Fraud, Waste and Abuse – Small Problem, Big Consequences
Tags: abuse, federal funding, Fraud, grants, SBIR, SBIR/STTR reauthorization, STTR, waste
SBIR reauthorization has brought heightened attention to the topic of Fraud, Waste and Abuse in the SBIR and STTR programs. Although the incidence of this type of activity is low – estimated to occur in less than 0.1% of SBIR awards – agencies are nonetheless required to increase their focus in this area. This includes adding a telephone hotline or web-based method to report waste, fraud and abuse on their websites and in their solicitations.
If the low incidence of waste, fraud and abuse is interesting, data presented at a recent SBIR conference that 60 to 80% of cases investigated by agency inspectors general are initiated by disgruntled former employees is, while perhaps not astounding, eye opening.
What constitutes waste, fraud and abuse? The Dept. of Energy website has a concise description of the typical types of fraud in the SBIR/STTR program, both during the application process and following award. Here is what they outline:
Fraud during the application process:
- Submitting a plagiarized proposal
- Providing false information regarding the company, the Principal Investigator or the work to be performed
- Seeking funding for work that has already been completed
Fraud during the award:
- Using award funds for any use other than the proposed activities
- Submitting plagiarized reports or reports falsely claiming work has been completed
- Claiming results for an award that were funded by a different source
Here are some ways to avoid potential issues related to fraud:
- Disclose duplicate/overlapping proposals.
- If submitting multiple proposals, clearly state what is different.
- Makes sure you understand, meet and remain compliant with the SBIR eligibility requirements for small businesses
- Follow the project budget as awarded. Notify the agency, and request approval where appropriate, if changes are needed.
Per the SBA policy directive: failure to comply with federal cost principles governing an award is considered Waste, Fraud and Abuse.
- “But for the certifications you would not have gotten the award” (translation: be sure you understand and comply with all of the rules!)
Best advice: do as your mother told you, read and follow instructions and always tell the truth.
Lisa Kurek is Managing Partner of BBCetc