Report on Research Compliance 18, no. 6 (June 2021)
Nearly four years after noticing spending “irregularities” by a principal investigator (PI), the University of Nevada Las Vegas (UNLV) entered into a settlement agreement with the HHS Office of Inspector General (OIG), refunding $1.07 million and paying a penalty of almost $400,000. The four awards at issue—three from NIH and one from the Health Resources and Services Administration (HRSA)—totaled $5.7 million.
For UNLV, the experience led to the adoption of new policies and procedures, while OIG officials told RRC the case demonstrates the value of the agency’s self-disclosure program.
According to the settlement, subaward payments under the three NIH awards “were unallowable either because they were made to organizations without sufficient documentation of whether the activities were for the performance of the awards, or because they were made to entities with which the PI had an undisclosed conflict of interest.”
OIG added that the “awards were improperly charged for the salary and fringe benefits of the PI without adequate documentation, and for the travel and associated costs of at least two trips to Nigeria that were unallowable because there was no evidence that the trip was in furtherance of the NIH-funded research.”
Additionally, between Sept. 1, 2015, and Feb. 6, 2018, UNLV “improperly charged a portion of the salary of a nurse practitioner” in its HIV clinic even though there was not “sufficient documentation to support such salary costs charged to the award.”
Although the facts indicate it could have been, the case was not settled under the False Claims Act (FCA), but instead under the Civil Monetary Penalties Law (CMPL), 42 U.S.C. § 1320a-7a(o), which is applicable to “violations of grants, contracts and other agreements” for which HHS has provided funding.
“Under this OIG authority, OIG may sanction anyone that engages in fraud or certain other improper conduct related to HHS grants, contracts, and other agreements,” OIG spokesman Don White told RRC. “The authorities in this section of the CMPL, which have been delegated to OIG, include civil monetary penalties, assessments, or exclusion from federal health care programs.”
Both the FCA and the CMPL allow penalties that are triple the amount of misspent funds. In this case, as noted, the penalty was considerably smaller.
Misspending Spanned Years
The award numbers listed in the settlement agreement are linked to Echezona Ezeanolue, M.D., who did not respond to multiple requests for comment RRC made via phone calls and emails to numerous organizations with which he is or has been associated.
Executive Vice President/Provost Chris Heavey told the Las Vegas Review-Journal that UNLV was “not alleging malfeasance or wrongdoing on the part of the investigator.”
The following timeline of events leading up to the settlement is based on information UNLV provided, details in the settlement, and on RRC’s reporting.
July 2015: Ezeanolue joined UNLV as associate professor of pediatrics and public health. He also served as the director of the maternal-child HIV program at UNLV’s School of Medicine.
Sept. 24, 2015, to Aug. 31, 2018: Improper payments occurred.
Fall 2017: A “standard oversight process” identified “irregularities with grant expenditures.” UNLV did not specify which award was initially at issue. UNLV suspended funding for the three NIH grants, “pending an internal review,” and transferred the HRSA grant to another PI.
Early 2018: UNLV told RRC it “identified financial conflicts of interest related to some grant expenditures for the PI.”
March 30, 2018: Ezeanolue’s employment with UNLV ended. Tony Allen, spokesman for UNLV, would not discuss the terms of his departure, stating that personnel matters cannot be disclosed.
April 2018: “Upon conclusion of a thorough internal review,” UNLV “notified NIH of its findings and requested cancellation of three grants,” which NIH agreed to.
Spring 2018 (exact date not provided): UNLV “posted its conflict of interest disclosure on a public, accessible website, per NIH protocol.”
June 11, 2018: UNLV self-reported to OIG there were “compliance issues” with the four grants.
Jan. 22, 2021: The Nevada System of Higher Education, on behalf of UNLV, reached a settlement agreement with the OIG for repayment of $1.07 million “for non-compliant expenditures related to referenced NIH and HRSA grants” and a $380,000 fine, Allen told RRC. “The settlement was paid through investment fund revenue and not from state, donor or tuition dollars.” The exact amount was $1,450,947.81.
Feb. 3, 2021: OIG posts the settlement on its website under self-disclosures.
