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 $5 billion per year in a portfolio of approximately 35,000 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 the Inspector General...
NSF’s Office of the 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 receive 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...
Spattering or glowing vents inside Pu`u `O`o, Kilauea’s active vent. Kilauea is the youngest and
southeastern-most volcano on the big island of Hawaii. (Photo by Tom Pfeiffer /
www.decadevolcano.net/VolcanoDiscovery.com; selected by Ken Straka)
Table of Contents
Executive Summary..................................................................5
OIG Management Activities .................................................... 7
Legal Review ................................................................................... 7
Outreach .......................................................................................... 8
Certifications .................................................................................. 12
Audits & Reviews .................................................................. 13
Significant Reports......................................................................... 13
Audit Resolution............................................................................. 20
Work in Progress ........................................................................... 23
A-133 Audit Reports....................................................................... 23
Investigations ..................................................................... 27
Civil and Criminal Investigations .................................................... 27
Administrative Investigations ......................................................... 31
Reviews ......................................................................................... 34
OIG Performance Report 2005-2006....................................37
Goal 1: Promote NSF Efficiency and Effectiveness ....................... 37
Goal 2: Safeguard the Integrity of NSF
Programs and Resources .............................................................. 39
Goal 3: Utilize OIG Resources Effectively and Efficiently .............. 42
Statistical Data ....................................................................... 47
Appendicies ........................................................................ 59
Reporting Requirements ................................................................ 59
Acronyms ....................................................................................... 60
From the Inspector General
Letter from the IG…
This report highlights the activities of the National Science Foundation (NSF) Office of Inspector General (OIG) for
the six months ending March 31, 2006. During this period, our office issued 17 audit reports and reviews that iden-
tified $2,671,061 in questioned costs and $940,046 of promised cost-shared funds at risk of not being contributed.
In addition, we closed 43 civil/criminal cases, 30 administrative cases, and recovered $2,331,397 as a result of our
investigative efforts.
Although the amount of questioned costs is one important measure of an OIG’s effectiveness, it is not the sole objec-
tive of the audits we conduct of NSF grant funds. Over the past few years we have changed the focus of our audits
to look more closely at the financial internal controls of the research institutions funded by NSF and to assess their
effectiveness. We have learned that to simply question the allowability of costs claimed for an award is not enough
to assure appropriate accountability for federal dollars. Our goal is to prevent fraud, waste and abuse by helping in-
stitutions to recognize weak internal controls and to strengthen them so that future funding will be better managed.
I again reaffi rm our support for amending the Program Fraud Civil Remedies Act of 1986 (PFCRA) to include NSF.
PFCRA enables designated agencies to handle allegations of program fraud, when the claims are less than $150,000,
without the assistance of the Department of Justice. In March, the National Science Board sent a letter to Congress
formally requesting that PFCRA be amended to include the National Science Foundation. I urge Congress to consider
that request.
On page 18 of this report, we discuss some of our recent audit work involving the reporting and dissemination of NSF
research results. Effective communication of the outcomes of scientific research serves many purposes, including
maximizing the impact of NSF’s investments in research, affording the agency appropriate recognition as a sponsor
of cutting-edge science and technology, and facilitating access to scientific results by researchers in related fields. In
February, we issued a report that examined NSF’s dissemination practices and found that NSF relies heavily on the
individual researchers to publicize their own results. We believe that the agency could, and should, do more. For
example, other federal grant-making agencies make citations in journals resulting from their research available to
the public, and often go further by providing free and convenient access to the fi nal reports or published articles. In
an era in which technology allows the instantaneous and widespread communication of scientific results, NSF is not
taking a good opportunity to provide a useful service to the science community. A follow-up audit report exploring
other issues related to dissemination will be issued within the next few months.
Finally, in May 2006, the terms of eight key members of the National Science Board will expire. Dr. Warren Wash-
ington, Dr. Diana Natalicio, Dr. Mark Wrighton, Dr. Nina Federoff, Dr. Michael Rossman, Dr. Jane Lubchenco, Dr.
Daniel Simberloff, and Dr. John White will be leaving the Board. The six-year terms of these members coincide with
my tenure as Inspector General and I am very pleased to have worked with them and to have observed first-hand their
contributions to NSF and to the scientific and engineering research, and education enterprises. In particular, I want
to express my deep appreciation to Dr. Washington, Chairman of the National Science Board, and Dr. Wrighton,
Chairman of the Audit & Oversight Committee, for their interest and support of the OIG over the past four years.
Christine C. Boesz, Dr.P.H.
Inspector General
May 8, 2006
Executive Summary
• The audit of NSF’s FY 2005 financial statements resulted in
an unqualified opinion. However, in its Report on Internal
Controls Over Financial Reporting, the auditors identified two
reportable conditions relating to NSF’s post-award adminis-
tration and contract monitoring. In February, NSF submitted
its proposed action plans to address six recommendations
related to these reportable conditions. The proposed cor-
rective actions were reasonable and generally responsive to
all but two recommendations. The OIG and the independent
auditor will continue working with NSF management to en-
sure these issues are resolved in a timely manner. (Page 13)
• The OIG contracted with the Defense Contract Audit Agency
(DCAA), to complete a series of audits of the financial re-
ports and practices of Raytheon Polar Services Company
(RPSC) which provides operations and maintenance sup-
port to NSF’s United States Antarctic Program (USAP).
Most recently, the OIG and DCAA completed three more
reviews that assessed RPSC’s compliance with its feder-
ally disclosed cost accounting practices and the adequacy
of its financial business systems and controls. The auditors
found that RPSC improperly claimed $ 21.1 million of indirect
costs as direct costs for the contract period 2000 to 2002
contrary to its disclosure statement. As a result, the Depart-
ment of Defense (DOD), which is responsible for overseeing
RTSC’s compliance with its CASB disclosure statement on
all federal contracts, issued an initial determination of non-
compliance to RTSC for RPSC, its subsidiary. (Page 14)
• In February 2006, OIG issued an audit report on NSF’s
policies and practices for publicly disseminating the results
of NSF-funded research, including the information that it
receives in the final project reports. Although NSF provides
the public with information about proposed research selected
for funding, the auditors found that it does little to publicize
information about the results of that research. While NSF
collects citations of journal articles resulting from its funded
research, it is the only federal agency that does not provide
this information to the public. The audit report recommends
that NSF make the publication citations more widely avail-
able by including them in the award abstracts database
already publicly available through its website. (Page 18)
5
Executive Summary
• A scientist who owned a small business, was sentenced to 12 months home
confinement, five years probation, and fined $20,000 for Mail Fraud and Tax
Evasion charges related to grants and contracts received from SBIR awards
made by NSF and other agencies. The scientist previously pled guilty to send-
ing SBIR Phase II progress reports to NSF that included research previously
conducted by the company under an Air Force SBIR Phase II contract, and
failing to pay income tax on grant funds he converted to his personal use. He
paid $288,414 for penalties and interest related to tax evasion, and the court
prohibited him from participating in federal grants, contracts, or employment
for five years. In addition, the scientist paid $1,111,586 to the government to
settle a False Claims Act case based on investigative findings that the scientist
submitted false reports to various agencies related to SBIR awards. (Page 27)
• A university paid $2.5 million and entered into a settlement agreement with
the federal government to resolve civil allegations that it submitted false
claims on approximately 500 federal grants awarded from 1997 through
2004. The National Science Foundation’s share of the settlement was
$345,808. The grants were made by numerous federal agencies for work to
be performed at two of the university’s specialized service facilities (SSFs).
A multi-agency investigation concluded that the university submitted grant
applications containing incorrect or overstated information about anticipated
expenses in the SSFs, because the university did not use a proper basis
for setting and regularly updating its billing rate structure, as required by
OMB Circular A-21. As part of the settlement, the university also signed
a compliance agreement with the federal government that will require it to
make significant changes in its grant administration program. (Page 27)
• An OIG investigation concluded that a PI plagiarized text and figures from mul-
tiple source documents into two SBIR Phase I proposals he submitted to NSF.
We recommended NSF send the PI a letter of reprimand informing him that NSF
has made a finding of research misconduct against him, and require that when
proposals are submitted by the PI, or on his behalf, to NSF, he be required to
submit a certification to OIG for 3 years that, to the best of his knowledge, they
contain nothing that violates NSF’s research misconduct regulation. (Page 32)
• The 2005 OIG Performance Report describes progress in the achievement of
our three goals: 1) to promote NSF efficiency and effectiveness; 2) safeguard
the integrity of NSF programs and resources; and 3) utilize OIG resources
effectively and efficiently. (Page 37)
6
OIG Management
Legal Review
The Inspector General Act of 1978, as amended, mandates
that our office monitor and review legislative and regulatory
proposals for their impact on the Office of Inspector General
(OIG) and the National Science Foundation’s (NSF) programs
and operations. We perform these tasks for the purpose of
providing leadership in activities that are designed to promote
economy, effectiveness, efficiency, and the prevention of fraud,
waste, abuse and mismanagement. We also keep Congress
and NSF management informed of problems and monitor legal
issues that have a broad effect on the Inspector General com-
munity. During this reporting period, we reviewed 42 bills that
either affected NSF, OIG, or both. The following legislation
merits discussion in this section.
Program Fraud Civil Remedies Act of 1986 (PFCRA) (31
U.S.C. 3801-3812)
A legislative priority that we support is amending PFCRA to in-
clude NSF and the 26 other agencies that are currently excluded
from participation under the Act’s enforcement provisions. The
amendment would enable NSF and the other agencies to fully
perform their statutory mission to prevent fraud, waste and
abuse by availing themselves of the enforcement capabilities
contained within the Act. We have raised the issue of NSF’s
inclusion under the PFCRA legislation in several prior Semian-
nual Reports.
PFCRA sets forth administrative procedures that address
allegations of program fraud when the claims are less than
$150,000.00. Currently, the executive departments, military
departments, establishments, as defined under the Inspector
General Act of 1978, and the United States Postal Service, are
the only agencies permitted to proceed under PFCRA. NSF
and the other agencies with Inspectors Generals appointed by HIGHLIGHTS
agency heads are not included.
Legal Review 7
We believe that using the enforcement provisions of PFCRA
will enhance NSF and other agency recoveries in instances
of fraud that fall below PFCRA’s jurisdictional threshold of
Outreach 8
$150,000.00. In short, including NSF and the other agen-
cies under PFCRA will further the OIG community’s statu- Certifications 12
tory mission to deter fraud, waste and abuse. In a March
7
OIG Management
2006 letter to Congress, the National Science Board made a formal request
“that Congress amend the PFCRA to include NSF” and afford the agency
the investigative resolution authorities provided other federal agencies.
Outreach
NSF OIG continues to reach out to the national and international research
communities, other federal agencies and OIGs, and NSF staff in an effort to
provide information and raise awareness regarding our mission and the need
for effective collaboration. During this semiannual period, NSF OIG worked
to communicate to each audience how our mission contributes to the overall
success of the research community. Our message remains clear: research
requires money, and those who spend the taxpayers’ money must be account-
able. Compliance systems are a practical way to ensure accountability and must
be created and nurtured in institutions throughout the research community, not
just to achieve technical compliance but also as a way to enhance the research
enterprise through better management and administration.
During this semiannual period, our message was strengthened by the participa-
tion of Assistant United States Attorney, Paula Newett, during our presentation
at NSF’s Regional Grants Conference in Boulder, Colorado, in March. Ms.
Newett is the Deputy Chief (Acting), Civil Division, United States Attorney’s Of-
fice, Eastern District of Virginia (EDVA). She is the Head of the Affirmative Civil
Enforcement (ACE) Unit, which prosecutes a broad array of civil frauds in health
care, grants, and procurement. She explained that ACE had recovered over
$200,000,000 from federal contractors and grantees between 2003 and 2005.
Her comments addressed the importance of including integrity agreements1
as part of settlement agreements. She explained that integrity agreements
are drafted by an OIG in conjunction with the United States Attorney’s Office,
but once approved by all parties, are monitored by the affected agencies. Ms.
Newett explained that because of NSF’s location within EDVA’s jurisdiction, her
office had jurisdiction over NSF grant recipients and that she therefore worked
closely with NSF OIG investigators. Her presentation made clear the account-
ability requirements for organizations and individuals receiving federal grants.
Working with the Research Community
IG Delivers Keynote Address at Symposia Held in China. Professor Zhang
Cunhao, Chairman of the National Natural Science Foundation of China (NSFC)
invited the Inspector General to deliver keynote presentations about the impor-
tance of compliance plans in strengthening internal controls on research and
business functions, at three symposia held in China during October 2005. At
the same sessions Dr. Ken Busch, Investigative Scientist presented five case
1
An integrity agreement includes a set of compliance measures committed to by a grant recipient
organization to ensure the integrity of all claims for reimbursement made to the federal government.
