecommunications. NSF has been reducing travel costs by further
increasing the use of virtual merit review panels and encouraging the
use of non-refundable tickets for staff travel.
CHALLENGE: Encouraging the Ethical Conduct of Research
Overview: Congress passed the America COMPETES Act in 2007 to
increase innovation through research and development, and to improve
the competitiveness of the United States in the world economy. NSF
responded to the Act by mandating mentoring plans for all postdoctoral
43
Management Challenges
positions, and directing that grantees provide appropriate training
and oversight in the responsible and ethical conduct of research
to undergraduate students, graduate students, and postdoctoral
researchers participating in the proposed research project.
However, information collected during investigations, from site visits, and
from reviews of institutional RCR plans suggests that some institutions
are not taking these requirements seriously. Furthermore, the findings of
research funded by NSF’s Ethics Education in Science and Engineering
Program suggests that many of the ethics training programs currently
available provide limited positive effect on the perspectives of students
and postdocs regarding the ethical conduct of research. This potentially
compromises the public’s confidence in the research enterprise and
affects the safety of NSF funds. NSF is challenged to provide more
oversight on institutional implementation of these requirements and to
provide meaningful guidance regarding RCR training.
Challenge for the agency: NSF’s primary challenge is to ensure
that awardees implement effective RCR programs. RCR is just one
component necessary to create a culture of academic integrity that
extends to all levels of the university. At a time when opinion surveys
indicate that more Americans are becoming distrustful of science,
it is important that the conduct of scientific research not be tainted
by instances of misrepresentation or cheating. Affirmative steps
are necessary to counter the trends of increasing integrity-related
violations. Recent surveys suggest that cheating is endemic at various
levels of education, with 30% of researchers admitting to engaging
in questionable research practices. Consistent with these survey
results, OIG has seen a dramatic increase in substantive allegations of
plagiarism and data fabrication, especially as it relates to junior faculty
members and graduate students. Over the past 10 years, the number
of allegations received by our office has more than doubled, as have the
number of findings of research misconduct NSF has made based on OIG
investigation reports. In addition, OIG has seen a substantial increase of
allegations related to: peer-review based confidentiality violations, false
representations in CVs, false representations of publications in annual/
final reports, failure to list all affiliations and current support (especially
at overseas institutions), and fraudulent or otherwise improper use of
grant funds. The number and variety of ethical issues identified in our
investigative activities strongly suggest that the general ethical fabric of
the research enterprise may be at risk—not only at the student level but
at the faculty level as well.
Only 10% of the science and engineering workforce hold PhDs. For
this reason, the NSF Act places responsibility on NSF to “strengthen
scientific [and engineering] research potential at all levels in ... various
fields.” NSF’s research and training programs reach individuals who
44
OIG Semiannual Report September 2014
are ultimately employed by academia, industry, and government; these
individuals could have a broad and positive impact on the US science,
engineering and education workforce. NSF has been responsive to
recommended actions contained in our individual research misconduct
investigation reports. However, such agency actions only address
incidents after the fact. Extrapolation of the number of allegations OIG
has received across the 45,000 proposals NSF receives annually,
suggests that 1,300 proposals could contain plagiarism and 450-900
proposals could contain falsified data. Since NSF funds research in
virtually every non-medical research discipline, the agency is in a unique
position to lead the government response to these disturbing trends at all
levels of education.
OIG’s Assessment of the Agency’s Progress: The agency responded
to the America COMPETES Act by creating a requirement that grantees
submit mentoring plans for all NSF-supported postdoctoral positions and
provide appropriate training and oversight in the responsible and ethical
conduct of research to undergraduate students, graduate students, and
postdoctoral researchers participating in the proposed research project.
The NSF guidance is very limited compared with those instituted at
NIH in 2010. OIG has observed a wide disparity among grantee RCR
programs, ranging from high quality mentoring programs to programs
that simply refer students to web-based or computer-based training.
Early intervention remains critical to any effort to ensure that students
understand proper professional practices and the implications of
misconduct. We continue to receive substantive data fabrication/
falsification allegations involving students, post-docs, and faculty. We
currently have 24 active investigations regarding such allegations.
Therefore, we believe that more needs to be done and NSF should
expand its influence with institutions regarding this important issue. OIG
has developed a plan to systematically review RCR plans that were
initiated as a result of the America COMPETES Act. We have requested
RCR plan details from 50 random grantee institutions and hope to
complete that review in the near future.
