False Grant Effort Reports: Budgeted Time, Actual Work and the Salary Charged

Federal grant effort reporting fraud uses false accounts of employees’ work to charge federal awards for time spent elsewhere. An effort report can put a researcher on an awarded project while the researcher is preparing another proposal, teaching or doing administrative work. If you administer grants, certify effort or work on the research itself, you may know both the activity and the account that paid for it. That connection is the heart of the case: what the grant funded, what the employee did and what the institution told the government.

What the Budget Promised and What the Work Required

A budget describes planned work. An effort report represents work performed.

For grant effort, we examine whether the work charged belongs to the funded project: the experiment, the proposal being developed, the class being taught or the committee assignment.

The distinction becomes concrete when a scientist prepares a new application while working on an existing award. The Scripps Research Institute whistleblower’s complaint described experiments, analysis and drafting needed for applications that had not received funding. According to the complaint, those activities consumed time that Scripps charged to awarded grants. The experimental work served a new proposed project.

We examine who chose the allocation, what they knew about the work and how the institution used the report to get paid.

NIH Grant Charges for Faculty Time Spent Writing Unrelated Proposals

When an NIH grant charges faculty time spent writing unrelated proposals, an existing award pays for the pursuit of a new one. Scripps agreed to a $10 million settlement in September 2020 over allegations that it charged existing National Institutes of Health projects for faculty time spent on new grant applications, teaching, committee work and administration without adequate effort accounting.

The whistleblower, a former employee, described the salary pressure behind the alleged practice. His complaint said Scripps expected faculty to cover their salaries and benefits through federal grants and to generate grant support for research staff as well. Researchers needed new applications to keep future funding coming. According to his allegations, the awarded grants also paid for the work of seeking that future funding.

For 2012, he alleged that Scripps charged 100% of his salary to four awarded federal grants while he worked on new applications, resubmissions and other research. The complaint described scientific reviewers asking for changes after an unsuccessful application. Responding could require designing and performing additional experiments, analyzing results and rewriting the proposal. Proposal work included work at the bench.

The complaint also described an effort form with internal account numbers that carried no descriptions. The whistleblower alleged that Scripps did not explain how it calculated the hours assigned to those accounts, and that the form failed to distinguish awarded-grant work from applications, teaching and other activities. Even the total arrived filled in:

U.S. ex rel. Burris v. The Scripps Research Institute, whistleblower complaint, paragraph 104

He further alleged that he left payroll documents unsigned and Scripps never followed up for his signature.

We see the absurdity in that allegation: the grant pays for the hunt for the next grant. Research funding becomes a fundraising budget. The complaint alleged that this diverted effort from the funded medical research and gave Scripps an advantage over institutions that paid for proposal preparation themselves.

The Justice Department announced a $1.75 million whistleblower reward. Someone inside the laboratory can recognize what an account code conceals.

NSF Graduate Teaching, Tuition and Overhead Charged to Research

Rice University’s case concerned allegations that it charged National Science Foundation research grants for graduate teaching, including stipends, tuition remission and associated overhead. The Justice Department’s April 2020 announcement reported that Rice paid $3,754,186, describing the settlement as double the government’s loss.

The alleged charges appeared in grant budgets and drawdowns from November 2006 through September 2018. The government alleged that the teaching was unrelated to the research the grants funded. That makes the graduate student’s actual assignment central: the grant’s research work and the teaching work were different activities, even though both took place at the university.

The cost trail extended beyond a salary entry. It included the stipend, the tuition remission and the overhead charged with them. For someone administering graduate appointments or grant accounts, the comparison reaches both the work assignment and the associated charges. A research allocation can carry more than the amount the student receives as pay.

Grant Payroll Budget Estimates Never Reconciled With Actual Effort

Grant payroll budget estimates never reconciled with actual effort can leave the planned allocation standing after the work has changed. The University of Puerto Rico case shows why the certification and the reconciliation belong beside each other.

In its November 2018 settlement announcement, the Justice Department described unreconciled budget reports and alleged failures to meet time-and-effort requirements for payroll allocated to NASA, Department of Energy and National Science Foundation grants during calendar 2011. The university had certified compliance. The department reported recovering $1,772,790.

For a grants administrator, the revealing comparison is the budget allocation against the actual effort and the payroll charged. A percentage carried forward from the proposal tells us what the institution expected. The reconciliation tells us whether the charge changed to reflect what happened. The compliance certification is the institution’s assurance about that process.

Columbia Admitted Inaccurate Effort Reports

Columbia University admitted that certain effort reports contained inaccurate information and that its public health program mischarged federal grants for work that did not belong to those agreements. The October 2014 settlement was $9,020,073.

The government’s allegations concerned effort reports for nearly 200 New York employees, produced and certified without verifying the actual grant work. The charges included proposal writing and time unrelated to the particular AIDS and HIV treatment grant.

We see the problem in calling these certifications: according to the government, the institution certified work it had not checked. An administrator who understands the allocation process may see that practice repeated across employees.

NIH Salary Caps and Claimed Labor Hours

The December 2022 settlement involving iSense, Specific Diagnostics and their co-founder resolved allegations about compensation limits and employee hours charged to National Institutes of Health grants. The government alleged that iSense submitted employee costs above the applicable salary cap and otherwise overcharged for hours worked from July 2014 through June 2019. It alleged similar conduct by Specific Diagnostics from February 2017 through December 2018.

iSense agreed to pay $4 million as its part of the broader settlement. That amount resolved its covered allegations; the announcement does not assign all of it to the NIH salary-cap account. The two companies shared a co-founder but had different research businesses: iSense developed applications for colorimetric sensor arrays, while Specific developed antimicrobial susceptibility tests.

A compensation ceiling and an inflated account of hours are different ways a grant charge can exceed what the award should pay. We examine the employee’s compensation, the hours represented and the project charged together. The company-specific periods keep that comparison tied to the relevant award and payroll, without treating the companies’ shared founder as proof that their charges were identical.

What an Insider in the Grants Office Can Recognize

An insider can connect the work people performed to the reports and payment requests made in the institution’s name. The Scripps complaint alleged that applications, Just in Time reports, certifications and requests for payment misrepresented effort on identified awards. It also described an Other Support report listing active research commitments and pending applications.

The complaint also alleged that Scripps certified in progress reports that the next budget period’s effort would meet the award’s minimum. That puts the promised work beside the payroll allocation and the activity the researcher described. We examine the commitments made when funding was sought and the later assurances about the time devoted to the project.

The calendar gives the comparison a time period. Work on a resubmission, a teaching assignment or a committee obligation belongs beside the effort represented for that same period. The person signing a report, the administrator assigning the account and the researcher doing the work may each understand a different part of the discrepancy.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

When You Know What the Grant Actually Paid For

If you work with research payroll, effort certifications or the projects themselves and recognize a mismatch, speak with our whistleblower experts about the work behind the charge. We build your case around the funded project, the actual activity and the decisions that put the salary on the grant. We stay beside you throughout the case and bring in research-grant whistleblower lawyers who understand university effort reporting and research payroll.