NULLIUS IN VERBA:INSIGHTS FROM AN INSPECTOR GENERAL

Allison C. Lerner

Inspector General

National Science Foundation

Federal Demonstration Partnership

National Academy of Sciences

January 26, 2011

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What is an OIG?

What are Offices of Inspector General?Provide leadership and coordination to implement policies to: Provide leadership and coordination to implement policies to:

Prevent and detect fraud, waste, abusePromote economy, efficiency, effectivenessConduct civil, criminal and administrative investigations, Conduct audits, inspections, reviews of agency programs(funded activities), and operations

Features:Features:Independent of agency management Jurisdiction (NSF activities, programs, operations)Staff of experts: administrators, attorneys, auditors, criminalp , y , ,investigators, and scientists

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NATIONAL SCIENCE FOUNDATIONNATIONAL SCIENCE FOUNDATIONIndependent Federal Agency

funds researchers through merit-based review of proposals, supports Antarctic/Arctic research, ships, major facilities and centersprincipal federal agency promoting science and engineering education

A l b d t i ll t d f llAnnual budget is allocated as follows:<4% federal budget for research and development.nearly half of the federal support for non-medical basic research at U.S. colleges and universities colleges and universities.

Physical sciences ~ 41%Engineering ~ 41%Environmental Sciences ~ 49%Social Sciences ~ 52%Mathematics ~ 60%Biology (ex. NIH) ~ 67%Computer Science ~ 86%Computer Science ~ 86%

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NSF’S EXPECTATIONS• The awardee has full responsibility for the conduct of the project or

activity supported under this award and for adherence to the award conditions. Although the awardee is encouraged to seek the advice and opinion of NSF on special problems that may arise, such advice does not diminish the awardee’s responsibility for making sound scientific and administrative judgments and should not imply that the responsibilityadministrative judgments and should not imply that the responsibility for operating decisions has shifted to NSF. (Article 1, GC-1)

• By accepting this award, the awardee agrees to comply with the applicable Federal requirements for grants and cooperative agreements and to the prudent management of all expenditure and

i ff i h dactions affecting the award. (NSF’s Grant General Conditions, since 1988)

• The awardee must report issues related to research misconductThe awardee must report issues related to research misconduct (NSF’s Grant General Conditions, since 1988).

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FROM THE GOVERNMENT’S PERSPECTIVEGRANTS ARE NOT “SMALL BUSINESS”

Government oversight is increasingly focused on:• Transparency

A t bilit• Accountability• Documentation• Is the activity worthy of the government’s expenditure

of funds?

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of funds?

WHO IS NSF OIG?

I t

Office of Investigations

D t

Office of Audits

Inspector General (IG)

C l Deputy IG

Counsel to the IG Admin. Investigations

(Investigative Scientists)

Civil/Criminal

Financial Audits

Administrative Staff

Civil/Criminal Investigations

(Special Agents)

Legal and Outreach

CPA Contract Audits

Grant and External (Investigative Attorneys)

Investigations Specialists and Support Staff

Audits

Performance Audits

Expertise in all areas of research, grant and contract

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grant, and contract administration

OFFICE OF AUDIT

• Financial and Information Technology Audits− Financial statementsFinancial statements− OMB Circular A-133 (Single Audit Act) oversight− IT security, policies

• Grant and Contract Audits− Compliance with terms and conditionsCompliance with terms and conditions− Internal controls− Allowability of costs (per OMB circulars and NSF rules)

• Performance Audits− NSF program oversight and operations

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g g− Economy and efficiency of programs

SOURCES OF AUDITS

• Annual audit work plan • Statutory requirements

− CFO Act financial statement audits− Federal Information Security Management Act (FISMA)Federal Information Security Management Act (FISMA)− OMB Circular A-133 (Single Audit Act) oversight

• Risk-based− Trends from prior audit results − Investigative referrals and hotline complaints− Data analyticsy

• Congressional requests• NSF and National Science Board requests

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• Quick response audits of current issues

AUDIT PRIORITIES FOR 2011

• Contract administration

• Allowability of contingency costs on awards• Allowability of contingency costs on awards

• Labor effort reporting by awardees

• Human capital • Human capital

• Information technology audits• Increased government-wide oversight coordination• Increased government-wide oversight coordination

− Recovery Board and other OIGs− Council of Inspectors General for Integrity and Efficiency

(CIGIE)( )

• Increased use of data analytics− Improve risk-based audit planning

Emphasis on the end to end p ocess fo g ant o e sight

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− Emphasis on the end-to-end process for grant oversight