Other actions the agency has taken include the development of a new
ethics research program called Cultivating Cultures for Ethical STEM
(CCE STEM). The CCE STEM research effort is focused on identifying
the factors that create climates that foster and encourage research
integrity rather than focusing on curriculum development on integrity
issues. The Agency is also working with the National Academies to
develop and make available ethics materials that will be applicable
across all scientific fields that NSF supports.
45
Management Challenges
46
Statistical Data
Audit Data
Audit Reports Issued with Recommendations
for Better Use of Funds
Dollar Value
A. For which no management decision has been made by the commencement of $304,895,499
the reporting period
B. Recommendations that were issued during the reporting period $11,714,680
C. Adjustments related to prior recommendations 34
11-1-021 NEON construction proposal $(75,780,354)
12-1-008 NEON proposal audit $75,780,354
Total $0
Subtotal of A+B+C $316,610,179
D. For which a management decision was made during the reporting period $223,140,768
i) Dollar value of management decisions that were consistent with OIG $0
recommendations
ii) Dollar value of recommendations that were not agreed to by $223,140,768
management
E. For which no management decision had been made by the end of the reporting $93,469,411
period
For which no management decision was made within 6 months of issuance $81,754,731
34 Report No. 11-1-021 was an inadequacy memorandum related to NEON’s construction proposal. NEON submitted a revised
proposal; and the audit of the revision was issued as Report No. 12-1-008. That report found $154,437,748 total unallowable and
unsupported costs, of which $72,683,017 was unallowable contingencies. Both reports related to the same NEON project, but
Report No. 12-1-008 was a later picture of the proposal. To clarify that the entire $154,437,748 of funds put to better use pertained
to the same project (and thus to both reports), the prior period adjustment above removes $75,780,354 of funds put to better use
from the first report, No. 11-1-021, and adds them to the $78,657,394 previously reported in the second report, No. 12-1-008
(75,780,354 + 78,657,394 = 154,437,748). As a result, Report No. 11-1-021 no longer has any reported funds put to better use
and is omitted from the total reported in Section D. That Section also shows that a management decision was made during the
reporting period for $223,140,768, and that this amount was not agreed to by management. The $223,140,768 represents funds put
to better use related to contingency amounts on proposals for three large facility projects, one of which is NEON. Specifically, the
$223,140.768 includes $72,683,017 of contingency funds on NEON Report No. 12-1-008. Thus, at the end of this reporting period,
$81,754,731 (of non-contingency funds) remain unresolved on Report No. 12-1-008. (72,683,017 + 81,754,731 = 154,437,748).
Statistical Data
Audit Reports Issued with Questioned Costs
Number of Questioned Unsupported
Reports Costs Costs
A. For which no management 12 $14,320,526 $2,337,228
decision has been made by the
commencement of the reporting period
B. That were issued during the reporting 11 $5,007,831 $195,654
period
C. Adjustment related to prior 1 -$496,46635 $0
recommendations
Subtotal of A+B+C $18,831,891 $2,532,882
D. For which a management decision 8 $6,278,204 $15,568
was made during the reporting period
Dollar value of disallowed costs N/A $435,301 N/A
Dollar value of costs not disallowed N/A $5,842,903 N/A
E. For which no management decision 15 $12,553,687 $2,517,314
had been made by the end of the
reporting period
For which no management decision was 8 $7,574,636 $2,335,646
made within 6 months of issuance
35 Questioned costs of $496,466 have been removed from audit resolution of OIG Report No. 12-1-005.
48
OIG Semiannual Report September 2014
Status of Recommendations that Involve Internal NSF Management Operations
Open Recommendations (as of 03/31/2014)
Recommendations Open at the Beginning of the Reporting Period 98
New Recommendations Made During Reporting Period 3
Total Recommendations to be Addressed 101
Management Resolution of Recommendations 36
Awaiting Resolution 23
Resolved Consistent With OIG Recommendations 78
Management Decision That No Action is Required 0
Final Action on OIG Recommendations37
Final Action Completed 3
Recommendations Open at End of Period (09/30/2014) 98
Aging of Open Recommendations
Aging of Open Recommendations
Awaiting Management Resolution:
0 through 6 months 3
7 through 12 months 11
More than 12 months 9
Awaiting Final Action After Resolution
0 through 6 months 0
7 through 12 months 39
More than 12 months 36
36 “Management Resolution” occurs when the OIG and NSF management agree on the corrective action plan that will be
implemented in response to the audit recommendation.
37 “Final Action” occurs when management has completed all actions it agreed to in the corrective action plan.
