Employees of the Texas A&M system’s research foundation filed a whistleblower lawsuit against their employer in June of 2013.
The U.S. Attorney’s office in Houston has announced an out of court settlement where the foundation will pay $750,000 dollars.
The foundation was accused of inflating federal grants over a nine year period by violating salary caps, wrongfully awarding longevity pay, and improperly charging grants for expenses not incurred or not covered.
The joint investigation also involved the national science foundation, NASA, and the federal departments of education, energy, and transportation.
The A&M system denied any violation of the federal false claims act. But the system stated there were a few instances where mistakes were made, and steps will be taken to address issues raised during the federal investigation. The system also noted the settlement is about one percent of the total value of the grants, and foundation officials believe the actual error rate is much lower.
WTAW News has asked the system the funding source to pay the $750,000 dollar settlement.
And according to the U.S. Attorney’s news release, those who filed the whistleblower lawsuit are in line to receive a share of more than $142,000 dollars.
News release from the U.S. Attorney’s office in Houston:
The Texas A&M Research Foundation (TAMRF) has agreed to pay the United States $750,000 to resolve claims that the Foundation submitted improper charges to federal grants, announced U.S. Attorney Ryan K. Patrick.
TAMRF is an independent non-profit service organization focused on facilitating research and development within the Texas A&M University System with its principal place of business in College Station. The Texas A&M University System is composed of 17 member institutions and agencies that are classified as institutions of higher education. TAMRF is a recipient of federal grants, cooperative agreements and contracts from various federal agencies, including the Department of Education (ED), Department of Energy (DOE), NASA, National Science Foundation (NSF) and Department of Transportation (DOT). In addition, TAMRF receives sub-wards and subcontracts under federal grants, cooperative agreements and contracts.
The settlement is the result of an investigation that began after a qui tam, or whistleblower, lawsuit was filed under seal on June 6, 2013. The whistleblowers are employed by TAMRF and alleged that during their employment they witnessed TAMRF allow personnel to ignore federal restrictions and permitted the overcharging of salaries, which inflated grant expenses. The whistleblowers also alleged TAMRF engaged in cost shifting; allowed academic employees to wrongfully receive longevity pay; violated salary caps; and improperly charged grants for expenses not incurred or not covered.
The United States investigated the allegations finding that from January 1, 2007 through November 3, 2016, TAMRF improperly charged additional compensation to federal grants for academic employees at an institution of higher education ineligible to receive such pay.
The United States also concluded that TAMRF improperly charged various federal grants for expenses not properly allocable to them, including salaries and wages for individuals not working on the grants and supplies and equipment unrelated to the grants. TAMRF also improperly charged various federal grants for unallowable costs such as travel expenses unrelated to the objectives of the grants or for unaffiliated parties not working on the grants.
“DOE – Office of Inspector General (OIG) is committed to ensuring the integrity of our grant recipients by holding accountable those who choose to engage in false claim and mischarging schemes,” said Acting Inspector General April G. Stephenson of DOE. “This settlement is the result of a joint investigation which protected the government from inflated claims. We appreciate the efforts of the Department of Justice in pursuing this matter and will continue to work collaboratively with our investigative partners to aggressively investigate those who seek to defraud government programs.”
“NASA-OIG will continue to investigate all Qui Tam relator allegations of fraud, and applaud the relators that brought this matter to the attention of the United States,” said NASA Inspector General Paul Martin. “NASA-OIG appreciates the cooperative efforts of the entire investigative team during this investigation.”
“The funding NSF provides to our nation’s universities is vital to NSF’s mission of promoting the progress of science, but universities must do their part to ensure that these funds are spent on legitimate costs that directly benefit these awards,” said NSF Inspector General Allison Lerner. “NSF-OIG is committed to vigorously pursuing oversight of these taxpayer funds and I commend the U.S. Attorney’s Office and our investigative partners for their strong support in this effort.”
“Today’s settlement demonstrates that ensuring the integrity of DOT research grant programs is a top priority for the DOT-OIG,” said Regional Special Agent-in-Charge Joseph Zschiesche of DOT-OIG. “Working with our federal law enforcement and prosecutorial colleagues, we will continue to protect taxpayers’ investment in our nation’s infrastructure from fraud, waste, abuse and violations of law.”
Under the False Claims Act, a private party, known as a relator, can file an action on behalf of the United States and receive a portion of the recovery. In this case, the relators will receive $142,500.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
The U.S. Attorney’s Office (USAO) jointly conducted the investigation along with ED, DOE, NASA, NSF and DOT. Assistant U.S. Attorney Jill Venezia handled the matter for the USAO.
Statement from the Texas A&M system:
After an investigation that lasted more than four years and involved the review of thousands of documents relating to contracts and grants involving more than $63 million, the federal government agreed to settle its claims against the Texas A&M Research Foundation for $750,000.
While the Research Foundation denies any violation of the federal False Claims Act, there were a few instances where mistakes were made.
The settlement is about 1% of the total value of the grants and contracts in question, and Foundation officials believe the actual error rate is much lower.
In large part, the Research Foundation’s research compliance procedures worked but we appreciate the federal government’s thorough scrutiny which shows room for improvement.
We will take steps to address the issues presented in this review.