Yale to pay $7.6 million to settle grant investigation

Yale has agreed to pay $7.6 million for allegedly making false claims on federal research grants, the U.S. Attorney’s Office in New Haven said Tuesday, concluding a two-year investigation of Yale’s grant administration.

The investigation, which began in 2006, covered $3 billion in 6,000 grants from 30 federal agencies — including the Department of Health and Human Services, the Department of Defense and the National Aeronautics and Space Administration — between January 2000 and December 2006.

Prosecutors accused Yale of breaking the law by mischarging federal grants in two ways. First, some Yale researchers are said to have improperly transferred grant funds to accounts that were not specifically related to the purpose of the grant. Second, the government alleged some researchers paid themselves for all their summer work, even time and effort unrelated to the grant.

The $7.6 million settlement is half actual damages and half penalties for the false claims, the U.S. Attorney’s Office said.

“This settlement sends a clear message that the regulations applicable to federally-funded research grants must be strictly adhered to,” Acting U.S. Attorney Nora Dannehy said in a statement.

A spokesman for the U.S. Attorney’s Office, Tom Carson, declined to comment on the origin of the investigation.

In a statement Tuesday, the University acknowledged that some errors did occur, particularly with transfers between accounts. As part of the settlement, Yale denied liability for the false claims and was released from it. The government will not sue the University, the U.S. Attorney’s Office said.

The University said in the statement that it cooperated fully with the investigation, producing over a million pages of documents. The Yale Corporation, the University’s highest governing body, bolstered the Audit Committee and required regular reports on research compliance. The University established a committee to oversee audit, internal control and compliance issues.

And in 2006, the University chartered the Office of Research Administration, which developed mandatory training courses for faculty and staff, reviewed policies, introduced a Web-based reporting system, and stiffened oversight of cost transfers.

Andrew Rudczynski, who oversees grants and contracts as Yale’s associate vice president for research administration, did not return a telephone message seeking comment Tuesday.

The thicket of subpoenas, audits and new compliance policies was a source of strain and sometimes a point of contention between faculty members and administrators, who sometimes tended to see the burden of improving grant accounting as resting on each other.

“I recognize that this investigation has been stressful for many members of our faculty and staff, and I also recognize that federal regulations are sometimes burdensome,” University President Richard Levin said in a letter to faculty and staff Tuesday. “We are doing our part to make the regulations more clear and compliance less burdensome.”

Robert Kenney, an attorney at Hogan & Hartson, the Washington law firm that represented Yale, referred questions to Yale’s Office of the General Counsel, which did not immediately respond to a request for comment Tuesday. Shauna King, the vice president for finance, did not return a telephone message seeking comment.

Income from grants and contracts, about $400 million annually, accounts for about a quarter of Yale’s operating budget.

Comments

  • Alum

    If half of the $7.6 million is damages, then you're talking about $3.8 million misallocated. Assuming that was all done in one year, which is not the case, that would still be less than 1% of grant funds misallocated.

    In other words, Yale is settling with the government for having managed over 99% of its grant funds properly.

    The government ought to train its sites inwards if it wants to weed out mismanagement of public funds.

  • Grad Student

    I am always shocked and dismayed when I see how much time brilliant scientists have to spend on the most absurd red tape (rather than performing experiments that will one day elucidate a cure for cancer, etc.)

  • Grant Accountant

    This will not be the last storey about mismanagement of grant funds we will see. There are many other institutions of higher learning who don't know or want to know how to spend their grant funds properly, including the one I work for. They make a mess of spending the funds then expect us (the acountants) to clean it up prior to filing the financial report to the granting agency. There are a great many administrators and investigators, that are in charge of these grants, who lack the knowledge of the terms and conditions of the grant they were awarded. Eventually it will catch up to them.

  • MB&B Alum

    To Grant Accountant #3 above,

    You can look down from your high horse at the scientists, who are the actual individuals doing the work to get these funds, all you want. However, you need to understand that your job is to facilitate the proper administration of these funds. If you want to provide a real service using your expertise, then help to come up with a streamlined way for your institution's investigators to manage and track their spending and effort. As P.I.s we are already spending 60-80 hrs per week doing research, seeing patients, and teaching, and you expect us to do all this within a sea of regulations for which we receive no formal training. I know from years of experience and observations - every truly great scientist who remains perfectly compliant with every detail of the morass that is the current system of effort and spending regulations is either supported by an outstanding administrative structure who primarily manage these issues OR he/she is funded by a non-federal source like the HHMI, which frees them from this mess. The rest of us, though, have to muddle along doing the best we can while we try to stay afloat in an increasingly competitive and malignant funding climate. Unfortunately, the actual science becomes the ultimate victim of all of this.

  • Another Grant Accountant

    P.I.'s know that there are regulations when they apply for these grants. If you can't be bothered to follow the terms & conditions to spend FREE MONEY then don't apply for the funds!

    Let's talk about how administrators inform P.I.'s when they are in violation of policies and they disregard them and/or give us a hard time when we're just trying to do our jobs!

  • Anoter Grant Accountant

    And another thing - you don't get 7 million dollar fines for general mistakes. Yale was fined for CHARGING SALARIES TO GRANTS that were completely unrelated. You don't have to know a thing about regulations as common sense would tell you that that's unallowable.

  • SOM Asst Prof

    These comments epitomize exactly why there is such a rift between PIs and the administrative officials at Yale and elsewhere. How can you call a research grant "FREE MONEY?" This "FREE" money is only obtained after years of work by as many as 10 individuals to generate data and the PIs who, if they are like me, work flat-out 12-16 hours day and nights writing these things over weekends, holidays, anytime. To renew that grant you have to work equally hard. If you really think this is "free money" you have no business working in academia. Until you realize what happens on the other side of the paperwork and respect our efforts, you will continue to foster ill-will. I and most of my colleagues do not disregard the advice of administrators when they approach us in a spirit of collaboration rather than accusation.

  • Another Grant Accountant

    @ SOM - Yes but what does that have to do with charging salaries to grants that are unrelated (what Yale was fined for)? What does that have to do with me personally notifying departments that certain charges are unallowable and having to fight with them because they want to do what the hell they want regardless?

    Again, mistakes are acceptable and PIs don't have to know the ins/outs of all rules & regulations. It's the more egregious offenses that are the topic at hand here.