END TO END PROCESS FOR GRANT OVERSIGHT

•Funding Over Time •Unallowable, Unallocable, Unreasonable CostsI d t D t ti

•No /Late Final R t

PRE-AWARD RISKS ACTIVE AWARD RISKS AWARD END

RISKS

•Conflict of Interest•False Statements•False Certifications•Duplicate Funding

fl d d

•Inadequate Documentation•General Ledger Differs from Draw Amount•Burn Rate•No /Late/Inadequate Reports•Sub-awards, Consultants, Contractors

Reports•Cost Transfers•Spend-out• Financial

• Inflated Budgets•Candidate

Suspended/Debarred

Sub awards, Consultants, Contractors•Duplicate Payments•Excess Cash on Hand/Cost transfers•Unreported Program Income

Adjustments• Unmet Cost

Share

10D A T A A N A L Y S I S

ONE UNIVERSITY’S RISK ASSESSMENT

HEAT MAP

High

Moderate Auxiliary Services

Deferred MaintenancePrivacy of

InformationEndowment

Contracts & Grants Management

BA

BIL

ITY

Environmental, Health & Safety

Immigration & Visa Processing

Human Subjects

Student Affairs

Animal Subjects

Technology Licensing

Off-Campus Facilities

Human Resource Management

Construction Management

Property Management

Financial Reporting

PRO

B

AcquisitionExecutive Benefits

SecuritySubjects Subjects

Gifts & Restricted Funds

Low

gy g

11IMPACT

Moderate HighLow

INVESTIGATIONS

Ci il d C i i l I ti ti• Civil and Criminal Investigations– Cases of Fraud, Theft, Conspiracy, Embezzlement,

False Statements, Etc.– Consequences:

Restitution, Fines, Prison, Compliance Plans

• Administrative Investigations– Cases of Research Misconduct; Breach of ;

Confidentiality; Human Subjects; Animal Welfare– Consequences:

Debarment, Certifications and Assurances,

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Remedial Training, etc.

WHAT IS FRAUD?– It’s a civil or criminal investigation (Civil Fraud, Qui Tam, 18 USC

1001, Conflicts of Interest))

Fraud: “intentional perversion of truth for the purpose of inducing – Fraud: intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or to surrender a legal right.” Black’s Law Dictionary 1990. (element are: lie, with intent, reliance, loss)

– Is not a synonym for Research Misconduct (administrative). Fraud is a very narrow term and may “promote complacency and the belief that scientific research is free of misconduct.”

AAAS/ABA Project on Scientific Fraud and Misconduct Workshop Number 2, 1989S/ ojec o Sc e c aud a d sco duc o s op u be , 989

%

Common Types of Civil/Criminal Allegations

31%

13%

9%3%

Theft/Embezzlement (31%)

False or Fraudulent Statements (24%)

Miscellaneous* (20%)

F l F d l t Cl i (13%)

*Includes mail fraud, false identification insurance

1324%

20%

False or Fraudulent Claims (13%)

Conflicts of Interest (9%)

Computer Fraud (3%)

fraud, impersonating a government officer, and

copyright infringement.

Grant money Grant money for

rent and tuition?

Individual fraud on an NSF Grant

Fraudulent final report submitted to NSF by professor• Fraudulent final report submitted to NSF by professor• NSF grant money used for personal expenses• NSF: Professor’s grant was suspended and he had to repay almost

$200,000

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$ ,• Criminal result: Professor pled guilty and was fined $15,000 and faced

5-years probation

F l i t ?False receipts?

Individual fraud on an NSF Grant

• Subject had embezzled at least $214,000 in grant money bysubmitting falsified expense vouchers

• Sentenced to 1 year in prison followed by 2 years supervised

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release• Ordered to pay $93,053 in restitution to the government• NSF debarred him for 3 years

CONSEQUENCES FOR INSTITUTIONAL FINANCIAL MISMANAGEMENT

1 $5 M compliance plan violated terms of Cooperative Agreement

Government Imposed Compliance Plans

1. $5 M, compliance plan, violated terms of Cooperative Agreement

2. $500,000, 5 year compliance plan, unable to account for funds

3. $1.5 M, 5-year compliance program; cost-sharing

4. $150,000, 5-year compliance program; misuse of federal funds

5. $2.5 M, 5-year compliance program; cost-sharing, salaries, double chargingg g

Institutional Fraud

• Typically resolved as civil false claimsyp y• Financial Restitution• Compliance plans based on key elements of the sentencing guidelines

1. Responsible Officials and Tone from the top2. Due Care in Assignments with Substantial Discretionary Authority3 Communication Standards and Procedures

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3. Communication Standards and Procedures4. Establish Monitoring, Auditing and Disclosure System 5. Consistent Enforcement of Standards and Rules 6. Respond Appropriately to the Offense

RESEARCH MISCONDUCT (RM)RESEARCH MISCONDUCT (RM)

• RM means “fabrication, falsification, or plagiarism in proposing or , , p g p p gperforming research funded by NSF, reviewing research proposals submitted to NSF, or in reporting research results funded by NSF.” 45 C.F.R. 689.1(a)

• Does not include mistake or honest error.

