December 2007


The Office of Inspector General will issue this newsletter periodically to report the results of recent audits, investigations, and other work related to NSF's programs. Our intent is to help members of the research community become more aware of the types of problems that may be found during an audit or investigation, as well as measures that may be taken to prevent them.



In This Issue







Evaluation of Employee Benefits at NSF’s FFRDCs Finds Unfunded Liability of Over $80 Million ::

A management consulting firm retained by OIG determined that as of September 30, 2004 the unfunded liability for post-retirement benefits at NSF’s five Federally Funded Research and Development Centers (FFRDC) surpassed $80 million, and this liability was expected to increase by another $6.8 million in the following fiscal year.  The firm found that the value of medical benefits varied significantly among the five FFRDCs, with two having a higher value than benefits provided by comparable groups, and two with much lower values.  All of the FFRDCs were found to have very similar pension programs, which exceeded the value of those provided by most comparative groups. The study made several recommendations including periodically comparing the benefit plans of its FFRDCs to those of comparable organizations as a check on their reasonableness, and provided specific ideas for helping to control benefit costs.  





:: Significant Control Weaknesses Identified at University Campus ::

An audit of three awards for $9.4 million to the University of Maryland Baltimore County (UMBC) found serious internal control deficiencies, including inconsistent adherence with UMBC’s established financial management practices. These internal control deficiencies resulted in $174,655 of erroneous costs claimed to NSF grants and if not corrected, could have a significant impact on UMBC’s ability to administer future awards funds. Auditors found as a material weakness that UMBC staff did not always follow the University’s cost accounting procedures to ensure that costs charged to NSF awards were accurate, allowable, and allocable. The university also lacked procedures to detect errors in the amount of indirect costs claimed, and failed to adequately monitor subawardees.  UMBC concurred with all the report findings and indicated that it was taking corrective action.





:: National Single Audit Sampling Project Indicates Improvements Are Needed ::

The Inspector General community issued its Report on National Single Audit Sampling Project on the quality of annual audits performed by state auditors or independent public accountants and required by the Single Audit Act of 1984.  The IGs’ report established that improvements in performance of these single audits are needed government-wide.  Quality control reviews of a random sample of 208 audits found that 115 were of acceptable quality, but that 30 or 16 percent had significant deficiencies and were therefore of limited reliability, and 63 or 35.5 percent were unacceptable and could not be relied upon.  The most prevalent deficiencies were insufficient documentation of the understanding of internal controls over compliance and inadequate compliance testing of OMB A-133 compliance requirements.





:: Former Professor Pleads Guilty ::

A former professor at a Tennessee university pled guilty to a federal felony charge of making a false statement under an NSF grant.  The professor admitted to sending university employees to conduct an evaluation project in support of the professor’s private consulting business.  The evaluation project was separate from the professor’s work under the NSF grant at the university, and she was paid consulting fees separate from her university salary.  The professor also admitted that the false statements and other conduct caused a loss of between $10,000 and $30,000  and that she abused a position of trust as Principal Investigator on the NSF grant and center director at the university.  On July 30, 2007, the professor was sentenced to six months home confinement, 2 years probation, and ordered to pay restitution of $25,598.




:: Former Research Center Employee Sentenced to Prison for Mail Fraud ::

A former employee of an NSF-funded research center pled guilty to one count of mail fraud, in response to an indictment charging the subject with seven counts of mail fraud.  On June 25, 2007, the subject was sentenced in U.S. District Court to 16 months in prison, 3 years of supervised release, payment of restitution of $18,214.15, and payment of a special assessment of $100.  We referred the outcome of this investigation to NSF with a recommendation that the subject be debarred for a period of 5 years because she abused her position of trust and could readily obtain the same type of employment elsewhere, as well as the fact that her actions were intended solely for her personal financial gain.  NSF’s decision is pending.



:: Professor Plagiarizes From NSF Proposal ::

A proposal by a professor at an Oregon university contained extensive sections of text and multiple figures duplicated from an earlier proposal that NSF had asked the professor to review according to an OIG inquiry and a university investigation.  The investigation concluded that his actions were intentional, violated academic standards of scholarship, and that his plagiarism was therefore an act of research misconduct.  The university prohibited the subject from submitting external proposals for 3 years, required 2 years of subsequent official prior review of any external proposals submitted, and placed a letter of reprimand in the professor’s personnel file.  Based on our recommendations, NSF made a finding of research misconduct, and applied several sanctions including proposing that the professor be debarred from receiving federal funds for a period of 3 years.


:: Student Claims “Laziness” Caused Him to Fabricate/Falsify Data in Four Manuscripts ::

In an egregious example of student misconduct, a graduate student at a Washington university admitted he falsified and fabricated NSF-funded research data in four manuscripts, three of which were published.  Our office received the allegation following the university’s inquiry. During the investigation, the student admitted he falsified and fabricated the data because of “a combination of lack of motivation, laziness and a lack of interest in the work (especially experiments).”  The university made a finding of research misconduct, dismissed the student from the university, and revoked his master’s degree.  We recommended that NSF:  make a finding of research misconduct; send the subject a letter of reprimand; debar him for 3 years, require both certifications and assurances for 3 years following debarment, and bar the subject from serving as an NSF reviewer for 3 years.






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