8
OIG Semiannual Report March 2006
studies involving misconduct in research investigations for his audience to con-
sider. The purpose of the symposia was to educate university-based research
faculty and discuss best practices for handling issues of research misconduct.
Professor Zhang noted China’s appreciation for the excellent collaboration
between NSF OIG and the NSFC over the past five years and expressed his
desire that the partnership continue.
OIG Staff Participate in Conferences. Members of the OIG staff were invited
to attend and present at a wide range of workshops, conferences, meetings, and
other events conducted by institutions and associations of research profession-
als. At each event, OIG staff not only presented detailed, practical information
about our work, but also framed the subject matter in the context of the larger
goal of ensuring the integrity of the research endeavor. We fielded questions
from our audiences on a wide range of topics and followed up with individu-
als to ensure complete and accurate information was provided. It remains
the goal of our outreach presentations to assist individuals and organizations
within the national and international research communities in their efforts both
to create systems to identify, resolve, and prevent recurrence of misconduct or
mismanagement, and to foster an environment of ethical conduct in research,
education and grant administration.
During this semiannual period, OIG staff participated in events with the Society
for Research Administrators International; the National Council of University
Research Administrators; the Federal Audit Executive Council; the Science
Foundation of Ireland; the American Chemical Society; the Washington Acad-
emy of Sciences; the University Corporation for Atmospheric Research; the
Federal Law Enforcement Training Center / Department of Homeland Security;
and the Inspector General Academy. In each of these forums, our staff engaged
a broad spectrum of the community involved with provision, use, administration,
and oversight of federal grant funds.
OIG Staff Speak at Universities. Members of the NSF OIG have received
numerous invitations to provide training to, and answer questions from, uni-
versity personnel. University officers and individuals involved in applying for
and administering NSF awards, individuals involved in performing supported
research, and individuals involved in conducting university-level inquiries into
allegations of research misconduct, are among those who have received
presentations from OIG personnel. During this semiannual period, we visited
seven universities or university systems for such presentations. At each, the
participants demonstrated great interest in the presentations and engaged OIG
staff in constructive questions and answers to refine their understanding of the
subjects being discussed.
International Auditor Exchange. An OIG audit manager spent three months
working in the United Kingdom (UK) for the Research Council’s Internal Audit
Service (RCIAS). The office is responsible for auditing the operations of the
seven UK Research Councils that fund approximately $4 billion annually in
9
OIG Management
government research grants to educational institutions. The purpose of the
exchange was to compare the respective approaches to auditing employed by
the two countries, and learn the techniques and methodologies used by the
other to audit grant funds and ensure proper management and accountability.
Both the OIG and RCIAS found the exchange enlightening and beneficial.
Working with the Federal Community
NSF OIG investigators reach out to their counterparts in the IG community on a
regular basis. During this semiannual period, we frequently worked with other
federal agencies and Offices of Inspector General on a host of professional
matters. These agencies include the Departments of Agriculture, Energy,
Justice, Office of Management and Budget, Government Accountability Of-
fice, and Social Security Administration. These professional interactions were
conducted both on an office-to-office level to address requests for particular
assistance, and also within the context of the Council of Counsels to Inspectors
General (CCIG) and committees of the President’s Council on Integrity and Ef-
ficiency /Executive Council on Integrity and Efficiency (PCIE/ECIE). NSF OIG
continues to actively participate in the PCIE/ECIE Investigations Committee,
the ECIE Investigative peer review effort, the Misconduct in Research Work-
ing Group (chaired by the NSF IG), the PCIE/ECIE Inspections and Evaluation
Committee, and the PCIE GPRA Roundtable and the PCIE/ECIE Information
Technology Roundtable.
Deputy U.S. Attorney General Nominee Addresses the 2005 OIG Grant
Fraud Training. Deputy U.S. Attorney General Nominee Paul J. McNulty was
Paul McNulty the keynote speaker during this year’s Grant Fraud Workshop organized by our
(right) with Matt
Quinn, Investi-
office. Subsequent to the workshop, he was confirmed as Deputy U.S. Attorney
gations and Dr. General. Mr. McNulty acknowledged the significant challenges facing federal
Boesz at OIG’s
Grant Fraud
agencies having responsibility for ensuring that the $400+ billion of taxpayers’
Workshop. money, awarded in the form of grants, is expended in accordance with the law.
He discussed his efforts to address the growing problem
of procurement fraud. In his former capacity as the U.S.
Attorney for the Eastern District of Virginia, Mr. McNulty
spearheaded the Procurement Fraud Working Group,
which consists of representatives from OIGs and others
in the federal law enforcement community. The investi-
gators meet quarterly to share investigative information
and discuss their common objective: identifying those
who intentionally misuse government funds and violate
the trust placed in them.
Mr. McNulty emphasized his commitment and active
partnership with the OIG community in pursuing and
bringing to justice those individuals and organizations
that deliberately violate the public’s trust and the crimi-
nal and civil laws of the United States. He specifically
10
OIG Semiannual Report March 2006
acknowledged NSF-OIG’s efforts in bringing the OIG community together to
provide relevant training and to discuss best practices and lessons learned
pertaining to grant fraud. This year’s Grant Fraud Workshop resulted in the
largest turnout to date, with a total of 125 attendees, representing 31 different
offices. Among those attending were 75 investigators, 20 auditors, 20 attor-
neys, and 10 other professionals.
Working with NSF
OIG/NSF Liaison Program. NSF OIG has built on its previous success
in establishing and maintaining effective communication and professional
relationships with the individual directorates and offices within NSF. During
this semiannual period, our liaison teams (generally one investigator and one
auditor) have served as a valuable conduit of information between our offices
in the course of approximately 50 liaison events.
This year, we again conducted a survey of Assistant Directors, Division Di-
rectors, and other staff principals, to assess the efficacy of the OIG Liaison
Program and the quality of communications between the agency and OIG.
We received replies from approximately 75% of those offered the survey. We
are pleased to report that all of the NSF respondents indicated they were
comfortable communicating with their OIG liaisons and understood the OIG
role and how it supports the NSF mission. OIG remains committed to build-
ing and maintaining strong and open lines of communication with the agency.
We will use the results of this year’s survey to identify opportunities to further
improve those communications.
Program Managers’ Seminar Briefings. OIG staff continue to participate as
Resource Personnel in the NSF Program Managers’ Seminar, which provides
new NSF staff with detailed information about the Foundation and its activi-
ties. During each seminar, the OIG Resource Person makes a presentation
about our office to the new Program Managers. These sessions have been
successful in fostering personal and professional relationships between OIG
and agency staff, as well as in educating NSF personnel on the mission and
responsibilities of NSF OIG.
Conflict-of-Interests Briefings. The NSF Designated Agency Ethics Official
continues to offer OIG staff an opportunity to address NSF staff at manda-
tory conflict-of-interest briefings which are conducted approximately twice per
month. This generous offer provides OIG with a forum in which we can commu-
nicate our mission and responsibilities, our ongoing liaison program with NSF,
and the manner by which employees can bring matters to our attention.
11
OIG Management
Certifications
Office of Audit Receives A Clean External Peer Review Report. In ac-
cordance with Government Auditing Standards, we are required to have an
external quality control review conducted of our audit operations and quality
control system at least once every three years. The purpose of the peer review
is to determine whether the audit organization has a quality control system in
place to provide reasonable assurance that it is following all applicable auditing
standards. During this reporting period, the Board of Governors of the Federal
Reserve System (FRS) OIG conducted an external quality control review of our
audit operations. We are pleased to report that FRS-OIG found that our audit
quality control system provides reasonable assurance of conforming to profes-
sional auditing standards in the conduct of our audits. In the report, FRS-OIG
made four suggestions regarding our internal quality assurance program and
enhancing our internal audit policies and procedures.
NSF OIG Recertifies Its Compliance with Whistleblower Act. The NSF
OIG has been recertified by the Office of Special Counsel as meeting its statu-
tory obligation to inform its workforce about the rights and remedies available
under the Whistleblower Protection Act (WPA) and related civil service laws.
In 1994, Congress enacted 5 U.S.C. §2302(c) to address concerns about igno-
rance among federal workers of their right to be free from prohibited personnel
practices, especially retaliation for whistleblowing. That provision charges “the
head of each agency” with responsibility for “ensuring (in consultation with the
Office of Special Counsel) that agency employees are informed of the rights
and remedies available to them” under the prohibited personnel practice and
whistleblower retaliation protection provisions of Title 5.
12
Audits & Reviews
Significant Reports
Financial Statement Audit and Review of
Information Systems
The federal government has made the improvement of financial
management a high priority for many years. The President’s
Management Agenda identified improved financial manage-
ment as one of its top five government-wide initiatives, with the
aim of producing accurate and timely information to support
decisions affecting operations, budget, and policy.
The Chief Financial Officer’s (CFO) Act of 1990, as amended,
requires federal agencies to prepare annual financial state-
ments and the agency OIG, or an independent public account-
ing firm selected by the OIG, to audit these statements. The
Federal Information Security Management Act (FISMA) re-
quires an independent evaluation of the agencies’ information
security controls. During this reporting period, we completed
these two required audits for fiscal year (FY) 2005.
Fiscal Year 2005 Independent Auditors Issue Unqualified
Opinion, Continue to Cite Need for Improved Award Over-
sight
Under a contract with the OIG, KPMG LLP conducted an audit
of NSF’s financial statements for FY 2005 and issued another
unqualified opinion to NSF. However, in its Report on Inter-
nal Controls Over Financial Reporting, KPMG identified two
reportable conditions relating to NSF’s post-award administra-
tion and contract monitoring.
At any point in time, NSF administers some 35,000 awards
amounting to approximately $23 billion in the agency’s total HIGHLIGHTS
portfolio to support basic science and engineering research Significant Reports 13
and education. Assessing scientific progress and ensuring
effective financial and administrative oversight of these funds Audit Resolution 20
are critical elements in managing NSF’s award programs. In
FY 2005, NSF made progress in addressing prior post-award
Work in Progress 23
monitoring recommendations by implementing a number of
new procedures. However, the auditors reported that addi-
tional improvements are still needed. Specifically KPMG rec- A-133 Audit Reports 23
13
Audits & Reviews
ommended that NSF: (1) establish and implement a detailed strategic plan to
monitor all institutions identified as having high risk awards; (2) clearly state
how site visit selections are to be determined; and (3) ensure that both objec-
tive and subjective factors are applied during the risk assessment process to
capture all high risk awards.
KPMG also identified problems with NSF’s process of monitoring the financial
performance of its largest contractors who receive advance payments. The
auditors reported that NSF does not adequately review quarterly expenditure
reports submitted by contractors receiving advance payments for 1) accuracy
and propriety, 2) correct computations, and 3) authorized purpose under the
contractual agreement. In addition, NSF’s process for reviewing and approv-
ing expenditures does not include periodic testing. Without adequately per-
forming such procedures, substantial misstatements and unauthorized expen-
ditures may go undetected.
In February, NSF submitted its proposed action plans to address the recom-
mendations related to these reportable conditions. The proposed corrective
actions were reasonable and generally responsive to all but two recommenda-
tions. The OIG and the independent auditor will continue working with NSF
management to ensure these issues are resolved in a timely manner.
FY 2005 FISMA Information Systems Reports
The FY 2005 Federal Information Security Management Act (FISMA) Inde-
pendent Evaluation Report and the FY 2005 FISMA Evaluation Summary Re-
port state that NSF has an established information security program and has
been proactive in reviewing security controls and identifying areas to strength-
en this program. The report identified eight areas in which NSF can further
improve its information system security program. Management agreed with
the findings and recommendations in these reports and indicated that, in many
instances, it has already initiated corrective action.
Audits of Raytheon Polar Services
Company Find Compliance and Control Problems
At NSF’s request, the OIG contracted with the Defense Contract Audit Agency
(DCAA), to complete a series of audits of the financial reports and practices
of Raytheon Polar Services Company (RPSC). RPSC provides science, op-
erations and maintenance support to sustain year round research in NSF’s
United States Antarctic Program (USAP). In the March 2005 Semiannual2,we
reported that the auditors questioned $33.4 million, or 9.2 percent, of the $363
million costs claimed by RPSC for the three-year period ended December 31,
2002. During this semiannual period, the OIG and DCAA completed three
more reviews that assessed RPSC’s compliance with its federally disclosed
2
March 2005 Semiannual Report, p.15.
14
OIG Semiannual Report March 2006
cost accounting practices and the adequacy of its financial business systems
and controls to accurately account for and report its indirect and other direct
costs in accordance with the NSF contract requirements.