• “Awardee institutions bear primary responsibility for prevention and detection of [RM], and for the inquiry, investigation, and adjudication . . .” 45 C.F.R. 689.4(a)

• OIG reviews institution reports for accuracy, fairness, and completeness. If warranted, conducts additional investigation and reports to NSF Deputy Director who adjudicatesreports to NSF Deputy Director, who adjudicates.

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INCREASING ALLEGATIONSINCREASING ALLEGATIONS• From 1998‐2008, NSF has observed a 3‐fold 

increase in RM allegationsincrease in RM allegations

Allegations Since 1998

3.5

4

4.5

All

eg

ati

on

s

g

*Normalized to 1998research misconduct allegations

2

2.5

3

n N

um

ber

of

A

Misconduct In Science

1

1.5

2

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Fo

ld I

ncr

ease

i

Research Misconduct

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F

Year

HALL OF EXCUSESHALL OF EXCUSES• I didn’t do it. My grad student/undergraduate/postdoc/grant writer/faculty colleague/secretary/Co-PI/SRO/AOR/VP of

Research/Dean/spouse wrote that section.

• It’s only background/introductory material (or it had no technical merit).y g y ( )

• The reviewers are smart enough to know what is my work and what is someone else’s.

• It’s in the public domain.

• It’s not plagiarism; it’s just bad citation.

• I used the same words, but I meant something different.

• There's no other way to say that.

• I didn't have space for all the citations

• “It’s only a proposal It’s not like it’s a publication”It s only a proposal. It s not like it s a publication

• “Fastlane removed all the quotation marks”

• “My English teacher told me it’s not plagiarism if I change every 7th word.”

• “I was told that having between 70-80 citations in a proposal was enough.

• Anymore and I would look like I wasn’t proposing to do something new.”

• “If that was done by me, it was not intentional, and if I did it, I was not aware that I was doing it, and if I did it, it stopped.”

• A bird distracted me.

ff f d fl• I was suffering from severe acid reflux.

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Research Misconduct Actions Since 1998

Research Misconduct Actions Since 1998

14

16

ns

Assurance of accuracy

7%Debarment

or suspension

5%

10

12

mb

er

of

Act

ion

Certification of Accuracy

Retract Paper1%

Warned/Other20%

6

8

ncr

ease

in

Nu

m 11%

Letter of Reprimand

20%

Research Misconduct

Finding18%

0

2

4

Fo

ld I

n 20%

Prohibition from

serving as

Remedial Training

11%

18%

0

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Year

20

greviewer, advisor, or consultant

7%

WHAT’S IN YOUR RCR TRAINING PLAN?

On-line?Face to face meetings w/advisor?

• What’s the format?Face-to-face meetings w/advisor?Faculty-led courses?

“9 l t ” (RM li i Wh t’ th bj t “9 core elements” (RM policies, authorship and citation practices, data acquisition and sharing*, animal/human subjects protection IRBs gov’t

• What’s the subject matter?

subjects protection, IRBs, gov trequirements).Or issues as determined by risk assessment.assessment.

Only students/postdocs directly funded by an NSF grant?

• Who participates?

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Foreign-educated?All?

RESPONSIBLE CONDUCT OF RESEARCHRESPONSIBLE CONDUCT OF RESEARCH

• Institutional Responsibilities to NSF (proposals submitted ON or AFTER January 4, 2010)

• Certify that a Plan exists for RCR and ethical training for Certify that a Plan exists for RCR and ethical training for undergrads, grad students, and postdocs.

• Designate person to oversee complianceDesignate person to oversee compliance

• Institutions must verify that students and researchers have received proper trainingreceived proper training

• Institutional plans and efforts are subject to review.

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WHAT IF THE IG SHOWS UP?

• Don’t panicDon t panic

• Provide full disclosure

• Self-identify – problems and solutions to correct them

• Maintain confidentiality – reputation is the currency of science

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QUESTIONS, THOUGHTS??Q ,

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CONTACT INFORMATION

Internet: oig.nsf.gov

E mail: oig@nsf govE-mail: oig@nsf.gov

Telephone: 703-292-7100

Anonymous: 1-800-428-2189

Write: 4201 Wilson Blvd

Arlington, VA 22230

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