Specific Diagnostics: Labor Hours Charged to NIH Grants

Specific Diagnostics agreed to pay $4 million in a federal grant settlement that included allegations of overbilling for labor hours charged to NIH grants. The National Institutes of Health allegations concerned charges above the applicable salary cap and other overbilling for employees’ work. Someone familiar with the payroll or grant submissions may know how the hours became a charge, and where that charge departed from the work.

Specific, headquartered in San Jose, designs antimicrobial susceptibility tests. The Justice Department announced the settlement on December 21, 2022. The company shared a co-founder with iSense, a separate biotechnology company whose charges to the same agency also figured in the resolution. Specific’s part of this civilian grant fraud case concerned its own employee costs and its own period of alleged overbilling.

What Specific Allegedly Charged to NIH Grants

The National Institutes of Health allegations against Specific covered February 1, 2017, through December 31, 2018. The government said Specific submitted employee work-hour costs that exceeded the applicable salary cap and otherwise overcharged for hours worked.

We examine the salary calculation, the hours supporting it and the amount assigned to the award together. Someone who knows how the company prepared a submission can explain the decisions behind those entries: whose work they describe and how the company priced it for the grant.

We want to see what the public actually paid for.

The Settlement Also Covered Defense Grants

The settlement also covered allegations that iSense charged defense grants for costs incurred by Specific, separately from Specific’s NIH labor-hour and salary-cap allegations.

What Each Settling Party Agreed to Pay

Specific’s obligation was part of a $10,068,875 federal grant settlement. Alongside Specific’s payment, iSense agreed to pay $4,000,000 and their co-founder agreed to pay $2,068,875 personally. The resolution covered the different grant-mischarging and backdated-agreement allegations together.

The investigation and settlement included the Department of Health and Human Services Office of Inspector General. The Justice Department described each company’s conduct separately, giving an insider a way to connect the allegations to the costs and submissions they knew.

What a Grant Effort Report Can Hide: The Scripps Case

In the Scripps Research Institute’s 2020 settlement announcement, the Justice Department described allegations that faculty time spent on new grant applications, teaching, committee work and administration was charged directly to existing National Institutes of Health projects without adequate effort accounting.

Columbia’s Admission About Inaccurate Effort Reports

Columbia University admitted in a separate 2014 grant settlement that certain effort reports contained inaccurate information and that its ICAP public-health program mischarged federal grants for work that did not belong to those awards.

In examining what grant reports say about work performed, we follow that connection: the reported effort, the activity it represents and the award charged for it.

How Payroll and Effort Records Explain Grant Labor Charges

Our assessment brings together the employee’s account of the work and the records used to charge for it. Salary records explain the compensation calculation. The submission to the grant shows what the company asked federal funds to cover. Effort records and knowledge of the project help explain which activity those costs represent.

A researcher may know which project an experiment supported. A payroll or grants employee may know how that work became a salary charge. We work with those different views of the same expense.

For someone who knows Specific’s submissions to the National Institutes of Health, that comparison reaches both the work-hour costs and the salary calculation. We assess what you know with whistleblower lawyers who understand federal research funding.

Whistleblower Rewards Follow the Recovery

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. We assess the grant charges you can explain and the federal money connected to them with you, including how a potential whistleblower reward fits your case.

You Know How the Research Time Was Charged

If you know how employee time or compensation reached Specific’s NIH grant submissions, talk with our whistleblower experts about those charges. We connect the research work, salary calculations and grant charges to build your strongest case with federal grant fraud whistleblower lawyers. Our experts stay beside you from that first conversation through the case.