The NSF USAP contract is of such a magnitude that the con-
tractor must submit a written Cost Accounting Standards Board
(CASB) disclosure statement to the government, which identifies
the accounting policies and practices it will consistently follow
for classifying costs as direct or indirect. RPSC, a subsidiary
of the parent company, Raytheon Technical Services Company
(RTSC), operated under RTSC’s CASB disclosure statement be-
tween 2000 and 2004. The auditors found that RPSC improperly
claimed $ 21.1 million of indirect costs as direct costs for the con-
tract period 2000 to 2002 contrary to its disclosure statement. As
a result, the Department of Defense (DOD), which is responsi-
ble for overseeing RTSC’s compliance with its CASB disclosure
statement on all federal contracts, issued an initial determination
of non-compliance to RTSC for RPSC, its subsidiary.
Emperor
In addition, as of January 1, 2005, RPSC was removed from RTSC’s disclo-
penguins in
sure statement, and was therefore operating without any disclosed practices,
Anarctica line up
raising further questions as to the basis on which RPSC is billing NSF’s USAP
to dive for food
contract. RTSC only recently submitted a draft CASB disclosure statement to
as scientists
the government specifically for RPSC. Until RTSC makes an official disclo-
study the birds
sure statement submission, the basis on which RPSC is billing NSF’s USAP
for information
contract remains unclear.
pertinent to
human
A second audit found that RPSC did not: 1) have adequate controls to properly
physiology.
identify allowable and allocable NSF costs; 2) perform internal compliance
oversight reviews; and 3) provide staff with adequate training to properly clas-
sify costs for the NSF contract. These weaknesses, coupled with the lack
of compliance with RTSC’s disclosed accounting practices, caused RPSC to
claim $33.4 million in questionable indirect and other direct costs from 2000
to 2002 on its NSF contract. The third audit found that RPSC’s accounting
records did not reconcile with costs recorded in two major business systems
that NSF uses for financial and project management of the USAP. As a result,
RPSC overcharged NSF approximately $206,000 for indirect costs and may
be relying on inaccurate project cost information for project management deci-
sions.
The audit report recommended that NSF coordinate with DCAA and DOD
to have RPSC correct its cost accounting practices, recover all questioned
costs plus interest, and audit future quarterly expenditure reports to identify
and withhold payments to RPSC for incorrectly claimed indirect costs. It also
recommended that NSF ensure that RPSC establish adequate policies and
procedures, including an internal compliance oversight program and an em-
ployee-training program to ensure compliance with the NSF contract require-
15
Audits & Reviews
ments. Finally, the report recommended that NSF ensure that RPSC recon-
ciles the costs recorded in the various accounting and project management
systems to its official accounting records.
In the next semiannual period, we expect to provide NSF with the results of
the audit of claimed costs for 2003 and 2004. In addition, we will report on as-
sessments of controls over RPSC’s billing process, New Zealand operations,
and a major subcontractor.
Major Internal Control Weaknesses Found at Three
Academic Institutions
In three separate audits, two school districts and a university were found to
have serious deficiencies in the ability to track and report expenses claimed
on NSF awards. All three institutions lacked adequate systems to track an ag-
gregate total of $42 million of claimed cost sharing. In addition, weak controls
over accounting for salaries, wages, and associated fringe benefits resulted in
nearly $1.4 million of questioned costs.
Two School Districts Share Similar Control Deficiencies
The OIG audited cost reports submitted by Detroit City School District (DCSD)
and San Francisco Unified School District (SFUSD), as part of our ongoing
review of awardees under NSF’s Urban Systemic Initiative (USI) and Urban
Systemic Program (USP). Consistent with prior USI/USP audit findings, grant
accounting control deficiencies were identified at these school districts in the
areas of salaries, wages, fringe benefits, indirect costs and cost sharing.
The audits found that both school districts had a number of material control
weaknesses that allowed the submission of inaccurate cost reports to NSF.
Each district lacked the required employee certifications and personnel activity
reports to support the claim that $5.7 million in salary and fringe benefit costs
was incurred and benefited NSF awards. In addition, both districts lacked an
efficient system to properly identify and account for a total of $29.6 million in
cost sharing attributed to their NSF awards. Neither district had adequate
policies and procedures for determining allowable indirect costs for their NSF
grants. Finally, DCSD’s accounting system did not separately track participant
support costs incurred under the award, and SFUSD did not timely reconcile
claimed costs with its accounting records to ensure the validity of its reports
of claimed costs to NSF.
As a result, the auditors questioned approximately $1.4 million of the $10.9
million DCSD claimed as costs to NSF, including $1.2 million of unallowable
and unbudgeted salaries, wages and fringe benefits, and $188,053 of costs
unrelated to the NSF award. For SFUSD, the auditors identified $712,620
in questioned costs of the $9.2 million SFUSD claimed to NSF. Among the
items questioned were $427,844 of costs that were not recorded in SFUSD’s
16
OIG Semiannual Report March 2006
accounting records, $215,445 for overcharges of indirect costs, and $69,315
of salaries and associated fringe benefit costs that should have been charged
to SFUSD’s general fund.
Both DCSD and SFUSD agreed with most of the audit report findings and indi-
cated they are working on corrective actions. The audit reports were forward-
ed to NSF’s Division of Institution and Award Support for audit resolution.
University Has Systemic Weaknesses Affecting Oversight of NSF Grant
Funds
An audit of Howard University found that the University lacks a system of
internal controls that provides reasonable assurance that NSF grant funds
were being used for the purpose they were provided, or spent for allowable
expenses. While the University has made some progress in improving its
grant operations, it needs to do more to correct longstanding systemic weak-
nesses that were also identified in prior internal and external audits. These
weaknesses have persisted because Howard University did not have compre-
hensive financial management policies, procedures, and controls to effectively
manage, account for, and monitor NSF grant funds. As of June 30, 2004,
Howard had 35 active NSF grants worth approximately $18.8 million.
The audit identified significant weaknesses in the University’s internal controls
over cost sharing, funds passed-through to subawardees, faculty salaries, and
trainee stipends for the five NSF grants audited, which totaled $10 million. The
auditors could not determine whether the University actually provided $12.3
million of cost sharing claimed because the University commingled the funds
with other accounts and was unable to demonstrate that the costs actually
supported NSF projects. The University also lacked comprehensive sub-
award agreements that would have obligated its subrecipients to provide $5.4
million of cost sharing and restricted $2.3 million of funds to participant and/or
trainee support. The auditors also questioned FY 2004 faculty salary costs of
$91,877 or 52 percent of the total faculty salaries claimed on the five audited
awards because the University charged NSF for duplicate, unauthorized, and
unsupported salaries. Given the pervasive nature of these weaknesses, we
believe that other NSF funds amounting to $8.8 million are at similar risk.
The report recommended that Howard University implement a program for
monitoring and overseeing its grant management processes that includes im-
proved controls and accountability over NSF cost sharing obligations, sub-
awards, and faculty salary charges. Howard should also obtain an indepen-
dent evaluation to verify that timely and appropriate corrective actions are
implemented to address all audit report recommendations. If the evaluation
continues to disclose grant management problems, we recommended that
NSF withhold additional funding until appropriate corrective actions are imple-
mented. Generally, Howard University agreed with the audit recommenda-
tions and indicated that they have initiated corrective actions. We have for-
warded the audit report to NSF’s Division of Institution and Award Support for
17
Audits & Reviews
development of an appropriate corrective action plan in conjunction with the
University and the cognizant audit agency, the Department of Education.
Improvements Needed in Reporting and
Disseminating Research Results
This semiannual period, we completed the second in a series of audits aimed
at assessing NSF’s performance in reporting and disseminating the results
of the research it funds. Effective communication of the results of scientific
research advances knowledge, stimulates new research ideas, and helps train
future scientists, engineers, and educators. Additionally, communicating re-
search results assures taxpayers that they have received value for their in-
vestment and helps to increase the public’s understanding and appreciation of
science and technology.
In February 2006, OIG issued an audit report on NSF’s policies and prac-
tices for publicly disseminating the results of NSF-funded research, including
the information that it receives in the final project reports. A related audit is
now underway examining whether NSF’s dissemination policies and practices
meet the needs of the research community and other NSF constituents and
taxpayers. And NSF is taking corrective actions as a result of an audit report
issued last year on NSF’s performance in collecting research results through
project reports. The status of each audit is discussed below.
Public Access to Research Results Should Be Expanded
Although NSF provides the public with information about proposed research
selected for funding, it does little to publicize information about the results of
that research. NSF historically has relied on the researchers to disseminate
information about their NSF-funded work through peer-reviewed publications
and professional conferences. However, these methods of communication
may not reach other interested parties outside the scientific research commu-
nity, such as students and educators.
In addition, NSF’s dissemination policies and activities are much more limited
than those of other federal agencies funding basic research, including the
National Aeronautics Space Administration, the National Institutes of Health,
and the Departments of Energy, Agriculture, and Defense. While NSF collects
citations of journal articles resulting from its funded research, NSF is the only
agency that does not provide this information to the public.
The audit report recommends that NSF make the publication citations more
widely available by including them in the award abstracts database already
publicly available through its website. Interested parties will be able to de-
termine what publications resulted from NSF’s investment in research. NSF
agreed with the recommendation and is currently determining the actions nec-
essary for implementation.
18
OIG Semiannual Report March 2006
Audit To Further Examine NSF’s Dissemination Policies
We are continuing to explore issues surrounding NSF’s policies for dissemi-
nating the results of its research. In particular, we are evaluating whether
NSF should provide the public with direct access to other types of information
containing research results, including project reports, research summaries,
and abstracts of published journal articles. We are also assessing whether
interest exists among NSF’s various stakeholders for making more informa-
tion available about the results of individual research projects on the agency’s
website.
Update on Improvements in Project Reporting
An audit report issued last year stated that from 1999 to 2004, over 42 percent
of the 108,000 required annual project reports due to NSF were never submit-
ted, and 53 percent of the 43,000 final project reports were submitted, on av-
erage, 5 months late.3 The report contained a series of recommendations to
NSF on how it could improve responsibility and oversight to ensure the timely
submission of these reports. In response to our audit recommendations, NSF
initiated policy changes and is in the process of designing a more comprehen-
sive project report tracking system that will calculate reporting milestones and
notify principal investigators as deadlines approach. NSF expects to imple-
ment this new tracking system in fall 2006.
Challenges with Sunshine Act Compliance Persist
At the request of Congress, OIG conducts an annual review of the NSB’s
compliance with the Sunshine Act. During 2005, the National Science Board
continued to encounter challenges in meeting each of the procedural require-
ments of the Act. The audit report indicates that the Board still lacks a struc-
ture and protocol for handling the many Sunshine Act issues that arise in the
daily conduct of Board operations. Without this structure and protocol, the
Board will continue to experience procedural inconsistencies such as inade-
quate documentation of votes to close meetings and failure to submit required
reports.
In addition, the report discusses how the Board makes its decisions to close
some of its meetings. The Sunshine Act presumes that meetings will be open
to the public unless the Board plans to discuss a topic that may disclose ma-
terial that falls under one of ten narrow exemptions. However, at the time
the Board set its meeting agendas, it appears to have included open agenda
items in its closed meetings. This occurred because the decision to include
agenda items in open or closed sessions necessarily is made in advance of
the actual meeting. Because the Board does not document the discussion,
3
March 2005 Semiannual Report, p.16-17.
19
Audits & Reviews
the auditors were unable to determine whether the Board properly applied the
Sunshine Act’s standard when it decided on closed meeting agenda items.
Consequently, the public may not receive all the benefits of open government
promised by the Sunshine Act.
Based on these findings, the report reiterates our previous recommendations
that the Board develop, implement, and provide training to its members and
staff on policies and procedures for addressing the procedural requirements
of the Sunshine Act. In addition, it recommends that the Board develop, im-
plement, and provide training on a process for documenting the reason for
placing each agenda item in a closed meeting rather than an open meeting.
The Board has generally agreed with our findings and is planning appropriate
action.
Audit Resolution
NSF Secures Matching Contributions and Improved
Controls at Two Foreign Institutions
Prior audits of awards to the United States-Mexico Foundation for Science in
Mexico4 and the Inter-American Institute for Global Change Research in Bra-
zil5 have resulted in the establishment of controls to improve accountability of
federal grant funds at both foreign awardee institutions and NSF. Pursuant to
the OIG audit recommendations, NSF has amended its grant agreements with
both foreign grantees to include special award conditions to ensure financial
and administrative integrity over its award funds. Also, NSF has conducted
site visits to both awardee organizations to provide technical assistance to aid
the awardees’ understanding of NSF grant requirements and to verify correc-
tive actions addressing the audit recommendations.
United States-Mexico Foundation for Science (USMFS)
Our audit of $11 million of awards made by NSF and three other federal agen-
cies to establish an endowment fund for USMFS found that conditions for the
funding stipulated by Congress were not included in the grant agreements.
Consequently, USMSF did not obtain $5 million or 45 percent of matching con-
tributions from Mexico, or implement adequate financial controls to account
for and administer the US endowment. Pursuant to the audit recommenda-
tion, NSF amended the award agreement governing its $4 million share of
endowment contributions to comply with the Congressionally-mandated re-
quirements.
