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Yale pays $7.6 million to settle federal
investigation
March/April 2009
by Nadya Labi '02MSL
Say what you will about Wall Street firms. But when
it’s universities that receive billions of dollars from the government,
mistakes don’t come cheap. In late December, the U.S. Attorney’s Office in New
Haven announced that Yale had agreed to pay $7.6 million to settle allegations
that it had made false claims on federal research grants. The settlement ended
a two-year investigation that covered more than 6,000 federal grants worth $3
billion from around 30 federal agencies, according to Acting U.S. Attorney Nora
Dannehy.
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Yale acknowledged in a statement that “some errors did occur.”
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Dannehy says that Yale’s alleged sins were twofold.
First, some costs were charged to the wrong grants. Researchers, she says,
"were motivated to carry out these wrongful charges because the grant was
nearing its expiration date, and federal regulations require that unspent grant
funds be returned to the government." Second, researchers overestimated the
time and effort they spent on a particular grant. "The government’s evidence
was that some researchers submitted 100 percent of their time to a federal
grant, when in fact they were spending some of their time on unrelated work.”
Yale, for its part, denied liability for any false
claims. But the university acknowledged in a statement that "some errors did
occur, particularly with respect to transfers of costs to some federal awards
from other federal awards or Yale accounts.”
In September 2006, three months after receiving the
government subpoenas that started the investigation, Yale established the
Office of Research Administration to train faculty and staff in compliance with
federal grant regulations. Andrew Rudczynski, who holds the recently created
position of associate vice president of research administration, says that Yale
has installed a web-based system to track effort reporting. The university is
also working on systems to provide better feedback to faculty about their
grants so that they are kept apprised of how much time has elapsed on a grant
and how much money they’ve spent.
Yale’s transgressions aren’t unique. In the past six
years, several institutions, including Northwestern, Johns Hopkins, and
Harvard, have paid settlements in the low millions over claims that researchers
had overestimated their effort reporting on grants from the National Institutes
of Health. The Northwestern and Johns Hopkins investigations were prompted by
whistle-blowers, but Harvard voluntarily disclosed its problem to the NIH. No
individuals were named in Yale’s settlement, and Dannehy would not reveal what
prompted the investigation into Yale. But the subpoenas followed a much smaller
audit in which the Department of Health and Human Services had accused Yale of
slipshod accounting on a $1.7 million grant for research on gene expression in
stem cells.
Yale cooperated fully with the investigators—too
fully, in the minds of some faculty members. For starters, Yale lawyers asked
for copies of the hard drives of some faculty, though the lawyers backed down
in a couple of instances when professors raised questions about the propriety
of handing over drives that contained confidential information such as student
evaluations. And since July 2007, faculty who work on sponsored research have
been required to complete a 45-minute web-based training program on grant
administration and pass a ten-question exam. Rudczynski says that nearly 90
percent of faculty who are principal investigators on grants have completed the
training.
“I looked over the exam and the questions were
ridiculous," says Joel Rosenbaum, a professor of molecular, cellular, and
developmental biology (whose grants were not targeted in the investigation).
"To keep track of all the myriad rules and regulations, I have to take an exam to
prove that I'm capable of running a grant? I’ve run a research lab for 40
years. Why would I want to study all those rules when all I have to do is lift
a telephone and someone should be able to tell me what I can and can’t do? I
refused.”
The university is in a tight spot. It receives $400
million in federal research grants annually. When President Richard Levin
announced the settlement, he said: "As stewards of public funds, it is our duty
to adhere strictly to the regulations." Rudczynski says Yale recognizes the
many demands on professors' time, but wants the faculty to shoulder more of the
burden of compliance. After all, "if you gave your checkbook to me, you'd like
to make sure I spent the money in an appropriate way." That means faculty
members now have to add a new skill to their résumé: accounting.  |