49
Statistical Data
List of Reports
OIG and CPA-Performed Reviews38
Report Subject Questioned Unsupported Better Use
Number Costs Costs of Funds
14-1-001 New York University $75,494 $0 $0
14-1-002 Virginia Polytechnic Institute & State $1,604,129 $0 $0
University
14-1-003 Southwest Research Institute $0 $0 $0
14-1-004 UCLA $2,358,380 $131,139 $0
14-1-005 Audit of AURA Cost Book Evaluation for $0 $0 $11,714,680
the Rebaselined ATST / DKIST Project
14-1-006 University of Illinois at Urbana - $173,290 $50,529 $0
Champaign
14-2-008 (Sikuliaq) NSF’s Management $0 $0 $0
and Oversight of the R /V Sikuliaq
Construction Project
14-3-002 LSST (Alert Memo) NSF’s Management $0 $0 $0
of Costs Proposed for the Large
Synoptic Survey Telescope Construction
Project
14-3-003 NSF’s Relocation to its New $0 $0 $0
Headquarters Location (Alert Memo)
14-7-002 IQCR of #14-2-006 (Purchase Card Audit) $0 $0 $0
14-7-00 IQCR of #13-1-004 (ARRA Cornell $0 $0 $0
University)
Total: 11 $4,211,293 $181,668 $11,714,680
38 The Office issued 11 reports this semiannual period.
50
OIG Semiannual Report September 2014
NSF-Cognizant Reports
Report Subject Questioned Unsupported
Number Costs Costs
14-4-012 3-13 Association of Science-Technology Centers - DC $0 $0
14-4-013 6-13 Balboa Park Cultural Partnership - CA $0 $0
14-4-014 6-13 Cal Poly Corporation - CA $0 $0
14-4-015 6-13 Carnegie Institution of Washington - DC $0 $0
14-4-016 6-13 Cary Institute of Ecosystem Studies - NY $0 $0
14-4-017 6-13 CBIA Education Foundation - CT $0 $0
14-4-018 6-13 CENIC Corporation for Education Network Initiatives $0 $0
California - CA
14-4-019 6-13 Exploratorium - CA $0 $0
14-4-020 REVISED 12-12 Field Museum of Natural History - IL $0 $0
14-4-021 6-13 IRIS Incorporated Research Institutions for $0 $0
Seismology - DC
14-4-022 6-13 Institute for Advanced Study - NJ $0 $0
14-4-023 6-13 Kennesaw State University Research and Service $0 $0
Foundation - GA
14-4-024 9-13 KQED, Inc. - CA $0 $0
14-4-025 6-13 Maine Mathematics and Science Alliance - ME $0 $0
14-4-026 6-13 Museum of Science - MA $0 $0
14-4-027 6-13 National Alliance for Partnership in Equity Education - PA $0 $0
14-4-028 6-13 National Collegiate Inventors and Innovators Alliance - MA $0 $0
14-4-029 9-13 NEON National Ecological Observatory Network, Inc. - CO $0 $0
14-4-030 6-13 NISS National Institute of Statistical Sciences - NC $0 $0
14-4-031 6-13 Oakland Museum of California - CA $0 $0
14-4-032 5-13 Oregon Museum of Science and Industry - OR $0 $0
14-4-033 6-13 Oregon Public Broadcasting - OR $0 $0
14-4-034 6-13 Quality Education for Minorities Network - DC $0 $0
14-4-035 REJECTED 6-13 Soundvision Productions - CA $0 $0
14-4-036 6-13 The Adler Planetarium - IL $0 $0
14-4-037 6-13 The Computing Research Association - DC $0 $0
14-4-038 9-13 The Concord Consortium - MA $0 $0
14-4-039 6-13 The New Mexico Consortium - NM $0 $0
14-4-040 6-13 The Science Museum of Minnesota - MN $0 $0
14-4-041 6-13 University of Tulsa - OK $0 $0
14-4-042 6-13 Woods Hole Research Center - MA $0 $0
14-4-043 6-13 University Enterprises Corporation CSUSB - CA $0 $0
14-4-044 7-13 MSRI Mathematical Science Research Institute - CA $0 $0
51
Statistical Data
14-4-045 9-13 ARCUS Arctic Research Consortium of $0 $0
the United States - AK
14-4-046 6-13 Association of American Colleges & Universities - DC $0 $0
14-4-047 8-13 Association of American Geographers - DC $0 $0
14-4-048 6-13 California Academy of Sciences - CA $0 $0
14-4-049 6-13 Island Institute - ME $0 $0
14-4-050 6-13 Los Angeles County Museum of Natural History $0 $0
Foundation - CA
14-4-051 9-13 The Algebra Project - MA $0 $0
14-4-052 9-13 UCAR University Corporation for Atmospheric $0 $0
Research - CO