Also, as a result of the coordinated efforts of our office, the Office of Science
and Technology Policy, and the OIGs of the three other federal funding agen-
4
March 2005, Semiannual Report, p.17.
5
September 2004, Semiannual Report, p.17
20
OIG Semiannual Report March 2006
cies, USMFS has recently executed an agreement with the Mexican Govern-
ment to obtain the remaining $5 million of matching endowment contributions.
NSF recently conducted a site visit to ensure that USMSF has implemented
adequate financial controls to account for and administer the US endowment
funds. We are currently reviewing the site visit report.
Inter-American Institute for Global Change Research (IAI)
A prior audit of NSF awards worth over $16 million to IAI disclosed that NSF,
on behalf of the United States, was funding a disproportionate share of the
organization’s total research costs, and that the organization had not prop-
erly monitored 14 subawards, valued at over $10 million. Following our au-
dit recommendations, NSF has worked closely with IAI to establish a project
management manual providing written subaward policies and procedures for
administering and monitoring NSF research funds passed-through to other
institutions. As a result of NSF’s technical assistance and two on-site visits
to IAI’s offices in Brazil, the Institute is better able to manage its new NSF re-
search grant for $10.4 million, awarded on September 30, 2005.
Furthermore, NSF has continued to work with IAI’s governing body to promote
and oversee its fundraising efforts. IAI’s new Executive Director, hired in Au-
gust 2005, has already undertaken positive steps in preparation for obtaining
additional funds. He obtained a declaration of support from the Organization
of American States and an agreement from the Brazilian Embassy to issue
demarches on IAI’s behalf for unpaid member contributions. The IAI Director
is also continuing to develop fundraising strategies to increase the number of
research projects involving global change in the Americas. We are awaiting
receipt of the Director’s final strategies, expected after a May 2006 Confer-
ence of the Parties, which are intended to guide IAI efforts of funding a greater
proportion of the organization’s total research costs with non-US funds.
Company Specializing in Science and Technology
Content Agrees to Improve Accountability
Last year, we reported on our audit of ScienCentral, Inc. (SCI) and Center
for Science in the Media, Inc. (CSMI)6. SCI, a for profit company, is closely
related to CSMI, a non-profit company that conducts research and develops
mass media approaches that bring science and technology news and infor-
mation into mainstream communications. The audit found that SCI/CSMI did
not have adequate financial management, cost sharing, or other systems to
provide for segregation of key accounting duties, adequate documentation of
award costs, cost segregation, or compliance with other award terms and con-
ditions. In addition, CSMI did not have the required OMB Circular A-133 audits
6
March 2005 Semiannual Report, pp.18-19.
21
Audits & Reviews
for its fiscal years 2000 and 2001. The audit report questioned $921,489, or
34 percent of total claimed costs.
In response to the report’s compliance and internal control recommendations,
SCI stated that it: (1) implemented a new accounting system that allows seg-
regation of grants by account, direct, indirect, and production cost pools and
made other improvements to its internal controls; (2) hired an accounting firm
to review its accounting and reporting systems, suggest improvements, and
perform future OMB Circular A-133 audits; and (3) provided training to staff on
all changes and new written procedures to ensure future compliance. NSF
agreed with the awardees’ corrective actions and sustained $517,973, or 56
percent, of the amount questioned in the audit.
Actions to Implement Visiting Personnel
Recommendations Remain Incomplete
In September 2004, we reported on our audit of the costs associated with
NSF’s use of visiting personnel,7 or “rotators,” in place of permanent staff.
While NSF has implemented new policies and procedures for documenting
lost consulting income for which it reimburses the rotators, NSF has not com-
pleted implementing the remaining two recommendations. Although funding
constraints have delayed NSF’s plans for developing a program to automate
its IPA salary and benefit computation process, it expects to conduct a re-
quirements determination and develop a cost estimate for the system during
this fiscal year. As recommended, NSF is currently developing an alternative
methodology for calculating Visiting Scientists’ salaries to prevent duplicate
payments. NSF expects to have its new methodology implemented by July
2006.
7
Visiting personnel are temporary professional staff appointed under the Intergovernmental Person-
nel Act (IPAs) or NSF’s Visiting Scientists, Engineers, and Educators (VSEEs) program. The article
on visiting personnel appeared in the September 2004 Semiannual Report at pages 14-15.
22
OIG Semiannual Report March 2006
Work In Progress
Labor Effort at Universities
As stated in our last semiannual report,8 OIG has undertaken an initiative to
assess the adequacy of accounting and reporting processes for labor costs at
a representative sample of NSF’s top-funded institutions. Approximately one
third of all NSF award funds to universities are for salary and wages, amount-
ing to $1.3 billion annually. Recent legal actions involving overcharges of staff
time amounting to millions of dollars at several major universities, including
some funded by NSF, have raised public awareness of the potential for abuse
in reporting labor efforts. As the first in this series of audits, we issued a draft
report on the labor effort practices at the University of Pennsylvania in Febru-
ary 2006 and expect to issue the final report in the next semiannual reporting
period. In addition, we plan to initiate similar audits at another five universities
this summer.
A-133 Audit Reports
OMB Circular A-133 provides audit requirements for state and local govern-
ments, colleges and universities, and non-profit organizations receiving federal
awards. Under this Circular, entities that expend $500,000 or more a year in
federal awards are required to have 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 audits. OIG reviews these reports for any findings and
questioned costs related to NSF awards, and to ensure that the reports them-
selves comply with the requirements of OMB Circular A-133.
During this reporting period, the A-133 audits of NSF grantees found compli-
ance deficiencies and internal control weaknesses, resulting in nearly $1 million
of questioned costs. The findings contained in A-133 reports help to identify
potential risks to NSF awards and are useful to both the agency and OIG in
planning site visits, post-award monitoring, and future audits. Our reviews also
revealed problems with the quality and timeliness of the A-133 reports that
were similar to findings identified in a Quality Control Review we completed
during this reporting period. Because of the importance of A-133s in monitor-
ing grantees, the OIG returns reports that are judged inadequate to the firms
that prepared them.
Findings Related to NSF Awards
In this reporting period, we reviewed 89 audit reports covering NSF expenditures
of $812 million from fiscal year 2002 through 2005. These reports revealed
182 instances in which grantees failed to comply with federal requirements, and
8
September 2005 Semiannual Report, p.20
23
Audits & Reviews
45 instances in which weaknesses in grantees’ internal controls could lead to
future violations. The auditors questioned a total of $868,337 of costs claimed
by recipients of NSF awards. The most common violations were related to
financial and award management and salaries and wages, as detailed in the
table below:
Findings Related to NSF Awards by Category
Category of Type of Finding
Finding
Compliance Internal Controls Monetary Total
Financial and Award 61 32 93
Management
Salary/Wages 22 4 5 31
Other 20 5 3 28
Subawards 18 18
Procurement System 13 1 14
Equipment 11 1 1 13
Indirect Costs 9 1 2 12
Other Direct Costs 7 1 8
Travel 6 2 8
Cost-Sharing 4 4
Fringe Benefits 3 1 4
Consultant Services 3 3
Property Management 2 2
System
Total 177 45 16 238
We also examined Management Letters accompanying the A-133 audit reports.
Auditors use these letters to report internal control deficiencies that are not
significant enough to include in the audit report, but which could become more
serious over time if not addressed. The letters we examined disclosed a total
of 96 deficiencies that could affect NSF awards, in areas such as salaries and
wages, and financial management.
Findings Related to Quality and Timeliness
For 25 of the 89 audit reports we reviewed in which NSF was the cognizant or
oversight agency, we found that 40 percent had been submitted late or the audit
reporting package was incomplete. OMB Circular A-133 requires audits to be
completed and reports submitted within the earlier of 30 days after receipt of
the auditor’s report(s), or nine months after the end of the audit period, unless
a longer period is agreed to in advance by the cognizant or oversight agency
24
OIG Semiannual Report March 2006
for audit. In each case, we informed the audited organization that the late
submission of a complete reporting package could affect the organization’s risk
profile and suggested that all future A-133 audits be performed and submitted
in a timely manner.
The A-133 reports we reviewed also revealed problems with audit quality.
Auditors are required to follow OMB Circular A-133 guidelines to calculate dol-
lar-value thresholds for classifying and selecting federal programs to recom-
mend in the audit. However, the Federal Audit Clearinghouse (FAC) identified
potential errors affecting 14 NSF awardees. The OIG reviewed each of the
potential errors and contacted the respective auditors for explanations. In each
case, the auditors either provided adequate explanations, or additional infor-
mation to demonstrate compliance with the Circular, or the error did not affect
the results of the audit. While some of the errors were clearly immaterial, the
auditors generally acknowledged the errors allowing for improved compliance
in future audits.
A-133 Audit Quality Control Review
During this reporting period, we completed a Quality Control Review (QCR) of
an A-133 audit conducted by a public accounting firm at Michigan State Uni-
versity. This was one of 208 QCRs conducted as part of the National Single
Audit Quality Project, a government-wide undertaking by the Inspector Gen-
eral community to assess and provide a baseline measurement of A-133 audit
quality. The project began in November 2004, and a final report is expected
late this year.
Our review found that the external auditor did not sufficiently document signifi-
cant conclusions and judgments involving work performed or omitted as required
by Government Auditing Standards. Specifically, there was inadequate justi-
fication to support the auditor’s decision to exclude 5 of 14 compliance areas
from the audit scope. Further, the auditor did not review the University’s risk
assessment process to ensure it met compliance requirements for managing
major federal grant programs, one of five key components of an effective internal
control system. Finally, the auditor did not clearly document the details of its
work related to the schedule of federal expenditures including tests of labor,
fringe benefits, procurement, and subrecipient costs.
Although the auditors did not agree with all of the eleven findings cited, they
agreed to improve workpaper documentation to ensure compliance with Govern-
ment Auditing Standards. We submitted the results of our review to the National
Single Audit Quality Project management staff to be incorporated with those
being reported government-wide. Given the importance of A 133 audit quality
to NSF’s post-award administration, our office will continue to be involved in
overseeing and reporting on the results of this government-wide project.
25
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Investigations
Civil and Criminal Investigations
Scientist Sentenced for Mail Fraud and
Tax Evasion, Pays $1.4 Million Settlement
Following a multi-agency investigation, a scientist, who was the
owner of a small business in Massachusetts, was sentenced
to 12 months home confinement, five years probation, and
fined $20,000 for Mail Fraud and Tax Evasion charges related
to grants and contracts that the scientist received from SBIR
awards made by NSF, the National Aeronautics and Space Ad-
ministration, the Department of the Air Force, the Department
of Energy, and the Department of Agriculture. The scientist
previously pled guilty to sending SBIR Phase II progress re-
ports to NSF that included research previously conducted by
the company under an Air Force SBIR Phase II contract, and
failing to pay income tax on grant funds he converted to his
personal use.9 The scientist also paid $288,414 for penalties
and interest related to tax evasion, and the court prohibited him
from participating in federal grants, contracts, or employment
for five years.
In addition, the scientist paid $1,111,586 to the government to
settle a False Claims Act case based on investigative findings
that the scientist submitted false reports to various agencies
related to SBIR awards.
Based on our recommendation, NSF had suspended the scien-
tist after he pled guilty.10 After the sentencing we recommended
that NSF debar the scientist and his company. NSF’s response
to this recommendation is pending.
University Pays $2.5 Million to Settle
Investigation of Mischarges to HIGHLIGHTS
Federal Awards Civil & Criminal
Investigations 27
A New England university entered into a settlement agreement
with the federal government to resolve civil allegations that the Administrative
university violated the False Claims Act by submitting false
Investigations 31
9
September 2004 Semiannual Report, p.25. Reviews 34
10
March 2005 Semiannual Report, p.29.
27
Investigations
NSF and OIG Jointly Over- claims on approximately 500 federal grants awarded from July
see Compliance Agreements 1997 through October 2004. The grants were made by numer-
ous federal agencies including DOD, EPA, NSF, and NASA,
Compliance agreements are for work to be performed at two of the university’s specialized
frequently a component of settle- service facilities (SSFs). The National Science Foundation’s
ment agreements entered into share of the settlement was $345,808.
to resolve investigations involv-
ing institutions. They serve as A coordinated multi-agency investigation concluded that the
compacts between the subject university submitted grant applications containing incorrect or
institution, NSF management, overstated information about anticipated expenses in the SSFs,
and OIG, to ensure the subject because the university did not use a proper basis for setting and
institution takes affirmative regularly updating its billing rate structure, as required by OMB
actions to create policies and Circular A-21. The university’s failure to revise and appropriately
procedures to ensure compliance set its billing rate structure resulted in numerous false claims
with all federal regulations con- being submitted for payment to the granting agencies.
cerning the proper custody, use,
and accounting for NSF grant The investigation also concluded that the university failed to fol-
funds. As signatories to the low federal law for calculating how extra compensation should
plan, both NSF management be paid to the university faculty members for additional work
and OIG have a strong interest on grant-supported research activity at the SSFs, resulting in
in the success of these actions, improper excess charges being charged to the federal grants.
and therefore jointly monitor Finally, the university failed to provide the required cost sharing
their progress for the term of the under certain awards.
compliance agreement.
