Preventing Fraud and Waste at Federal Research Agencies

By: Ellen Kuo
Wednesday, May 10, 2023
At a recent hearing of the Committee on Science, Space, and Technology, officials from National Science Foundation (NSF) and National Science Board testified about not only NSF’s budget, but also about the agency’s efforts  to reduce waste, fraud, and abuse. This is an important endeavor since large sums of appropriated funds have been approved to support science and agencies need to protect against misuse within the research ecosystem. Both NSF and the U.S. Department of Energy (DOE) were participants at another House Science Committee hearing with other research agencies.

Allison C. Lerner, Inspector General at NSF, testified with other inspector generals on their oversight of grants and their work with the agency’s grantee institutions. She focused on three key areas: addressing the integrity of NSF programs and internal controls, holding people accountable, and collaborating to prevent wrongdoing. 

NSF uses robust risk assessment processes to focus its work on programs and institutions that appear to be at highest risk and seeks ways to amplify the impact of its audits by sharing promising practices from its external audits with all members of the NSF recipient community. Using multidisciplinary investigative teams, it enhances the thoroughness and success of its cases while pursuing penalties that include government-wide suspensions. NSF's recipients are identifying ways to prevent fraud, improve their award management environments, and are working with NSF's chief of research security strategy and policy to confront research security-related challenges. 

Lerner suggested strengthening NSF’s ability to hold individuals accountable who misuse NSF funds by reforming the Program Fraud Civil Remedies Act to make it a stronger tool to recover fraudulent expenditures and deter individuals from committing small dollar fraud. She also sought the creation of mandatory statutory exclusion for those convicted of violating certain felony fraud statutes so that they cannot have access to government funds during their exclusion period. 

DOE Inspector General Teri L. Donaldson noted in her testimony the need for more funding to expand its abilities to perform oversight in light of increased risk factors associated with the influx of funds to DOE. In fiscal year 2022, DOE’s  annual budget was $44.3 billion. However, when combined with the funds authorized or appropriated under the Infrastructure, Investment and Jobs Act, the Inflation Reduction Act, the CHIPS Act, and $1 billion to support solar projects, its portfolio has gone from $44.3 billion to $478 billion—an unprecedented number.

With $62 billion in funds on the move, DOE has launched a large-scale data acquisition and monitoring project which will generate leads for audits and inspections. Such movement of large sums will immediately create new risks. Additionally, Donaldson noted there are new programs using untested internal controls that create enormous risk with funds moving to state, local governments, and tribes, which may have never received such a large volume of funding. Donaldson wanted to see more resources for oversight from Congress to ensure funding goes where it is supposed to land.