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Guarding Against Grant Fraud

By Barbara Floersh - December 3, 2012

Given the stiff competition for grant funding and the amount of money at stake, the field of grant proposal writing is unfortunately fertile ground for fraud. When someone blows the whistle and the lawsuit flies, the person who wrote the grant proposal is in the line of fire. And, the organization that submitted the proposal — the applicant organization, is likewise in hot water.

Two Harvard University affiliated teaching hospitals and a prominent Alz­heimer’s disease researcher accused of using falsified data to obtain a government research grant are set to stand trial. The lawsuit alleged that the proposal’s falsified data was used to obtain a $12 million grant from the National Institutes of Health.

In June 2011, a California jury found a grant proposal consultant guilty of fraud, forgery, and making false statements. The charges involved a 2007 grant proposal she wrote and submitted for a consortium of schools to the 21st Century Community Learning Center grant program. After the $35-million grant was awarded, one of the participating schools found that the proposal submitted was “materially different” from the copy it had received from the school that served as the consortium’s applicant. Among other things, memos of understanding had been altered and signatures had been forged.

Stories such as these pop up in the news several times a year — falsification of data, forgery, plagiarism, lies. The time and money involved on both sides of the lawsuits are substantial, and the work to rebuild confidence in an organization and its professionals is time-consuming and not always successful. While funders must find more effective ways of spotting grant fraud, grant-seeking organizations must also step up. When your organization submits a grant proposal for consideration, its credibility and wellbeing are on the line.

Being accused of fraud will do long-term damage to your organization’s ability to secure grants and contributions.

Henry Flood, senior grant management advisor for The Grantsmanship Center in Los Angeles, wrote in his recent article How to Prepare a Grants Policy for Your Organization, “Excellent grant administration requires good managerial skills, but alone that’s not enough. Managers must establish clear expectations and responsibilities, and articulate them, in concise and unambiguous language, to all who have any involvement in applying for or managing grants.” While pre-award and post-award policies and procedures aren’t an ironclad defense against fraud, they’re definitely a starting point. If your organization hasn’t tackled this in a well-considered, systematic way, now is the time.

Policies and procedures are written documents that guide your organization’s work and give specific instructions on how to carry out specific tasks. As Flood wrote, “Policies set the broad parameters for managing an organization,” and “… a procedure is a more detailed how-to document that defines actions that must be completed to comply with the policy. Procedures explain and illustrate how policies will be implemented.”

To guard against fraudulent grant proposals, here are ideas to consider when developing or reviewing your organization’s policies and procedures.

• Appoint someone to lead each grant development project: The leader should keep the work on track, oversee data gathering, verify documentation, and communicate with partner organizations and administrators. Make the imperative of enforcing ethical practices unequivocal, and ensure that the leader has immediate access to top-level administrators.

• Verity Data: Almost all grant proposals include source citations, and some include extensive footnotes, a bibliography, or complicated scientific data. Require people working on proposals to provide full citations and documentation notes to the project leader.

Require the project leader to review and verify citations and information sources. If the proposal includes data the project leader isn’t qualified to verify (i.e., scientific data), the lead administrator should be alerted and arrange for a competent review.

This is not as difficult as it might sound. When collecting data and documentation, staff members simply need to keep decent records. Information from an interview should be backed up by notes, for example. The results of a data analysis should be backed up by working papers. When citations and documentation are sufficient, verifying can often be done quickly.

• Internal, Arm’s-Length Ethics Review: Before the lead administrator signs government grant application documents, or before a grant is submitted to a foundation or corporation, require an internal organizational review that focuses on accuracy and ethics. This check can be quickly accomplished for most proposals. But for those that are especially complicated, or for research proposals that include dense scientific data, the reviews won’t be so simple. Working this type of review into the proposal development timeline, however, can save a lot of trouble in the long run.

• Monitor Consultants: Get the consultant’s work in time to review it thoroughly and address questions. Then submit the proposal yourself. If you do allow a consultant to submit a proposal on behalf of your organization, always read the work and check the facts first. Whether your organization is a large, multifaceted university or a small family service center, guarding against fraud in grant proposals is a responsibility of good management. Take it seriously and avoid an “it can’t happen to us” approach because it can. NPT

Barbara Floersch, director of The Grantsmanship Center in Los Angeles, Calif., has more than 35 years of experience in nonprofit management, proposal writing, grants administration, and nonprofit consulting. Her email is [email protected] and the website is www.tgci.com

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