14-4-053 3-13 Berkeley Geochronology Center - CA $0 $0
14-4-054 6-13 Bishop Museum - HI $0 $0
14-4-055 9-13 Fermi Research Alliance - IL $0 $0
14-4-056 6-13 Friends of the North Carolina State Museum of $0 $0
Natural Sciences - NC
14-4-057 6-13 IUP Research Institute - PA $0 $0
14-4-058 6-13 New York Hall of Science - NY $0 $0
14-4-059 6-13 Old Dominion University Research Foundation - VA $0 $0
14-4-060 6-13 The Ecological Society of America - DC $0 $0
14-4-061 8-13 Twin Cities Public Television - MN $0 $0
14-4-062 6-13 WGBH Educational Foundation 10-month audit - MA $0 $0
14-4-063 6-13 New York Public Radio FKA WTNC Radio - NY $0 $0
14-4-064 6-13 Rancho Santa Ana Botanic Garden - CA $0 $0
14-4-065 9-13 Virtual Astronomical Observatory LLC - DC $0 $0
14-4-066 9-13 AUI Associated Universities, Inc. - DC $0 $0
14-4-067 6-13 Toyota Technological Institute at Chicago - IL $0 $0
14-4-068 Intentionally left blank $0 $0
14-4-069 9-13 Consortium for Ocean Leadership - DC $0 $0
14-4-070 12-13 Council of Graduate Schools - DC $0 $0
14-4-071 6-13 New Jersey Academy for Aquatic Sciences - NJ $0 $0
14-4-072 8-13 Open Networking Laboratory - CA $0 $0
14-4-073 6-13 American Museum of Natural History - NY $0 $0
14-4-074 12-13 American Physical Society - MD $0 $0
14-4-075 6-13 Five Colleges, Inc. - MA $0 $0
14-4-076 6-13 MPC Corporation - PA $0 $0
14-4-077 6-13 New York Botanical Garden - NY $0 $0
14-4-078 REVISED 3-12 Berkeley Geochronology Center - CA $0 $0
14-4-079 12-13 Missouri Botanical Garden - MO $0 $0
14-4-080 12-13 Santa Fe Institute - NM $0 $0
52
OIG Semiannual Report September 2014
14-4-081 3-13 Decision Science Research Institute dba Decision $0 $0
Research - CA
14-4-082 9-13 IODP Management International - VA $0 $0
14-4-083 12-13 The Chicago Zoological Society - IL $0 $0
14-4-084 9-13 California Institute of Technology - CA $0 $0
14-4-085 12-13 Bay Area Video Coalition - CA $0 $0
14-4-086 6-13 BIOS Bermuda Institute of Ocean Sciences - NY $0 $0
14-4-087 12-13 Institute of Global Environment & Society - MD $0 $0
14-4-088 12-13 ICSI International Computer Science Institute - CA $0 $0
14-4-089 12-13 American Association of Community Colleges - DC $0 $0
14-4-090 12-13 American Mathematical Society - RI $0 $0
14-4-091 Intentionally left blank $0 $0
14-4-092 12-13 Horizon Research, Inc. - NC $0 $0
14-4-093 12-13 Institute for Broadening Participation - ME $0 $0
14-4-094 12-13 Mobile Area Education Foundation, Inc. - AL $0 $0
14-4-095 12-13 Mote Marine Laboratory, Inc. & Subsidiaries - FL $0 $0
14-4-096 12-13 The Samuel Roberts Noble Foundation - OK $0 $0
14-4-097 12-12 Openairboston.net, Incorporated - MA $0 $0
14-4-098 REVISED 6-13 SoundVision Productions - CA $0 $0
14-4-099 12-13 TERC Technical Education Research Center, Inc. - MA $0 $0
14-4-100 12-13 Rocky Mountain Biological Laboratory - CO $0 $0
14-4-101 12-13 American Geophysical Union - DC $0 $0
14-4-102 12-13 Biological Sciences Curriculum Study - CO $0 $0
14-4-103 12-13The American Society for Cell Biology - MD $0 $0
14-4-104 12-13 AAAS American Association for the Advancement of $0 $0
Science - DC
14-4-105 12-13 Carnegie Institute - PA $0 $0
14-4-106 12-13 American Association of Physics Teachers - MD $0 $0
14-4-107 12-13 Scientific Committee on Ocean Research - DE $0 $0
14-4-108 12-13 Mathematical Association of America - DC $0 $0
14-4-109 12-13 Marine Biological Laboratory - MA $751,581 $0
14-4-110 12-13 Association for Institutional Research, Inc. - FL $0 $0
14-4-111 9-13 Pacific Resources for Education and Learning - HI $0 $0
14-4-112 12-13 REVISED American Geophysical Union - DC $0 $0
14-4-113 12-13 American Educational Research Association - DC $0 $0
14-4-114 12-13 Center for Severe Weather Research - CO $0 $0
