BOSTON, June 17, 2004 – LAWFUEL – United States Attorney Michael J. Sullivan
today announced that HARVARD UNIVERSITY and BETH ISRAEL DEACONESS MEDICAL
CENTER (“BIDMC”) have agreed to pay $2,404,270 to settle allegations that
false claims were made to the National Institutes of Health (“NIH”) in
connection with four federal grants. Today’s settlement is in addition to
$850,188 that HARVARD agreed to pay in August 2002 in connection with the same
allegations, bringing the total payment by HARVARD and BIDMC to over $3.25
million.
The settlement, made effective today, resolves allegations that between
1994 and 1999 HARVARD and BIDMC improperly charged a variety of salary and
equipment expenses to four federal grants awarded to HARVARD by the National
Institute on Aging, part of the NIH which is a component of the Department of
Health and Human Services. The government alleges that HARVARD billed a total
of $5.5 million dollars under the four NIH grants, and of that amount $1.9
million was improperly billed. The four NIH grants were awarded to HARVARD to
support research on aging, including salaries of physician scientists,
research supplies, and other support. During the relevant time period, the
same individual was the Principal Investigator on three of the NIH grants and
a Director on the fourth.
HARVARD was the grantee for each of the four grants. Under an informal
agreement between HARVARD and BIDMC, BIDMC physician scientists performed work
under the grants, and BIDMC submitted invoices to HARVARD requesting
reimbursement for the work and expenses. HARVARD paid BIDMC and then charged
the expenses to the NIH grants – a practice not prohibited by NIH. The
Principal Investigator was involved in the administration of the four grants,
both as a faculty member of Harvard Medical School, and simultaneously as an
employee of BIDMC.
“This settlement should send a message that institutions who accept
federal grant money, no matter who they are, must strictly adhere to the terms
and conditions of those grants,” stated U.S. Attorney Sullivan.
The government alleged a number of improprieties in the administration of
the four NIH grants. With respect to the largest of the grants (a so-called
“K12 Grant”), the government alleged that HARVARD submitted grant continuation
applications containing incorrect or overstated information about the budgets
for the grant years, the physician scientists working on the grant, and the
oversight of the progress and administration of the K12 Grant. The United
States also alleged that BIDMC submitted invoices to HARVARD for, and HARVARD
charged to the K12 Grant, certain expenses that were not allowable, including:
— salaries of physician scientists who did not work on the grant;
salaries of physician scientists who did not meet the citizenship
requirements of the grant; the salary of a physician scientist who did
not meet the 75% effort requirement of the grant; and salary expenses
of the Principal Investigator in excess of the budgeted amount;
— supply and equipment expenses incurred in connection with other
projects not related to the K12 Grant, and expenses incurred by
physician scientists who were not eligible to work on the grant or did
not work on the grant; and
— expenses related to the use of research animals that were used for
other projects not related to the K12 Grant or were used by physician
scientists who were not eligible to work on the K12 Grant.
The United States alleged similar improprieties in the administration of
the other three federal grants. These included charging the salaries of
researchers who either did not work on the grant, did not meet the citizenship
requirements of the grant or whose Statements of Appointment were not timely
filed with the NIH, and charging expenses that were not adequately documented
as required by the terms and conditions of the grants.
“Safeguarding the integrity of HHS research dollars is imperative,” said
Acting Principal Deputy Inspector General Dara Corrigan. “The Office of
Inspector General has no more important task than instilling confidence in the
American taxpayer that the vast sums expended by HHS each year on grants are
managed with integrity and responsibility.”
HARVARD and BIDMC voluntarily disclosed the mismanagement problems to the
NIH and cooperated during the course of the government’s investigation. The
settlement figure reflects this cooperation. Additionally, HARVARD has
provided a detailed progress report to NIH on improvements made to strengthen
HARVARD’s management systems so that these issues do not reoccur. NIH has
reviewed and accepted HARVARD’s report.
The case was investigated by the U.S. Attorney’s Office with assistance
from the U.S. Department of Health and Human Services, Office of Inspector
General’s Office of Audit Services. The case was handled by Assistant U.S.
Attorney George B. Henderson, II, in Sullivan’s Civil Division.