As part of the settlement, the university also signed a compli-
During this semiannual period, ance agreement with the federal government that will require the
we have been actively monitor- university to make significant changes in its grant administration
ing two such compliance plans: program. The changes include the implementation of written
one from a large school system policies regarding compliance with all laws and regulations re-
and the other from a university. lated to the receipt of federal grant money, the implementation
Both compliance agreements of additional training programs for grant administrators, and the
have five-year terms. In one case, submission to the federal government of annual reports detailing
NSF management and OIG the university’s compliance efforts.
representatives traveled together
to conduct an on-site inspection NSF had significantly more awards implicated in the wrongdoing
and to meet new compliance in this case than any other agency. Currently, the university has
officials. In both cases, represen- approximately 190 active NSF awards totaling more than $51
tatives from NSF management million, with more than 120 proposals pending. Accordingly, we
and OIG met to review reports recommended that NSF (1) work with the agency overseeing
submitted pursuant to the com- the compliance agreement to ensure that NSF’s interests are
pliance plans, assessed the success addressed, and (2) designate the university to be “high risk,”
of the institutions’ implementa- resulting in the imposition of appropriate additional conditions
tion of policies and procedures, on the university’s performance under all extant and new NSF
and jointly worked toward a awards. NSF agreed with our recommendations. This is the
common goal of ensuring NSF first time that NSF has designated an awardee institution as
grant funds were protected. “high risk.”
28
OIG Semiannual Report March 2006
Small Business Owner Submits Altered Letters
of Support
In a proposal for a Small Business Innovation Research (SBIR) Phase II award
sent to NSF, the owner of a Florida company misrepresented the results of
the Phase I award by indicating that several previously filed patents were the
results of the award. We also determined that the owner altered previous let-
ters of support by changing the dates, in several cases by more than a year,
to imply current support for various SBIR proposals. The 10 original letters
were altered and resubmitted a total of 27 times within 13 proposals.
We ultimately concluded there was not sufficient evidence to proceed with a
referral to the Department of Justice for civil or criminal prosecution, because
1) the misrepresentations were not material to NSF’s funding decisions, and
2) several of the authors of the support letters believed it was an acceptable
practice to change dates on previously submitted letters of support to resubmit
them with additional proposals. However, we recommended that NSF make
a finding that the owner committed research misconduct and require him to
submit additional certification with any future proposals for a period of 2 years.
This certification would assure NSF that all of the information contained in the
proposal is true and accurate. NSF’s decision is pending.
During this investigation, we discovered that NSF has not established guidance
regarding the proper use of letters of support for those seeking grants. The
absence of any such guidance makes it difficult to hold potential awardees
accountable for the accuracy of their submissions. We recommended that
NSF provide appropriate guidance to applicants by implementing the following
actions:
• Update current NSF policies and guidelines to identify specific requirements
for letters of support that are submitted with proposals.
• Provide additional guidance to PIs and awardees by including a presentation
on the requirements for letters of support in the Regional Grants Conferences
and professional meetings.
• Independently confirm the authenticity of all letters of support that commit
specific support, financial or otherwise, to the proposal.
These recommendations are currently under consideration by NSF.
University Returns Award Funds to NSF
As a result of an OIG investigation, a California university returned $29,477.02
in residual award funds to NSF. We received information that the university
transferred residual funds from federal awards into surplus holding accounts,
and we opened an investigation. The investigation revealed that the university
transferred both positive and negative account balances of several local, state,
federal, and private closed grant accounts to a single holding account in order
29
Investigations
to facilitate the conversion to a new accounting system. The university failed
to restore these residual grant funds in a timely manner. In addition to return-
ing the NSF funds, at our request, the university disclosed to five other federal
agencies the existence of a total of $33,388.02 of their federal grant funds that
were being held in its holding account.
NSF Agrees to Increase Monitoring of Awardee
NSF agreed with OIG recommendations to declare an active award with a Min-
nesota institution as high risk and to impose special award conditions on current
and future awards. OIG had previously recommended that NSF take action to
protect funds awarded to the institution, because DOJ had determined that the
institution lacked adequate internal controls to ensure that cost transfers were
made in a timely fashion, for appropriate reasons, and with adequate docu-
mentation.11 DOJ entered into a settlement agreement in which the institution
agreed to return $6.5 million to the United States, with approximately $5,000
being returned to NSF. The Department of Health and Human Services is in
the process of working with the institution to bring its accounting systems into
compliance with the applicable requirements regarding the request, receipt,
and use of federal grant proceeds.
Employee Misuses Government Travel Credit Card
NSF notified us that within a 5-week period, an employee charged $1,654.78
to her government travel credit card for transactions that did not appear to co-
incide with official travel. The employee admitted to OIG investigators that she
repeatedly misused her government travel credit card for purchases outside the
scope of official business. We referred our findings to NSF, which canceled
the employee’s government travel credit card account and suspended her from
duty without pay for 5 days.
Participant Support Funds Returned
We previously summarized cases where the grantees were either unfamiliar
or non-compliant with the rules regarding participant support costs.12 In this
semiannual period we continued to review cases in which universities recog-
nized they had misspent participant support funds and agreed to return those
funds. The cases we resolved this period included instances in which principal
investigators used participant support funds to pay for travel and laboratory
supplies, and violations of the Fly America Act. The universities returned a
total of $20,710.27 to NSF.
11
September 2005 Semiannual Report, p.25.
12
September 2005 Semiannual Report, p.27, and March 2005 Semiannual Report, p.37.
30
OIG Semiannual Report March 2006
Administrative Investigations
Actions by the Deputy Director
NSF Finds That Director of Grants Committed Research Misconduct
In a previous Semiannual Report, we discussed our recommendation for a find-
ing of research misconduct for a Director of Grants at a New York community
college who submitted two NSF proposals with plagiarized text.13 Based on our
investigation and recommendations, NSF: 1) found he committed research mis-
conduct; 2) sent him a letter of reprimand; 3) required him to certify completion
of a course in scientific ethics; and 4) required him to certify that any proposals
he submits to NSF for 11 months after its finding of research misconduct do
not contain plagiarized material.
NSF Proposes Debarment of Visiting Scientist for Plagiarism
The investigation of a foreign, visiting scientist who committed plagiarism on
multiple proposals submitted to, or reviewed by, NSF appeared in our last
Semiannual Report.14 Based on our investigation and recommendations, NSF:
made a finding of research misconduct; proposed debarment of the subject
for 2 years; and prohibited him from serving as an NSF reviewer, advisor, or
consultant for 2-years. The subject has not yet indicated whether he plans to
contest the debarment action.
Agency Reprimands Graduate Student for Fabrication of Data
Based on the investigation discussed in our last Semiannual Report,15 NSF
concluded that a graduate student who fabricated data in her thesis committed
research misconduct. NSF issued a letter of reprimand in which it explained
that, although fabrication of data is a serious matter, mitigating factors resulted
in no further action taken by NSF, as recommended by OIG. These factors
included the student 1) taking full responsibility, 2) cooperating fully with the
university’s and OIG’s investigations, 3) expunging fabricated data, which
were not published, from the thesis, and 4) apologizing to NSF. Further, NSF
acknowledged that the university had already taken substantive actions that
protected the federal interest.
13
September 2005 Semiannual Report, p.29-30.
14
September 2005 Semiannual Report, p.30.
15
September 2005 Semiannual Report, p.30.
31
Investigations
Report Forwarded to the Deputy Director
PI Plagiarized Text and Figures in Two Proposals
An OIG investigation concluded that a PI from New Jersey plagiarized text and
figures from multiple source documents into two SBIR Phase I proposals he
submitted to NSF. Initially, our investigation included three NSF SBIR propos-
als submitted by the PI, each of which contained apparently plagiarized text
and figures. As part of our procedures, we provided the PI with a copy of the
draft investigation report with a request for comments prior to forwarding it for
adjudication. In his response the PI disclosed for the first time that he was not
the author of one of the proposals (the other proposal). The SBIR firm provided
the name of another company scientist who authored the other proposal. The
CEO requested the PI submit the other proposal as well as the ones the PI had
authored. The PI also told us in his response that all his answers to our inquiry
and investigation questions about the other proposal were written by the other
scientist and the PI copied them into his response.
We removed the other proposal from our investigation of the PI’s plagiarism,
and opened an inquiry into the apparent plagiarism by the other scientist. We
modified our assessment of this case to reflect these new facts, and determined
that the two remaining proposals the PI admitted he wrote contained sufficient
plagiarized text and figures to warrant a finding of research misconduct.
We recommended NSF send the PI a letter of reprimand informing him that NSF
has made a finding of research misconduct against him, and require that when
proposals are submitted by the PI, or on his behalf, to NSF, he be required to
submit a certification to OIG for 3 years that, to the best of his knowledge, they
contain nothing that violates NSF’s research misconduct regulation.
Other Significant Administrative Cases
Sloppy Research Is Not Misconduct
A New York institution notified us it was conducting an investigation into an al-
legation of data falsification. After the subject left the institution, some of her
former colleagues were unable to replicate her published results, prompting the
institution’s investigation. The subject’s research was primarily supported by
the National Institutes of Health, so we coordinated our efforts with the Office
of Research Integrity (ORI).
The institute’s investigation committee concluded the subject’s laboratory
notebooks were unacceptably poor and did not meet community standards for
recording and archiving data, and were not helpful in resolving the allegation.
As part of her defense, the subject hired an independent laboratory to replicate
her results. The committee coordinated with the journal that published her
research so the three scientists who reviewed her published paper could also
32
OIG Semiannual Report March 2006
review the replication efforts. The three reviewers disagreed about whether
the replicated results supported the original data and interpretation.
The committee concluded that the allegation could not be resolved because
there was not enough evidence to reach a definitive conclusion. The adjudicator
found that the evidence did not support a finding, and we concurred and closed
our case. We admonished the subject for poor record keeping and agreed with
the committee’s observation that if her records had been better, the allegation
might have been avoided or at least resolved more definitively.
Appellate Court Opinion Triggers Review of Retaliation Claim
We received a request to reopen a fifteen-year old case on the basis that a
state appellate court had concluded that a Texas institution retaliated against
a professor for making protected disclosures. Retaliation is a serious matter,
and we had committed to review this case again if new facts came to light.
In 1991, a complainant alleged that, as a result of his disclosures to us regarding
possible false statements in a proposal submitted to NSF, his institution retali-
ated against him by reprimanding him, reducing his pay, and failing to renew
his contract. In addition to filing a complaint with us, he pursued redress for
this and other alleged wrongs in a variety of forums, including the institution
itself, the Equal Employment Opportunity Commission, and state and federal
court. In all forums, except the state court, the complainant’s claims were not
sustained. In 1996, with the state court suit still pending, we closed our case
with the proviso that if new facts came to light, we would consider reopening it
to determine whether we needed to take action. As a result of this review, and
in the exercise of our discretion, we determined that we did not need to take
additional action to protect the federal interest.
Use of Animals Without IACUC Approval
A subaward was terminated when a scientist used animals in his research
without obtaining official approvals. We received an allegation that a scientist
working on an NSF-funded subaward had improperly used vertebrate animals
without first submitting and receiving Institutional Animal Care and Use Com-
mittee (IACUC) approvals as required by NSF policy and applicable federal
regulations. During our review, we determined that the proposal submitted to
NSF did not indicate that vertebrate animals were to be used and that the PI
did not intend to use animals during this award.
Although both the awardee and subawardee have policies and training on
the use and care of animals, we determined that the scientist working on the
subaward unilaterally decided to use the animals. He did not seek or obtain
permission from his university’s IACUC or inform the PI of his intentions. Sub-
awardee officials did not find out about the use of the animals until the scien-
tist sought reimbursement. The subawardee quickly informed both NSF and
the primary awardee of the matter. In addition, the subawardee referred the
33
Investigations
matter to its IACUC committee. Because the scientist had no prior history of
wrongdoing and cooperated fully in the investigation, the subawardee took no
action against him. Ultimately, he was not reimbursed for the animals, and no
NSF funds were used. The awardee’s IACUC terminated the subaward as a
result of the scientist’s actions.
Reviews
Computer Software Used to Catch Plagiarism
OIG is currently experimenting with the use of computer software to identify
plagiarized text in NSF proposals. There are a number of free or commercially
available software packages that have the ability to identify text that is common
to multiple documents. Some software packages are designed to perform a
side-by-side comparison of two or more documents, while others compare the
text of a document to text found on websites.
