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Yale Agrees to Pay $7.6M to Resolve Research Grant Allegations



Yale University has agreed to pay $7.6 million to resolve allegations that it broke the law by mismanaging federally funded research grants, federal authorities announced Tuesday.

The civil settlement with the government resolves allegations that some Yale researchers at times charged a federal grant account for costs unrelated to grant objectives. The government also alleged the researchers wrongfully charged 100 percent of their summer activity to grants when the researchers spent significant time on unrelated work.

“This settlement sends a clear message that the regulations applicable to federally funded research grants must be strictly adhered to,” said acting U.S. Attorney Nora Dannehy.

Prosecutors said Yale did not admit liability in reaching the settlement and cooperated fully with the investigation. Yale acknowledged some errors occurred, but said the university has upgraded its accounting and reporting systems.

“We are the fortunate beneficiaries of more than $400 million of federal research grants annually, grants that enable Yale to participate in the advancement of knowledge, the cure of disease, and the betterment of the human condition,” said Yale President Richard C. Levin. “As stewards of public funds, it is our duty to adhere strictly to the regulations.”

Yale is the latest university to reach a settlement over allegations involving its federal grants. Florida International University in 2005 agreed to pay $11.5 million to settle allegations that it mischarged costs and overbilled under several contracts and grants with the Department of Energy, authorities said.

Other universities that reached multimillion-dollar settlements in recent years include the University of Alabama at Birmingham and two related entities; Northwestern University; Johns Hopkins University and one of its hospitals, Harvard and an affiliate of its medical school; the University of Connecticut; and the Weill Medical College of Cornell University.

The Yale investigation by numerous federal agencies, which began in 2006 with multiple subpoenas on the university, focused on grants awarded to the university between January 2000 and December 2006.

At issue were allegations that grant money was used to cover costs that did not relate to the objectives of the specific grant involved.

Researchers allegedly were motivated to carry out wrongful transfers when the grant was near its expiration date and they needed to spend down the remaining grant funds, authorities said. Regulations require that unspent grant funds be returned to the government.

The wrongful salary charges stemmed from the fact that researchers are not paid their academic-year salary by Yale during the summer, authorities said. The only salary received by the researchers during the summer came from what they charged to federal grants, prosecutors said.

Yale said it produced more than a million pages of documents in response to governmental requests for information and actively assisted investigators in analyzing questioned transactions and accounting practices.

“Although Yale and the government did not agree completely on either the nature or extent of errors in the charging of costs to federal awards, Yale acknowledged that some errors did occur, particularly with respect to transfers of costs to some federal awards from other federal awards or Yale accounts,” Yale said in a statement.

In 2006, the university created the Office of Research Administration, which has developed mandatory training programs for faculty and staff, revised and updated policies and procedures and tightened oversight of cost transfers. The university also established a senior management committee to regularly review and oversee action on audit, internal control and compliance issues. A major overhaul of Yale’s online capabilities in grant administration is under way, Yale said.

In the period covered by the investigation, Yale received approximately $3 billion in federal grant and contract income.

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