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  Audit Shows CDC Misled Congress About Funds

By Valerie Strauss
Washington Post Staff Writer
Friday, May 28, 1999; Page A33

The Centers for Disease Control and Prevention in Atlanta spent much of the $23 million approved by Congress for research on chronic fatigue syndrome (CFS) in recent years on other things and gave false information to Congress about the program, according to a new audit.

The episode has angered some lawmakers, especially Rep. John Edward Porter (R-Ill.), and prompted efforts within the CDC to establish new accounting controls to fix deficiencies identified by auditors. But questions are being raised by Porter and others about whether those efforts by the government's premier health agency are enough.

"I'm concerned about lying to Congress, lying to people who make the policies of the country," said Porter, who added that he is still discussing with new CDC Director Jeffrey P. Koplan steps he wants taken to rectify the problem. "We have not agreed and the matter remains open."

In response to the inspector general, June Gibbs Brown, Koplan wrote on April 21 that "the funds that were not expended for CFS were spent in extremely important disease areas, such as measles, poliomyelitis and human papillomavirus.

"While CDC is not legally prohibited from spending funds budgeted for CFS on other programs, we acknowledge the importance of complying with the intent of Congress and providing information to Congress," Koplan wrote.

The May audit, conducted by the Office of Inspector General at the Department of Health and Human Services, was undertaken after revelations were made last year by a CDC researcher, William Reeves. CDC is part of HHS.

Reeves, who as chief of the viral exanthems and herpesvirus branch of the CDC is directly responsible for the agency's chronic fatigue syndrome research program, reported last summer that millions of dollars Congress had given for research on the syndrome were being used to support research in other, unrelated diseases.

Congress allocated about $23 million from 1995 to 1998 for research into the syndrome, a debilitating disease characterized by profound fatigue and lack of stamina. Though the director of the CDC is allowed to transfer money from one research program to another, lower-level employees are not allowed to do so.

In his report to Congress, Reeves said that Brian Mahy, the CDC's division director and his immediate supervisor, had moved funds out of chronic fatigue syndrome research. Reeves said Mahy asked him to verify that $1.2 million in question had been used for chronic fatigue syndrome laboratory work--even though it was not true.

Reeves also reported that the former acting director of the CDC, Claire Broome, had told a congressional panel headed by Porter that the CDC had allocated $5.8 million for chronic fatigue syndrome for 1998 and that $3.4 million would directly support research in Reeves's branch. But, he said, his entire 1998 branch allocation from Mahy was $2.5 million. Reeves said he did not believe Broome knew she was given inaccurate information at the time.

Koplan and Mahy declined to be interviewed.

CDC spokeswoman Barbara Reynolds said: "CDC requested the audit from HHS when these [Reeves's] points were made apparent to them. And we believe the audit served its intended purpose. It did give us a sense of the scope of the problem and gave us corrective actions." She said she could not discuss whether disciplinary action was being taken against any CDC employee over the audit's findings.

The audit concluded that during fiscal years 1995 through 1998, of nearly $23 million, $9.8 million, or 43 percent, was incurred for chronic fatigue syndrome purposes.

Auditors said "we could not accept" $8.8 million, or 39 percent, because it was spent for activities unrelated to CFS. They could not "determine the applicability" of another $4.1 million, or 18 percent, of indirect costs because there was not sufficient documentation.

"We determined that CDC does not have adequate controls to ensure that direct costs charged at the program level are based upon the actual efforts of the involved personnel and the actual use of other resources," the audit said. "Lacking such controls, the Division Director [Mahy], who generally justified the transfer of CFS costs to ensure that other division programs were sufficiently funded, was able to transfer unrelated costs to the CFS program without appropriate analysis, documentation or justification."

The auditors also found that "CDC's various centers, divisions and branches are able to arbitrarily charge indirect costs to some or all of their programs, with no assurance that those charges will be reasonable and consistent."

CDC chief Koplan said the CDC would share a spending plan on chronic fatigue syndrome with the CFS Coordinating Committee, Congress and others; implement a training program for staff responsible for budget and accounting; and establish an internal review sought by the auditors.

But Porter, noting that lying to Congress is illegal, and others said that was not enough.

"I won't be relieved until I see what the agency does in terms of both restoring the money that was misspent and making sure the research is back on track because it has been derailed for five years," said Kim Kenney, executive director of the Chronic Fatigue and Immune Dysfunction Syndrome Association of America. "And I want disciplinary action against the people responsible for such gross mismanagement of funds."

Reeves, too, questioned whether a training program for managers was the answer.

"People doing these jobs are senior executives," he said. "Their entire job is to know the rules. . . . If one is doing this kind of thing on purpose, certainly a training and certification program is not going to fix it."

© Copyright 1999 The Washington Post Company

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