We obtained one “freeware” package and one commercially available to test
their capabilities. Interns with linguistics training ran randomly selected pro-
posals through the software to determine if they contained plagiarism. The
interns analyzed over 600 proposals, and found that approximately 2.5% of the
proposals contained more than de minimus unattributed copied text from other
sources. Plagiarism rates were relatively uniform across scientific disciplines,
although we noted that the rate of possible plagiarism in NSF CAREER propos-
als was significantly higher at 15%.
The process of identifying plagiarism using computer software still requires in-
teraction with a professional to be effective, especially with software packages
Investigator Anna
that compare text in proposals to documents available on websites. Nonethe-
Amores tests less, the software packages identify common text and a possible source docu-
software de-
signed to detect
ment where that text is located. These features can significantly expedite the
plagiarism. process of identifying plagiarized text.
34
OIG Semiannual Report March 2006
NSF Responds Rapidly to Failures to Humane Care Required
Track Human Subjects Research NSF awardees are responsible
for the humane care and treat-
During this period we worked closely with a directorate to
ment of any vertebrate animal
complete our review of NSF’s tracking of human subjects
used in projects supported by
research in one of the directorate’s programs. This project is
NSF awards.16 When verte-
the most recent in a series of reviews we have conducted over
brate animals are to be used
the past 10 years in which we have urged NSF to improve its
in an NSF-funded project, the
human subjects research tracking systems. These reviews
proposal must include sufficient
have shown a continuing, significant failure of NSF’s processes
information to enable reviewers
for ensuring the protection of humans during funded human
to evaluate the choice of species,
subjects research, and have included a number of recommen-
number of animals to be used,
dations intended to comprehensively address the systemic
and any necessary exposure of
problems identified. This particular review was a follow on to
animals to discomfort, pain,
a pilot review of the previously referenced program in which
or injury. The proposal must
we found some instances of noncompliance with NSF human
have received the approval of the
subjects rules.
submitting organization’s Insti-
tutional Animal Care and Use
NSF is a signatory on the federal government’s Common
Committee (IACUC). Finally,
Rule on the Protection of Human Subjects. NSF requires that
NSF requires that the “Verte-
the “HUMAN SUBJECTS” box on the proposal cover page
brate Animal” box on the NSF
be completed for all proposals describing human subjects
cover sheet be checked.17
research. When making an award recommendation, the
program officer enters information into a database that enables NSF staff to
track this research. Awardees are required to inform NSF that the research
has been reviewed and approved by the Institutional Review Board (IRB) before
NSF funds the project. In lieu of such notification, NSF may fund the project
and stipulate that human subjects research may not be initiated until the IRB
approval notification is received.
We determined that for a vast majority of the research projects we reviewed in
this NSF program, information was lacking in NSF’s internal databases. We not-
ed that, in the absence of fully and accurately recorded data, NSF cannot draw
firm conclusions about the amount or extent of the human subjects research it
funds. Other instances of problems were also identified, primarily in projects
funded in the program’s first year of operation. These included: incomplete
Cover Pages on proposals prepared by submitting institutions, and funding for
human subjects projects prior to receipt of IRB approval or NSF prohibition on
conducting the human subjects research. We also noted incomplete training
information for NSF program officers.
16
NSF Grant Policy Manual (July 2005) § 713. Awardees must: comply with the Animal Welfare
Act and the regulations promulgated thereunder by the Secretary of Agriculture; follow the guide-
lines described in the National Academy of Science (NAS) Publication, “Guide for the Care and
Use of Laboratory Animals”; and comply with the “Public Health Service Policy and Government
Principles Regarding the Care and Use of Animals.”
17
Grant Proposal Guide (July 2004), II.D.5
35
Investigations
In response to our recommendations, NSF ensured that the affected awards
from the program under review were updated with the appropriate information.
The Directorate formed a Grants Management Team to review recommended
award actions and train its entire staff in post-award grants management. NSF
has committed to including language describing an institution’s responsibilities
regarding human subjects in all future program announcements and solicita-
tions. It also will require all program officers to indicate whether or not human
subjects are involved in a project, and to confirm compliance with human sub-
jects regulations. NSF stated that when grants.gov is fully implemented, all
applicants will be required to provide human subjects research information, and
in the meantime, NSF will include those requirements in FastLane. NSF has
also committed to providing enhanced training to its program officers and to
ensure that the web-based tutorial on program officers’ responsibilities regarding
human subjects research is accurate and its internal web links are functional.
Shortly after NSF responded to our recommendations, we encountered an
institution that had been conducting human subjects research under a 2003
NSF award in a different program and confirmed that this project was not coded
for human subjects research in NSF’s database. The institution asked us if
it needed to cease the research until the IRB approval was received, and we
relayed NSF’s prompt affirmative response that it should cease that research
until IRB approval was obtained. The institution stopped the research until IRB
approval for the nonexempt project was obtained, conducted training sessions
for its PIs, and included information about the requirements for conducting
human subjects research in its electronic newsletter. NSF has corrected the
award information in its databases.
36
OIG Performance Report
2005-2006
This section describes OIG’s accomplishments towards the
three goals set forth in the OIG Performance Plan for 2005-
2006:
1. Promote NSF efficiency and effectiveness.
2. Safeguard the integrity of NSF programs and
resources.
3. Utilize OIG resources effectively and efficiently.
Under each of these goals, we identified several strategies for
achieving the goal. For each strategy, we listed specific actions
that we planned to complete during the performance period,
which ran from April 1, 2005, to March 31, 2006.
Goal 1:
Promote NSF Efficiency and Effectiveness
1. Identify and implement approaches to improve audit
product quality and timeliness.
• Implement a tool to assess effectiveness of the story-confer-
encing process as a means to improve audit product quality
and timeliness.
• Analyze the costs and benefits of moving to electronic work-
papers; if feasible, conduct pilot testing with the performance
audit team.
HIGHLIGHTS
• Work with a consultant with Government Auditing Standards
expertise to review and comment on the statement of work Goal 1: Promote NSF
for contract auditors; establish a timeline to address the
consultant’s comments, and make revisions.
Efficiency and
• Complete 75% of all OIG audits within one year of conducting Effectiveness 37
the audit planning conference.
• Complete 65% of all CPA external audits within one year of Goal 2: Safeguard the
conducting the audit planning conference. Integrity of NSF Programs
• Assess results of the annual employee survey and retreat
and develop appropriate steps to address the highest priority and Resources 39
concerns of audit staff.
• Develop and issue an audit follow-up and resolution policy Goal 3: Utilize OIG
statement for OIG staff to facilitate the timely, consistent, and Resources Effectively and
coordinated resolution of audit recommendations.
Efficiently 42
37
Performance Report
OIG made substantial progress in improving audit timeliness and quality.
Team-based auditing is an approach that relies on formal meetings called story
conferences between auditors and managers at key points in an audit. These
meetings are intended to facilitate improved communications and result in
more-timely, higher-quality audit reports. Since FY 2003, the OIG’s Office of
Audit (OA) has used the team based auditing approach on high-risk audits. In
FY 2006, to determine whether the process is working as intended, we began
distributing questionnaires to staff after each audit to obtain their thoughts on its
effectiveness . Overall, audit staff and senior managers agree that team-based
auditing is an effective way to improve audit product quality and timeliness. We
initiated research on electronic workpaper alternatives, but did not reach the
point where we were ready to pilot test a program.
OA retained a consultant with expertise in Government Auditing Standards to
review and comment on our draft audit guide for use during audits performed
by Independent Public Accounting (IPA) firms under contract with OIG. To in-
crease the effectiveness of our grant audits and more closely align the results
with the needs of our stakeholders, the consultant recommended the OIG adopt
the use of performance audit standards to carry out its grant audits. These
standards, in contrast to financial audit standards, enable the auditor to focus
more on auditees’ management controls rather than just the allowability of
costs claimed, and identify root causes of audit findings. As such, these audits
should be useful in obtaining more effective corrective actions. Therefore, we
are currently developing a statement of work and audit program to provide de-
tailed guidance to OIG staff and audit contractors on applying the performance
audit standards.
We met the performance target for completing at least 65 percent of CPA
performed audits within one year. While we did not meet the target for OIG
performed audits, audit supervisors and staff have been asked to identify and
commit to ongoing audit workload targets, which should allow us to meet the
performance targets for the upcoming performance year.
OA made significant progress in developing an audit follow-up and resolution
policy for OIG staff. The draft is currently under review by OIG senior man-
agement. In response to last year’s employee survey and retreat, we began
circulating the monthly work- in- progress reports to audit staff to ensure that
issues of common concern and importance were regularly communicated to
all audit staff. Together, these policies and procedures should ensure a more
consistent approach to the conduct of audits.
38
OIG Semiannual Report March 2006
2. Strengthen our focus by refining approaches for selecting work and
setting priorities.
• Assess the audit planning process.
• Develop appropriate steps to address ideas of audit staff as summarized by
the audit planning team.
• Develop and execute the annual audit plan.
• Develop a catalog of publications, etc., for an audit planning library.
• Conduct annual risk assessment of NSF’s award portfolio using specified
risk factors.
OA successfully used team communication and brain-storming techniques to
assess its process for developing and reporting the results of audit planning.
We first convened the entire audit staff to discuss our historic processes and
then used small group discussion to identify ways to streamline and improve the
process. The meetings resulted in a number of substantive recommendations,
including a new layout and content for the external audit plan based on the
NSF award cycle. We then formed an audit planning sub-committee, consist-
ing of members from each audit group, which successfully implemented the
recommendations and completed the audit plan on schedule. The results were
presented to the National Science Board at its September 2005 meeting.
The quality of our audit planning efforts depends largely on the accuracy and
value of the information that is brought into the process. Therefore, we continued
our efforts to develop a catalog of publications for our audit planning library,
which will carry into the coming year. In order to further inform our selection
of grants for audit, we also analyzed NSF’s electronic award data using speci-
fied risk factors, such as the type of award instrument and funded institution,
and prior audit findings. Over the next 12 months, we will expand our efforts to
access additional information sources and develop techniques to improve the
risk assessment process.
Goal 2:
Safeguard the Integrity of NSF Programs and
Resources
1. Identify ways to improve case product quality and timeliness.
• Ensure investigations are consistent with OIG procedures and the PCIE/ECIE
quality standards for investigations.
• Implement modified case milestones and assess their effectiveness on case
processing and monitoring.
• Ensure referral of audit issues arising from investigations.
• Improve the quality of forensic audit services in support of investigations.
• Assess whether investigative statistics reported in semiannual and annual
reports are appropriate performance measures.
39
Performance Report
• Assess methods for reducing the duration of Research Misconduct investiga-
tions.
• Assess whether tracking NSF Management’s response time to our Reports
of Investigations helps to ensure timely completion of cases.
• Review grant-funding agencies’ OIG semiannual reports to Congress to de-
velop a list of best practices and lessons learned to facilitate internal process
improvement discussions.
• Increase the number of cases in which investigators conduct on-site visits.
The OIG’s Office of Investigations (OI) continues to employ the strategies
listed above, as well as those articulated in previous plans, to meet the objec-
tive of improving case quality and timeliness. We maintained our leadership
role in the ECIE community for investigative peer review and quality standards
by coordinating the timing and completion of ECIE reviews and responding
to requests for assistance. We satisfactorily completed our annual internal
peer review and modified our processes and Investigative Manual according
to the recommendations of the review team. Our process was enhanced by
our review of other OIGs’ Semiannual Reports to the Congress, including their
reported statistics.
In addition to continuing a rigorous quality control and assurance program on
all case files, we completed a thorough analysis of our case milestones. As a
result, we reduced the duration of several milestones and eliminated one that
we determined to be unnecessary. We also began a project to track milestone
completion by individual staff member. We have focused aggressively on track-
ing our cases and their results with OIG’s Knowledge Management System
(KMS). Working closely with OIG’s software engineers, we have been able to
make improvements to the system that reduce manual tracking and increase
the accuracy of our data. By routinely sharing our list of referred reports with
NSF management, we have increased the effectiveness of our communica-
tions, better ensured that appropriate actions are taken against wrongdoers,
and reduced the time to obtain management responses.
Our focus on ensuring adequate outcomes to our investigative efforts afforded
us the opportunity to refer a number of matters to either the Office of Audit
or NSF management for resolution. We have expanded our use of a forensic
auditing firm to support investigations and have continued to emphasize the
value of on-site visits as compared to telephonic or written inquiries. Our ef-
forts have resulted in significant improvements in our information analysis.
These efforts are being rewarded with increased recoveries, more agreement
by NSF management on our recommendations for improvement, and improved
capability to process a significantly increased case load with the same number
of investigators.
40
OIG Semiannual Report March 2006
2. Strengthen proactive activities
• Ensure that the relevant OIG information presented to NSF and the public is
current.
• Emphasize OIG liaison activity with NSF and outreach to the research com-
munity.
• Convene one Grant Fraud Investigation’s Training Program.
• Monitor and assess the effect of proactive activities on case processing time,
priorities, and allegation assessment.
