Prosecutors say the flagship public university overcharged the government for the salaries of its employees without documenting their contributions, and inflated the cost of services performed by a contractor. They say the school also sought reimbursement for equipment and supplies that were not covered by the grant. All of this allegedly took place from 2005 to 2010, during which time the school received about $1 billion in grants from the HHS.
For its part, the university said the government’s findings are the result of bookkeeping problems that were first discovered nine years ago and have since been fixed.
David Norton, the school’s vice president for research, said the university fully cooperated with HHS and federal prosecutors during the investigation. He said the school has added automated support systems, personnel and mandatory training on federal accounting requirements to prevent further problems.
“We’ve made significant improvements for all of our compliance systems in recent years. We feel we are very much responsive to the federal government at this point,” he said in an interview.
Problems came to light during a 2006 internal audit of a bookkeeping system the school used to track grant reimbursements. Norton said the school made a few fixes a year later that in part addressed the issue.
But a routine federal audit in 2009 found that the school’s bookkeeping system failed to consistently verify the amount of time and expenses employees charged. Norton said the rapid expansion of the school’s sponsored research and trouble rolling out a new accounting system led to errors.
Despite the investigation, he said, the university has not seen a dropoff in government research funding. Its research awards reached a record $706 million last year alone, he said.
To cover the cost of the settlement, the school intends to use investment earnings and other money that would have been invested in research. Norton said none of the money will come from state funds and it will have no effect on tuition rates.
“Because we could anticipate this somewhat it lessens the blow, but we don’t anticipate it seriously impacting our ability to compete for grants and do world-class research,” he said.
The federal government has been cracking down on researchers misusing grant money. In August, Wheeling Jesuit University agreed to pay $2.3 million to settle claims that it misappropriated research grant funding for over a decade. Around the same time, the National Science Foundation ordered Northeastern University in Boston to pay back $2.7 million for nearly a decade of mismanaging grant money from the agency.