Audit Reveals Misconduct in Research Lab

Georgia Tech has taken corrective action following the conclusion of an internal investigation into allegations of questionable purchasing practices and undisclosed conflicts of interest for several employees in one of its research labs.

Investigators have totaled approximately $475,000 in unallowable purchases and salary costs on contracts in the Georgia Tech Research Institute’s (GTRI) Advanced Concepts Laboratory (ACL) between 2009-2013. Subsequent personnel actions include the termination of four lab members as a result of the investigation. Three additional employees resigned during the course of the investigation. The unallowable expenditures are in the process of being repaid to the funding sponsors.

Steve Cross, executive vice president for Research, said the concerns originating out of ACL represent a serious and unacceptable ethical breach, and that processes have been implemented to prevent any future occurrences.

“The rules for allowable and unallowable purchasing are complex, and misunderstandings can occur as a result,” Cross said. “In this case, we had individuals who are suspected of defrauding Georgia Tech and its sponsors. Our system of financial controls and accountability identified the irregularities, and we have engaged in an aggressive and proactive approach to improve processes related to how we manage sponsored work.

“Whenever these kinds of charges are alleged, it is something to be taken very seriously,” he said. “We have appointed new leadership for ACL, individuals known both for their research expertise and personal integrity. We have been in close communication with the affected sponsors regarding our investigation and course of action, and they have expressed appreciation for our transparency and thoroughness.”

To assist in reviewing the allegations, Georgia Tech engaged an external consultant – specializing in the investigation of improprieties in government grants and contracts – who collaborated with Tech’s Department of Internal Auditing. Their findings identified several ACL employees who colluded to misuse Institute funds for personal gain, manipulated Tech’s system of financial controls, and participated in the misappropriation of funds.

In particular, the review suggests the purchases could have been for the benefit of previously undisclosed, outside business activities, and to specific vendors with whom researchers had a non-professional relationship.

Internal Auditing subsequently set forth a series of observations and recommendations to mitigate future risk.

Among the changes, GTRI staff in finance and accounting, research security, and ethics and compliance will be more closely aligned to central administration. Spending limits on procurement cards (PCards) will be reduced; increased use of the SciQuest (known on campus as BuzzMart) e-procurement system will be encouraged; electronic equipment purchases will be reviewed and approved by information technology staff; and mandatory training in project management implemented. A greater emphasis on tracking research expenses, and certifying those transactions by project directors and principal investigators, is also anticipated.

The results of the investigation have been turned over to law enforcement authorities to determine whether criminal charges will be brought against any of the former employees.

“In keeping with the goals of Georgia Tech’s strategic plan, our intent is to continuously streamline and improve business practices,” Cross said. “The lessons learned from the improvements under way at GTRI will serve as a template for the entire Institute.

“This is a very disappointing discovery, because any breach of the public trust impacts everyone affiliated with Georgia Tech,” he said. “As a community, we know the vast majority of faculty and staff represent the Institute admirably, in an ethical and transparent manner. Any behavior designed to take advantage of that trust is unacceptable and reprehensible.”