• Ensure all FOIA/PA requests are responded to in a timely manner.
• Analyze the effectiveness of our plagiarism software as a proactive tool.
• Meet all needs for dissemination of outreach materials, including outreach
posters.
• Emphasize regular and on-going interaction with the OIG and Department of
Justice/ U.S. Attorney Office communities.
The objective of this strategy is to improve our abilities to detect wrongdoing
and communicate the results of our investigative efforts. We continued to em-
phasize the detection of fraud, waste and abuse through our proactive review
program. We initiated and completed several studies that led to management
implication reports with significant agency responses and fund recoveries from
awardees. One study, focused on the effectiveness of plagiarism detection
software, generated a number of significant research misconduct cases.
We updated the information on the OIG web
site and reinvigorated our outreach program
to NSF and the communities it serves through
our liaison program. OIG staff participated in
numerous outreach events, including presenta-
tions at universities, professional associations,
NSF Program Management Seminars, Regional
Grants Seminars, conflict of interest briefings,
and other NSF and research community activi-
ties. Additionally, we convened a highly suc-
cessful, well attended in-service training for
the IG community on grant fraud, and our staff
continued to participate in interagency task forces. We maintain an agile FOIA NSF OIG’s grant
fraud workshop
response team to ensure that all inquiries are completed on time. Our increas- attracted law
ing work activities resulted in prioritizing performance goals, and we intend to enforcement
professionals
complete, early in the coming performance year, the review of the NSF Bulletin from many
that describes how to handle allegations of research misconduct. federal agencies.
This past year saw an increase in the number of professional interactions with
civil and criminal prosecutors at the Department of Justice and with a number
of United States Attorney’s Offices, including numerous training events and
meetings. Of particular note, the United States Attorney for the Eastern District
41
Performance Report
of Virginia (EDVA) made time in his busy schedule to address the NSF OIG
Grant Fraud Training Workshop. Additionally, the Head of the EDVA Affirma-
tive Civil Enforcement Unit (responsible for recoveries of over $200,000,000
from federal contractors and grantees between 2003 and 2005) participated
with OIG staff members in a presentation to the NSF Regional Grants Con-
ference in Boulder, Colorado. Our proactive activities in this area have paid
huge dividends and have contributed to the establishment of excellent working
relationships between our offices.
We maintained an active summer intern program through which we brought
a number of law students and others interested in investigative careers into
our office. The intern program made significant contributions to our proac-
tive efforts, which were essential to the detection of wrongdoing. Our interns
conducted reviews under the supervision of OI staff, thereby allowing us to
leverage resources and complete this essential component of a well-rounded
investigative effort.
Goal 3:
Utilize OIG Resources Effectively and Efficiently
1. Utilize professional expertise and talents of all OIG staff.
• Conduct annual survey of OIG staff to obtain its views on the effectiveness
of
- OIG use of its resources in personnel, equipment, technology and con
tracting,
- Management planning, policies, and procedures,
- Internal communications and coordination., and
- OIG impact on NSF, and
- KMS and other management tools.
• Analyze survey results and develop corrective actions for the problems
identified.
• Continue the use of the team approach in brainstorming and resolving OIG
internal
management issues and in developing OIG activities.
• Complete development of an integrated Knowledge Management System
(KMS)
within the OIG.
• Develop in-house technical expertise for maintaining KMS.
• Complete a KMS user manual for OIG staff.
• Conduct KMS focus groups to identify what IT applications or tools are
used by staff to support their primary work processes, and what problems
they have using these tools; analyze results to determine need for training
or alternative tools.
• Explore appropriate alternative IT tools that may offer work process im-
provements.
• Develop and conduct KMS training.
42
OIG Semiannual Report March 2006
• Update KMS user manuals.
• Provide prompt, effective responses to requests for IT support.
• Update auditor and management analyst position descriptions.
• Develop a core audit training program and core audit competencies. Intro-
duce appropriate opportunities for cross-training.
• Complete training identified in Individual Development Plans.
Over 60 percent of OIG staff responded to the annual employee survey con-
ducted in February 2006. Respondents gave the highest ratings overall to
the support they received from management in the form of office space, sup-
plies, training, and computer resources. Our staff also report that they have a
good understanding of the mission and goals of the office, that they and their
co-workers follow appropriate standards, and that they believe OIG makes an
important contribution to NSF. As in past years, we focused attention during
our 2005 retreat on areas that were identified by that year’s survey as op-
portunities for improvement. Two issues received significantly higher ratings
in 2006: satisfaction with our KMS system, and intra-office cooperation and
coordination. With regard to the lowest rated issues overall, we noted that
these issues mostly continued to trend higher than in past years and that none
received ratings below 3.2.
OIG staff professionals volunteer to form teams to plan office programs and
resolve issues. The team approach was used to analyze and comment on the
results of the employee survey, organize and frame the discussions for the 2005
retreat, and review changes to existing policies and recommend new ones.
Based on the 2005 survey and retreat discussions, a staff committee drafted
recommended action items for management consideration and incorporated
new issues in the 2006 employee survey. Teams of two to four staff each act
as liaisons to the various NSF directorates to foster better communication be-
tween OIG and the agency.
We conducted focus groups to assess various issues and identify improvements
for the office KMS system, which provides automated management and tracking
capabilities to support audit, investigative, and administrative functions. We also
held eight training sessions (four each for the Audit and Investigation groups),
updated the KMS User Manual, and made numerous system enhancements
during the year. The enhancements included new modules for tracking staff
individual development plans and for handling forensic accounting requests,
refinements to many existing KMS modules, and various new and redesigned
reports for presenting KMS information in formats that met users’ needs. We
upgraded the OIG server to provide faster processing and acquired new soft-
ware tools to assist in managing and performing audits and investigations.
In fulfilling its charge to update auditor and management analyst position descrip-
tions, the Position Description Team extensively researched values and com-
petencies in the OIG community, as well as work done on core competencies
by a consultant under NSF contract. The team recommended 8 Core Values
and 18 Core Competencies to be included in all audit staff position descriptions.
43
Performance Report
After discussions on rankings with senior audit managers and obtaining feed-
back from all audit staff, the team substantially revised the audit staff position
descriptions. We believe these changes will provide staff and supervisors with
a better understanding of the expectations for their performance, a clearer link
with the OIG Performance Plan, and improved ability to identify training needs
for future career development.
Approximately 75 percent of the training proposed on the individual develop-
ment plans of OIG staff was completed during the past year. While we hope to
increase this percentage in future years, we also recognize that not all proposed
training is likely to be accomplished within the 12 month period.
2. Improve communication and collaboration within OIG.
• Provide timely information exchange and referrals among the audit, investiga-
tion, and administrative units.
• Share information about audit, investigative, and administrative activities at
all-staff meetings.
• Strengthen Investigations/Audit/Administrative teams performing OIG/NSF
liaison duties.
• Survey staff for suggestions on how to improve internal communications and
collaboration.
• Continue periodic meetings between audit and investigation managers to
discuss cross-cutting issues, mutual concerns, and cooperative efforts.
At the 2005 OIG retreat, management solicited suggestions for how to improve
internal communications and collaboration from staff. The responses included
93 comments and suggestions on a variety of topics, including making meetings
more productive, training, multi-disciplinary projects, internal communications,
and supervision. Several of the suggestions, such as conducting more-frequent
orientation for new staff, were implemented immediately, while others are still
being considered. The results of the 2006 employee survey indicate that our
efforts in improving coordination were largely successful, as the statement “there
is a spirit of cooperation among our different OIG units” received a significant
increase in its score over the previous year.
Improvements to the KMS Referral module facilitated the timely exchange of
information among the audit, investigative, and administrative units within OIG.
The office continues to emphasize active and meaningful exchanges among
staff of the various units. The offices of audit and investigation convened a
number of increasingly productive meetings to exchange ideas and discuss
progress on referrals. The completion this year of the KMS module for reporting
and tracking referrals between the two units greatly facilitated this process. All
staff participate in OIG’s monthly meetings to share information, ensure broad
understanding of how their respective units operate, and present the results of
recent reports and cases.
44
OIG Semiannual Report March 2006
3. Ensure effective external communications and consultation
with our stakeholders.
• Produce timely external reports on OIG results and issues.
• Provide testimony and other requested information to congressional com-
mittees.
• Provide briefings to the NSB, Congress, OMB, NSF, and others regarding
OIG plans, priorities, and progress.
• Issue two OIG Newsletters by email.
• Update NSF leadership regularly on OIG activities and concern.
• Collaborate with federal and international agencies to advance common audit,
investigative, and management goals.
• Provide leadership and active participation in the IG community.
• Improve presentation and content of OIG website.
OIG is responsible for keeping key stakeholders and oversight officials informed
in a timely way about its activities and findings concerning NSF programs and
operations. OIG’s Semiannual Reports to the Congress, budget submissions
to the Office of Management and Budget and to the Congress, NSF’s Financial
Statement Audit Report, Performance Report, and Management Challenges
Letter were all delivered within the timeframe specified by law or by the pre-
scribed target date. The IG testified before the House of Representatives
Committee on Science Subcommittee on Research in March 2005 about the
two most important management challenges facing NSF: strategic management
of NSF resources and improved financial performance. In February 2005, Dr.
Boesz submitted a statement for the record before the U.S. Senate Committee
on Appropriations that discussed in more detail NSF’s challenge in managing
large infrastructure projects. In both instances the IG provided all information
requested by congressional members and staff.
Our staff presented regular briefings to the Audit and Oversight Committee of
the National Science Board on a variety of topics, such as the audit of NSF’s
financial statement, the OIG annual audit plan, the findings of several per-
formance audits, the OIG budget request, and the Sarbanes-Oxley Act. We
released two electronic newsletters to provide an interim update on our activi-
ties, between Semiannual Reports, to interested parties in the government and
research communities. The IG and Deputy IG conducted eight briefings for
the NSF Director and Deputy Director on recent, ongoing, and planned OIG
activities, as well as other matters concerning the management and operations
of the agency.
Our office actively participates in many committees and initiatives organized
by the IG community, and we have played a leadership role in two key areas:
establishing a dialogue among international organizations responsible for sci-
ence research funding; and increasing awareness within the federal government
about research misconduct. In June 2005, the IG and the Head of Scientific Af-
fairs for DFG Germany co-hosted a workshop entitled Accountability in Science
Research Funding – Meeting the Challenge, to discuss strategies for addressing
45
Performance Report
accountability challenges. Representatives of
13 countries attended the meetings that were
held in Bonn. We also sent an auditor on a
temporary detail to England to share auditing
techniques, and one of our auditors provided
advisory assistance to the Science Foundation
of Ireland. OIG continues to lead the PCIE/
ECIE Misconduct in Research Working Group,
which is chaired by NSF’s Inspector General.
This group monitors the status of agencies’
efforts to establish policies addressing re-
search misconduct and organizes educational
programs highlighting the issue.
OIG open hous- OIG staff contribute in many ways toward advancing the common goals of
es foster better
communication our community. We organized and hosted a successful one-day Grant Fraud
between NSF Workshop that was attended by 125 professionals from most grant-making
and OIG staff.
Darrell Drake, agencies. Case studies on successful grant fraud investigations and prosecu-
Lee Stokes, and tions were presented and discussed at length. The IG serves as an elected
Jill Schamberger
stand ready to member of the Executive Council of Inspectors General, a steering committee
explain OIG’s for PCIE/ECIE policies and activities. OIG staff continued to actively partici-
mission.
pate in the PCIE/ECIE Investigations Committee, the PCIE/ECIE Inspections
and Evaluation Committee, the PCIE/ECIE IT Roundtable, the IG Steering
Committee for E-Learning, and the PCIE GPRA Roundtable, which is a forum
for discussion of the integration of GPRA requirements into the audit function.
Staff members also assisted in organizing and coordinating the PCIE/GAO
Roundtable on Financial Statement Audits, in which 200 auditors from GAO
and the IG community addressed critical issues in auditing federal agencies’
annual financial statements.
Our staff participated in the Comptroller General’s Domestic Grant Working
Group with auditors from federal, state, and local agencies to develop a guide
for improving accountability for grant funds. Audit staff were also actively in-
volved with the PCIE/ECIE Federal Audit Executive Council, which coordinates
the implementation of federal initiatives that affect the policy and operations
of IG audit organizations. Our auditors worked with the Financial Statement
Audit Network, a committee of the Federal Audit Executive Council, which
conducts a forum to discuss key issues concerning the preparation and audit
of federal financial statements. Finally, OIG staff served as members of the
Working Group on Stewardship and Accountability sponsored by the National
Science and Technology Council Research Business Models Subcommittee.
This working group is addressing ways to streamline sub-recipient monitoring
and improve financial performance.
We continued to make a number of improvements to the OIG website to facilitate
communications with our stakeholders.