14-4-115 12-13 Field Museum of Natural History - IL $0 $0
14-4-116 12-13 Connor Prairie Museum Inc. & Connor Prairie $0 $0
Foundation - IN
14-4-117 12-13 National Geographic Society - DC $0 $0
14-4-118 12-13 American Chemical Society - DC $0 $0
53
Statistical Data
14-4-119 12-13 UNAVCO, Inc. CO $0 $0
14-4-120 12-13 Start International, Inc. - DC $0 $0
14-4-121 9-13 Teachers Development Group - OR $0 $0
14-4-122 6-13 University Enterprises, Inc. - CA $0 $0
14-4-123 12-13 The Franklin Institute - PA $0 $0
14-4-124 12-13 Las Cumbres Observatory Global Telescope $0 $0
Network, Inc. - CA
TOTAL: $751,581 $0
Other Federal Reports
Report Subject Questioned Unsupported
Number Costs Costs
14-5-024 8-13 Amarillo College - TX $2,221 $0
14-5-037 6-13 Connecticut College $12,427 $0
14-5-052 8-13 State of Texas $13,986 $13,986
14-5-054 6-13 University of Hawaii $564 $0
14-5-067 6-13 State of Arizona $12,009 $0
14-5-119 6-13 Fisk University - TN $3,750 $0
Total: $44,957 $13,986
54
OIG Semiannual Report September 2014
Audit Reports With Outstanding Management Decisions
This section identifies audit reports involving questioned costs, and funds put to
better use where management had not made a final decision on the corrective action
necessary for report resolution with six months of the report’s issue date. At the end of
the reporting period there were 9 reports remaining that met this condition. The status
of recommendations that involve internal NSF management is described on page 49.
Report Subject Questioned Unsupported Better Use
Number Costs Costs of Funds
05-1-005 RPSC Costs Claimed FY2000 to 2002 $1,933,722 $0 $0
09-1-014 University of Michigan $1,604,713 $1,418,889 $0
09-5-048* 8-07 College of the Mainland - TX $110,629 $0 $0
12-1-008 NEON Proposal Audit39 $81,754,731
12-5-143* 9-11 Fort Berthold Community College - ND $25,343 $24,659 $0
13-1-001 REVISED University of Wisconsin - Ice Cube $2,134,379 $0 $0
13-1-002 Jackson State University $943,475 $844,241 $0
13-1-004 ARRA Cornell University $794,221 $19,703 $0
13-5-094* 6-12 Fort Berthold Community College - ND $28,154 $28,154 $0
Total: $7,574,636 $2,335,646 $81,754,731
*This report was on hold at the request of OIG.
39 Resolution is on hold pending the final results of the OIG escalation memorandum of May 22, 2014.
55
Statistical Data
Investigative Activities
Referrals to Prosecutors 8
Criminal Convictions/Pleas 3
Arrests 3
Civil Settlements 5
Indictments/Information 6
Investigative Recoveries $1,133,085.60
Referrals to NSF Management for Action 29
Research Misconduct Findings 8
Suspensions/Debarments/Exclusions 15
Administrative Actions 55
Certifications and Assurances Received
40
19
Investigative Case Statistics
Preliminary
Civil/Criminal
Administrative
Active at Beginning of Period 5 131 116
Opened 14 31 36
Closed 11 38 42
Active at End of Period 8 124 110
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 (5 U.S.C. § 552a).
During this reporting period:
Requests Received 10
Requests Processed 9
Appeals Received 0
Appeals Upheld 0
Response times ranged between 2 days and 80 days, with the median around 15 days
and the average around 20 days.
40 NSF accompanies some actions with a certification and/or assurance requirement. For example, for a specified period, the
subject may be required to confidentially submit to OIG a personal certification and/or institutional assurance that any newly
submitted NSF proposal does not contain anything that violates NSF regulations.
56
Semiannual Report - September 2014
Published by the National Science Foundation, Office of Inspector General on 2014-09-01.
Below is a raw (and likely hideous) rendition of the original report. (PDF)