UNLV: Outside Payments Not Disclosed
UNLV has a dedicated webpage for “Conflicts of Interest/Compensated Outside Interests” (see https://www.unlv.edu/research/coi). In addition to posting policies and procedures, disclosure forms, FAQs and other related information, the page has a link to “Financial Conflicts of Interest (FCOI) with research funded by the Public Health Service” (see https://bit.ly/3tO4KKQ).
The webpage explains that the FCOI “reporting process allows institutions to report the existence of any identified financial conflicts of interest to the Public Health Service as required by Federal regulation, specifically Title 42 Code of Federal Regulation Part 50 Subpart F for grants and cooperative agreements.”
Allen said the FCOIs leading to the settlement were unique. Indeed, the only document that can be downloaded from the link shows six entries—all for Ezeanolue. No dates of disclosure of the FCOIs are included but are listed as “unknown.” Total payments listed are $357,379, coming principally from “Sunrise Foundation” ($144,527) and an entity called “Easy Access” ($200,372).
Healthy Sunrise Foundation, based in Las Vegas, is an organization “with a core mission to improve birth outcomes through enhanced maternal-child health programs.” Its website lists Ezeanolue as vice president.
Risk Assessments, COI Forms Updated
White said his agency did not require UNLV to take corrective actions as part of the settlement. Lack of mandatory corrective actions or a compliance plan—which can be costly and time-consuming to implement—is one benefit to self-disclosure.
“OIG operates with a strong presumption against requiring compliance obligations in the context of a settlement arising from a self-disclosure,” White said.
Despite not being required to do so, UNLV “tightened its policies and procedures related to grant expenditures as a result of this experience,” Allen said. “A few examples include restructuring the Office of Sponsored Programs to strengthen its checks and balances, implementing electronic business processes through UNLV’s financial system, and developing a robust risk assessment for subawardees.”
He added that UNLV “takes these matters seriously and investigates them thoroughly, and the strategies we followed are those that all institutions in similar situations should consider.”
UNLV “regularly reviews its business processes, and it’s fair to say this experience has led to updates in several areas, including research,” Allen said.
He noted that “all academic faculty and professional staff are required to complete annual Conflict of Interest and/or Compensated Outside Services disclosure forms whether or not they engaged in any outside activities,” and that the forms “have been updated in recent years to include a greater focus on international relationships and activities.”
OIG: Case ‘Highlights Risk Areas’
RRC also asked White what could be learned from this situation, including what led to the settlement and the value of self-disclosure.
“This self-disclosure and the resulting settlement highlight the benefits of self-disclosing to report and resolve improper conduct impacting a grant award. It also highlights risk areas for grant recipients, including monitoring of subrecipients, proper disclosure of conflicts of interest, and the need to maintain adequate documentation,” White said. “OIG encourages self-disclosure by any recipient who may have criminal, civil, or administrative liability related to any HHS grant, contract, or other agreement. Prompt disclosure, full cooperation, and robust internal investigation of potential violations are key indicators of an award recipient’s integrity.”
White added that there are “many benefits to self-disclosure.”
OIG “resolves self-disclosed conduct with a lower settlement amount than if the government had initiated the investigation,” he said. “For entities or individuals seeking to resolve conduct impacting multiple HHS awards or multiple awarding divisions, submitting a single self-disclosure to OIG may be more administratively streamlined.”
As noted earlier, this case involved four awards from two different HHS agencies.
1 HHS, “Final UNLV-OIG Settlement Agreement,” settlement agreement, accessed May 17, 2021, https://bit.ly/3uUJqVG.
2 HHS OIG, “University of Nevada, Las Vegas Agreed to Pay $1.4 Million for Allegedly Violating the Civil Monetary Penalties Law by Submitting Improper Claims to NIH and HRSA Grants,” Enforcement Actions, February 3, 2021, https://bit.ly/33GTrcP.
3 Julie Wootton-Greener, “UNLV settles with US, pays $1.45M over alleged misuse of grant funds,” Las Vegas Review-Journal March 11, 2021, https://bit.ly/3tNS86P.
4 “Our Mission,” HealthySunrise Foundation, accessed May 17, 2021, https://healthysunrise.org/.