46
Statistical Data
Audit Reports Issued with Recommendations
for Better Use of Funds 48
Audit Reports Issued with Questioned Costs 49
Audit Reports Involving Cost-Sharing Shortfalls 50
Status of Recommendations that Involve Internal
NSF Management Operations 51
List of Reports NSF and CPA Performed Reviews 52
NSF-Cognizant Reports 53
Other Federal Audits 54
Audit Reports with Outstanding Mangement Decisions 55
Investigations Case Activity 56
Freedom of Information Act and Privacy Act Requests 58
47
Statistical Data
Audit Reports Issued with Recommendations
for Better Use of Funds
Dollar
Value
A. For which no management decision has been $0
made by the commencement of the reporting
period
B. Recommendations that were issued during the $0
reporting period
C. Adjustments related to prior recommendations $0
Subtotal of A+B+C 0
D. For which a management decision was made $0
during the reporting period
i) Dollar value of management decisions that $0
were consistent with OIG recommenda-
tions
ii) Dollar value of recommendations that were $0
not agreed to by management
E. For which no management decision had been $0
made by the end of the reporting period
For which no management decision was made $0
within 6 months of issuance
48
OIG Semiannual Report March 2006
Audit Reports Issued with Questioned Costs
Number of Questioned Unsupported
Reports Costs Costs
A. For which no management 16 $45,590,514 $5,500,231
decision has been made by
the commencement of the
reporting period
B. That were issued during the 20 $3,539,398 $22,331
reporting period
C. Adjustment related to prior (1) $154,322 $0
recommendations
Subtotal of A+B+C 35 $49,284,234 $5,522,562
D. For which a management 12 $1,831,340 $791,064
decision was made during
the reporting period
i) dollar value of disallowed N/A $574,284 N/A
costs
ii) dollar value of costs not N/A $1,257,056 N/A
disallowed
E. For which no management 24 $47,452,894 $4,731,498
decision had been made
by the end of the reporting
period
For which no management deci- 6 $44,316,118 $4,709,167
sion was made within 6 months
of issuance
49
Statistical Data
Audit Reports Involving Cost-Sharing Shortfalls
Number of Cost-Shar- At Risk of Actual Cost
Reports ing Prom- Cost Shar- Sharing
ised ing Short- Shortfalls
fall (Ongo- (Completed
ing Project) Project)
A. Reports with monetary 5 $18,914,667 $940,046 $6,960,987
findings for which no
management decision
has been made by the
beginning of the reporting
period:
B. Reports with monetary 0 $0 $0 $0
findings that were issued
during the reporting pe-
riod:
C. Adjustments related to $0 $0 $1,154,340
prior recommendations
Total of reports with cost shar- 5 $18,914,667 $940,046 $8,115,327
ing findings (A+B+C)
D. For which a management N/A N/A $0 $0
decision was made during
the reporting period:
1.Dollar value of cost-shar- N/A N/A $0 $0
ing shortfall that grantee
agreed to provide
2.Dollar value of cost- N/A N/A $0 $0
sharing shortfall that man-
agement waived18
E. Reports with monetary 5 $18,914,667 $940,046 $8,115,327
findings for which no
management decision has
been made by the end of
the reporting period
Indicates the dollar value waived by management. Most was waived as a result of additional docu-
18
mentation provided during audit resolution to support the questioned amounts.
50
OIG Semiannual Report March 2006
Status of Recommendations that Involve Internal NSF Management Operations
Open Recommendations (as of 3/31/2006)
Recommendations Open at the Beginning of the Reporting Period 86
New Recommendations Made During Reporting Period 30
Total Recommendations to be Addressed 116
Management Resolution of Recommendations19
Awaiting Resolution 21
Resolved Consistent With OIG Recommendations 95
Management Decision That No Action is Required 0
Final Action on OIG Recommendations20
Final Action Completed 30
Recommendations Open at End of Period 86
Aging of Open Recommendations
Awaiting Management Resolution:
0 through 6 months 10
7 through 12 months 8
More than 12 months 3
Awaiting Final Action After Resolution
0 through 6 months 20
7 through 12 months 12
More than 12 months 33
19
“Management Resolution” occurs when the OIG and NSF management agree on the corrective action plan that will be
implemented in response to the audit recommendations
20
“Final Action” occurs when management has completed all actions it agreed to in the corrective action plan.
51
Statistical Data
List of Reports
NSF and CPA Performed Reviews
Report Subject Questioned- Unsup- Better Cost
Number Costs ported- Use of Sharing
Costs Funds At-Risk
06-1-001 RPSC CAS 418 $0 $0 $0 $0
06-1-002 University of Miami $0 $0 $0 $0
06-1-003 UNAVCO Incurred Cost Audit $44,101 $0 $0 $0
06-1-004 RPSC ID/ODC Classification $0 $0 $0 $0
System
06-1-005 San Francisco Unified School $712,620 $0 $0 $0
District
06-1-006 Institute for Systems Biology $23,721 $0 $0 $0
06-1-007 Detroit City School District $1,749,024 $0 $0 $0
06-1-008 Howard University ECSEL $141,595 $22,331 $0 $0
06-2-001 FY 2005 FISMA Evaluation $0 $0 $0 $0
Survey
06-2-002 FY 2005 Report on FISMA $0 $0 $0 $0
06-2-003 RPSC POFMS Survey & Inter- $0 $0 $0 $0
nal ControlAssessment
04-2-004 Data Dissemination $0 $0 $0 $0
06-2-005 FY 2005 Financial Statement $0 $0 $0 $0
Audit
06-2-007 Independent Auditors’ Report of $0 $0 $0 $0
Fiscal Year2005 & 2004 Spe-
cial-Purpose
06-2-008 AUP-Intragovernmental Activity $0 $0 $0 $0
and
06-2-009 AUP International Ocean Drill- $0 $0 $0 $0
ing Program
06-2-010 2005 Government in the Sun- $0 $0 $0 $0
shine Act
Total: $2,671,061 $22,331 $0 $0
52
OIG Semiannual Report March 2006
NSF-Cognizant Reports
Report Subject Ques- Unsup- Cost
Number tioned ported Sharing
Costs Costs At-Risk
06-4-001 Educause $0 $0 $0
06-4-002 Earth & Space Research $0 $0 $0
06-4-003 Dallas Independent School District $203,827 $0 $0
06-4-004 Pasadena Area Community College District $0 $0 $0
06-4-005 Kalispell Public Schools $0 $0 $0
06-4-006 WGBH Educational Foundation $0 $0 $0
06-4-007 Gadsden Independent School District $0 $0 $0
06-4-008 Cleveland Municipal School District $0 $0 $0
06-4-009 Stark County Educational Service Center. $0 $0 $0
06-4-010 Consortium of Univ. for the Advancement Of $6,160 $0 $0
Hydrologic Science
06-4-011 The Exploratorium $0 $0 $0
06-4-012 Southwest Center for Educational Excellence $0 $0 $0
06-4-013 Oregon Museum of Science & Industry $0 $0 $0
06-4-014 William Davidson Institute at the Univ. of MI $0 $0 $0
Business School
06-4-015 Town of Holbrook $0 $0 $0
06-4-016 University Corporation for Atmospheric Re- $0 $0 $0
search
06-4-017 Joint Oceanographic Institutions $0 $0 $0
06-4-018 Educational Broadcasting Corporation $0 $0 $0
06-4-019 Institute of Ecosystem Studies, Inc. $0 $0 $0
06-4-020 Museum of Science $0 $0 $0
06-4-022 Carnegie Institution of Washington $0 $0 $0
06-4-024 WGBH Educational Foundation $0 $0 $0
06-4-025 The Computing Research Association, Inc. $0 $0 $0
06-4-027 Horizon Research, Inc. $0 $0 $0
Total: $209,987 $0 $0
53
Statistical Data
Other Federal Audits
Report Subject Questioned Unsup- Cost
Number Costs ported Sharing
Costs At-Risk
06-5-001 University of Richmond & Its Affiliate $388,000 $0 $0
06-5-003 Blackfeet Community College $22,161 $0 $0
06-5-004 The College of Wooster $130,929 $0 $0
06-5-007 Minuteman Regional Vocational $18,694 $0 $0
School District
06-5-009 Smithsonian Institution $5,500 $0 $0
06-5-016 Brigham Young University $12,397 $0 $0
06-5-022 The University of Alabama $3,772 $0 $0
06-5-024 State of Mississippi Institutions of $10,850 $0 $0
Higher Learning
06-5-036 Northwestern University $1,204 $0 $0
06-5-037 Central State University $3,270 $0 $0
06-5-046 Polytechnic University $47,253 $0 $0
06-5-059 Black Hills Special Services Coop- $9,225 $0 $0
erative
06-5-061 American Indian Higher Education- $5,095 $0 $0
Consortium
Total: $658,350 $0 $0
54
OIG Semiannual Report March 2006
Audit Reports With Outstanding Management Decisions
This section identifies audit reports involving questioned costs, funds put to
better use, and cost sharing at risk where management had not made a final
decision on the corrective action necessary for report resolution with 6 months
of the report’s issue date. At the end of the reporting period there were six
reports remaining that met this condition. The status of recommendations that
involve internal NSF management is described on page 51.
55
Statistical Data
INVESTIGATIONS CASE ACTIVITY
(October 1, 2005 – March 31, 2006)
Preliminary Civil/Criminal Administrative
Active Cases at
Beginning of Period 26 59 61
Opened Cases 124 28 24
Closed Cases 86 43 30
Active Cases at
End of Period 64 44 55
INVESTIGATIONS CASE STATISTICS
Referrals to DOJ 5
Criminal Convictions/Pleas 3
Civil Settlements 1
Administrative Actions 14
Investigative Recoveries $2,331,397.68
Research Misconduct Findings 3
Cases Forwarded to NSF
Management for Action 7
Cases Forwarded to NSF Management
in Prior Periods Awaiting Action 0
56
OIG Semiannual Report March 2006
INVESTIGATIONS CASE STATISTICS (CONTD.)
Assurances and Certifications21
Number of Cases Requiring Assurances During This Period 6
Number of Cases Requiring Certifications During This Period 4
Assurances Received During This Period 0
Certifications Received During This Period 0
Number of Debarments in Effect During This Period 7
21
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.
57
Statistical Data
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. paragraph 552) and the Privacy Act (5 U.S.C. paragraph
552a). During this reporting period:
We received 12 FOIA requests. We responded to 10 with a response time that ranged
between 3 days and 21 days, with the median around 10 days and the average around 11
days.
No appeals were filed.
58
Appendix 1
Reporting Requirements
Under the Inspector General Act, we report to the Congress
every six months on the following activities:
Reports issued, significant problems identified, the value of
questioned costs and recommendations that funds be put to
better use, and NSF’s decisions in response (or, if none, an
explanation of why and a desired timetable for such decisions).
(See pp. 5, 13, 47)
Matters referred to prosecutors, and the resulting prosecutions
and convictions. (See pp. 27, 56)
Revisions to significant management decisions on previously
reported recommendations, and significant recommendations
for which NSF has not completed its response. (See pp. 20,
55)
Legislation and regulations that may affect the efficiency or
integrity of NSF’s programs. (See p. 7)
OIG disagreement with any significant decision by NSF man-
agement. (None)
Any matter in which the agency unreasonably refused to provide
us with information or assistance. (None)
59
Appendix 2
ACRONYMS
CFO Chief Financial Officer
COI Conflict of Interest
COV Committee of Visitors
DACS Division of Acquisition and Cost Support
DCAA Defense Contract Audit Agency
DD Deputy Director
DFE Designated Federal Entity
DGA Division of Grants and Agreements
DoD Department of Defense
DoJ Department of Justice
ECIE Executive Council of Integrity and Efficiency
FASAB Federal Accounting Standards Advisory Board
FFRDC Federally Funded Research and
Development Centers
FISMA Federal Information Security Management Act
FOIA Freedom of Information Act
GAO General Accounting Office
GPM Grant Policy Manual
GPRA Government Performance and Results Act
HHS Department of Health and Human Services
IG Inspector General
IRB Institutional Review Board
KMS OIG Knowledge Management System
MIRWG Misconduct in Research Working Group
MREFC Major Research Equipment and
Facilities Construction
NIH National Institute of Health
NSB National Science Board
NSF National Science Foundation
OIG Office of Inspector General
OMB Office of Management and Budget
OPP Office of Polar Programs
ORI Office of Research Integrity
PCIE President’s Council on Integrity and Efficiency
PI Principal Investigator
PFCRA Program Fraud Civil Remedies Act
QCR Quality Control Review
SBIR Small Business Innovation Research
STC Science and Technology Centers
USAP United States Antarctic Program
USI Urban Systemic Initiative
USP Urban Systemic Program
60
Semiannual Report - March 2006
Published by the National Science Foundation, Office of Inspector General on 2006-03-01.
Below is a raw (and likely hideous) rendition of the original report. (PDF)