Sciencefriday, Inc. And Ira Flatow To Pay $145,531 To Resolve Allegations Of Misuse Of Nsf Grant
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Allison C. Lerner, Inspector General of the National Science Foundation, today announced that SCIENCEFRIDAY, INC. (“SCIENCE FRIDAY”) and IRA FLATOW, both individually and in his capacity as president of SCIENCE FRIDAY, have entered into a civil settlement agreement with the government in which SCIENCE FRIDAY and FLATOW will pay $145,531 to resolve allegations that they violated the False Claims Act and the common law in the management of a $998,554 federally-funded grant awarded to SCIENCE FRIDAY by the National Science Foundation (“NSF”) for the period between August 2009 and July 2011. SCIENCE FRIDAY, a for-profit corporation based in Stamford, sought the funds from NSF for the purpose of extending the impact of its weekly National Public Radio program to a new and younger audience through the use of cyber-space platforms and interactive tools such as Facebook and Twitter.
In addition to payment of the settlement sum, SCIENCE FRIDAY and FLATOW voluntarily agreed to exclusion from participation in federal programs, grants, and contracts, or from providing services under grants and contracts, with the U.S. government, any department or agency of the U.S. government, or any projects, grants or contracts directly funded by the U.S. for a period of one year, commencing on the effective date of the settlement agreement. SCIENCE FRIDAY and FLATOW also agreed to adhere to a five-year compliance plan, which shall be implemented upon the parties being identified in a proposal for an NSF grant as a possible recipient of NSF funds, in any capacity.
The investigation focused on allegations involving several types of mischarges to the federal grant. The grant required that SCIENCE FRIDAY comply with several administrative requirements, including in part: (1) the submission and certification of quarterly Federal Financial Reports (“FFRs”) reporting the amounts of federal grant money expended in each financial quarter; (2) the submission and certification of advances or reimbursements of grant funds each time federal money was drawn down by the company; (3) the submission of a budget(s) detailing the expected use of the grant funds; (4) the establishment of an accounting system capable of recording grant expenditures according to budget categories; (5) the preparation of adequate time and effort reports accounting for the expenditure of grant funds; and (6) compliance with federal regulations and policies applicable to all awards and grants, and with regulations and policies specific to the NSF grant.
As the result of an investigation conducted by the NSF Office of Inspector General (“OIG”), the government identified a number of alleged deficiencies in SCIENCE FRIDAY’s use of the grant funds: (1) SCIENCE FRIDAY submitted nine false FFRs to the U.S. certifying that all disbursements “have been made for the purposes and conditions…of the [Award]”; (2) SCIENCE FRIDAY submitted 19 false cash advance requests to the U.S. certifying that the requests for advance were correct; (3) SCIENCE FRIDAY maintained a time and effort system incapable of tracking the time spent working on the grant award and the amount of salary charged to the grant; and (4) SCIENCE FRIDAY inappropriately used grant money to cover unallowable and unsupported costs.
The False Claims Act provides for up to treble damages and penalties of $5,500 to $11,000 per false claim submitted to the Government.
“This settlement sends a clear message that recipients of federally-funded grants must strictly adhere to the regulations applicable to those grants,” stated U.S. Attorney Daly. “If recipients fail to do so, they risk significant consequences.”
“My office will aggressively pursue those who misuse federal grant funds intended to advance science education,” added NSF Inspector General Lerner. “I commend the U.S. Attorney’s Office for its efforts in reaching this settlement agreement.”
U.S. Attorney Daly also noted that SCIENCE FRIDAY and FLATOW cooperated with the government’s investigation.
As a result of the settlement, there will be no lawsuit filed against SCIENCE FRIDAY and FLATOW regarding the grant covered by the settlement agreement. In entering into the settlement, SCIENCE FRIDAY and FLATOW did not admit liability or wrongdoing, and the agreement indicates that the parties settled this matter to avoid the delay, uncertainty, inconvenience, and expense of litigation.
The matter was handled within the U.S. Attorney’s Office by Assistant U.S. Attorney William A. Collier and Auditor Susan N. Spiegel.
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