Federal Grant & Contract News for Nonprofits - August 2013

Several matters have recently arisen which are especially important for organizations that submit invoices or claims for funds from federal and/or state governments. As the current government fiscal year draws to a close, these events should remind nonprofits of the need to ensure strict compliance with federal procurement and grant requirements. Over the past several years, the federal government has utilized the civil False Claims Act (FCA) with increasing frequency, and it appears that many states are looking to follow suit. The following describes some recent FCA settlements involving nonprofits and relatively recent changes to the federal and state false claims landscape.

Nonprofits’ FCA Settlements -

In late July, Northwestern University agreed to settle for nearly $3 million in an Illinois whistleblower lawsuit that accused one of its former researchers of misusing funds from the National Institute of Health (NIH). According to the U.S. Department of Justice, the NIH grants were supposed to fund research into adverse drug reactions, drugs for the blood cancer multiple myeloma, quality of care issues for cancer patients, and a blood-clotting disorder. Instead, the researcher allegedly used the funds for personal use, such as paying for family trips, food, and hotels for himself and his friends, as well as fraudulent consulting agreements with unqualified family members and friends.

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